Oklahoma Republican Rep. John Pfeiffer held a news conference Tuesday to reiterate his party has no interest in hearing a bill to eliminate the state's capital gains income tax deduction.
Pfeiffer said that was part of the deal for Republicans to vote on a revenue package including cigarette, fuel and gross production tax hikes.
"We would agree to go gross production tax to 5 percent. In exchange, we wouldn’t hear the capital gains tax. The speaker respects the will of the caucus, but as of yet, to my knowledge, we don’t have any Republican members coming and asking us to hear the capital gains bill," Pfeiffer said.
The State Chamber of Oklahoma is also campaigning against the repeal of the capital gains tax deduction. Joining the chamber is the Oklahoma Association of Realtors.
"Removing those exemptions will discourage long-term investments and have a negative impact on our economy. In addition, capital gains taxes can vary dramatically year over year, and it’s not going to be a long-term, stable funding source," said commercial real estate broker Brad Worster in an OAR video.
Groups representing farmers and ranchers, small businesses and mineral rights owners are also lining up against the capital gains bill.
Travis Schnaithman is a farmer in the Garfield County town of Garber. He said those raising cows and calves would be hurt by the incentive’s repeal.
"We go to sell those cattle, they’re going to be susceptible to a 5 percent capital gains tax on those breeding animals, and where profit margins are extremely narrow and tight today, that’s a substantial hit," Schnaithman said.
Pfeiffer says a proposal to keep the deduction just for agriculture would not stand up in court. The incentive cost Oklahoma $465 million between 2010 and 2014, and a review found 85 percent of those claiming the deduction earn more than $200,000 a year.
The unlikelihood of the capital gains repeal being heard isn't stopping House Democrats from trying to bring the bill up for a vote. Rep. Scott Inman tried again Tuesday to bring Senate Bill 1086 to the floor for a vote. His motion was defeated on a party-line vote.
Inman also tried to bring up House Bill 3113, which raises income taxes on high earners, saying the revenue package funding education will eventually have funds diverted to health care and lawmakers still haven’t made up for years of state formula cuts.
"Under House rule 9.2 —" Inman said.
"State your motion," said Rep. Todd Russ, who was presiding over Tuesday's session.
"Thank you, Mr. Speaker. Under House rule 9.210, I have the right to explain, give a brief explanation of my motion to suspend the rules, and I was trying to utilize that privilege under the House rules," Inman said. "So, I was concluding by saying the bill would bring in about $125 million to fund those promises."
That attempt was also defeated on a party-line vote.
Inman also attempted to put a cost of living adjustment for retired state workers to a vote during Tuesday's House session. A few Republicans wanted to vote on that bill, but the motion to suspend House rules so it could be voted on failed.
