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Probe into Tacos San Pedro tax credit reveals shocking lack of state oversight


Probe into Tacos San Pedro tax credit reveals shocking lack of state oversight (KOKH)
Probe into Tacos San Pedro tax credit reveals shocking lack of state oversight (KOKH)
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FOX 25 has a follow-up on our investigation of a massive tax credit handed out to a small taco shop on the south side.

FOX 25 was the first to report Tacos San Pedro was approved for a nearly quarter billion dollar subsidy that's meant for big manufacturers in Oklahoma.

While the state has yet to explain how the restaurant was, according to the state database, able to claim credit, we've uncovered just how little oversight there is on this particular program.

The carne asada burrito and homemade salsa are fan favorites, no question. But our questions remain unanswered about how the beloved little restaurant got such a massive tax break- -$238,578,500, according to the state's database for fiscal year 2021.

In our original report that aired on January 21, 2023, co-owner Eva Gil told us, "I never applied for it. And I never got it."

With no explanation from the Oklahoma Tax Commission on how a company that clearly doesn't qualify is listed on the state's database as claiming it, we found serious concerns with this particular incentive, the Investment/New Jobs Tax Credit Package.

"We need to see if these incentives programs are really truly working for the benefit of these citizens," said Kyle Roggow, chairman of the Incentive Evaluation Commission. "And if they're not, what can we do to improve them?"

The Incentive Evaluation Committee is tasked with reviewing reports from an outside consultant on all incentives offered by the state of Oklahoma. According to IEC's November 2022 report, this particular tax break does not actually require an application. Companies claim the credit on their taxes and then file a special form, form 506, with the Oklahoma Tax Commission.

The OTC will not show us the form they got from Tacos San Pedro without the owners' permission. It would reveal the amount applicants listed for 'total investment' and 'number of employees.' Gil previously told us FOX 25 they only have 11 employees. It is still unclear if anyone at the OTC is tasked with actually looking over those 506 forms.

Another issue outlined in the IEC report- these particular tax credits can carry over indefinitely. As of 2020- $734 million in subsidies were sitting unused for companies to continue claiming for years to come

The IEC committee voted to approve some recommended changes, including putting a cap on the carryforward period at 7 years and instituting an application and approval process that must be completed before a business could claim the credit. Those businesses would also have to file new claims with the Oklahoma Tax Commission every year.

But none of those changes can happen without action from state lawmakers.

"Just because we make a recommendation, they may not always take action on them," said Roggow.

We asked him, "Do they typically follow your recommendation?"

Roggow responded, "Sometimes they'll do those. And sometimes they'll move a little quicker."

While Roggow could not comment on the Tacos San Pedro tax credit, he did point out it's up to each business to go through the application process legally while following all the criteria.

We asked in response, "But don't we need eyeballs making sure that criteria really exists?"

"Yes," said Roggow. "We need to make sure we are looking at all incentives."

Now the curious case of a taco shop is bringing to light loopholes that allow the chance for your tax dollars to be wasted.

It is still unclear whether Tacos San Pedro has received any money from this tax break, it is possible they have not.

The Oklahoma Tax Commission declined our request for an interview with the agency's director.

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