But the legal decision handed down in the Southwestern Bell lawsuit left businesses vulnerable to the assessment of intangibles.
“The court was very specific in its requirement that all intangible property not currently exempted should be taxed,” the Chamber’s Woods said. One assessor’s opinion, unfortunately, is not enough guarantee to prevent a massive tax burden to be imposed on local businesses.”
Current intangible exemptions
Not all intangibles are taxed. Currently, the Oklahoma Constitution exempts certain intangible properties from ad valorem such as cash and cash on hand, money on deposit, accounts and bills receivable, bonds, promissory notes, stock, property held in trust, annuities and annuity contracts.
The outcome of this vote will not change those exemptions already in effect.
Proponents for a ‘yes’ vote
The business community, in particular large public service providers, support a “yes” vote.
Woods said a levy on intangible personal property creates a tax on business assets that are difficult to measure such as marketing materials, client lists, and software.
“The state question, if passed, would prevent the taxation of intangible property of businesses,” Woods said.
Woods said taxing intangibles can be a problem for businesses with multiple locations since there’s no set way for various assessors to measure intangibles.
“If the state question fails, it would result in one of the largest tax increases on businesses in state history,” Woods said. “There is already a growing coalition of businesses that support this exemption.”
Woods believes passage of the bill is critical for Oklahoma businesses.
“Ultimately if SQ 766 fails, Oklahoma businesses will be crippled with a subjective and mounting tax burden crippling job creation, investment and innovation.”
Proponents for a ‘no’ vote
Public schools and other recipients of ad valorem taxes oppose this state question.
“State Question 766 alone would have about a $600,000 impact on schools and it’s about a $33 million impact to public schools in general,” Norman School Superintendent Joe Siano said. “You can take each one of these tax reductions independently and say, ‘that’s not going to hurt very much,’ but when you take them together and couple it with the fact that schools are being funded at less than 2008 levels, I think you’re facing a critical problem.”