Oklahoma Senate Bill 1086 and the impact on farmers and ranchers - KSWO 7News | Breaking News, Weather and Sports

Oklahoma Senate Bill 1086 and the impact on farmers and ranchers

LAWTON, Ok (KSWO) -

On day 6, Oklahoma legislators are still feeling pressure from teachers. Last week, they passed the Amazon Tax Bill and a bill regarding Ball and Dice games, but there are two other big revenue bills on the floor this week. 

One of those is Senate Bill 1086. It would eliminate the current exclusion on qualified capital gains. For farmers and ranchers, those capital gains include land and cattle. If Senate Bill 1086 were to pass, not only would they pay a capital gains tax, but they would also have to pay state income tax on those gains.

Oklahoma farmers and ranchers depend on their assets to live, so when Senate Bill 1086 was put into motion, it caused concern among a large population of our state. Some common capital gains transactions in agriculture are land and breeding cattle. Take land, for example. Since land normally appreciates, it will likely be sold for more than it was originally purchased for. Under Senate Bill 1086, that income would be taxed.

"They'd pay property tax on their land, they'd pay a capital gains tax on their land, and then if 1086 goes through, they'd pay state income tax on that gain and so that's just something we're not in favor of in that sense," said Michael Kelsey, the Executive Vice President of the Oklahoma Cattlemen's Association.

The cattlemen's association looks at this as their members being double taxed. It's a similar story for breeding cattle. Under 1086, if a rancher chose to sell a portion of this cattle after the required holding period, they would pay a capital gains tax, and an income tax on the gain they received from those cows. There has been talks of lawmakers adding an amendment to the bill that would exclude farmers and ranchers, but that's not possible.

"The Oklahoma Supreme Court ruled a few years ago, that would be discriminatory and unconstitutional," Kelsey said. "In other words, to make one sector of the population pay, and another sector not, in the capital gains case, it would be discriminatory."

While the Oklahoma Cattlemen's Association is against Senate Bill 1086, they are still in support of teachers and their efforts.

"We certainly respect and admire our educators, our teachers," said Kelsey. "They are the leaders, especially in rural communities. We don't want to make this an us versus them scenario. We're trying to bring to light how this piece of proposed legislation would negatively effect farmers and ranchers."

There is a chance the House won't even hear the bill. Floor leader John Echols reportedly made a deal with House Republicans to not bring the capital gains bill to the floor for a vote, in exchange for Republicans to vote for the initial education funding bill.

Copyright 2018 RNN Texoma. All Rights Reserved.

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