state lawmaker plans to introduce legislation

Saturday, January 22nd 2005, 12:05 pm
By: News On 6

OKLAHOMA CITY (AP) _ A state lawmaker plans to introduce legislation that will keep Oklahomans who received federal grants to build storm shelters from paying taxes on the aid.

A recent ruling by the Internal Revenue Service that says the grants are taxable means the state can tax them as income, too, Oklahoma Tax Commission officials said.

The ruling would affect more than 7,500 Oklahomans who received $17.5 million in federal grants to build storm shelters, many following the deadly May 1999 tornadoes that wiped out neighborhoods and became one of the costliest storms in state history.

A $1,000 grant would mean the recipient would pay about $50 in state taxes, said Paula Ross, spokeswoman for the Oklahoma Tax Commission.

Congressional leaders have promised to pass a law making the IRS ruling moot, which would eliminate the state tax burden. But Rep. Kevin Calvey said he didn't want to wait.

``We're going to go ahead and make sure that gets done so these people don't get a tax bill,'' said Calvey, R-Del City.

State officials said Oklahoma won't lose any revenue if the law change goes through because they realize the IRS would tax the money as income until recently.

``Any objective observer would say people shouldn't face a tax because they got a grant from the federal government,'' Calvey said.