The head of a state House committee that’s scrutinizing millions of dollars in business tax credits is questioning the growth in credits used by insurance companies and whether the state should be reimbursing counties and schools for tax revenue lost when property owners take exemptions.
Rep. David Dank, R-Oklahoma City, took particular aim at the home office tax credit, which he said is granted to insurance companies based in the state that employ a certain number of workers. The home office tax credit grew from about $8.5 million in 2006 to almost $17 million in 2012, he said during a meeting of the House Tax Credits and Economic Incentive Oversight Committee.
“We don’t know who these employees are. Do they really work in a home office or do they count agents and other employees?” Dank said. “There is no pre-approval. We basically take their word for it in many respects.”
Frank Stone, assistant commissioner of finance for the Insurance Department, said tax credit applicants must fill out a form that requires documentation for the deductions.
“We do try to verify as much information as we can,” Stone said.
Dank also talked about the use of transferable tax credits, of which the insurance industry is a prime purchaser. They allow eligible businesses to sell them at a discounted rate to another individual or business as a way to raise capital for projects. Dank has questioned whether such a practice is beneficial for the state.
The committee also addressed funding for county governments, schools and libraries.
Owners pay taxes based on the property’s value, but they can receive an exemption for five years if they build a factory on the land. The state reimburses the entities for the lost revenue.
“This year we shelled out $37 million in state reimbursement for property taxes,” Dank said. “These reimbursements actually exceed any actual lost revenue suffered by schools or counties. So we also find ourselves in the business of growing government for no logical reason.”
Dank and Rep. Jeff Hickman, R-Dacoma, discussed whether local entities, instead of the state, could be allowed to decide whether they want to grant such exemptions.
Dank noted that about half the reimbursements for 2012 covered exemptions granted to wind farms. Hickman said after the meeting that a federal tax credit wind farms have claimed expires Dec. 31.
The committee will continue its discussion of tax credits during meetings in October.
Was this article valuable?
Here are more articles you may enjoy.
Supreme Court Makes It Easier to Sue for Job Discrimination 
USAA to Lay Off 220 Employees 
Chubb to Acquire MGA Healthy Paws From Aon 
Why New York’s Attorney General Objects to Trump’s Bond Insurer 
