One of southeast Oklahoma's largest landowners has accumulated more than $54 million in state income tax credits, even though the company has closed or sold all but one of its manufacturing plants.
Weyerhaeuser Co. leads the list of income tax credit qualifiers since 2007, according to a tally kept by the Oklahoma Tax Commission and published on the state's Open Books website.
Also making the list are several executives affiliated with Nebraska-based Tenaska Inc., whose subsidiary owns a power plant near Kiowa. Together, those executives qualified for more than $23 million in state income tax credits.
The tax credits have piled up because the Oklahoma Investment/New Jobs tax credit allows businesses or individuals to take up to 20 years to claim the credits. The incentive allows tax credits of 1 to 2 percent of the cost of a new manufacturing plant or expansion.
The long timeline gives new companies time to get established and build profits, said Treasurer Scott Meacham.
But it also can cause problems for state budget forecasters, who likely face another revenue shortfall next year and no federal stimulus funds to close the budget gap.
"From a state budgetary standpoint, we don't want those multiyear incentives," Meacham said. "We would rather them hit currently so we have more predictability of our revenue stream."
The Oklahoma Tax Commission publishes two reports on tax credits: a tax expenditure report that lists the amount of credits, rebates or deductions claimed by taxpayers; and a list on the state's Open Books website of who has qualified for tax credits.
The tax expenditure report shows companies and individuals claimed $28.5 million under the Investment/New Jobs tax credit in fiscal year 2010. However, the Open Books site shows $121 million was available to be claimed under that tax credit.
The two reports are not comparable, said Paula Ross, spokeswoman for the Tax Commission. That's because the Open Books site lists the amount that could be claimed under a type of tax credit.
If it's actually claimed depends on whether the taxpayer has a tax liability large enough to use the credit, Ross said.
Weyerhaeuser spokesman Greg French said that's how the timber company ended up with such a large tax credit of $54 million. The company began operating in Oklahoma in 1969.
"The amount reflected is the total amount available to us as a result of previous investments in the state over a period of several decades," French said. "That's a running total of the credits still available to the company."
Weyerhaeuser sold a Valiant container board mill in 2008 and closed its Wright City sawmill last year.
The company still operates a softwood lumber sawmill in Idabel and timberland offices in Broken Bow. It has 162 employees and owns or leases nearly 500,000 acres of timberland in Oklahoma.
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New jobs credit tumble
The Oklahoma Investment/New Jobs tax credit allows individuals or businesses income tax credits of between 1 and 2 percent of the cost of new manufacturing plants or plant expansions. Here's how much has been claimed in recent fiscal years:
2006: $40.2 million 2008: $118.7 million 2010: $28.5 million Source: Oklahoma Tax Commission biannual Tax Expenditure Reports