Oklahoma House Bill Aims to Eliminate 6% Retail Markup Requirement

A proposed amendment to the Oklahoma Unfair Sales Act could reshape the way retailers price goods in the state. House Bill 1024, introduced by Rep. Steve Bashore, seeks to remove the long-standing 6% markup mandated by the state on retail products.

The bill changes the definition of “cost to the retailer” by eliminating the automatic 6% markup. Currently, this markup is added to the cost of goods, including items like groceries, over-the-counter medications, diapers, and baby formula, to account for a retailer’s operational costs. Under the proposed amendment, retailers would no longer be required to include this markup, giving them more flexibility in pricing their products.

Rep. Steve Bashore, the bill’s author, argues that this change is necessary to create a fairer market environment. “Oklahoma is one of only a few that still has a law mandating a markup on retail products such as groceries, OTC meds, diapers, baby formula and everyday items,” Bashore said. “The current government mandated markup is 6% and in my opinion is a hidden tax on Oklahoma residents.”

The proposed change has sparked debate, with concerns from some retailers, particularly smaller businesses, who argue that removing the markup could negatively affect their ability to compete. However, Bashore believes the amendment would give retailers more discretion in pricing, potentially allowing them to offer more competitive rates.

“This government mandated markup violates the free market, dictates pricing and places brick and mortar retailers at a disadvantage competing against online retailers, especially those located in other states and countries,” Bashore emphasized.

Bashore’s comments reflect a broader concern about the long-term viability of local businesses under the current law. He pointed out that the law has been in effect for more than 70 years without significant updates to address the realities of modern commerce.

“I can’t explain to a senior why they must pay 6% more for their OTC meds or a single mother why she has to pay 6% more for her child’s diapers just because they live in Oklahoma,” he said. “If I ran the bill today that mandated retailers must increase their products 6% over cost, would it pass? The answer is absolutely not!”

The bill’s opponents, including some petroleum marketers, grocers, and convenience store owners, are quietly voicing concerns about how this change could impact their businesses in the long term. Despite this, Bashore remains firm in his belief that the law needs to be updated.

“Big box stores are already cheaper than smaller stores,” Bashore continued. “Their buying power is and always will be greater, however, big box stores are not and will not be allowed to lower prices to eliminate competition if this bill passes due to current law that bans predatory pricing.”

With the potential to significantly alter the retail landscape in Oklahoma, House Bill 1024 is slated for a hearing today. If passed, the bill would go into effect on November 1, 2025, giving businesses time to adjust to the new definitions and prepare for the changes.

This reform seeks to shift the market dynamics and eliminate what Bashore considers a vestige of an outdated policy, designed to regulate pricing in an era when the market was vastly different. Whether this change will result in lower prices for Oklahoma residents or increase challenges for local retailers remains to be seen.