Sales Tax Study Shows $60 Million Potential For Tulsa

The Tulsa City Council is looking at ways to broaden Tulsa's tax base by studying ways to impose sales tax on services as well as goods. Outgoing Mayor Dewey Bartlett initiated a study with the goal of improving Tulsa's finances and made one more pitch for the change in sales tax.

Councilors discussed possible new taxes on services that are currently untaxed - anything from haircuts to house cleaning. A study shows it's a way to bring in about $60 million a year for city services at a time when the city is constantly cutting.

Legislators must enact tax reform at the state level.

It was the last city council meeting for the outgoing mayor who lost the election to G.T. Bynum in June. Bynum will be sworn into office next Monday. Councilor Jack Henderson also lost his bid for re-election, so it was his final meeting as well.

Read The Study 

Bartlett is leaving the new administration with research that shows one way to prop up the city's budget is to charge sales tax on things that aren't taxed now.

Tulsa gets sales tax when things are sold but this study shows if Tulsa was able to collect sales tax on services, everything from hair cuts to carpet cleaning, it would bring in about $65 million a year.

When home security installers work in Oklahoma, their bill for service does not include sales tax.

But many other states do tax services - not just products - and it helps pay the cost of government.

"It would bring in an extra $60 million for the City of Tulsa alone," Bartlett said. 

Bartlett told city councilors broadening the group of businesses that pay sales tax, would not just bring in more money, it would stabilize the sales tax roller coaster.

The tax imagined in the study would apply to services: locksmiths, travel agencies, cell phone carriers and private investigators.

It would not apply to architects, payroll services, photographers or accountants.

But the tax could be applied wherever lawmakers wanted.

Tulsa city councilors passed a plan that could lead to private development of city-owned property in the Pearl District.

Councilors discussed and passed forward a plan to declare the former Laura Dester Shelter as surplus property. The city owns the property now but plans to transfer the property to the Tulsa Development Authority.  

The TDA can market the property, with restrictions, for private development. The former shelter is located near 6th and Peoria.

The Council also discussed some people thinking their water bills were increasing when in fact it probably reflected increased summer usage. The last increase took place July 1, 2016.

"We don't prescribe any policy per se, we just asked if were to do that, what would be the impact, how do we answer that question?" said researcher Dr. Ali Nejadmalayeri.

The answer came by looking at surrounding states that do tax services.

The legislature looked at the idea last year but ultimately rejected it.

"I can tell you last year our look at this was by far the deepest look and the most broadly accepted I've seen in my previous years," said Rep. Glen Mulready, (R) Tulsa. 

For Bartlett, long opposed to new taxes, it's a final effort to shore up city finances long term.

"Most of the voters understand very well that cities are beginning to feel serious pinching in their ability to provides services because of the lack of funds," Bartlett said. 

Only the legislature can approve expanding the sales tax.

The Oklahoma Municipal league plans to push them to do that.