City Of Tulsa Suing State Of Oklahoma Over Tax Collections

Staff and Wire Reports

TULSA, OKLAHOMA -- The City of Tulsa is suing the State of Oklahoma over tax collections.

The City wants to hire an outside firm to collect city sales tax, but the state won't allow it.

The City of Tulsa figures it's losing out on $7 million a year in sales tax because the state tax commission isn't making sure that every business pays what's due.

6/2/2010 Related story: Tulsa Mayor Critical of Tax Collection Ban 

The lawsuit [CV-2010-1038] asks a judge to rule that the city of Tulsa has the right to use a private firm to collect its sales taxes. 

The suit is a constitutional challenge to House Bill 2359, which orders municipalities to use the Tax Commission for collection services.  The requirement was put into law only after Tulsa started looking into privatizing tax collections.

State lawmakers passed HB 2359 on the final day of this year's session, but before the governor signed it into law, the city of Tulsa had signed a contract with an Alabama firm to handle the collections.

The Oklahoma Tax Commission collects sales and use tax for all Oklahoma communities.

Tulsa Mayor Dewey Bartlett has support from leaders of at least 10 suburban towns who all think the Oklahoma Tax Commission isn't doing the best possible job of collecting taxes.

"We would like to have the ability to do that, make that decision ourselves, and not be dictated by Oklahoma City, especially when Oklahoma City is not in a position to do it well," Bartlett said.

The collection of sales tax is big business for state government, which gets a cut for making the collection.  For cities, it's the main source of income that pays for most of what they do.

"49 states in the U.S. have property tax and sales tax," Mayor Mike Nunnelly, Mannford, said. "We are the only one that the legislature says will only have sales tax only for general fund operations. And now they've said we will be the only one who collects that and you don't have another option."

The lawsuit was filed in Oklahoma County by the City of Tulsa. It claims state lawmakers violated the constitution by requiring cities to use the Oklahoma tax commission.

Not all of the small town mayors say they would go with someone else to collect taxes, but all have concerns about the tax commission and wonder with a private firm could do it better, faster and cheaper.

"We've been concerned about their lack of response to our question are we getting all of it," said Mike Burdge, Sand Springs Vice Mayor.

Leaders supporting Tulsa's lawsuit against the Oklahoma Tax Commission include:

• City of Jenks- Mayor Vic Vreeland; City Manager Mike Tinker
• City of Owasso- Mayor Doug Bonebrake
• City of Broken Arrow- Mayor Mike Lester and City Manager Dave Wooden
• City of Sand Springs- Vice Mayor Mike Burdge
• City of Mannford- City Manager Mike Nunneley
• City of Glenpool- Mayor Shane Buchanan; City Manager Ed Tinker
• City of Collinsville- Mayor Stan Sallee
• Tulsa County- Commissioner Karen Keith