As Oklahoma lawmakers potentially head back into special session to resolve the state’s budget crisis, it’s time to demand that industrial wind contribute!
Oklahoma could potentially generate more than $120 million annually through a simple majority vote of the legislature to change two wind subsidy programs.
Did you know industrial wind companies don’t pay sales taxes? An estimated $20 million annually, according to Oklahoma Tax Commission figures, could be collected in sales tax revenue if this exemption was repealed.
Another $100 million annually could be saved if the Legislature instituted an annual cap on what Oklahomans pay for yet-to-be earned Zero Emission Tax subsidies. Although any new projects no longer qualify for the credit, taxpayers are still required to pay subsidies for 10 years from first commercial operation on wind generation facilities that commenced operations before July 1, 2017. Year-to-date electricity production from wind for 2017 suggests that we will pay more than $112 million in tax credits for the 2017 tax year. If we implemented a $12.5 million cap — the amount established for economically at-risk oil and gas wells — we could generate $100 million in savings. Without a cap, the total over the next 10 years will exceed $930 million.
We pay out millions to industrial wind every year! We can continue to write blanks checks to an industry that makes billion-dollar profits, or we can mandate they contribute in the same manner as every other member of our energy sector.
As you’re aware, Oklahoma lawmakers are currently considering how to fund an estimated $500 million budget gap for 2018, and we remain hopeful industrial wind will be required to do their part. However, you might not be aware of much-needed wind tax credit reforms that are also being considered at the federal level.
Congress is contemplating tax reform for federal wind tax credits as part of the Senate’s tax plan. Industrial wind has expanded across the landscape of western states, aided in large part by a federal tax incentive that pays 2.3 cents per kilowatt-hour. In the 2016 tax year, it is estimated the wind production tax credit (PTC) generated $11 billion for wind companies.
The Senate plan proposes to make two key adjustments. The first, known as the Base Erosion Anti-Abuse Tax (BEAT), discourages U.S. companies from outsourcing jobs and investments overseas. The new tax is designed to discourage companies that significantly reduce their U.S. tax liability by making cross-border payments to affiliates. The industry is largely foreign-owned and payments to affiliates overseas would no longer be counted to reduce tax liability in the United States. This is a favorite ploy of foreign-owned wind companies and large multinational companies investing in wind solely for the tax benefits to avoid paying their fair share of U.S. taxes.
The House tax plan also calls for reducing direct tax incentives for wind projects. Over the next few weeks, the House and Senate bills will be reconciled in a conference committee. It’s the perfect time to let lawmakers and Congress know you support changing the abusive tax policies of industrial wind.
Let’s Act Now!