By John Dobberstein, Editor
Gov. Kevin Stitt floated the idea of establishing “business courts” in Oklahoma to bring swifter outcomes to complex litigation instead of disputes taking years to solve instead of weeks or months.
Twenty-five states in the U.S. have created a similar court system to handle certain business disputes, most recently Texas, which adopted the measure last year. In Texas Business Court, companies appear before appointed judges with expertise in corporate and litigation matters.
Stitt noted that in Delaware, which has more companies incorporated than any other state, recent decisions by state leaders are causing angst among business leaders.
“In New York, look at how the court system is punishing President Trump’s business,” Stitt told business leaders Thursday at the Broken Arrow Chamber’s annual State of the State luncheon. “You can’t have a court system that arbitrarily pulls things out of thin air and says that you owe $464 million when there were no damages.”
In Texas, proponents of business courts believe they will streamline lawsuits, create a body of relevant case by requiring written opinions, and increase confidence in the state’s judicial system.
Texas Business Court will handle alleged breaches of contract with at least $10 million in controversy where the parties agree to jurisdiction in the business court; the finance or business code and at least $10 million in controversy; and corporate law issues relating to organizational governance or securities that involve at least $5 million in controversy.
Judges are appointed by the Texas governor to 2-year terms with the advice and consent of the Texas Senate, and the governor can reappoint judges at the end of a term. Judges in the business courts must have a Texas law license and at least 10 years of experience in complex litigation, corporate transaction and/or as a Texas judge.
Stitt has a similar vision for business courts in Oklahoma with highly trained lawyers interpreting disputes and getting them resolved efficiently.
“Businesses need certainty and they need that done quicker,” Stitt said. “That’d be another huge, huge advantage for our state if we can get that across the finish line this year.”
Tax relief dominated much of Stitt’s speech before business leaders here. One of his major goals is to eliminate the state income tax to allow Oklahoma to compete more effectively against other states.
On Wednesday, House Speaker Charles McCall (R-Atoka) gained House passage of multiple bills he authored regarding Oklahoma’s tax structure and policy. The bills were in addition to tax policy legislation passed by the House earlier this year.
The legislation passed this week pertained to both corporate and personal income tax cuts. HB 2948 phases out the corporate income tax over 5 years by reducing the amount of tax due each year by 20% increments beginning tax year 2024.
By tax year 2028, 100% of corporate tax liability will be exempt. corporations can choose to continue paying the tax if they elect to. The bill passed by a vote of 78-19.
HB 2949 establishes a path to eliminate the state income tax. Beginning tax year 2025, every year that the cumulative revenue growth is equal to or greater than $400 million revenue triggers to allow the personal income tax rate to be cut by 0.25%.
When the tax rate has been reduced to 3%, the rate may be reduced further by .30 percent each year until the rate is zero and the personal income tax is completely phased out after 10 years. The bill passed by a vote of 75-19.
HB 2950 replaces the bracket system for personal income tax with a 4.75% flat tax beginning tax year 2025. The first $13,350 of income for single filers and $27,100 for joint filers, heads of households and qualifying widowers would not be taxed. The bills will now be sent to the Senate for consideration.
“I made a promise to Oklahomans when the grocery tax passed earlier this session that the House was not done delivering tax relief to our citizens,” McCall said in a statement, noting the state savings are at record levels.
Stitt noted Florida has a zero income tax and New York is at 10.9%, and the state of New York has managed its budget in such a way that they must continue hiking taxes. Even though Oklahoma has a record $5 billion in extra revenue stored away, Stitt doesn’t want to see it spent on creating more government programs.
“We know how hard it is to cut things once they get started. My point in lowering that is when we have excess revenue, we have to give that back to the taxpayer because we don’t want to just keep growing government at every single level,” Stitt said.
Lee Applebaum says
Oklahoma has had a business court statute on the books for 20 years, but business courts have never been implemented. The statute is Title 20, Section 20-91.7. With the governor behind it, and Texas having implemented laws to create a business court, seems like things will change in Oklahoma after all these years.