All Oklahoma state tax credits and exemptions would be reviewed to determine if their benefits outweigh the costs under a bill proposed last week by Rep. David Dank, R-Oklahoma City.
Elimination of ineffective tax credits that cut revenue is key to lowering the state income tax rate, Dank said, adding that a lower income tax is a more effective tool for economic development than tax credits.
“It is very clear that any effort to reduce state income taxes for all Oklahomans has run aground on the tax credit issue,” Dank said. “We cannot give real tax relief to all while we continue to pass out hundreds of millions of dollars in questionable tax credits to a favored few.”
Current credits would sunset at the beginning of fiscal 2015 if HB 1369 becomes law, and would then have to be renewed, amended, or eliminated by lawmakers, according to Dank.
New tax-credit bills would include a limit on the revenue that is deferred, as well as a termination date. The proposed tax-credit sunset bill would end transferable credits, he said, and require that new credits provide permanent jobs.
“Any tax credit, now or in the future, would have to return real dollars to the state,” Dank added.