OKLAHOMA CITY (OBV) — A proposal from Rep. Ryan Eaves would ask Oklahoma voters to eliminate ad valorem taxes on business inventory beginning in 2027.
The measure, HJR 1054, would exempt inventory held by forprofit businesses, estates and trusts if those items are listed as inventory in their books and records.
Eaves said the idea grew out of longrunning discussions about the cost pressures facing small employers.
“We talk a lot about small businesses being the backbone of the economy. If that’s the case, then why are we taxing business inventory,” he said. “Whether it is five hundred dollars or fifty thousand dollars, that is their money. Let them keep it and budget it for new equipment, R&D or product expansion. That helps our small communities in numerous ways.”
He said Oklahoma’s business owners are not opposed to taxation but want policy that makes sense.
“Hardworking Oklahomans do not mind paying taxes. We know it is a part of life. What we struggle with is paying taxes we do not understand,” he said. “If we are going to say Oklahoma is open for business, then we need pro-business policies. I do not know of many things on the docket that would signal to out-of-state businesses that Oklahoma wants you. It also tells existing Oklahoma businesses that we are here for you and want to partner with you.”
HJR 1054 would place Oklahoma closer to several neighboring states with reduced or eliminated inventory assessments, though research varies on the exact number. Eaves said the larger point is competitiveness. “The days of competition being across the street are gone. Our competition is across state lines and across oceans because the world is getting smaller. We need to adapt to these changing conditions. This is one thing that can help.”
Local governments currently collect inventory taxes as part of their ad valorem base, and some officials have expressed concern about the potential impact. Eaves said he understands the hesitation but believes communities will ultimately benefit.
“I hear the concern that this takes something away from them, and I understand that. But those are the businesses’ dollars anyway. Let them keep it. Let them invest in job growth and capital improvements. Those dollars will stay in our communities. They will turn into sales tax dollars and payroll tax dollars.”
Eaves said conversations among House members have been largely positive, though some colleagues remain cautious.
“There will be some opposition. Local taxing authorities always say how strapped they are, and that may be. But what has harmed them more than anything is inflation,” he said. “If we say we support small business, then let’s prove it and watch what they can do.”
The bill is not part of a structured overhaul of the state’s tax system, Eaves said, but rather a practical step in a long process. “If you try to fix everything at once, you will never get it done. My bigpicture view is that I believe in small businesses in Oklahoma, and whatever we can do to help them from a tax perspective, we should do.”
HJR 1054 directs the Secretary of State to place the proposal on a statewide ballot. If approved, the exemption would take effect January 1, 2027
