A law signed recently by Gov. Mary Fallin will end Oklahoma’s zero emissions tax credit for the wind industry on July 1, 2017. House Bill 2298, by House Speaker Charles McCall and Senate President Pro Tempore Mike Schulz, accelerates the sunset for new zero emission tax credits for wind energy, ensuring no new projects after July 1 will qualify.
This is good news for Oklahomans. HB 2298 will save taxpayers hundreds of millions of dollars. The tax credit was designed to incentivize the wind industry in Oklahoma, but it quickly grew into a massive drain on our state’s budget by allowing foreign and out-of-state wind developers to cash in at the expense of Oklahoma taxpayers.
When Gov. Frank Keating signed legislation in 2001 creating the tax credit for wind energy, it was believed the credit would cost the state less than $2 million annually. In 2014, however, the wind industry claimed $113 million in wind tax credits for production. That’s more than a 5,000 percent increase!
Earlier this year, OCPA published a list of 13 “First Steps” that state lawmakers should consider to fill the $878 million state budget gap. Repealing the zero emission tax credit was just one of four proposals that dealt with the wind industry. The others include:
- Cap Zero Emission Tax Credit Liability Payout at $15 million Annually Effective July 1, 2017
- Cap Ad Valorem Reimbursement for Wind at $15 million Effective July 1, 2017
- Repeal Sales Tax Exemption on Wind Turbine Sales Effective July 1, 2017
While Oklahomans work hard to make ends meet, wind energy companies continue enjoying lucrative subsidies and tax breaks at the expense of taxpayers. The sunset for zero emission tax credits is a great first step, but now taxpayers need to see greater steps from lawmakers. Oklahoma simply can’t afford to keep subsidizing the already prosperous wind industry.