{"id":10550,"date":"2012-10-11T16:05:36","date_gmt":"2012-10-11T21:05:36","guid":{"rendered":"http:\/\/stateimpact.npr.org\/oklahoma\/?p=10550"},"modified":"2012-12-20T09:57:05","modified_gmt":"2012-12-20T15:57:05","slug":"will-public-schools-suffer-if-oklahomans-vote-to-stop-taxing-ideas","status":"publish","type":"post","link":"https:\/\/stateimpact.npr.org\/oklahoma\/2012\/10\/11\/will-public-schools-suffer-if-oklahomans-vote-to-stop-taxing-ideas\/","title":{"rendered":"State Question 766: Will Public Schools Suffer if Oklahomans Vote to Stop ‘Taxing Ideas?’"},"content":{"rendered":"
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Logan Layden \/ StateImpact Oklahoma<\/p>\n

Oklahoma County Assessor Leonard Sullivan isn't sure how much Sonic's logo is worth, even though he'd be making that determination if the reach of the intangible property tax is expanded.<\/p>\n<\/div>

Oklahoma lawmakers are\u00a0scrambling\u00a0to fix the state’s tax code after a court decision created business uncertainty.\u00a0<\/span><\/p>

The outcome of a\u00a02009 ruling from the state Supreme Court could mean that Oklahoma businesses face a tax on all of their intangible personal property.<\/span><\/p>

This could mean taxes on business licenses, trade secrets and company logos \u2014 things with value beyond their tangible physical traits.<\/span><\/p>

On November 6, Oklahoma voters will decide on a potential expansion of the state\u2019s intangible property tax. A yes vote on SQ 766 would amend the state constitution and eliminate the tax all together.<\/span><\/p>

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Supreme Court Sets the Stage<\/span><\/h3>

The state Supreme Court issued the decision that set this issue off in September 2009. Southwestern Bell sued the state, saying it should have been exempt from taxes on customer lists, databases, licensed software and trademarks, among other intangible property.<\/span><\/p>

[module align=”left” width=”half” type=”pull-quote”]<\/p>

“I don\u2019t have the expertise to tell you how much Sonic\u2019s name is worth, and I don\u2019t know anyone who has that knowledge.”<\/p>\n

\u2014Oklahoma County Assessor Leonard Sullivan<\/h6>

[\/module]<\/p>

Not only that, it ruled all <\/em>intangible property should be taxed and only the handful of items outlined in the state constitution should be exempt. Before the decision, only centrally assessed companies like utilities and airlines were liable for the tax. The court would have it apply to all businesses.<\/span><\/p>

Oklahoma County Assessor Leonard Sullivan is one of the many people who think taxing all <\/em>intangible property is a bad idea.<\/span><\/p>

\u201cFirst thing, I don\u2019t have the expertise to tell you how much Sonic\u2019s name is worth, and I don\u2019t know anyone who has that knowledge,\u201d Sullivan says. \u201cI think I have as much expertise as any assessor in the United States, and I wouldn\u2019t know how to put a value on Sonic\u2019s name and logo. So, it\u2019d been total chaos to begin with\u201d<\/span><\/p>

Sonic\u2019s Vice President of Tax, Charles Woods, says he doesn\u2019t know how much his company\u2019s identity is worth either.<\/span><\/p>

\u201cWell, that\u2019s a question that the counties would have to deal with. I think that illustrates the problem,\u201d Woods says.<\/span><\/p>\n

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Logan Layden \/ StateImpact Oklahoma<\/p>\n

Norman Public Schools Superintendent Joseph Siano says he doesn't see the urgent need for the passage of SQ 766.<\/p>\n<\/div>\n

Who Benefits, Who Pays?<\/span><\/h3>

The State Chamber of Commerce is pushing for the passage<\/a> of State Question 766. Chief Operating Officer Chad Warmington calls a tax on intangible property a “tax on ideas,” and says the failure of SQ 766 would cause confusion.<\/span><\/p>

\u201cIf I\u2019m in one county and being levied an intangible tax, why am I not levied it the same way in another county, or why is it not levied at all,” he says. “And it just becomes \u2014 77 different taxing jurisdictions \u2014 which becomes a big problem for business.\u201d<\/span><\/p>

The solution is simple,\u00a0Warmington says.<\/span><\/p>

\u201cWe just need to eliminate it altogether. Exempt it all in the constitution \u2014 because there are some specific things that are already exempt in the constitution,” he says. “This just says any intangibles are exempt.”<\/span><\/p>

That is a direct message. But Warmington\u2019s answer highlights the main problem with State Question 766: It exempts all <\/em>intangible property.\u00a0Centrally assessed companies currently are<\/em> paying taxes on intangible property. If 766 passes and those companies don\u2019t have to pay that tax, education\u00a0officials\u00a0say it could cost Oklahoma\u2019s schools about $30 million a year.<\/span><\/p>

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