Bill in Oklahoma Legislature looks to close gap in income tax,

Journal Record, The (Oklahoma City), Mar 18, 2009 by Janice Francis-Smith

Oklahoma law clearly states that a person who owes delinquent income taxes to the state of Oklahoma shall not be able to renew professional licensure until the matter is resolved. But the law doesn't say anything about issuing a brand-new license for someone who owes back taxes.

A law that appears to have been written to help more Oklahomans come into compliance with tax laws has instead created a loophole allowing more Oklahomans to skirt the intent of the law.

Title 68, Section 238.1 formerly prohibited a state license from being issued, renewed, reinstated or transferred until the Oklahoma Tax Commission verified that the applicant was in compliance with state income tax laws. That law was changed in 2001, to provide for the collection of income taxes "in a manner that will maximize flexibility for licensees to pay any such taxes due while minimizing disruption to operations of licensing entities."

If a licensee failed to pay taxes after every reasonable effort has been made by the Tax Commission to help, he or she would be denied renewal of a license. But the new version failed to address what would happen to a licensee who simply waited for a license to expire and applied for a new license without paying taxes.

For some professions, such as hairdressers, the state will issue only one identifying license number, which has to be renewed periodically. But for other forms of professional licensure, such as a permit to serve alcohol, each two-year license bears its own number; repeat applicants can only be identified if someone makes the effort to check the applicant's Social Security number.

"If someone's license expired on the 16th and they came in here the next day, I would have to give them a new license," confirmed Kathy Sharp, coordinator of the legal department and licensing division for the Oklahoma Alcoholic Beverage Laws Enforcement Commission.

Even for those positively identified as both former license holders and delinquent taxpayers, current law prohibits only renewals, not the issuance of a new license. State Rep. Jason Murphy, R-Edmond, and state Sen. Clark Jolley, R-Edmond, joined forces on House Bill 1295, which would restore language preventing new licenses from being issued for delinquent taxpayers.

Jolley presented HB 1295 to the Senate Finance Committee on Tuesday. The measure was opposed by just one member out of the 11 who voted. State Sen. Jim Wilson, D-Tahlequah, who was elected to the state House of Representatives in 2000, said he has "never been too infatuated with this proposal."

"Taking away someone's livelihood in order to make them pay taxes - it's a moral issue for me," said Wilson.

HB 1295 will next be considered by the full membership of the Senate.