Property Tax Alert: Oklahoma

January 2007

Titles to Oklahoma properties were transferred between two of the taxpayer's related companies such that the taxpayer retained control of the properties at all times; therefore, the properties' fair cash values could not be increased by more than 5% for property tax purposes.

In tax year 2003, when the title was transferred, the county assessed the properties at a large increase over the previous year. The taxpayer contended that the increases violated a provision of the Oklahoma constitution that placed a 5% limit on increases to the fair cash value of property, providing the property is not transferred to another. The county argued the transfer from a wholly owned company to the company's owner or to companies owned by the owner constituted a transfer, and thus the cap did not apply. The taxpayer, however, retained ownership of the companies after the title transfer because the property was never transferred to a third person.

The Legislature, in enacting the statutory scheme in order to carry out the cap, did not overstep its constitutional powers. The property is still valued and assessed each year; it is only the increase in value in excess of 5% that is capped and not assessed, and all property remains on the tax rolls.

Please contact Rash & Associates for more information.