Okla. Stat. tit. 68, § 68-2702

assess penalties by Tax Commission - Tax Commission Compliance Fund.

A. The governing body of any incorporated city or town and the

Oklahoma Tax Commission shall enter into contractual agreements

whereby the Tax Commission shall have authority to assess, to

collect and to enforce any taxes or, penalties or interest thereon,

levied by such incorporated city or town, and remit the same to such

municipality. Said assessment, collection, and enforcement

authority shall apply to any taxes, penalty or interest liability

existing at the time of contracting. Upon contracting, the Tax

Commission shall have all the powers of enforcement in regard to

such taxes, penalties and interest as are granted to or vested in

the contracting municipality. Such agreement shall provide for the

assessment, collection, enforcement, and prosecution of such

municipal tax, penalties and interest, in the same manner as and in

accordance with the administration, collection, enforcement, and

prosecution by the Tax Commission of any similar state tax except as

provided by agreement. Such agreement shall authorize the Tax

Commission to retain an amount not to exceed one-half of one percent

(0.5%) as a retention fee of municipal tax collected for services

Oklahoma Statutes - Title 68. Revenue and Taxation Page 1119

rendered in connection with such collections; provided, if a

municipality files an action resulting in collection of delinquent

state and municipal taxes, the Tax Commission shall remit one-half

(1/2) of the retention fee applied to the amount of such taxes to

the municipality to be apportioned as are other sales tax revenue.

All funds retained by the Tax Commission for the collection services

to municipalities shall be deposited in the Oklahoma Tax Commission

Revolving Fund in the State Treasury. The municipality shall agree

to refrain from any assessment, collection, or enforcement of the

municipal tax except as specified in an agreement made pursuant to

subsections A, C, D and E of this section.

B. The Tax Commission shall place all sales taxes, including

penalties and interest, collected on behalf of a municipality

pursuant to the provisions of this section and all use taxes,

including penalties and interest, collected on behalf of a

municipality pursuant to the provisions of Section 1411 of this

title in the Sales Tax Remitting Account as provided in Section 1373

of this title.

C. Notwithstanding the provisions of subsection E of this

section, the Tax Commission and the governing body of any

incorporated city or town may enter into contractual agreements

whereby the municipality would be authorized to implement or augment

the enforcement, collection and prosecution of the municipal tax in

those contracting municipalities and to provide for the satisfaction

of refunds or credits to taxpayers. Such agreements shall and are

hereby authorized to provide that the municipality and the Tax

Commission may exchange necessary information to effectively carry

out the terms of such agreements. The municipality, its officers

and employees shall preserve the confidentiality of such information

in the same manner and be subject to the same penalties as provided

by Section 205 of this title, provided that the municipal prosecutor

and other municipal enforcement personnel may receive all

information necessary to implement or augment the enforcement and

prosecution of municipal sales tax ordinances.

D. Provided further that, upon the request of any incorporated

city or town, the Tax Commission shall enter into contractual

agreements with such municipality whereby the municipality would be

authorized to implement or augment the enforcement, either directly

or through contract with private auditors or audit firms, of the

municipal tax. Any person performing an audit shall first be

approved by the Tax Commission and, once approved, shall be

appointed as an agent of the Tax Commission for purposes of the
tractual

agreements with such municipality whereby the municipality would be

authorized to implement or augment the enforcement, either directly

or through contract with private auditors or audit firms, of the

municipal tax. Any person performing an audit shall first be

approved by the Tax Commission and, once approved, shall be

appointed as an agent of the Tax Commission for purposes of the

audit. Contracts with a private auditor or audit firm shall not be

subject to the limitations of Section 262 of this title and shall

and are hereby authorized to provide that the municipality, private

auditors or audit firms and the Tax Commission may exchange

necessary information to effectively carry out the terms of such

Oklahoma Statutes - Title 68. Revenue and Taxation Page 1120

agreements. The municipality, its officers and employees and

private auditors or audit firms may receive all information

necessary to perform audits and shall preserve the confidentiality

of such information in the same manner and be subject to the same

penalties as provided by Section 205 of this title. Municipalities

conducting audits directly or by contracting for private auditors or

audit firms pursuant to this subsection shall furnish to the Tax

Commission the audit results and all relevant supporting

documentation. Further, such municipalities shall provide for the

payment of private auditors or audit firms by deduction from the tax

assessment resulting from the audit conducted by said private

auditors or audit firms unless a municipality contracts with the

auditor or audit firm for another method of payment. Any municipal

sales tax funds recovered as a result of the services provided under

this subsection will not be included in calculating the retention

fee retained by the Tax Commission pursuant to subsection A of this

section. The contracts authorized by subsection A of this section

shall provide that the Tax Commission shall not have any obligations

thereunder to any municipality that does not participate in an audit

conducted under this subsection.

E. 1. Pursuant to the provisions of this subsection, upon the

request of any municipality, the Tax Commission shall enter into a

contractual agreement with the municipality whereby the municipality

would be authorized to engage in compliance activities, either

directly or through contract with private persons or entities, to

augment the collection of the municipal tax by the Tax Commission.

The sole responsibility for the administration of any and all such

compliance activities shall remain with the Tax Commission to ensure

that sellers and purchasers shall only be required to register, file

returns, and remit state and local taxes to one single authority,

and that no enforcement activities are duplicated.

2. Any contractual agreement entered into pursuant to paragraph

1 of this subsection and any person or entity who will be performing

compliance activities shall first be approved by the Tax Commission

in its sole discretion. Once approved, the private person or entity

shall be appointed as an agent of the Tax Commission for purposes of

such compliance activities. Any agreements entered into pursuant to

paragraph 1 of this subsection shall provide that the municipality,

private persons or entities appointed as an agent and the Tax

Commission may exchange necessary information to effectively carry

out the terms of the agreements. The municipality, its officers and

employees and any private person or entity appointed as an agent of

the Tax Commission may receive all information necessary for

compliance activities and shall preserve the confidentiality of the

information in the same manner and be subject to the same penalties

as provided by Section 205 of this title. Municipalities conducting

compliance activities directly or by contracting with private

Oklahoma Statutes - Title 68. Revenue and Taxation Page 1121
ent of

the Tax Commission may receive all information necessary for

compliance activities and shall preserve the confidentiality of the

information in the same manner and be subject to the same penalties

as provided by Section 205 of this title. Municipalities conducting

compliance activities directly or by contracting with private

Oklahoma Statutes - Title 68. Revenue and Taxation Page 1121

persons or entities pursuant to this subsection shall furnish to the

Tax Commission the compliance results and all relevant supporting

documentation and the Tax Commission shall take such information and

issue proposed assessments or conduct other such administrative

action as is necessary.

3. There is hereby created in the State Treasury a revolving

fund for the Oklahoma Tax Commission to be known as the "Tax

Commission Compliance Fund". The fund shall be a continuing fund,

not subject to fiscal year limitations, and notwithstanding any

other provisions of law, shall consist of the first three-fourths of

one percent (3/4 of 1%) of enhanced collections of state sales and

use taxes collected pursuant to an agreement entered into pursuant

to paragraph 1 of this subsection. All monies accruing to the

credit of the fund are hereby appropriated and may be budgeted and

expended by the Oklahoma Tax Commission for the purpose of

reimbursing a municipality for enhanced collections of state sales

taxes pursuant to an agreement entered into pursuant to paragraph 1

of this subsection. Expenditures from the fund shall be made upon

warrants issued by the State Treasurer against claims filed as

prescribed by law with the Director of the Office of Management and

Enterprise Services for approval and payment.

4. The Director of the Office of Management and Enterprise

Services shall form an Implementation Working Group composed of

representatives of municipalities and of the Tax Commission and

shall adopt a plan to implement this subsection by September 30,

2011. The plan shall ensure that the Tax Commission shall maintain

a central point of collection and centralized administration and

enforcement and further shall be consistent with all applicable

state laws.

F. Any sum or sums collected or required to be collected

pursuant to a municipal sales tax levy shall be deemed to be held in

trust for the municipality, and, as trustee, the collecting vendor

shall have a fiduciary duty to the municipality in regards to such

sums and shall be subject to the trust laws of this state.