Representative Joe Dorman
House District 65
State Capitol Building
2300 North Lincoln Blvd., Rm. 325
Oklahoma City, Oklahoma 73105
Contact: Eric Berger
Dorman offers compromise to restore electric car tax credits
OKLAHOMA CITY (March 8, 2010) Honoring his commitment to constituents and other Oklahomans who contacted him in recent months, Rep. Joe Dorman , D-Rush Springs, this week fulfilled his promise to find a way to honor tax credits owed by the state to citizens who bought Low-Speed Vehicles that use alternative energy sources.
Dorman is offering his solution in the form of two amendments to related bills. They would effectively reverse last year’s Oklahoma Tax Commission ruling that left many electric vehicle purchases excluded from the tax credit program. The 2009 OTC ruling held that several vehicles purchased under the belief that they were eligible for state and federal tax credits would not qualify under Oklahoma law, due to similarities with golf carts, as defined by Oklahoma Statutes. Many of these vehicles have been certified as roadworthy by the state, but have since been determined to not qualify for the tax credit offered under Oklahoma Statute for Low-Speed Vehicles powered by electricity.
"Many CPA's in Oklahoma encouraged citizens to purchase these vehicles to take advantage of a recent federal tax credit and combine it with the credit which has been in Oklahoma law since the mid-1990's," said Dorman. "After the Tax Commission ruled many of these vehicles would not qualify for the state tax, I received many calls and emails requesting this revision."
Dorman promised he would find a way to address this subject, but would not file a bill to find the solution.
"In our current legislative system, if you file a bill, the fate of that legislation is often left up to a committee chairman or a few members," said Dorman. "This subject deserves the attention of the entire legislature and the best way to get something through the system is to file an amendment to a bill on the floor where the entire body gets to make an "up or down" vote on the subject when on the floor of the House or Senate.
Dorman reviewed several bills, and found the best fit for the solution with House Bill 2641, filed by Rep. Steve Martin, R-Bartlesville, which would lower any future state credit to equal the credit offered by the federal government on any tangible goods and House Bill 3024, authored by Speaker Chris Benge, which establishes a $500 credit for Low-Speed Vehicles and extends the original credit to Medium-Speed Vehicles. These two bills are intended to keep Oklahoma tax credits from exceeding more than would be honored by the federal government in a credit to taxpayers in different ways.
"I do not like the idea of automatically reducing a commitment on the books without a vote of the legislature," said Dorman. "Many do long-range planning for purchases based upon some credits, but if we can get my amendment in place on one of these bills and address the current problem, I will have to support the legislation as it fixes the current problem with LSV's."
Dorman's amendment will address the issue in two respects. The first would change the definition for an eligible vehicle to any vehicle considered road-worthy by the Department of Public Safety, as they issue licenses and plates for vehicles. This would negate the effect of the OTC ruling. The second provision allows the state to honor any credit on such vehicle purchases back to 2008, but the credit will not be paid by the state until Oklahoma ’s General Revenue Fund grows by at least 3 percent. House Fiscal Staff estimates the total cost of honoring the LSV credit could exceed $39 million.
"This should address all the concerns brought forth with taking the authority of determining qualifying vehicles away from the Oklahoma Tax Commission and delaying payment on the credits until revenues increase, therefore not depriving funding to education, seniors, public safety and any other state entity," said Dorman. "I know people would like to receive their money now for this purchase, but any tax credit we pay out now, which is not otherwise planned for in the budget, takes money away from our kids and seniors. I hope this show of good faith will be enough for purchasers of the vehicles that we will honor the credit which otherwise would not be paid due to OTC rulings and fears of declining budgets by state lawmakers."
Dorman attached the amendment to HB 2641 and HB 3024 on the final day to make amendments to the bill. Both bills are on the calendar for consideration by the House of Representatives this week, the final week for consideration of House Bills by the House of Representatives.
“I believe the State of Oklahoma has an obligation to keep its word to our citizens, and my amendment would accomplish that without harming services in a period of a budget crisis,” said Rep. Dorman. “I also believe the Department of Public Safety is far better qualified than the Tax Commission to determine what vehicles are roadworthy, and thus qualify for this tax credit, which has been Oklahoma law since the mid-1990’s.”
(Final note) Both amendments were killed on floor votes in the House. The Senate will attempt to attach the same amendments as they progress through the process.