Oklahoma tax in 2012 on Large Capital Gain?


Did you pay Oklahoma tax for a large long term capital gain on your 2012 return?  Maybe Apple or Halliburton?  It might be worthwhile to consider a claim for refund before April 15, 2016.  The Oklahoma statutes include a deduction to eliminate Oklahoma tax on long term capital gain from sale of certain assets with an Oklahoma connection.  This includes stock in a company having its headquarters in Oklahoma for the preceding three years.  But there is a problem, the Oklahoma headquarters provision may violate the interstate commerce clause of the US constitution by discriminating against out of state companies. 

This issue was previously litigated but not definitively resolved.  The Oklahoma Court of Civil Appeals held the headquarters requirement should be excised from the statute.  The Oklahoma Supreme Court overruled the OCCA in a 5 to 4 decision and held the provision constitutional.  CDR Systems Corporation v. Oklahoma Tax Commission, 2014 OS 31.  The taxpayer prepared to appeal to the US Supreme Court with the support of several national taxpayer organizations.  But at the last minute, without explanation, the OTC refunded the tax and made the case moot.  The Journal Record and the Tulsa World interviewed the taxpayer's attorney but the OTC refused to comment.

Now there are other pending cases involving this same issue.  It is not known whether the OTC will simply give refunds to all or actually force one or more taxpayers to file in the US Supreme Court. 

For taxes paid on gains in a 2012 Oklahoma return, the refund claim must be filed by April 15, 2016.

For more information please contact Tim Larason at larason@andrewsdavis.com or 405-235-8713. Read more about Tim here.


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2 comments (Add your own)

1. Tim Larason wrote:
This rule is still in the statute and applies to sales made in 2014, 2015, 2016 and 2017

Fri, November 17, 2017 @ 10:53 AM

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