When Oklahomans fill out their state tax forms, most receive some form of break on what’s owed, whether it’s credits, deductions or exemptions on income, sales, excise, franchise or gross production taxes.
So just how many tax and fee breaks does Oklahoma have on the books?
StateImpact Oklahoma has been asking for a few months now.
What we found out: No one really knows for sure.
State Sen. Tom Adelson, D-Tulsa, is a fixture at meetings of the Task Force for the Study of State Tax Credits and Economic Incentives and a member of the finance committee. Even he isn’t sure.
“The Tax Commission isn’t even able to track all of them,” Adelson said. “And I might refer you to Representative Dank, because he’s had his House staff look at it.”
Rep. David Dank, R-Oklahoma City, chairs the legislative task force and has railed against what he calls wasteful credits for years. Surely he’ll know.
“You’re talking about two different things,” Dank said. “One is you’re talking about tax credits, then you’re talking about tax incentives, and then, quite frankly, three or four different things. And you’re talking about deductions from the tax code. You’re talking about exemptions to the income tax. So there are a lot of areas.”
So, there are “a lot” of tax breaks on Oklahoma’s books. That’s a given. Maybe state Tax Commission Administrator Tony Mastin has the answer.
“We have a tax expenditure report,” Mastin said. “It’s on our website.”
(To download the 2009-2010 Oklahoma Tax Expenditure Report, click here.)
The biannual tax expenditure report. It’s an almost complete list of every tax and fee break. There may be a few that slip through the cracks, but it’s the commission’s best effort to account for them all. And the total stands at about 467. They range from the popular and well known, like the income tax standard deduction, to the more obscure.
“The Tax Commission isn’t even able to track all of them.”
-Sen. Tom Adelson, D-Tulsa
For example, there are sales tax exemptions for property sold to organizations promoting second amendment rights, for the sale of paper napkins and cups to food venders, and for railroad track spikes manufactured and used in Oklahoma.
Those not having to pay vehicle registration fees include religious societies and owners of classic cars used in exhibitions. There are income tax credits for the removal of dry fire hydrants, for breeders of specially trained dogs, and even for the purchase of chicken manure.
A farm hand fires up a tractor to begin planting spinach at Conrad Farms just outside of Gore in eastern Oklahoma. Taxpayers helped fertilize this soil in the form of a $5 tax credit for each ton of poultry litter purchased. It’s supposed to be an incentive is to move the chicken waste out of the Illinois River Watershed.
Steve Conrad owns the 2,100 acre farm and was shocked to hear how much he benefited from the credit. In 2009, Conrad got more than $37,000 in poultry litter credits.
“I could never really figure out for sure how many dollars I was actually saving,” Conrad said. “Like I say, it’s in the form of a credit. I don’t know where exactly it fits into your return. I’m really not – I’m sure it’s not on the bottom line. I’d have to call my accountant.”
He called his accountant and confirmed receiving about 7,500 tons.
Despite the thousands of dollars that helped out Conrad Farms and dozens of others over the past few years, this credit represents a very small portion of Oklahoma’s yearly tax expenditure, which is estimated to be as high as $5 billion. Though the Tax Commission says that number is too high and it’s impossible to get an exact figure.