The Oklahoma Tax Commission has refuted claims by wind industry representatives that state incentives have expired for the renewable energy source.
The state has already paid out more than $63 million in tax credits connected to wind power in the current fiscal year, according to Tony Mastin, executive director of the tax commission. The state will be refunding credits for at least the next ten years, Mastin said in a letter to Oklahoma Treasurer Ken Miller.
Miller had initiated the analysis trying to verify claims by wind industry representatives.
“The claim that the State is ‘retaining an additional $50 million in revenue’ due to the unavailability of the zero-emission income tax credit for facilities placed in operation after July 1, 2017 is not accurate for the immediate future,” Mastin stated in the letter.
Mastin said it was correct that a bill passed by the Legislature last year repealed the credit for facilities placed in operation on or after July 1, 2017. However, the credits are allowed for ten years after a facility is placed in operation.
“Therefore, based on current law, the Tax Commission expects to pay refunds from zero-emission tax credit claims until (Fiscal Year 2028).”
Mastin’s letter stems from charged debate over proposals from a statewide coalition of business and civic leaders to collect more taxes from oil and gas companies and wind energy providers.
The Step Up Oklahoma revenue package includes a proposal to levy a tax of $1 per megawatt of wind power generation; the wind industry is chafing at that and a proposal to cap tax incentives on previously completed projects.
The oil and gas industry is backing a proposal to double, from 2 percent to 4 percent, the tax levied on oil and gas production. Step Up Oklahoma supporters have called for wind power companies to share in the sacrifice.
The proposal has renewed debate over the comparative tax burdens on the energy industries.
In his letter, Mastin said he couldn’t confirm the claim by the wind industry that new wind energy projects bear a tax burden that is “4 to 5 times” the amount of oil gas production projects in Oklahoma.
Mastin noted that oil and gas wells and wind energy projects are subject to corporate income taxes, payroll taxes and individual income taxes.
Oil and gas wells are also subject to sales and use taxes and gross production taxes, though wind energy projects are exempt.
Wind energy projects are subject to ad valorem (property) taxes, but oil and gas wells are exempt.
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