We have obtained redacted copies of more than 20 "Letters of Determination" the Oklahoma Tax Commission issued
during the September to October 2006 time frame. Our sources, well connected and reliable, informed us these letters authorized $330 million in new
tax credits.
Some significant issues with these letters.
1. Grandfather clause
A grandfather clause was included in the new law to allow ventures authorized prior March 15, 2006, to remain under the old law.
This grandfather clause was allowed to be miss used when, $330 million in new investments, were hurriedly rushed through and issued a "determination letter" under the old law days before the grandfather clause expired.
-
|
Capital Formation Incentive Act, SECTION 14. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 2357.63E of Title 68, unless there is created a duplication in numbering, reads as follows:
A. Any person or entity that has obtained a favorable determination letter from the Oklahoma Tax Commission prior to March 15, 2006, regarding the ability to claim or otherwise utilize any of the tax credits authorized pursuant to the provisions of Section 2357.62 or 2357.63 of Title 68 of the Oklahoma Statutes shall not be subject to the amendments to the Small Business Venture Capital Formation Incentive Act made by this legislative measure to qualify for the tax credits authorized pursuant to the provisions of Section 2357.62 or 2357.63 of this title except as provided in this section. Notwithstanding any determination letter issued with respect to such investment, no credit shall be allowed unless:
1. Such qualified investment is made prior to November 1, 2006, to satisfy a legitimate business purpose of the entity receiving such investment which is consistent with its organizational instrument, bylaws or other agreement responsible for the governance of the business venture;
2. The investor's funds were at risk; and
3. The investment was not made chiefly for the purpose of reducing tax liability.
|
2. Unheard of response time, for a reason?
Determination letters were issued within 2 business days of date on the submitted venture plan.
-
A quick turn around assures proceeds
from selling the tax credits are available to cover the investment and the "so called investors"
never risk a dime of their own money.
-
Most important is the "so called investors" leave no financial records showing they obtained the funds to invest in the beginning.
One of many seemingly minor points to avoid leaving evidence of involvement.
3. Determination letters issued on open ended shell applications
Some letters were no more than a letter stating -- details and amounts to be determined at a later date.
|
Home