Lawmakers Approve Income Tax Cut Despite Threat of Reimbursment Costs
A lawsuit by an out-of-state company that challenges a tax break on capital gains for Oklahoma-based businesses is causing some concern at the state Capitol.
An analysis on the potential costs of a tax reimbursement show Oklahoma could be on the hook for as much as $480 million if the court rules in favor of tax payers.
Republican State Rep. Jeff Hickman raised the issue during questions on a tax cut bill approved by the House last week. But budget negotiators said any repercussions of the capital gains issue should be worked out apart from the state budget.
The Oklahoma Court of Civil Appeals ruled the law that gives an exemption advantage to Oklahoma-based companies is an unconstitutional violation of the Commerce Clause of the U.S. Constitution.
Now the state is looking for the court to clarify whether the ruling applies to previous tax returns by out-of-state individuals and companies.
State officials say that clarification is critical because it could determine if the state must reimburse those who filed amended returns to the tune of up to $480 million.