State Statutes Revenue and Taxation 68 O.S.
Section 2357.60 through 2357.65
Sections 1 2357.71 through 6 2357.76
Senate Bill 1577 was enacted as an amendment to the State Tax code, declaring
A. Sections 1 2357.71 through 6 2357.76, including Sections 20, 21, 22, 23, 24 and 25, as the "Rural Venture Capital Formation Incentive Act."
SECTION . AMENDATORY 68 O.S. 2001, Section 2357.74, as last amended by Section 6,
Chapter 299, O.S.L. 2005
68 O.S. Supp. 2005, Section 2357.74), is amended to read as follows: Section 2357.74 B
a. two hundred percent (200%) of any qualified investment by the taxpayer in the qualified rural small business
capital company, or
b. two hundred percent (200%) of the qualified investment made by the qualified rural small business capital
company in the Oklahoma rural small business venture.
B. Section 2357.60 through 2357.65 of this title, Sections 10, 11, 12, 13 and 14 as the "Small Business Capital Formation Incentive Act."
SECTION 9. AMENDATORY 68 O.S. 2001, Section 2357.63, as last amended by Section 4, Chapter 299, O.S.L. 2005 (68 O.S. Supp. 2005, Section 2357.63), is amended to read as follows:
4. Limited to the lesser of:
a. two hundred percent (200%) of any qualified investment by the taxpayer in the qualified small business capital company, or
b. two hundred percent (200%) of the qualified investment made by the qualified small business capital company in the Oklahoma small business venture.
What is known as the Capital Formation Incentive Act is not a single document as such, but rather a series of legislative amendments enacted since the 1980s and scattered throughout, the nearly 1,300 pages of law that make up what is generally known as "the Oklahoma Tax Code." Oklahoma Statute Title 68. Revenue and Taxation.
Senate Bill 1577, the amendment passed in May 2006 and taking effect in June 2006 claiming to close the tax loophole, consist of 86 pages of changes scattered through out various parts of the 1,300 page.
The very reason that Lawmakers wait until toward the end of the session when a huge back log of bills are awaiting passage and Lawmakers eager to get their pet legislation passed simply start vote trading on bills they know nothing about.
Only the naive and fool hardy hang to the notion all laws undergo scrutiny and deliberation.
What the amendments that were suppose to plug the loophole actual in fact
did nothing to the loop hole, rather added legal protection for those abusing
SB 1577 was a law amending State Statutes.
To protect the abuses
1. Inserted wording that allowed borrowing money
Site Section and give wording
2. To legalize taking a profit of 200%
Site Section and give wording
They had to put some limits to keep the program from the exceptionally greedy
to might draw too much attention and kill
200% a guaranteed $2 for every one invested, is more than enough to make anyone
rich. (Actually 300% a guaranteed $3 for every one invested since they keep the investment
and the $2 is all incentive.) Particularly since you can collect and resell the tax credits in a matter
months, one can multiple their money by 200, 400 and maybe even 800% percent per year.
Still the major key to the fraud is what is missing, i.e., no over sight. No one
responsible for insuring the program is not abused.
Note: The area of the law addressing the 200% limitations is ambiguous leaving it unclear, what, if anything, is in fact limited to 200%.