TULSA — Oklahoma could lose as much as $450 million if a court ruling about a capital gains tax deduction stands, according to the state Tax Commission.
The Tax Commission this week asked the Oklahoma Supreme Court to overturn a lower court ruling or prevent the ruling from being applied retroactively, The Tulsa World reported Saturday.
In January, the Court of Civil Appeals said a state law was unconstitutional. That law treats capital gains tax deductions of Oklahoma-based companies differently from those of out-of-state companies.
The appeals court reheard the issue at the Tax Commission’s request. That court upheld its initial ruling in a substitute opinion last month, but limited it to the company that brought the suit.
In a court filing this week, the Tax Commission said that substitute opinion still leaves the state at risk of huge losses because other companies could seek to amend their tax returns for the past three years.
“The outcome of this case is important to the state of Oklahoma because it has a potentially large and adverse fiscal impact, and could generate as much as $450 million in claims for refunds for income tax paid, due to the erroneous interpretation of the statute by the Oklahoma Court of Civil Appeals,” the Tax Commission said in part of its recent court filing, according to the World.