Oklahoma budget agreement doesn't address court ruling on capital-gains tax deduction

Legislative budget leaders say it's too speculative to set aside funds to deal with a possible adverse ruling that a capital-gains tax deduction for Oklahoma-based companies is unconstitutional.
BY MICHAEL MCNUTT mmcnutt@opubco.com Published: May 6, 2013

The appellate court ruled the Oklahoma capital gains deduction, which took effect Jan. 1, 2006, violates the commerce clause of the U.S. Constitution.

The court, in a 3-0 ruling, reversed an opinion by the Oklahoma Tax Commission, which denied an appeal from a California company stating it also should have received the deduction. The commission filed a petition for a rehearing March 6.

Capital gains include money from the sale of real estate, stocks or personal property.

Oklahoma companies may claim the capital gain deduction if they own the assets being sold at least three years before the transaction.

Out-of-state companies have to own the property for at least five years to claim the deduction, according to the law.

The appellate court found that the Oklahoma capital gains deduction discriminates against out-of-state companies because it affords Oklahoma companies different treatment for similar taxable events.

Rep. Scott Martin, R-Norman, chairman of the House Appropriations and Budget Committee, said no lawsuit has been filed seeking payment.

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