Oklahoma Sales and Use Tax Protest — Letter of Protest and Refund Claim

OKLAHOMA SALES AND USE TAX — LETTER OF PROTEST AND/OR REFUND CLAIM

TABLE OF CONTENTS

1. Caption and Filing Information
2. Introduction and Election of Remedy
3. Protest of Proposed Sales/Use Tax Assessment (68 O.S. §§ 207, 221)
4. Refund Claim (68 O.S. § 227)
5. Wayfair / Economic-Nexus Defense (68 O.S. § 1392)
6. Exemption Certificates and Resale Defense
7. Demand for Oral Hearing
8. Relief Requested
9. Reservation of Rights and Appeal
10. Verification
11. Signature, Service, and Certificate of Service
12. Oklahoma Practice Notes
13. Sources and References

1. CAPTION AND FILING INFORMATION

BEFORE THE OKLAHOMA TAX COMMISSION

OFFICE OF ADMINISTRATIVE LAW JUDGES

OKLAHOMA CITY, OKLAHOMA

LETTER OF PROTEST AND/OR CLAIM FOR REFUND

Filed pursuant to 68 O.S. §§ 207, 221(C), and/or § 227

2. INTRODUCTION AND ELECTION OF REMEDY

Protestant/Claimant [TAXPAYER NAME] ("Taxpayer") respectfully submits this filing pursuant to:

☐ Section 3 — Protest of Proposed Assessment under 68 O.S. §§ 207 and 221(C), challenging the Notice of Proposed Assessment dated [__/__/____] in the amount of $[________].

☐ Section 4 — Claim for Refund under 68 O.S. § 227, seeking refund of $[________] in sales/use tax erroneously paid for the periods [YYYY-MM] through [YYYY-MM].

☐ Both — Taxpayer protests the proposed assessment AND asserts a refund claim for amounts paid under protest pursuant to 68 O.S. § 226.

This filing is made within all applicable statutory deadlines as detailed below.

3. PROTEST OF PROPOSED SALES/USE TAX ASSESSMENT (68 O.S. §§ 207, 221)

3.1. Timeliness

This protest is filed on [__/__/____], within sixty (60) days of the date of mailing ([__/__/____]) shown on the Notice of Proposed Assessment, as required by 68 O.S. § 221(C).

3.2. Identification

Taxpayer [NAME] is [a corporation organized under the laws of [STATE] / a sole proprietorship / an LLC] with principal place of business at [ADDRESS], Oklahoma sales tax permit number [STS-________], and FEIN [XX-XXXXXXX]. Taxpayer is engaged in [describe business — e.g., wholesale distribution; e-commerce retail; manufacturing].

3.3. Amounts in Dispute

3.4. Statement of Facts

3.4.1. [Describe Taxpayer's business operations during the audit period, including locations, products/services sold, and any customer-classification or sourcing methodology.]

3.4.2. [Describe the specific transactions giving rise to the proposed assessment.]

3.4.3. [Describe the OTC's audit methodology — e.g., sample-and-projection, transaction-by-transaction, third-party data match — and any disagreements with the methodology.]

3.5. Assignments of Error

Assignment of Error No. 1 — [Title]. [E.g., The OTC erroneously imposed sales tax on transactions documented as exempt resale sales supported by valid Form 13-16-A exemption certificates on file.]

Assignment of Error No. 2 — [Title]. [E.g., The OTC's projection methodology lacks a representative sample under OAC 710:65-3-30 and overstates Taxpayer's liability by extrapolation from a non-representative quarter.]

Assignment of Error No. 3 — [Title]. [E.g., The OTC sourced the transactions to Oklahoma in error; under 68 O.S. § 1354.14 (destination-based sourcing for interstate sales), the items shipped to non-Oklahoma destinations are not subject to Oklahoma sales tax.]

Assignment of Error No. 4 — [Title]. [E.g., Penalties are unwarranted under 68 O.S. § 217 because Taxpayer acted with reasonable cause in reliance on professional advice.]

3.6. Argument and Legal Authority

[For each assignment of error, set out: (i) the controlling statute or rule, (ii) any OTC letter ruling, (iii) controlling Oklahoma case law (cited in OK reporter form, e.g., 2019 OK 12, 437 P.3d 132), and (iv) application to facts. Quote dispositive statutory text. Cite any U.S. Supreme Court Commerce Clause / Due Process authority where economic-nexus issues are raised.]

4. REFUND CLAIM (68 O.S. § 227)

4.1. Statutory Basis

Pursuant to 68 O.S. § 227, any taxpayer who has erroneously paid sales or use tax may file a verified claim for refund with the Oklahoma Tax Commission within the limitation period prescribed by statute. Taxpayer asserts this claim within the applicable limitation period as detailed below.

4.2. Required Statutory Content (68 O.S. § 227(b))

4.3. Timeliness of Refund Claim

Taxpayer paid the amounts at issue on [__/__/____] (and other dates set forth in Exhibit [__]). This claim is filed on [__/__/____], within the limitation period under 68 O.S. § 227. [Confirm currently applicable limitation period — historically three (3) years; verify per current statute.]

4.4. Grounds for Refund

4.4.1. [Describe with specificity — e.g., Taxpayer collected and remitted sales tax on transactions that were exempt manufacturing sales under 68 O.S. § 1359; valid exemption certificates from each customer are attached as Exhibit B.]

4.4.2. [Or — Taxpayer self-assessed use tax on items qualifying for the agricultural exemption under 68 O.S. § 1358; supporting documentation attached as Exhibit C.]

4.4.3. [Or — Taxpayer erroneously sourced sales to Oklahoma when destination was in another state; corrected sourcing analysis and shipping records attached as Exhibit D.]

4.5. Supporting Documentation

Attached are: (i) original returns, (ii) amended returns where applicable, (iii) invoices and supporting transaction records, (iv) exemption certificates (Form 13-16-A), (v) shipping records, and (vi) a reconciliation worksheet showing the calculation of the refund claim.

4.6. Demand for Hearing on Refund Claim

If the OTC denies this claim in whole or in part, Taxpayer expressly demands an oral hearing on the denial pursuant to 68 O.S. § 227(d) and § 207(c).

5. WAYFAIR / ECONOMIC-NEXUS DEFENSE (68 O.S. § 1392)

5.1. Applicable Standard

Under 68 O.S. § 1392(G), a remote seller is required to collect and remit Oklahoma sales/use tax only if it had aggregate sales of tangible personal property in or delivered to Oklahoma worth at least $100,000 during the preceding or current calendar year. Oklahoma's economic-nexus statute imposes NO TRANSACTION-COUNT threshold (in contrast to states modeled directly on the South Dakota Wayfair statute).

The duty to collect attaches the first calendar month succeeding the month in which the threshold is crossed.

Sales made through a marketplace facilitator that itself collects and remits Oklahoma tax are excluded from the remote seller's threshold calculation under § 1392(G).

5.2. Constitutional Limits

• Commerce Clause. Under South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018), a state may impose collection obligations on remote sellers without physical presence, but the obligation must satisfy Complete Auto's four-part test: substantial nexus, fair apportionment, non-discrimination, and fair relation to services.
• Due Process. The remote seller must have purposefully availed itself of the Oklahoma market.

5.3. Taxpayer's Position

5.3.1. Below threshold. Taxpayer's aggregate Oklahoma sales for [YEAR(S)] were $[________], which [is / is not] below the $100,000 statutory threshold. Sales records and a year-by-year reconciliation are attached as Exhibit [__].

5.3.2. Marketplace exclusion. Of Taxpayer's gross sales delivered into Oklahoma totaling $[________], $[________] were facilitated by [Amazon / Walmart Marketplace / eBay / Etsy / Other], each of which is a registered marketplace facilitator collecting and remitting Oklahoma tax. These sales are excluded under 68 O.S. § 1392(G).

5.3.3. Effective-date challenge. The OTC's assessment for periods [before threshold crossing date] improperly imposes liability before Taxpayer's collection obligation attached under § 1392(G).

5.3.4. Constitutional challenge (where applicable). [Reserve and brief any Commerce Clause / Due Process challenge to retroactive application or to the OTC's measurement of nexus.]

6. EXEMPTION CERTIFICATES AND RESALE DEFENSE

6.1. Standard

Under OAC 710:65-7-6 and 68 O.S. § 1361, a seller is relieved of liability for sales tax on a transaction supported by a properly completed exemption certificate accepted in good faith. The Oklahoma Form 13-16-A (or Streamlined Sales and Use Tax Agreement Certificate of Exemption) is the standard certificate.

6.2. Taxpayer's Certificates

Taxpayer maintains valid, properly completed exemption certificates for each of the disputed transactions, attached as Exhibit [__] and indexed by customer in the schedule below:

6.3. Good-Faith Acceptance

Taxpayer accepted each certificate in good faith and had no actual knowledge that any certificate was invalid or that any customer was misusing it. Liability for any misused certificate, if any, properly lies with the purchaser under 68 O.S. § 1361.

7. DEMAND FOR ORAL HEARING

Pursuant to 68 O.S. § 207(c), Taxpayer expressly demands an oral hearing before the OTC Office of Administrative Law Judges. Taxpayer requests not less than ten (10) days' notice of the hearing date and reserves the right to present testimony, expert evidence (including economic-nexus and sourcing analyses), documentary evidence, and legal argument. Hearing procedures shall be conducted in accordance with OAC 710:1-5-20 through 710:1-5-49.

8. RELIEF REQUESTED

WHEREFORE, Taxpayer respectfully requests that the OTC:

• A. Withdraw and abate the Notice of Proposed Assessment dated [__/__/____] in the disputed amount of $[________];
• B. Grant the refund claim in the amount of $[________], plus statutory interest;
• C. Recognize Taxpayer's lack of economic nexus under 68 O.S. § 1392 for the periods at issue (where applicable);
• D. Sustain Taxpayer's exemption-certificate defenses (where applicable);
• E. Abate all penalties asserted under 68 O.S. § 217 for reasonable cause; and
• F. Grant such further relief as the Commission deems just and equitable.

9. RESERVATION OF RIGHTS AND APPEAL

Taxpayer reserves all rights, including:

• The right to amend or supplement this filing with additional evidence and argument;
• The right to conduct discovery before the OAL Judges as permitted by procedural rules;
• The right to direct appeal to the Oklahoma Supreme Court within thirty (30) days of mailing of any final OTC order under 68 O.S. § 225(a);
• The alternative right to a trial de novo in district court (Oklahoma County or Taxpayer's county of residence) under 68 O.S. § 225(b);
• The right to refund recovery under 68 O.S. § 227 as to amounts paid under protest;
• The right to challenge any provision under the United States and Oklahoma Constitutions, including the Commerce Clause, Due Process Clause, and the Oklahoma uniformity provisions; and
• All rights under the Oklahoma Taxpayer Bill of Rights.

10. VERIFICATION

STATE OF OKLAHOMA

COUNTY OF [COUNTY]

I, [NAME / OFFICER NAME, TITLE], being first duly sworn upon my oath, depose and state that I am the [Taxpayer / authorized officer of Taxpayer] in the foregoing matter; that I have read the foregoing Letter of Protest and/or Claim for Refund; that the statements of fact contained therein are true and correct to the best of my knowledge, information, and belief; and that this verification is made pursuant to 68 O.S. §§ 207(b) and 227.

[________________________________]

[NAME], [Title]

Subscribed and sworn to before me this [____] day of [_______________], 20[____].

[________________________________]

Notary Public — State of Oklahoma

(My Commission Number: [________])

(My Commission Expires: [_______________])

11. SIGNATURE, SERVICE, AND CERTIFICATE OF SERVICE

11.1. Signature

Date: [__/__/____]

Respectfully submitted,

[LAW FIRM / CPA FIRM NAME]

By: [________________________________]

[ATTORNEY / CPA NAME], OBA No. [####] (if attorney)

Counsel / Authorized Representative for Taxpayer

[STREET ADDRESS]

[CITY, OK ZIP]

Telephone: [NUMBER]

Email: [EMAIL]

11.2. Certificate of Service

I hereby certify that on the [____] day of [_______________], 20[____], the foregoing LETTER OF PROTEST AND/OR CLAIM FOR REFUND was filed by:

☐ Certified U.S. Mail, Return Receipt Requested, addressed to:

Oklahoma Tax Commission
Office of Administrative Law Judges
Oklahoma City, OK 73194

☐ OkTAP Online Portal (https://oktap.tax.ok.gov)

☐ Hand Delivery to the Connors Building, 2501 N. Lincoln Boulevard, Oklahoma City, OK 73194

A copy was served upon the OTC audit/refund division at [ADDRESS / EMAIL].

[________________________________]

[REPRESENTATIVE NAME]

12. OKLAHOMA PRACTICE NOTES

• 60-day protest deadline. As with income tax, the 60-day deadline under 68 O.S. § 221(C) is jurisdictional. A late protest forfeits administrative rights and renders the assessment final.
• Refund SOL. The limitation period for refund claims under 68 O.S. § 227 has been amended over time. Historically three (3) years; legislative amendments (e.g., 2016) shortened or modified the period for certain taxes. VERIFY the currently effective period for the specific tax type and period before filing. When in doubt, file the earlier of (i) three years from payment, or (ii) the conservative window suggested by current OTC publications.
• Pay-and-protest under 68 O.S. § 226. Where interest accrual or collection pressure is significant, Taxpayer may pay disputed amounts and pursue a refund claim under § 227, preserving the merits dispute while stopping interest.
• Economic nexus — $100,000 only. Oklahoma's threshold under 68 O.S. § 1392 is $100,000 in aggregate Oklahoma sales during the preceding or current calendar year. Unlike South Dakota's Wayfair statute, Oklahoma does NOT impose a transaction-count threshold. Always reconcile reporting against this single dollar metric.
• Marketplace facilitator exclusion. A remote seller's threshold calculation excludes sales facilitated by a marketplace that itself collects and remits Oklahoma tax. This is a frequent source of OTC over-assessment — verify Amazon/Walmart/eBay reporting and exclude those sales.
• Sourcing. Oklahoma is a destination-sourcing state for sales tax. Verify the OTC's sourcing analysis matches actual ship-to addresses and Streamlined Sales Tax sourcing rules.
• Exemption certificates. Maintain certificates contemporaneously. Late-collected certificates may be accepted at audit but face heightened scrutiny. Use Form 13-16-A or SST uniform certificate.
• Record retention. Sales tax records must be kept for at least 3 years under 68 O.S. § 1365; longer where § 223 extended-assessment periods may apply.
• Penalty abatement. Reasonable-cause penalty abatement is available under 68 O.S. § 217. Make a clear, documented showing — reliance on professionals, ambiguity of law, first-time-noncompliance, computational error promptly cured.
• Appeal options. Final OTC orders may be appealed to the Oklahoma Supreme Court within 30 days under 68 O.S. § 225(a) or, in the alternative, by trial de novo in district court under § 225(b). Choose strategically based on record adequacy.
• Confidentiality. All proceedings and records are confidential under 68 O.S. § 205. Mark filings accordingly.
• Watch for OTC Letter Rulings. The OTC publishes Letter Rulings (LR series) that, while binding only on the requesting taxpayer, are highly persuasive within the agency. Cite them in argument where on point.

13. SOURCES AND REFERENCES

• Oklahoma Statutes Title 68 (Revenue and Taxation) — https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os68.pdf
• 68 O.S. § 207 (Protests; Hearings) — https://law.justia.com/codes/oklahoma/title-68/
• 68 O.S. § 221 (Reports; Assessment) — https://law.justia.com/codes/oklahoma/title-68/section-68-221/
• 68 O.S. § 225 (Appeals) — https://law.justia.com/codes/oklahoma/title-68/section-68-225/
• 68 O.S. § 226 (Pay-and-protest)
• 68 O.S. § 227 (Refund claims) — https://law.justia.com/codes/oklahoma/title-68/section-68-227/
• 68 O.S. art. 13 (Sales Tax Code, §§ 1350–1377) — https://law.justia.com/codes/oklahoma/title-68/
• 68 O.S. art. 14 (Use Tax Code, §§ 1401–1411) — https://law.justia.com/codes/oklahoma/title-68/
• 68 O.S. § 1392 (Remote sellers; marketplace facilitators) — https://law.justia.com/codes/oklahoma/title-68/section-68-1392/
• South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018)
• Oklahoma Administrative Code Title 710, Chapter 65 (Sales and Use Tax) — https://oklahoma.gov/tax/about-otc/oac.html
• OTC Form 13-16-A (Application for Sales Tax Exemption / Resale Certificate) — https://oklahoma.gov/tax/forms.html
• OTC Form L-25 (Application for Protest or Demand for Hearing) — https://oklahoma.gov/content/dam/ok/en/tax/documents/forms/other/L-25.pdf
• Oklahoma Tax Commission — https://oklahoma.gov/tax.html
• OkTAP Online Portal — https://oktap.tax.ok.gov
• OTC Wayfair / Remote Seller FAQs — https://oklahoma.gov/content/dam/ok/en/tax/documents/resources/publications/streamlines-sales-tax/WayfairFAQs-06152020.pdf
• Streamlined Sales and Use Tax Agreement — https://www.streamlinedsalestax.org
• Oklahoma State Courts Network — https://www.oscn.net

Disclaimer: This template is provided for informational purposes only and does not constitute legal or tax advice. An attorney licensed in Oklahoma or a qualified Oklahoma tax practitioner must review and customize this document before filing. Statutory provisions, OTC procedures, and economic-nexus thresholds change frequently — verify all citations and deadlines before relying on this document.