Besides choosing their elected officials this November, Oklahoma voters will have to make an important decision on State Question 766, deciding whether or not intangible property will receive a tax exemption. A quick hint, if SQ 766 passes it could fuel further job growth and innovation in the state. If the ballot measure fails it could cost Oklahoma businesses precious resources in a stagnant economy and lead to new rounds of layoffs.
Until a 2009 State Supreme Court ruling, some Oklahoma businesses were “centrally assessed” by the State Board of Equalization while others were “locally assessed” by county assessors. Those that received local tax assessments were generally exempt from paying taxes on intangible property, while “centrally assessed” businesses had to pay taxes on intangible property. Now small and large businesses alike would be forced to pay property taxes on the value of their customer lists, contracts, philanthropy and goodwill, patents, and trademarks. They'd even pay property taxes on advertising.
AT&T sued the State of Oklahoma over taxes they paid on intangible property per their assessment from the State Board of Equalization. They lost the case when the Oklahoma Supreme Court ruled that “locally assessed” businesses were not exempt from the tax, effectively extending the tax on intangible property to all Oklahoma businesses. SQ 766, which stems from the Supreme Court ruling, seeks to remedy the new tax regime on intangible property – almost no other states tax intangible property.
The extension of a tax on intangible property to almost all Oklahoma businesses could cost employers hundreds of millions of dollars.
If SQ 766 passes, it would stave off a possible economic disaster for the state. With an uncertain tax regime and assessments on ideas and innovation, businesses would flee the state. Exempting taxes on intangible property is paramount to Oklahoma’s full economic recovery.