Commissioners Consider Use Tax after Presentation

by Elizabeth Pitts-Hibbard

The Stephens County Board of Commissioners will consider implementing a Use Tax for the county after hearing from Dr. Notie Lansford, Professor and Extension Economist for Oklahoma State University at their regular meeting on Monday, July 18.

Lansford said that Stephens County is one of three counties in Oklahoma that does not currently collect Use Tax, which is a sales tax applied to purchases made from out-of-state vendors, such as online retailers. The other two counties are Washington County, which will begin collecting Use Tax on January 1, 2023, and Oklahoma County, which cannot collect it because there is no current County sales tax.

According to an informational document Lansford prepared, the Board of Commissioners may implement a Use Tax if voters in the county have previously approved a County Sales Tax. The Use Tax rate is the same as the sales tax rate, and funds may be used for any county government function. Funds may be placed in the General Fund, using an estimated revenue within the budget process, or in a cash fund, which will operate with a monthly budget using actual revenue.

Lansford said that implementing a Use Tax for out of state purchases would create an “even playing field” for local merchants.

“Your local merchants are saying, ‘well, we’ve got to collect it, so people are saying if they buy it from us, they have to pay county tax on it, and we’d like an even playing field so the out of state purchase also has to collect it.’”

Lansford added that Internet sales are increasing and those purchases from out of state vendors would increase the tax revenue as well.

“To the extent that online sales are increasing, we’d like to be getting that tax revenue from out of state,” Lansford said.

Lansford also pointed out that several cities in Stephens County collect Use Tax, including the City of Marlow and Town of Bray.

According to Lansford’s presentation document, Marlow’s sales tax revenue in June 2022 was $149,566.33 and use tax collection was $44,005.71; both were increases over June 2021.

District 3 Commissioner Russell Morgan said that the Board had discussed implementing Use Tax for the County a few years ago but no action was taken at the time.

“I think it’s something we should consider, so it levels the playing field for the local mom-and-pop businesses, so you’re paying the same sales tax if you go home and order something,” Morgan said. “I’m not all about new taxes, but I think we need to do it for home town businesses.”

District 2 Commissioner Todd Churchman reiterated that Stephens County is alone in not collecting Use Tax.

“In reality, we’re the only ones in the universe not collecting it,” Churchman said. “All the cities are already collecting it, and all the counties except Oklahoma County.”

The Commissioners voted to table the agenda item until the next meeting so that residents would have the opportunity to discuss the issue with them.

Elsewhere on the agenda, the Board discussed two items that affect the Stephens County Sheriff Department.

The first, which was tabled from the previous meeting, addressed a report from the County insurance company regarding the technical issues at the Stephens County Jail, specifically the automatic locks that were affected by a severe storm in June and the cameras, which jail officials believe are ineffective. The insurance company, ACCO, will not cover the old system due to the fact that the computer system was outdated.

The Commissioners took no action on the item in order to give Undersheriff Rick Lang time to investigate potential funding sources and clarify the timeline for repair.

The agenda also included affirming a previously-approved request from November 2020 for a Performance/Operational Audit of the Stephens County Sheriff’s Department and Stephens County Jail. The request was signed by then-Chairman Morgan and the State Auditor’s office asked that Churchman, the current Chairman, sign the engagement letter so that the audit can begin.

The Commissioners agreed to continue with the audit process; a timeline was not available as of press time.

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