Judge sends store owners' discrimination cases back to Oklahoma Tax Commission

by Randy Ellis Published: August 25, 2012
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A group of 37 Oklahoma mom-and-pop convenience store owners who claim they were targeted for unfair state sales tax audits because of their race or religion must exhaust their appeals through the Tax Commission's administrative process before they can argue their case in Oklahoma County District Court, a judge ruled Friday.

Millions of dollars in sales tax revenues are at stake.

The Oklahoma City area store owners believe they were targeted for audits because they are Muslims or Vietnamese, said Natalie Mai, one of their attorneys.

The store owners told Oklahoma County District Judge Barbara Swinton in court filings that they object to the method Tax Commission employees have been using to audit them.

The controversial method involves getting sales information from the beer distributors who supply the stores and then using that information to project sales of additional merchandise using average sales data compiled by the National Association of Convenience Stores.

The auditing method is targeted at minorities and “intentionally designed to create sales tax assessments far in excess of actual tax liability,” the store owners alleged.

Beer purchase data

Tax Commission officials deny that minorities were targeted.

They say the bulk of the audits were triggered by a computer program designed to identify likely tax cheats.

The computer picked them out for audit because their reported sales of beer and other merchandise subject to sales tax appeared extraordinarily low when compared to the beer they purchased from distributors for sale at their stores, a Tax Commission attorney said.

Other stores were targeted because they were implicated in investigations involving the sale of unstamped cigarettes, food stamp program abuses or failure to withhold income tax on salaries paid to employees, court records indicate.

A Tax Commission audit supervisor has stated the method has been used when stores had “no records, insufficient records or clearly erroneous records.”

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by Randy Ellis
Capitol Bureau Reporter
For the past 30 years, staff writer Randy Ellis has exposed public corruption and government mismanagement in news articles. Ellis has investigated problems in Oklahoma's higher education institutions and wrote stories that ultimately led to two...
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