Revenue & Taxation

 

SB 237 (Maddox/Bonny): Changes the due date for filing franchise tax returns from July 1-September 1 to the date the entity's corporate income tax return is due, at the option of the taxpayer. The bill will not require any franchise tax returns to be filed earlier than they would have been due had the bill not been in effect.

SB 296 (Herbert/Bonny): Exempts servicing of advertising devices from sales tax, and clarifies the movie/TV production exemption enacted in 1996 to include documentaries, specials and music videos.

SB 340 (Stipe/Mass): Requires the use value of poultry production facilities to be determined according to a standard system of valuation to be used by all county assessors, under which a 10-year depreciation schedule with a 20% residual value will be used for real property and a 5-year depreciation schedule with a residual value of zero will be used for personal property. Poultry production facilities must be valued only in comparison to other such facilities, and for the first year, the fair cash value will be presumed to be the lesser of the actual purchase price or the actual documented cost of production. Nonresidential improvements for poultry production will not be considered to be commercial property.

SB 344 (Wilkerson/Langmacher): Provides various tax incentives, as follows:

  • Sales tax exemption for property or services sold to nonprofit organizations supported or sponsored by churches if church members serve as trustees of the organization;

  • Sales tax exemption for diesel fuel sold for consumption by commercial vessels, barges or other commercial water craft;

  • Deletion of expiration date for manufacturing investment income tax credit;

    Modification of three factor income tax formula for corporations with an initial investment of at least $200 million, made on or after 7/1/97, so that property and payroll are each weighted at 25% and sales is weighted at 50%;

  • Provision that a manufacturing facility which does not meet the requirement of 15 new jobs may be granted a five-year ad valorem exemption if the investment cost is at least $200 million, made on or after 7/1/97, and the facility retains employment of at least 500 full-time-equivalent employees; and

  • Provision that a taxpayer qualified to receive a five-year ad valorem exemption who overpays ad valorem taxes may receive a credit for the overpayment against current taxes due, for up to 5 years.

 

SB 459 (Helton/Voskuhl): Amends the Oklahoma Charity Games Act, originally enacted in 1992. The bill was drawn up incorporating suggestions made by representatives of various veterans' groups, the Governor's office, the Oklahoma Department of Veterans' Affairs, the ABLE Commission and the Oklahoma Tax Commission.

Major changes made in the bill include the following: (1) lowering of the tax rate on bingo faces from 1.5 cents to 1.0 cents and an extension of the time for organizations to remit taxes; (2) licensing of compensated employees and managers; (3) prohibitions on licenses being issued to persons convicted of felonies or certain misdemeanors; (4) allowing tax-exempt educational organizations to conduct charity games; and (5) allowing organizations to play up to two sessions per day. Effective 90 days after adjournment (emergency clause failed in House); tax rate reduction effective 7/1/98.

HB 1149 (Dunegan/Stipe): Provides that state motor fuel taxes will be increased by any amount by which the federal motor fuel tax is decreased. Any additional revenues will be apportioned to the State Highway Construction and Maintenance Fund.

HB 1253 (Roach/Fisher): Creates the Small Business Capital Formation Incentive Act. The Act provides an income tax credit of 20% of amounts invested in qualified small business capital companies or amounts invested in Oklahoma small business ventures in conjunction with a qualified small business capital company. Oklahoma small business ventures may not be primarily engaged in oil and gas exploration, real estate development, sales or rentals, wholesale or retail sales, farming, ranching, banking or lending or investing. A qualified small business capital company must have capitalization of at least $1 million. Effective 1/1/98.

HB 1295 (Braddock/Kerr): Excludes increases in assessed valuation of personal property within the boundaries of an increment district in computing debt limitations or for other purposes, other than the levy and apportionment of taxes. The base assessed value within an increment district is to include personal, as well as real, property.

HB 1337 (Begley/Weedn): Creates the Task Force on Centrally Assessed Property, to consist of 21 citizen members ,who must be representatives of various interests, (7 each appointed by the Governor, President Pro Tempore and Speaker )and the chairs of the Senate Finance Committee, the House Revenue and Taxation Committee, and the Senate and House Subcommittees on Education, who are ex officio nonvoting members. The Chair of the Citizens' Advisory Task Force on Property Taxation will serve as chair of the Task Force. The Task Force must review the law relating to ad valorem taxation of public service corporations and business personal property and relating to the Court of Tax Review. A report must be issued by 1/31/98.

The bill also requires persons protesting ad valorem taxes to give notice of the protest to the county treasurer by December 31, rather than by the date the taxes are paid. By January 31, the county treasurer must determine the total amount paid under protest and notify the State Auditor and Inspector, who must then compile a report showing the amount of taxes protested by school district. The treasurer must submit a schedule showing the disposition of any released escrowed ad valorem taxes to the State Auditor and Inspector. The bill also modifies procedures upon final determination of an appeal by a railroad, air carrier or public service corporation. Finally, each county treasurer must determine amounts not distributed to school districts due to protests for 1994, 1995 and 1996.

HB 1338 (Begley/Roberts): Makes various changes to ad valorem tax laws, as follows:

  • Requires property of a pipeline or oil or gas gathering system assessed by the State Board of Equalization after 1/1/97 to be so assessed through 1998;

  • Provides for notices of assessed valuation to become final if the taxpayer fails to file a written complaint within 30 days;

  • Modifies time limits for ad valorem tax protests;

  • Requires decisions of the Court of Tax Review to be rendered within 60 days of the scheduling conference and requires written notification to the parties;

  • Deletes the provision that the State Board of Equalization bears the burden of proof in ad valorem tax protests;

  • Requires the Board to notify parties and other interested persons of complaints and allows the Attorney General to appear in ad valorem tax actions;

  • Requires the Court of Civil Appeals to give precedence to appeals of decisions of the Court of Tax Review and provides that final notices of assessed valuation have the same force as a judgment not subject to further appeal;

  • Changes the composition of the Court of Tax Review to a panel of 3 district court judges appointed by the presiding judge of the administrative district to which the case is assigned by the Chief Justice of the Supreme Court; and

  • Allows district attorneys to be assisted by a school district attorney in certain cases.

 

HB 1709 (Blackburn/Henry): Amends the Constitution (Legislature authorized to amend) to state that: (1) homesteads in areas annexed by a municipality on or after 11/1/97 used for both residential and commercial agricultural purposes consist of up to 160 acres; and (2) the homestead exemption limit of $5,000 applies only if more than 25% of the square footage is used for business purposes. Corresponding changes are made in Title 31, and a provision relating to ad valorem tax homestead exemptions is included to the effect that a taxpayer applying for a homestead exemption is not required to appear personally before the county assessor. (NOTE: See HB 1898.)

HB 1758 (Ross/Haney): Includes ethnic festivals, sites and events within the definition of "tourism promotion" for purposes of the tourism tax.

HB 1807 (Langmacher/Wilkerson): Makes various changes to the tax code, as follows:

  • For FY 98, apportions the first $141,500 from motor vehicle revenues to the Tax Commission Reimbursement Fund (to implement the tag agent check verification system authorized in Section 6) and the next $183,500 to the General Revenue Fund;

  • Allows disclosure of motor vehicle information (fee of $1 per vehicle) to wreckers or towing services to provide notice to owners or secured parties of towed or impounded vehicles and to businesses to verify information or obtain correct information. Deletes the provision that the Tax Commission or a motor license agent may furnish vehicle registration information for a fee of $1 per vehicle and that the Tax Commission may provide certified copies of titles, applications for title and registration certificates for $2 per instrument;

  • Requires applications for proportional vehicle registration to include proof of a current Oklahoma driver license issued to the owner-operator, to prevent nonresidents from base-plating their vehicles in Oklahoma;

  • Allows the Tax Commission to issue temporary permits or authorization for vehicles currently proportionally registered;

  • Clarifies that rental and commercial trailers are registered for $40 for the first year and $4 annually thereafter. This is the fee currently being charged for such trailers;

  • Requires motor license agents to use a check verification system and to refuse checks for which there are insufficient funds. Agents failing to use the system will not receive fees for transactions for which checks are subsequently returned;

  • Lowers the penalty for using bad checks for payment of vessel or motor fees and taxes from $50 to $25, making this penalty consistent with those for motor vehicles;

  • Allows the Tax Commission to purchase the check verification system with funds from the Tax Commission Reimbursement Fund;

  • Raises the amount of interest and penalties which may be waived without approval of a district court judge from $1,500 to $5,000;

  • Requires complaints or pleadings in actions affecting the title to property to which the state is a party defendant to include the name and address of the taxpayer and the lien identifying number;

  • Clarifies that a collection agency under contract to the Tax Commission may collect all delinquent taxes, rather than those delinquent for more than 6 months and allows the Tax Commission to enter into a contract to identify nonresidents required to pay Oklahoma taxes who are presently unknown to the Tax Commission;

  • Includes motor fuel distributors licensed prior to 10/1/96, as well as importers, under the provisions for collection of taxes not remitted due to negligence, malfeasance or fraud;

  • Requires tax lien identifying numbers to be included in the notice served on the Tax Commission in estate tax actions in which the state is made a party defendant.

  • Clarifies reference in the franchise tax code;

  • Exempts sales of admission tickets by accredited museums from sales taxes. An amount equivalent to the amount which would have been remitted must be used for debt service for the museum for facilities for which a ticket is required;

  • Beginning 7/1/98, exempts sales to tax-exempt nonprofit biomedical research foundations providing educational programs and to tax-exempt nonprofit community blood banks headquartered in Oklahoma;

  • Deletes obsolete language relating to motor fuel tax exemption permits;

  • Beginning 7/1/98, exempts sales of machinery, materials, electricity, fuels and explosives used in coal mining;

  • Provides that sales tax permits will be issued for an initial probationary period of 6 months, and will automatically be renewed for an additional 30 months unless the Tax Commission refuses to renew them. Holders of a probationary permit will not be permitted to present the permit to obtain a commercial license tag;

  • Limits persons eligible for direct remittance of sales taxes to those who make taxable purchases of $1 million or more annually for use in Oklahoma enterprises;

  • Provides that the motor vehicle excise tax of $10 (for certain commercial vehicles) will not apply to pickup trucks, vans or sport utility vehicles;

  • Requires the Tax Commission to pay interest (6%) on refunds to members of federally recognized Indian tribes or to the federal government on behalf of such members for taxes illegally collected from oil and gas lease bonus payments;

  • Provides that income taxes are due by April 15 (rather than at the time of filing) if an return is filed electronically;

  • Provides that individuals with at least 66 2/3% of their income from farming may pay estimated taxes if qualified pursuant to the previous tax year and raises the threshold requiring payment of estimated taxes from expected tax liability of $100 to expected tax liability of $500;

  • Raises the amount of estimated tax which may be paid in installments from $100 to $500;

  • Deletes the requirement that aircraft with a selling price in excess of $5 million must be manufactured in Oklahoma to be exempt from aircraft excise taxes;

  • Allows the State Purchasing Director to contract with the federal government to acquire property offered for sale and allows the Director to draw a warrant against the requesting agency's funds for such purchases;

  • Requires members of the Citizens' Task Force on Taxation to be appointed by 8/1/97 and requires the Senate and House to provide staffing. The report deadline and termination date are changed from 12/1/98 and 12/31/98 to 9/1/99 and 12/31/99, respectively (NOTE: See HJR 1024.); and

  • Repeals Section 2810 of Title 68, which requires county assessors to issue a certificate when assessing farm tractors.

 

HB 1898 (Dunegan/Mickle): Amends the Constitution (Legislature authorized to amend) to state that: (1) homesteads of single adults (currently just families) outside municipal limits consist of up to 160 acres; (2) homesteads within a municipality used for both residential and agricultural purposes consist of up to 160 acres; (3) homesteads within a municipality used for both residential and business purposes consist of up to one acre; (4) at least 75% of the square footage of a homestead must be used as the principal residence to qualify for the exemption. Corresponding changes are made in Title 31. (NOTE: See HB 1709.) Effective 11/1/97.

HB 1909 (Mass/Stipe): Provides that if a parent or parents are residing and domiciled in a home owned jointly with one or more of their children, the parent or parents are entitled to the entire homestead exemption.

HB 2038 (Smith (Dale)/Wilkerson): Modifies procedures for apportionment of motor fuel tax revenues to counties. Such revenues will now be apportioned based on a formula developed by the Oklahoma Department of Transportation and approved by the DOT County Advisory Board, which will be based on the current formulas but will also take into consideration traffic volume and terrain. Such revenues must be deposited to the county highway fund for the purpose of constructing and maintaining county highways and bridges and may not be diverted to any other purpose, although in some cases revenues may be used for debt retirement or for county commissioners' salaries.

The bill also updates the statutes on the motor fuel importer and special fuels taxes so that the various levies enacted over the years are combined into levies of 16 cents per gallon for gasoline and 13 cents per gallon for diesel fuel. Vendor retention percentages are specified, although these are not essentially changed from current law. Use of the Motor/Diesel Fuel Indemnity Fund is expanded to include motor fuel distributors, as well as motor fuel importers. The County Bridge Improvement Act and the County Road Improvement Act are consolidated, and consulting engineering contracts entered into under either program must be approved by the Department of Transportation. Allowable expenditures under the Act are also specified.

HB 2071 (Steidley/Williams): Conforms the Ad Valorem Tax Code with the constitutional amendments adopted in 1996 relating to assessment ratios, 5% cap on valuation increases on locally assessed real property, and the freeze on valuation for low-income senior citizens. Specific provisions include:

  • Allowing the Tax Commission to furnish income tax information to county assessors for purposes of the additional homestead exemption and the senior citizens' valuation freeze;

  • Deleting references to 100% valuation;

  • Defining terms, including "transfer," which is defined to exclude deeds between persons and revocable express trusts created by such persons or their spouses;

  • Providing that the 5% cap is not to be construed as an automatic annual 5% increase or a 20% increase every four years;

  • Providing that, if a property is improved, the value of the improvement is assessed and then added to the existing (capped) value of the property;

  • Deleting statutory provisions for assessment ratios on airline and railroad property (now specified in the Constitution);

  • Providing procedures for applications for the senior citizens' valuation freeze. Once qualified, an annual application is not required;

  • Modifying provisions relating to tax statement explanations and requiring rules to be adopted by the State Auditor and Inspector rather than the Tax Commission;

  • Allowing county clerks to use rubber stamps, rather than stamp metering machines, for purposes of the documentary stamp tax; and

  • Modifying legislative intent on the school funding formula regarding equalization of assessments.

 HJR 1024 (Askins/Wilkerson): Creates a 30-member Citizens' Task Force on Taxation. The Governor, Pro Tempore and Speaker each appoint ten members. The Task Force is charged to review the state's tax system, review constitutional provisions, laws, rules and procedures on each function within the tax system, review constitutional provisions, laws, rules, procedures and resources allocated to agencies within the tax system, compare the state's system to those of other states, and evaluate alternative sources of revenue. A report must be submitted by 12/1/98, and the Task Force is terminated as of 12/31/98. (NOTE: See HB 1807.)

 

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