Many Oklahoma state tax, fee increases to start July 1

 

BY RANDY ELLIS 

Oklahomans thinking about buying a car or truck in the next few months might want to do it before July 1.

That’s when a new 1.25 percent sales tax on motor vehicles is scheduled to take effect.

Smokers concerned about a new $1.50 per pack fee on cigarette purchases have a little longer to consider their next move.

The cigarette fee increase isn’t scheduled to kick in until Aug. 25.

The state Legislature passed at least 14 bills last session that will touch at least some Oklahomans in the pocketbook.

Ten of them are scheduled to take effect on July 1, while the effective dates for the others range from Aug. 25 to Jan. 1. Two are to start on Nov. 1.

Of course, Oklahoma courts could still have something to say about the matter. Tobacco interests have already filed a lawsuit with the Oklahoma Supreme Court asking it to declare the $1.50 per pack cigarette fee unconstitutional. Other tax and fee increases also could spark court challenges.

Some of the scheduled tax and fee increases leave Oklahomans with financial decisions to make.

For the buyer of a $30,000 new car, the added sales tax would tack $375 onto the purchase price beginning July 1.

Used car buyers won’t escape the charge. A $10,000 used car will cost $125 more.

Adult smokers

Oklahoma’s 635,000 adult smokers also have a lot to think about as the Aug. 25 date for the new $1.50 per pack fee approaches.

The first instinct of smokers may be to stock up in advance to save money, but cessation advocates say much bigger savings can be had by quitting.

A pack of cigarettes costs an average of $5.837 in Oklahoma, said Julie Bisbee, director of public information and outreach for the Oklahoma Tobacco Settlement Endowment Trust.

For a pack-a-day smoker, the direct cost currently is about $2,130 a year. After the fee increase, that cost would go up to $2,678 a year.

And that’s just the direct purchase costs. The health care costs are much higher, she said. There are $1.62 billion in annual health care costs directly attributable to smoking in Oklahoma, and an additional $2.1 billion in productivity losses from smoking, she said.

Oklahomans pay an average of $899 per household — regardless of whether household members smoke or not — to cover state and federal government expenditures tied to smoking, she said.

For Oklahoma smokers who might want to quit, Bisbee offered some inspiration.

While it is true that 22.2 percent of Oklahoma’s adult population smoke, the number of former smokers in this state exceeds the number of smokers, she said. Statistics show 24.7 percent of the state’s population (707,941) are former smokers, she said.

The state has a tobacco helpline (1-800-QUITNOW) for smokers seeking help in quitting.

Another notable fee increase will impact Oklahomans who attend professional sporting events.

Beginning July 1, a $1 fee will be tacked on to the price of tickets for professional sporting events costing less than $50. A $2 fee will be added for tickets to such events costing $50 or more. Professional events that will require the fee include ice hockey, baseball, basketball, football, arena football and soccer.

Income tax change

Oklahoma taxpayers won’t feel the impact immediately, but another change will impact the amount of income tax many Oklahomans will pay in future years.

On Jan. 1, 2018, Oklahoma will uncouple its standard income tax deduction from the federal income tax deduction and freeze the amount at 2017 tax year levels. While the federal standard deduction will fluctuate with inflation, the state deduction no longer will.

Some other Legislative measures will impact specific industries.

The total amount of film rebates available in any one fiscal year will be cut from $5 million to $4 million beginning July 1.

And the Legislature will end zero emissions tax credits for wind energy projects put in operation after July 1.

The oil and gas industry also will pay more taxes on production from some wells.

Beginning July 1, the gross production tax rate will rise from 1 percent to 4 percent on horizontal wells drilled before July 2015. The rate lasts 48 months before going up to 7 percent. Changes also were made in a gross production tax rebate program.

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