CapitolBeatOK Staff Report

Published: 08-Mar-2010

Joe Dorman, a Democrat from Rush Springs serving in the state House, had promised for many months to find a way to honor tax credits owed by the state to citizens who bought Low-Speed Vehicles that use alternative energy sources.

Dorman is offering his solution in the form of two amendments to related bills. They would effectively reverse last year’s Oklahoma Tax Commission ruling that left many electric vehicle purchases excluded from the tax credit. Many of these vehicles have been certified as roadworthy by the state, but have since been determined to not qualify for the tax credit offered under Oklahoma Statute for Low-Speed Vehicles powered by electricity.

“Many CPAs in Oklahoma encouraged citizens to purchase these vehicles to take advantage of a recent federal tax credit and combine it with the credit which has been in Oklahoma law since the mid-1990’s,” Dorman explained in a release sent to CapitolBeatOK. “After the Tax Commission ruled many of these vehicles would not qualify for the state tax, I received many calls and emails requesting this revision.”

Dorman had promised he would address this subject, but would not file a new bill: “In our current legislative system, if you file a bill, the fate of that legislation is often left up to a committee chairman or a few members. This subject deserves the attention of the entire Legislature and the best way to get something through the system is to file an amendment to a bill on the floor where the entire body gets to make an ‘up or down’ vote on the subject when on the floor of the House or Senate.”

He reviewed several bills, and says he found the best fit with House Bill 2641, filed by Rep.
Steve Martin, a Bartlesville Republican, which would lower any future credit to equal the credit offered by the federal government on any tangible goods, and House Bill 3024, authored by Speaker Chris Benge, which establishes a $500 credit for Low-Speed Vehicles and extends the original credit to Medium-Speed Vehicles. These two bills are intended to keep Oklahoma tax credits from exceeding more than would be honored by the federal government in a credit to taxpayers in different ways.

“I do not like the idea of automatically reducing a commitment on the books without a vote of the Legislature,” said Dorman. “Many do long-range planning for purchases based upon some credits, but if we can get my amendment in place on one of these bills and address the current problem, I will have to support the legislation as it fixes the current problem with LSV’s.”

Dorman’s amendment would change the definition for an eligible vehicle to any vehicle considered road-worthy by the Department of Public Safety. This would negate the effect of the OTC ruling. A second provision allows the state to honor any credit on such vehicle purchases back to 2008, but the credit will not be paid until General Revenue Fund grows by at least 3 percent. House Fiscal Staff estimates the total cost of honoring the LSV credit could exceed $39 million.

“This should address all the concerns brought forth with taking the authority of determining qualifying vehicles away from the Oklahoma Tax Commission and delaying payment on the credits until revenues increase, therefore not depriving funding to education, seniors, public safety and any other state entity,” said Dorman.

Dorman attached the amendments on the final day possible. Both bills are on the calendar for consideration by the House of Representatives this week, the final week for consideration of House Bills in the House.

“I believe the State of Oklahoma has an obligation to keep its word to our citizens, and my amendment would accomplish that without harming services in a period of a budget crisis,” said Rep. Dorman.