NORMAN — A state question that sounds innocuous is likely to be one of the most hotly debated state issues in the coming election.
State Question 766, if approved, exempts all intangible personal property from ad valorem taxation.
According to the ballot language, “This measure amends Section 6A of Article 10 of the Oklahoma Constitution.
At present that section exempts some intangible personal property from ad valorem property taxation. This measure would exempt all intangible personal property from ad valorem property taxation.”
A decision by the Court of Tax Review in a 2009 lawsuit, styled Southwestern Bell Telephone Company v. Oklahoma State Board of Equalization, said that only the intangible property set forth in the Oklahoma Constitution is exempt. This left businesses concerned they will be taxed on intangibles in the future.
Voting yes on SQ 766 will allow the exemption of intangible personal property from ad valorem taxes.
What is intangible property?
According to ballot language, Intangible Personal Property which is still currently taxed but would not be taxed if the measure is adopted, includes items such as:
· patents, inventions, formulas, designs, and trade secrets;
· licenses, franchise, and contracts;
· land leases, mineral interests, and insurance policies;
· custom computer software; and
· trademarks, trade names and brand names.
Chamber of Commerce President John Woods said intangible property subject to taxation could include software, client lists, logos, professional licenses and marketing materials. That makes assessment very subjective.
“How do you quantify the value of an item of this nature?” Woods said. “That can vary widely from county to county.”
Cleveland County Assessor David Tinsley said county assessors have a different take on the issue.
“If we have intangibles, that’s because they (the businesses) give it to us,” Tinsley said. “We don’t value intangibles unless the business turns it in. Oklahoma is a self-reporting state. We ask for furniture, fixtures, equipment and inventory.”