Newspaper article THE JOURNAL RECORD

Bill Providing Sales Tax Refunds to Firms on Way to Governor

Newspaper article THE JOURNAL RECORD

Bill Providing Sales Tax Refunds to Firms on Way to Governor

Article excerpt

sales tax refunds on tangible personal property to firms investing at least $5 million in new or expanding manufacturing facilities and employing at least 100 new workers is now on its way to Gov. Henry Bellmon.

The Oklahoma House of Representatives and Senate both approved a conference committee report Wednesday on House Bill 1637, which was authored by Rep. Don McCorkell, D-Tulsa.

The bill was originated through the state's efforts to attract Dallas-based Kimberly-Clark Co. into establishing a $150 million tissue manufacturing plant in Oklahoma and employing 250 people.

Kimberly-Clark agreed to install the plant in Jenks with the understanding the measure would become law.

Originally, the bill provided sales tax credits for materials and property purchased for new or expanding facilities which costs $5 million or more and employ at least 100 workers. However, the bill was amended in conference committee to provide sales tax refunds instead of credits.

The amendment was the result of concerns voiced by the Oklahoma Tax Commission, said McCorkell.

Specifically, the tax commission feared sub-contractors building a manufacturing facility would apply for the credits for unqualified projects, he said.

"The tax commission was concerned a subcontractor would purchase $100,000 worth of lumber and apply for the credit but only use $50,000 worth of the lumber on the qualified project," said McCorkell. "They (the tax commissioners) felt it would be difficult to keep track of the exemptions."

Under the new procedure set forth in the conference committee report of the bill, the manufacturer would pay for its building materials and then submit a proof of claim to the tax commission for a refund of state and local sales taxes on the merchandise. …

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