Senate to Consider Tax Break for Venture Capital Investments
Paschal, Jan, THE JOURNAL RECORD
The 20 percent tax credit - offered to individual and corporate investors alike - is the centerpiece of Henry's House Bill 1442.
The final vote on the bill is expected today in the Oklahoma Senate.
"This is a neat little trick of mathematics here," said Henry, D-Shawnee.
He inked in this equation on the bottom of his copy of the bill:
"The corporate income tax just went up to 5 percent. Well, 20 percent of that is 1 percent. So a company that qualified, by its investments in venture capital or research projects, could cut its tax rate back to 4 percent," Henry said.
"That's the formula that Doug Fox came up with to help us sell the 20 percent tax credit," Henry said Thursday.
Fox is chairman of the board of Tribune-Swab Fox Co., owner of The Tulsa Tribune.
Most corporations will have a gain and won't be able to use that formula, Henry said.
Henry gave Fox and Noel Kirsch the credit for working tirelessly to provide the tax-law expertise needed to write the bill.
Kirsch is the Peat, Marwick & Mitchell Co. economist who predicted two months ago that the proposed tax break would generate at least $20 million in venture capital for Oklahoma.
Fox began preaching the gospel of venture capital in the statehouse halls this year long before others decided to sing along.
"Most people don't understand how venture capital works. I felt there was a need to do some missionary work," said Fox, who has 23 years of experience as a tax lawyer.
So Fox became a familiar face in the offices of House and Senate leaders this session.
"This is the single most important piece of legislation in the Legislature right now, in my view," Fox told The Journal Record in a telephone interview Thursday.
"It gives us the chance of getting a venture capital industry going in Oklahoma," Fox said.
The bill breezed through the state House of Representatives late Wednesday on a vote of 93-0.
Senate approval is anticipated today.
However, the vote might not come until late in a marathon final session that could last until midnight or early Saturday morning. …