theadanews.com - Ada, Oklahoma

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July 24, 2013

Shopping locally helps our community

Ada —

The Oklahoma Tax Commission website has a handy sales tax calculator that informs shoppers how much tax should be collected at every address across the state.  For example, when I entered an Ada street address, the calculator informed me I should pay 9.375 cents in sales tax for every dollar I spend. This is broken down into three categories.  The state collects 4.5 cents of the total, as it does on every purchase throughout the state.  Pontotoc County collects .875 of a cent. Finally, the city of Ada collects 4 cents.  Adans are quick to say that our city has the highest sales tax in the state but it’s not true. That dubious distinction goes to Fort Gibson with an 11 percent sales tax, according to the Oklahoma Policy Institute.

Consumers in Ada probably noticed the sales tax increased in April from 9.18 percent to 9.375 percent. The increase resulted from last November’s vote to add a quarter-cent sales tax for rural fire departments, as well as Call-A-Ride, the county nutrition center, and emergency management.  

Each state works out a different mix of sales, income, and property tax depending on the level of services the state wishes to provide to its people. Oklahoma is considered to be a “low tax and low service” state, meaning taxes and services are minimal compared to other states. Comparatively Oklahoma has a rather high sales tax (the fifth highest in the nation), but low income and property taxes.  For example, Oklahoma’s income tax tops out at 5.25 percent of income earned.  Income tax reform has been in the news because Governor Fallin would like to join other states such as Texas in completely eliminating the income tax. Her rationale is that eliminating the income tax would spur investment in Oklahoma by encouraging new businesses to locate here. However, this claim has been debated and it must be noted that the lost income to the state would have to be replaced through either property or sales tax.

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