Judicial imposition of 'intangible personal property' tax worries businesses
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Published: 11-May-2010

By Patrick B. McGuigan

Published: 11-May-2010

While this year’s legislative session at the Capitol in Oklahoma City has been focused on the state’s second year of revenue challenges, a potentially devastating tax increase on business has been quietly analyzed. Action to avoid a crippling new levy on Oklahoma businesses seems likely, in the wake of comments from the state’s association for commerce and industry, and a hint from state Senate President Pro Tem Glenn Coffee.

The State Chamber, in a recent email blast to members, said, “An Oklahoma State Supreme Court Ruling last fall could bring a big tax increase to Oklahoma businesses. In September, the court ruled that locally-assessed businesses should pay property taxes on their intangible personal property – items such as customer lists, signage, patents, trademarks, licenses, software, contracts, etc. The court said the only exemptions are those specifically listed in Section 6A, Article 10 of the state’s constitution.”

The Chamber communication continued, “Locally-assessed businesses do not now pay, and have never paid, taxes on their intangible personal property. The State Chamber and others have been working all session to develop a solution to this dilemma. A proposal for the legislature to consider may be forthcoming soon.”

At his Thursday, April 29 briefing for Capitol reporters, Senate President Pro Tem Glenn Coffee revealed a significant issue for this session’s closing days will be an effort to grapple with the controversial judicial ruling subjecting business “intangible property” to state taxation.

He told reporters, “This is a significant issue for all businesses. I believe we will have a short-term fix for this year, but for the future we need a comprehensive look. That is absolutely needed.”

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