OKLAHOMA CITY (KFOR) – Several Oklahoma lawmakers are now criticizing the state Tax Commission’s proposed rules for the ‘Parental Choice Tax Credit.’

Governor Kevin Stitt signed HB 1934 into law in May. The Senate and House battled it out to make a plan work for more than three months.

The new law would provide home schooled and private school students with tax credits.

Parental choice tax credit for private school students.

For home schooled students, eligible families could receive $1,000 per student.

After expressing concern over the new law in May, the Oklahoma Tax Commission recently released a set of proposed rules for the tax credits.

Lawmakers told KFOR the tax commission has made a few changes to their legislative intent, including:

  • Families will have to file a separate application per student
  • Families may have to now file a 1099
  • Parental choice tax credits will align with the tax year, instead of the school year.

“The Oklahoma Tax Commission is currently promulgating emergency rules that align with the statutory provisions enacted by the legislature in HB1934.”

Oklahoma Tax Commission Public Information and Press Liaison, Emily Haxton

“I’ve got a lot of question as to what the tax commission is trying to do. It appears to me the legislative intent was fairly simple, but the tax commission is not actually following the legislative intent and creating their own rules,” said Representative Mark McBride, R-Moore. “It’s obvious to me that in February we’re going to have to clean this up. I mean, we can’t have two different ideas. I’m not beating up on the tax commission either. I’m just saying we’ve got to figure out a way to balance this out.”

Rep. McBride said although he understands the tax commission wanting the credits to flow through the tax calendar year, he added the money was intended to follow students through just the school year.

Senate President Pro Tempore Greg Treat, R-OKC, said he also has some concerns about the proposed rules.

“[The rules] have changed slightly. I have some concerns. But the great news is parents are going to have school choice. The fact we’re looking through these means we have passed school choice and we passed monumental school choice. I’m actually excited we’re going through this process,” stated Pro Tem Treat.

He echoed the same concern as Rep. McBride that he did not envision tax credits falling on a tax calendar year, but more so the school year.

“That’s not an insurmountable problem. It’s just the way the tax commission works on having taxes in a calendar year. That’s an easy fix. But we’re wanting to make sure parents who really need this are able to take advantage of it. You’ll see us work pretty expeditiously once we go back into session to make sure that if any of those things can’t be cleaned up, the rules, we can do it through legislation,” said Pro Tem Treat. “We’ll have to clean some things up to help [the tax commission]. But I’m excited about the willingness of the tax commission to work with us to improve it. I want to make sure your viewers know the tax commission has been extremely good to work with. I think there’s a perception out there that they’ve been difficult. That’s not true. They’ve been very good to work with.”

Representative Forrest Bennett, D-OKC, told KFOR legislators are willing to work with the tax commission to straighten everything out.

However, Rep. Bennett said he saw problems like these coming about even before the bill was signed into law.

“I don’t share the surprise of some of our Republican colleagues. We knew this would happen. We told them this would happen. It’s frustrating because now it’s not just a conversation among legislators. It’s real world stuff families are going to have to deal with unless the legislature steps in,” explained Rep. Bennett.

Rep. Bennett voted against the parental choice tax credits during the legislative session. He said his opinion on the matter has not changed.

He added he is disappointed because a lawmaker’s “intent” in passing legislature is “immaterial.” He explained the proposed rules are now conflicting and there is a difference between what lawmakers want and what the tax commission wants.

“They do not focus on making sure the mechanics of the legislation work. And when you don’t do that, this is what happens,” he added. “I understand political realities. I understand wanting to placate the base. But we’re not talking about just a political question anymore. We’re talking about kids’ education.”

He said he wanted the legislature’s focus to move towards a free education for all, but instead parental choice tax credits for home-schoolers and private school students are being prioritized.

“My fundamental belief about my job and the oath that I took to the state constitution, which says that we are charged with creating and maintaining a system of free and public education for all students. My belief is we’ve got to do that first and I fundamentally don’t believe that we have. And my Republican colleagues, if they hear this, they’ll respond, ‘We have increased education funding year over year.’ And it’s true; the costs have outpaced that funding. I would love it if all of my colleagues agreed that we have left a job unfinished when it comes to public education. We need to fix that problem,” said Rep. Bennett.

All three lawmakers: Pro Tem Treat, Rep. McBride, and Rep. Bennett told KFOR there is a possibility of new legislation being presented in February to help clarify the tax credits.

“I think it would be better for all of us to understand them a bit better,” said Rep. Bennett.

Tax credit applications will open December 8 at 8:30 a.m.

The tax commission’s public comment on the parental tax credit closed at 4:30 p.m.

Prior to the public comment closing, ‘Yes. Every Kid. Foundation.’ sent its thoughts in.

“The Parental Choice Tax Credit empowers Oklahoma families to customize an education that best meets their kids’ unique learning needs. Instead of making it more difficult to access the program, we should do all we can to create a user-friendly experience for families and students. States are looking at Oklahoma as a leader in education freedom after the passage of the nation’s most expansive K-12 individual tax credit. Oklahoma must continue to lead by putting families first and implementing a program without unnecessary and burdensome red tape.”

Yes. Every Kid. Foundation. Director of Policy Operations, Whitney Marsh

The foundation recommends the tax commission:

  • Allow funds to flow directly to families. Allow taxpayers to claim the private school education expense on their income tax return. Proposed rules only allow this option for those homeschooling their children. This allows the program to work as intended, as a personal income tax credit, and simplifies the process for families.    
  • Keep private school accreditation as broad as the law intends. Defining another accrediting association to be approved by the State Board of Education limits options and burdens the State Board of Education with having to approve accrediting bodies.  
  • Lessen the requirements and role of the private school in the tax credit claim process. Requiring the Affidavit of Enrollment could cause a back-and-forth process with families, leading to delays in applications and submissions. Private schools may also not want the responsibility of soliciting and maintaining personal information. Private schools should not have to register annually with the Tax Commission if the affidavit requires proof of accreditation.  
  • Change the timeline of application to better align with the school calendar. The proposed rule outlines an application process that follows the tax year instead of the school year. This creates a barrier for families prioritized in this program. Launching an application that covers the spring semester of the 2023/2024 school year and then having the yearly application window open on March 1 better aligns with the school calendar. 
  • Include Notification Deadlines. The proposed rules do not address when families would be notified whether or not their application was approved. Including a notification requirement of thirty (30) days allows families to plan for their children’s schooling and makes the decision-making process more straightforward.