Oklahoma House Speaker Kris Steele, R-Shawnee, last week formed the House Tax Credit and Economic Incentive Oversight Committee to investigate the effectiveness of the state's economic tax credits and incentives.
The bipartisan panel will hold hearings through November. It will focus on business efforts and will not scrutinize personal or individual credits and exemptions.
Rep. David Dank, R-Oklahoma City, will head the panel. Dank headed a legislative task force last year that recommended the elimination of transferable tax credits, but the proposal failed to garner support in the recent legislative session. Dank said many of the current tax-exemptions are "special deals for special interests."
The plan to eliminate or reduce tax-exemptions was a key element in a failed effort in the 2012 Legislature to reduce the state's top income tax bracket by up to 50%.
"A primary reason legislators failed to agree on tax cuts for all 3.5 million Oklahomans last session was that they failed to address a widely abused tax credit system that gives hundreds of millions each year to a favored few," Dank said. "Step one to responsibly reducing the income tax is for the Legislature to saddle up and eliminate sweetheart tax giveaways."
Steele said lawmakers need to know which credits are effective, and which are not.
"As fiscal conservatives, our focus remains on keeping the valuable tax credits that grow our economy while reforming or eliminating the rest," Steele said.
A study by the House in 2011 said state tax credits transferred in calendar years 2008 and 2009 totaled $26.8 million. The probe found $16.2 million was transferred to insurance premium tax remitters and $10.6 million to income tax filers.