More cities join lawsuit against state Tax Commission

OKLAHOMA CITY (AP) -- More cities have joined a lawsuit against the Oklahoma Tax Commission over a sales tax revenue law that local officials claim has robbed city coffers of millions of dollars.

Oklahoma City decided to sue the commission in August over the law and has since been joined by Norman and Tulsa in the lawsuit.

Officials in other cities said they also planned to join the lawsuit.

Oklahoma City is looking to get back $8 million, Tulsa is seeking almost $7 million and Norman wants to regain more than $1 million.

The Oklahoma Municipal League, which also is involved in the suit, estimates that cities, towns and some counties have had more than $37 million siphoned off because of the 1993 state law, which the league claims is unconstitutional.

The law aims to increase state revenues by letting businesses that make on-time sales tax payments deduct up to 2.25 percent of what they would owe in state, city and county sales taxes.

Although the law sets a maximum deduction of $3,300 a month for those businesses, it also allows the state to take the full 2.25 percent from the funds distributed to cities and counties and put that money in the state's general fund.

City leaders believe the revenue loss from the business discount should be shared proportionally by the cities, counties and state.

A hearing before a Supreme Court referee for original jurisdiction is set for Oct. 18.

Also planning to join the lawsuit is The Village. City Manager Bruce Stone said city officials believe the city is missing about $230,000.

"We feel like that's a violation of the Constitution of Oklahoma, a violation of state statutes that deal with this issue and also a violation of our contract with them," he said.

Midwest City last week filed an application to join in the case, with officials there claiming it has lost more than $1.1 million in sales tax revenue since 1993.

Bethany City Attorney David Davis said the Bethany City Council asked him to enter the city in the suit to see if he could get back $140,364 in missing sales tax revenues.

Also planning to join the lawsuit is Mustang, which is seeking more than $122,000, and Moore, which claims to be missing more than $533,000.

Yukon City Attorney Mike Segler said he is also considering joining the lawsuit, claiming to be short about $348,535.

"We'll be reviewing the claim to see if it has merit," Segler said.