Taking aim at tax credits
McAfee & Taft attorney Cheryl Vinall Denney was quoted in a Journal Record article discussing the recent talk of putting a stop to Oklahoma’s transferable tax credits.
State Rep. David Dank, R-Oklahoma City, said this past Thursday, he was drafting a bill that would eliminate the transferability provisions from all state tax incentives. “I just don’t think that we can do this, where one party can sell a tax credit to other people,” he said to The Journal Record.
Dank’s proposal stems from a meeting of his legislative task force who have been put in charge of examining more than $5 billion in state tax incentives. Reviewing tax incentives for construction of energy-efficient home and a five-year ad valorem incentive for manufacturers were the issues discussed in the force’s second meeting held Tuesday. “If you can’t use a credit, then you should lose it. I just don’t think there’s any room in government for transferable tax credits,” Dank said.
Legal experts said transferability provisions make many tax credits more appealing to investors and business, reported The Journal Record. “The impact of eliminating that type of tax credit is, basically, that type of incentive won’t be as attractive as they have been, unless the company has a tax liability,” said Cheryl Vinall Denney. Denney also stated that tax credits were a good way for government to offer incentives to a business, those credits should be transparent, have a recapture provision and some types of accountability component such as job creation.
“The question that needs to be asked is this,” Denney said. “Is this something the government should be doing at all? If the answer is yes, then the incentive should be structured so you get the best incentive for the business and, at the same time, protect the state’s interest.”
The task force will meet again August 24.