§ 9-107. Computation of possessory interest tax.
The possessory interest tax shall be assessed as provided in this chapter or any method adopted and approved by the Osage Nation Congress and implemented by the Tax Commission. The method reflects a reasonable tax on the use of the possessory interest which is subject to taxation.
A. Possessory Interests Subject to Tax.
1. Any possessory interest in trust land on the Reservation is subject to the tax, unless exempted under Sections 9-104 and 9-114 of this Title.
B. Date of Assessment. Every possessory interest which is subject to taxation under this chapter shall be assessed as of January 1st of a given calendar year.
C. Tax Base. The tax base of all taxable possessory interests shall be eighty percent (80%) of the use basis thereof as determined by the Tax Commission in the manner described by this section, and such percentage shall be uniformly applied without exception.
D. Financial Information. The financial information required for the calculation of the possessory interest tax during the present tax year is that which belongs to the previous tax year. All financial information is subject to audit by the Tax Commission.
E. Calculation of Use Basis. The use basis of the possessory interest shall include the dollar value of the trust land covered by the possessory interest and the capitalized value of net income attributable to the use of the land, as determined pursuant to subsection (E)(2) of this section, and in accordance with forms and worksheets provided by the Tax Commission.
1. Statement of Taxpayer. Every taxpayer holding a nonexempt possessory interest, which is in operational mode or is capable of being in operational mode on the assessment date of any year, shall no later than April 15th of each year prepare, sign, and file with the Tax Commission a statement on forms provided by the Tax Commission, showing:
a. The name and address of the taxpayer and the nature of the taxpayer’s business;
b. A description of the possessory interest of the taxpayer, including length, width and acreage;
c. The gross operating revenue, the gross operating expenses, and the net income, and other financial information necessary to compute the tax in accordance with this section, including, but not limited to, audited financial statements. For the utilities subject to the jurisdiction of the federal regulatory authorities, the information incorporated in their related forms they file with those authorities shall be adequate. For others, the similar information that they file with the state regulatory commissions/authorities shall suffice;
d. A statement of the amount of the tax due.
2. The taxpayers shall calculate their possessory interest and tax liabilities in accordance with the capitalization net income method. The amount of the possessory interest tax for all categories shall thus be determined by computing the capitalized value of the net income (exclusive of any nonutility income for utilities) in proportion to the value of the trust land upon which the possessory interest is located, as described in subsection (E)(2)(a) of this section. The capitalization rate shall be set at thirteen percent (13%) except, when and if the taxpayer demonstrates in writing that a different and higher number is justified. Reasonable expenses to be incurred in producing the proportional annual net income shall be allowed as deductions, in accordance with rules prescribed by the Tax Commission.
a. The value of trust land for the purposes of this paragraph shall be set at Four Thousand Two Hundred Seventy Dollars ($4,270.00) per acre; and the said value may not be escalated by more than the annual rate of inflation as measured by the annual average rate of the GDP Price Deflator of the preceding year for the succeeding tax cycles. ONCA 06-10, eff. Sept. 29, 2006.