(Taken from the News Tracker Service)
Oklahoma Governor Brad Henry has signed legislation that allows corporate income tax incentives intended to attract the Seattle SuperSonics to Oklahoma City. The legislation amends Oklahoma's Quality Jobs Program Act to include a professional basketball team by expanding the definition of "basic industry" to include activities defined or classified in 2007 North American Industry Classification System (NAICS) Code 711211 (Sports Teams and Clubs). In March, Oklahoma City voters approved a sales tax extension to fund the construction of a practice facility to attract the team.
The legislation authorizes 15 years of quarterly incentive payments from the Oklahoma Tax Commission. Generally, the Act authorizes payments for a period of 10 years. The payments equal the net benefit rate multiplied by the actual gross payroll of new direct jobs for a calendar quarter. If the actual verified gross payroll for four consecutive calendar quarters is not at least $2.5 million within three years of the commencement date, or does not equal or exceed the total required during the 15-year period, the incentive payments will not resume until the actual verified gross payroll equals or exceeds the required amount.
The legislation would essentially allow the Sonics reimbursement of a portion of the payroll that it pays. Health insurance premiums and other benefits that the team pays will be excluded from the computation of the average annualized wage. The reimbursement will be capped at the highest individual income tax rate of 5.5% imposed during the remainder for the 2008 tax year and any subsequent tax year, or 5.25% imposed during the 2009 tax year and subsequent tax years if the 5.25% rate goes into effect.