Oklahoma State Senator David Holt Proposes $59 Million In New Sales Taxes

Last year I wrote a post about a payday loan bill that Senator David Holt submitted and later pulled in which I agreed with him about the concepts of the free market and that government should not be in the business of saving people from their own bad decisions. Senator Holt sent me a message on Twitter thanking me for my remarks and saying he appreciates someone willing to state limited government principles. He also said that, “Someday I’ll do something you don’t like.”

We’re there.

Yesterday, Senator Holt took to Facebook to announce his proposed bills that would give Oklahoma teachers a $10,000 pay raise. Senate Bill 316 would provide the raise and Holt introduced twelve separate measures to provide the funding. One of these measures, Senate Bill 331, increases taxes. To be fair to Senator Holt, SB331 is not an increase in tax rates but a removal of sales tax exemptions. But the net result is Oklahomans will pay more in taxes. 

Senate Bill 331 would add state sales tax to “Service of delivery, installation, repair or maintenance of taxable tangible personal property.” Tangible personal property is defined in the measure as “personal property that can be seen, weighed, measured, felt or touched or that is in any other manner perceptible to the senses.”

Holt estimates this bill will take $59 million per year from the wallets and purses of Oklahomans.

Senator Holt also listed other goods and services that could be taxed, plundering as much as $261 million more from the citizenry.

SB 331 – This measure repeals Oklahoma’s sales tax exemption on repair, maintenance, delivery and installation of taxable goods, something that is taxed in 24 other states.
Estimated annual value to the state: $59 million
Equivalent to a raise of: $1,075
Year of first impact: 2017

SB 331 could also be expanded to include items that are taxed in at least a dozen states nationally or a majority of surrounding states. These items include oil field services ($31.6 million), construction services ($142 million), utilities ($15 million), information services ($915,000), data processing ($9.2 million), software ($7.5 million), digital goods ($4 million), automotive services ($9.1 million), cable TV ($65.5 million), trailer park stays ($11.9 million), automotive leases ($6.7 million), pet grooming ($3.2 million), carpet cleaning ($3 million), extermination ($2.3 million), aircraft rental ($1.8 million), swimming pool cleaning ($1.6 million), diaper service ($1.3 million), fur storage ($1.1 million), landscaping ($843,000), marina service ($245,000), and telephone answering services ($200,000). These items alone would provide an additional $261 million.
Estimated annual value to the state: $261 million
Equivalent to a raise of: $4,750
Year of first impact: 2017

Last November almost 60% of Oklahoma voters said NO to State Question 779, which would have increased the state sales tax by one percentage point to generate a predicted $615 million per year for education funding. I cannot believe that this same 60% would be happy with paying more sales tax on repair, maintenance, delivery and installation of taxable goods.

NewsOK – “It’s so important that the Legislature not interpret what happened with SQ 779 as a statement that the people of Oklahoma don’t want teachers to have a raise,” Holt said. “I think the statement is the people want the Legislature to do its job and come up with a better plan.”

The statement is that whatever plan is enacted should not include a tax increase. If Senator Holt doesn’t see SB331 as a tax increase then I believe he is being intellectually dishonest with himself and with Oklahomans. Any bill that intentionally separates citizens from more of their money via a sales tax is a tax increase.

A proposal to essentially increase sales taxes is surprising from a Senator who touted cutting personal income taxes just a few years ago, saying that “from a business perspective we need to have a more competitive tax rate.” He was speaking in an interview about personal income taxes, but the principle is the same. 

Oklahoma voters already rejected an increase in sales taxes. Holt and the rest of the legislature would be well advised to remember that.

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