Anti-tax group may challenge automatic state income tax increase

Thursday, January 10th 2002, 12:00 am
By: News On 6

An anti-tax group may challenge an automatic state income tax increase in court.

Oklahomans Against Tax Hikes met Wednesday at the state Capitol to discuss options to the tax hike.

Denise Bode, state Corporation Commission chairman and organizer of the group, said she believes the automatic tax increase is unconstitutional. Bode said she's fielded telephones calls from people complaining about it.

State Sens. Glenn Coffee, R-Oklahoma City, and Scott Pruitt, R-Broken Arrow, and state Reps. Thad Balkman, R-Norman, and Kevin Calvey, R-Del City, also are part of the group.

Bode said the automatic tax increase isn't prudent during an economic downturn, and it hurts the poor, whose sales tax rebates also were affected.

The automatic tax increase was triggered Dec. 31 when the state Equalization Board certified revenues for the next fiscal year that are lower than the current year. The state income tax rate was 6.75 percent.

An income tax reduction passed by the Legislature in 1998 included a provision stating the rate will return to 7 percent any year revenue estimates certified by the Equalization Board are lower than the present fiscal year. The Equalization Board certifies money available for legislative appropriation.

The 1998 law also tightened qualifications for the state sales tax rebate when the certified revenue estimate drops.

Before the Equalization Board certified funds available for appropriation, an individual earning no more than $20,000 in a year or a family earning no more than $50,000 a year was entitled to a sales tax rebate.

Because of the board's action, that dropped to $15,000 for an individual and $30,000 for a family.

Rebates average about $40 per person.