Wednesday, September 7, 2011

Dank: Tax Credits Lack Controls, Transparency

From The House Media Division ~ Too many of Oklahoma’s tax credits have no controls and not enough transparency, state Rep. David Dank said today.            
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“One thing we have determined is that almost without exception, many of these tax credits have no caps,” Dank (R-Oklahoma City) said. “There are literally no caps at all on the cumulative amounts that can be used annually on many of these credits. That’s like handing the keys to the car and a credit card to a 16-year-old boy and saying, ‘Have fun son!’ You know he’s thinking that the sky is the limit.”            

Dank opened today’s meeting of the Task Force on State Tax Credits and Economic Incentives by noting his support of the Oklahoma Quality Jobs Program and saying that state lawmakers have more to learn about the Investment/New Jobs Tax Credits.            

“I know that most of us in the Legislature remain totally unfamiliar with the Jobs/Investment Tax Credit,” Dank said. “I am especially interested to learn about what caps, if any, may apply and what levels of accountability are involved, since in 2008 alone this tax credit accounted for close to $50 million.”            
The state’s Investment/New Jobs tax credits are income tax credits for either an investment in depreciable property used in a manufacturing or processing facility or for a net increase in average levels of employment in said facilities. Credits not used can be carried over to subsequent tax years without any restriction on the number of years.            

The Oklahoma Quality Jobs Program provides incentives to support establishments of basic industries that hold the promise of significant development of the Oklahoma economy. The amount of incentives provided must be directly related to the jobs created as a result of the establishment locating in the state and cannot exceed the estimated direct state benefits that will accrue to the state as a result of its location. To qualify, employers must be engaged in a basic industry, have an annual gross payroll for new direct jobs projected to equal or exceed $2.5 million within three years, and have a number of full-time-equivalent employees subject to the payroll tax and working an annual average of 30 or more hours per week in a new direct jobs located in this state equal or in excess of 80 percent of the total number of new direct jobs.

The program costs the state about $62 million annually.

“Quality Jobs is tied directly to the creation of good new jobs or the saving of existing ones. Those new employees pay taxes and buy homes and help build our economy, and the return to the state is evident,” Dank said. “I think the Quality Jobs concept can serve as an example of what we are working toward with this task force.”

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