Bills to cut income taxes advance

Tuesday, February 12th 2002, 12:00 am
By: News On 6

OKLAHOMA CITY (AP) _ Bills cutting income taxes for many low-income and middle-income Oklahomans passed a Senate committee Tuesday, but their fates are tied to approval of a comprehensive tax package.

The action came a day after leaders named a 32-member task force to study tax reform and present a report on April 12 for consideration this year. Don Davis, president of Cameron University, was named chairman.

Sen. Bernest Cain, D-Oklahoma City, won approval in the Senate Finance Committee of a bill that would raise the standard deduction on state income taxes to the federal level.

The panel also approved a bill by Sen. Mike Johnson, R-Kingfisher, to raise the personal exemption allowance on state income taxes from $1,000 to $3,000, the current federal level, over seven years.

Sen. Angela Monson, D-Oklahoma City, committee chairwoman, said the income tax proposals will no doubt be reviewed by the tax reform task force as it tries to reach an agreement on an overall package.

Monson said that on the one hand she is philosophically sympathetic to proposed changes in the income tax system, but is concerned about the cost during a time of reduced revenues.

The Legislature is in the early stages of writing a budget that will be about $100 million smaller than it was a year ago because of a downturn in tax collections.

The task force is under a mandate to determine whether the state's tax policy can be modified in a way that will stimulate economic growth while maintaining the current levels of state revenue.

Gov. Frank Keating, a Republican, has been pushing for elimination of the income tax and sales tax on groceries and replacing lost revenue with a 5.9 percent sales tax on services.

House Democrats have advanced a plan that would reduce the income tax and employ a limited 4.5 percent sales tax on services, the same as the current sales tax on goods.

The Senate committee on Tuesday passed two dozen tax-related measures, which will be scrutinized for their revenue impact as they go through the process. Action was delayed on a bill proposing a $1 per pack increase in the cigarette tax.

Among the bills approved were a measure by Sen. Johnnie Crutchfield, D-Ardmore, authorizing a three-day state sales tax holiday beginning on the first Friday in August and ending the following Sunday. Most clothing and footwear purchases of up to $100 would be exempt from the 4.5 percent state sales tax.


_ Senate Bill 895, by Sen. Gilmer Capps, D-Snyder, gives owners of high mileage vehicles a break on their excise taxes.

_ Senate Bill 970, by Sen. Bruce Price, D-Hinton, allows an income tax credit on the purchase of poultry litter.