The Oklahoma Senate sent the House a measure Thursday that will end the state’s capital gains income tax deduction.
The incentive allows corporations and individuals to deduct from their taxes the full profit on sales of property in Oklahoma or a stake in an Oklahoma company. The state’s incentive evaluation commission determined the credit was used mostly by taxpayers making more than $1 million a year and cost the state $465 million over five years.
"And if we want to do tax reform that we say that we want to do, this is an incredible obstacle to overcome when we want to do tax reform," said Sen. Dave Rader.
Passing Senate Bill 1086 and ending the incentive would bring in an estimated $120.5 million. Sen. James Leewright said that must be balanced with the incentive’s potential to attract business investment.
"Peel it like an onion and look at the intrinsic value that is here versus the extrinsic value. Yes, when you hear the numbers, there is a value in an intrinsic part, but the extrinsic value will be detrimental to this state," Leewright said.
In rebuttal, Rader noted what’s happened in Tulsa with the incentive in place.
"It did nothing to keep Apache from moving. It did nothing to keep Newfield Exploration from moving. It did nothing to keep Hilti from moving. And some say that it may have even helped the sale of Dollar-Thrifty," Rader said.
SB1086 passed 30–10.
