Newspaper article THE JOURNAL RECORD

Legislature Sends Tax Cuts, Credits, Incentives to Business

Newspaper article THE JOURNAL RECORD

Legislature Sends Tax Cuts, Credits, Incentives to Business

Article excerpt

Corporate hog farming and industry deregulation may have been the twin themes of the 1997 legislative session, but sprinkled throughout committee, floor and conference hearings on these issues were several tax cuts, credits and business incentives.

For instance, under Senate Bill 574, the Small Employer Quality Jobs Incentive Act by Sen. Ted Fisher, D-Sapulpa, and Rep. Russ Roach, D-Tulsa, a qualified business would receive incentive payments from the Oklahoma Tax Commission equal to 5 percent multiplied by actual gross payroll of new direct jobs.

The tax commission estimates that the measure could provide about $1.4 million in incentive payments. To qualify, a business would have to: * Be engaged in a basic industry as defined by the Quality Jobs Act. * Have no more than 90 full-time employees and a projected minimum employment of 10 new direct jobs within 12 months of application. * Have at least 75 percent of its total sales to out-of-state customers, to in-state customers or buyers if the product or service is resold by the purchaser to an out-of-state customer for ultimate use, or to the federal government. * Pay at least 80 percent of its employees in new direct jobs an annual wage equaling or exceeding 150 percent of the Oklahoma per capital personal income. * Have a basic health benefit plan for its workers. * Not be receiving or qualify for incentive payments under other business-incentive laws. Applications for the program would be made to the State Department of Commerce. Senate Bill 574 is on the governor's desk awaiting his signature. Already signed into law by Gov. Frank Keating is House Bill 1253, also by Roach and Fisher, who chair the economic development panels in their respective houses. Roughly estimated at a maximum revenue impact of $800,000 based upon a $2-million investment, the Small Business Capital Formation Incentive Act provides for a 20-percent state income tax credit for investments in qualified small business capital companies. The credit may only be claimed in years a company invests in an Oklahoma small business venture. However, if the credit exceeds the amount of taxes due, the excess may be carried forward for up to 10 years. To qualify, a small business capital company would have to be located in Oklahoma, be capitalized at not less than $1 million and have not more than 20 percent of its funds invested in any one company. A similar credit is provided for investments in small business ventures themselves, again 20 percent, with the same 10-year carry- forward provision. For this credit to apply, the business venture must: * Have at least half of its employees or assets located in Oklahoma. * Require financial assistance to commence or expand business that provides goods or services. * Not be primarily engaged in oil and gas exploration; real estate development, sales or rentals; wholesale or retail sales; farming or ranching; banking, or lending or investing funds in other businesses. This would not apply to firms which provide goods or services involving new technology, equipment or techniques to the above industries and businesses. Several tax breaks with relatively minor revenue impacts were outlined in House Bill 1807, by Rep. Ron Langmacher, D-Carnegie, and Sen. Dick Wilkerson, D-Atwood, a tax commission "clean-up" bill, including the following: * A state sales tax exemption for sales of accredited-museum admission tickets. To qualify for the exemption, a museum must collect the amount which would otherwise be assessed as sales tax, and use the funds to service debt incurred in constructing, enlarging or renovating the facility. …

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