Title
RESOLUTION NO. R-1314-101: A RESOLUTION OF THE COUNCIL OF THE CITY OF NORMAN, OKLAHOMA, REQUESTING LEGISLATIVE SUPPORT FOR HOUSE BILL 1875 THAT WOULD REDUCE THE OKLAHOMA TAX COMMISSION RETENTION FEES CHARGED TO MUNICIPALITIES TO ONE-HALF PERCENT (0.5%) OF A MUNICIPALITY'S TAX COLLECTIONS.
Body
BACKGROUND: The Oklahoma Municipal League has encouraged all Oklahoma municipalities to adopt Resolutions in support of Oklahoma House Bill 1875. The Bill, sponsored by State Representative Charles McCall and State Senator Clark Jolley, reduces the retention fee charged to municipalities by the Oklahoma Tax Commission for the collections of state sales and use taxes.
DISCUSSION: Currently, the Oklahoma Tax Commission charges a retention fee for collecting sales and use taxes ranging from one percent (1%) to one and three-quarters percent (1¾%). Over time, a significant imbalance has occurred between the fee charged and the actual costs of collection. For that reason, House Bill 1875 was developed. It is a product of extensive work, review of costs associated with state and municipal collections of sales and use taxes, and collaboration with the Oklahoma Tax Commission.
House Bill 1875 proposes to reduce the retention fees charges to municipalities to one-half percent (0.5%) of the municipalities' sales tax revenues that are collected by the Oklahoma Tax Commission. The City of Norman estimates that adoption of House Bill 1875 could result in an annual savings of approximately $300,000 in retention fee costs thus resulting in a corresponding amount of tax revenue being remitted to the City of Norman.
RECOMMENDATION: If City Council wishes to request legislative support for House Bill 1875, Staff recommends adoption of Resolution R-1314-101.