House Media Division
Representatives from the Oklahoma Insurance Department told members of a special legislative committee on tax credit reform today that premium tax credits issued in 2011 totaled nearly $56 million, despite the presence of a moratorium this year on many of those tax credits.
“Even with a moratorium in place, the tax credits issued by the Insurance Department this year almost matched the $58 million in credits the Department issued in 2008 without a moratorium in place,” said state Rep. David Dank, chairman of the House Tax Credit and Economic Incentive Oversight Committee, which held its second meeting today.
The Insurance Department also told the committee that the “home office” tax credit for the insurance industry has grown from approximately $8 million in 2006 to more than $17 million in 2011.
Dank said the tax credit has no cap on the amount that can be claimed and that it is perpetual in nature – companies can claim the credit forever. Adding to the frustration, Dank said, is that there are no real guidelines in place to certify whether a company claiming the credit actually has established a “home office” in the region.
“Is a call center for handling claims really a home office?” asked Dank. “Apparently so. There is no pre-approval. We basically take their word for it in many respects.”
The committee also heard from representatives of the Oklahoma Tax Commission on ad valorem, or property tax, rebates.
Dank said the state paid out $37 million in property tax rebates in 2011, which “exceeds any actual lost revenue suffered by schools or counties. So we find ourselves in the business of growing government for no logical reason.”
Dank said more than half of that amount went to cover property tax exemptions granted to windfarms, which may or may not actually employ any workers.
The next meeting of the committee is scheduled for October 10.
