Oklahoma Appeals Court - Capital gains deduction provision is unconstitutional

February 2013


In an unpublished opinion, the Oklahoma Court of Appeals held that the Oklahoma capital gains deduction is facially discriminatory and unconstitutional in violation of the Commerce Clause of the US Constitution. The capital gains deduction is generally available when certain property is held for at least three years by an Oklahoma company or held for at least five years by a non-Oklahoma company. While the court did not provide a remedy to cure the constitutional defect, similarly situated taxpayers should consider filing protective refund claims.

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