The days may be numbered for a costly tax incentive largely used by wealthy Oklahomans.
Sen. Dave Rader said Oklahoma’s capital gains income tax deduction isn’t benefiting the state.
"In five years from 2010 to 2014, the deduction brought a positive value to the state of $9 million but yet was a negative to $474 million to the state," Rader said, citing a study done for the Oklahoma Incentive Evaluation Commission.
The incentive allows 100 percent of the profits from the sale of property in the state or stock in an Oklahoma company to be deducted from state income taxes. Besides costing the state $465 million over five years, the deduction isn't widely used.
"Somewhere around 14, 13 percent of people use that. Of the people that use that, 85 percent of the people that benefit from this have an income of $200,000 a year or more," Rader said.
Sen. Josh Brecheen is not ready to kill the deduction.
"On this one, even though the numbers may bear out it's higher income that may leverage it, for the person who's just getting into the business of flipping homes or real estate, it's my understanding they have the same opportunity as anyone else to lessen their tax liability," Brecheen said.
After a subcommittee’s approval on Tuesday, SB1086 goes to the full Senate Appropriations and Budget Committee next.
