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 10 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Mastin said it was correct that a bill passed by the Legislature last year repealed the credit for facilities placed in operation on or after July 1, 2017.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 10 years for those facilities placed in operation before July 1, 2017.
"Therefore, based on current law, the Tax Commission expects to pay refunds from zero-emission tax credit claims until (Fiscal Year 2028)."
Sheila Curley, whose firm is doing a public-relations campaign for the wind industry in Oklahoma, noted Thursday that a 2017 news release from House Speaker Charles A. McCall, R-Atoka, publicly stated that the legislation removing the refundable tax credit for new projects would save the state $500 million over 10 years — $50 million per year.
Brent Gooden, whose public relations firm represents Step Up Oklahoma, said, "The Step Up Oklahoma plan will generate $133 million in new revenue through increased gross production taxes from oil and gas, which represents 17% of the revenue. The proposed $23 million from a wind production tax represents roughly 3% of the revenue.
"As we move forward, our focus is on solving our state's recurring revenue issue and funding a long overdue teacher pay increase. While wind's portion of the overall plan is minimal, it is still important to achieve the goal and move our state forward."
Debate over tax burden
Mastin's letter stems from the 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 new 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.
Curley said the wind industry has been trying to make a comparison just between property taxes and the gross production tax, not one of the overall tax burden.
A group led by the Wind Coalition's lobbyist in Oklahoma said Tuesday that "the wind industry currently pays an ad valorem tax that, when compared and modeled to a gross production tax (GPT), is equivalent to a 10 percent GPT — meaning, five times the current 2 percent GPT rate paid by the oil and gas industry."