Oklahoma 2022 Regular Session

Oklahoma House Bill HB1909 Compare Versions

Version 1 (Old)

Version 2 (New)

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3		-	HB1909 HFLR Page 1
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29		-	HOUSE OF REPRESENTATIVES - FLOOR VERSION
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31	28		STATE OF OKLAHOMA
32	29
33	30		1st Session of the 58th Legislature (2021)
34	31
35	32		HOUSE BILL 1909 By: Fetgatter
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41	38		AS INTRODUCED
42	39
43	40		An Act relating to revenue and taxation; amending 68
44	41		O.S. 2011, Section 2358, as last amended by Section
45	42		5, Chapter 201, O.S.L. 2019 ( 68 O.S. Supp. 2020,
46	43		Section 2358), which relates to Oklahoma taxable
47	44		income and Oklahoma adjusted gross income; providing
48	45		for inapplicability of designated section of the
49	46		Internal Revenue Code of 1986, as amended, with
50	47		respect to Oklahoma income tax return s; providing for
51	48		deductibility of ordinary and necessary business
52	49		expenses for business entities holding certain
53	50		licenses; and providing an effective date .
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59	56		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
60	57		SECTION 1. AMENDATORY 68 O.S. 2011, Section 2358, as
61	58		last amended by Section 5, Chapter 201, O.S.L. 2019 (68 O.S. Supp.
62	59		2020, Section 2358), is amended to read as follows:
63	60		Section 2358. For all tax years beginning after December 31,
64	61		1981, taxable income and adjus ted gross income shall be adjusted to
65	62		arrive at Oklahoma taxable income and Oklahoma adjusted gross income
66	63		as required by this section.
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68		-	HB1909 HFLR Page 2
69		-	BOLD FACE denotes Committee Amendments. 1
	65	+	Req. No. 6022 Page 2 1
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94	90		A. The taxable income of any taxpayer shall be adjusted to
95	91		arrive at Oklahoma taxable income for corporations and Oklah oma
96	92		adjusted gross income for individuals, as follows:
97	93		1. There shall be added interest income on obligations of any
98	94		state or political subdivision thereto which is not otherwise
99	95		exempted pursuant to other laws of this state, to the extent that
100	96		such interest is not included in taxable income and adjusted gross
101	97		income.
102	98		2. There shall be deducted amounts included in such income that
103	99		the state is prohibited from taxing because of the provisions of the
104	100		Federal Constitution, the State Constitution, federal law s or laws
105	101		of Oklahoma.
106	102		3. The amount of any federal net operating loss deduction shall
107	103		be adjusted as follows:
108	104		a. For carryovers and carrybacks to taxable years
109	105		beginning before January 1, 1981, the amount of any
110	106		net operating loss deduction allowed to a taxpayer for
111	107		federal income tax purposes shall be reduced to an
112	108		amount which is the same portion thereof as the loss
113	109		from sources within this state, as determined pursuant
114	110		to this section and Section 2362 of this title, for
115	111		the taxable year in which such l oss is sustained is of
116	112		the total loss for such year;
117	113
118		-	HB1909 HFLR Page 3
119		-	BOLD FACE denotes Committee Amendments. 1
	114	+	Req. No. 6022 Page 3 1
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144	139		b. For carryovers and carrybacks to taxable years
145	140		beginning after December 31, 1980, the amount of any
146	141		net operating loss deduction allowed for the taxable
147	142		year shall be an amount equal to the aggregate of the
148	143		Oklahoma net operating loss carryovers and carrybacks
149	144		to such year. Oklahoma net operating losses shall be
150	145		separately determined by reference to Section 172 of
151	146		the Internal Revenue Code, 26 U.S.C., Section 172, as
152	147		modified by the Oklahoma Income Ta x Act, Section 2351
153	148		et seq. of this title, and shall be allowed without
154	149		regard to the existence of a federal net operating
155	150		loss. For tax years beginning after December 31,
156	151		2000, and ending before January 1, 2008, the years to
157	152		which such losses may be carr ied shall be determined
158	153		solely by reference to Section 172 of the Internal
159	154		Revenue Code, 26 U.S.C., Section 172, with the
160	155		exception that the terms "net operating loss" and
161	156		"taxable income" shall be replaced with "Oklahoma net
162	157		operating loss" and "Oklahoma taxable income". For
163	158		tax years beginning after December 31, 2007, and
164	159		ending before January 1, 2009, years to which such
165	160		losses may be carried back shall be limited to two (2)
166	161		years. For tax years beginning after December 31,
167	162		2008, the years to which suc h losses may be carried
168	163
169		-	HB1909 HFLR Page 4
170		-	BOLD FACE denotes Committee Amendments. 1
	164	+	Req. No. 6022 Page 4 1
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195	189		back shall be determined solely by reference to
196	190		Section 172 of the Internal Revenue Code, 26 U.S.C.,
197	191		Section 172, with the exception that the terms "net
198	192		operating loss" and "taxable income" shall be replaced
199	193		with "Oklahoma net operating loss" and "Oklahoma
200	194		taxable income".
201	195		4. Items of the following nature shall be allocated as
202	196		indicated. Allowable deductions attributable to items separately
203	197		allocable in subparagraphs a, b and c of this paragraph, whether or
204	198		not such items of income were actually received, shall be allocated
205	199		on the same basis as those items:
206	200		a. Income from real and tangible personal property, such
207	201		as rents, oil and mining production or royalties, and
208	202		gains or losses from sales of such property, shall be
209	203		allocated in accordance with the situs of such
210	204		property;
211	205		b. Income from intangible personal property, such as
212	206		interest, dividends, patent or copyright royalties,
213	207		and gains or losses from sales of such property, shall
214	208		be allocated in accordance with the domiciliary situ s
215	209		of the taxpayer, except that:
216	210		(1) where such property has acquired a nonunitary
217	211		business or commercial situs apart from the
218	212		domicile of the taxpayer such income shall be
219	213
220		-	HB1909 HFLR Page 5
221		-	BOLD FACE denotes Committee Amendments. 1
	214	+	Req. No. 6022 Page 5 1
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246	239		allocated in accordance with such business or
247	240		commercial situs; interest income from
248	241		investments held to generate working capital for
249	242		a unitary business enterprise shall be included
250	243		in apportionable income; a resident trust or
251	244		resident estate shall be treated as having a
252	245		separate commercial or business situs insofar as
253	246		undistributed income is concerned, but shall not
254	247		be treated as having a separate commercial or
255	248		business situs insofar as distributed income is
256	249		concerned,
257	250		(2) for taxable years beginning after December 31,
258	251		2003, capital or ordinary gains or losses from
259	252		the sale of an ownershi p interest in a publicly
260	253		traded partnership, as defined by Section 7704(b)
261	254		of the Internal Revenue Code, shall be allocated
262	255		to this state in the ratio of the original cost
263	256		of such partnership's tangible property in this
264	257		state to the original cost of such p artnership's
265	258		tangible property everywhere, as determined at
266	259		the time of the sale; if more than fifty percent
267	260		(50%) of the value of the partnership 's assets
268	261		consists of intangible assets, capital or
269	262		ordinary gains or losses from the sale of an
270	263
271		-	HB1909 HFLR Page 6
272		-	BOLD FACE denotes Committee Amendments. 1
	264	+	Req. No. 6022 Page 6 1
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297	289		ownership interest in the partnership shall be
298	290		allocated to this state in accordance with the
299	291		sales factor of the partnership for its first
300	292		full tax period immediately preceding its tax
301	293		period during which the ownership interest in the
302	294		partnership was sold; the provisi ons of this
303	295		division shall only apply if the capital or
304	296		ordinary gains or losses from the sale of an
305	297		ownership interest in a partnership do not
306	298		constitute qualifying gain receiving capital
307	299		treatment as defined in subparagraph a of
308	300		paragraph 2 of subsection F of this section,
309	301		(3) income from such property which is required to be
310	302		allocated pursuant to the provisions of paragraph
311	303		5 of this subsection shall be allocated as herein
312	304		provided;
313	305		c. Net income or loss from a business activity which is
314	306		not a part of business carried on within or without
315	307		the state of a unitary character shall be separately
316	308		allocated to the state in which such activity is
317	309		conducted;
318	310		d. In the case of a manufacturing or processing
319	311		enterprise the business of which in Oklahoma consists
320	312		solely of marketing its products by:
321	313
322		-	HB1909 HFLR Page 7
323		-	BOLD FACE denotes Committee Amendments. 1
	314	+	Req. No. 6022 Page 7 1
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348	339		(1) sales having a situs without this state, shipped
349	340		directly to a point from without the state to a
350	341		purchaser within the state, commonly known as
351	342		interstate sales,
352	343		(2) sales of the product stored in public warehouses
353	344		within the state pursuant to "in transit"
354	345		tariffs, as prescribed and allowed by the
355	346		Interstate Commerce Commission, to a purchaser
356	347		within the state,
357	348		(3) sales of the product stored in public warehouses
358	349		within the state where the shipment to such
359	350		warehouses is not covered by "in transit"
360	351		tariffs, as prescribed and allowed by the
361	352		Interstate Commerce Commission, to a purchaser
362	353		within or without the state,
363	354		the Oklahoma net income shall, at the option of the
364	355		taxpayer, be that portion of the total net income of
365	356		the taxpayer for federal income tax purposes derived
366	357		from the manufacture and/or processing and sales
367	358		everywhere as determined by the ratio of the sales
368	359		defined in this section made to the purchaser within
369	360		the state to the total sales everywhere. The term
370	361		"public warehouse" as used in this subparagraph means
371	362
372		-	HB1909 HFLR Page 8
373		-	BOLD FACE denotes Committee Amendments. 1
	363	+	Req. No. 6022 Page 8 1
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398	388		a licensed public warehouse, the principal business of
399	389		which is warehousing merchandise for the public;
400	390		e. In the case of insurance companies, Oklahoma taxable
401	391		income shall be taxable income of the taxpayer f or
402	392		federal tax purposes, as adjusted for the adjustments
403	393		provided pursuant to the provisions of paragraphs 1
404	394		and 2 of this subsection, apportioned as follows:
405	395		(1) except as otherwise provided by division (2) of
406	396		this subparagraph, taxable income of an insur ance
407	397		company for a taxable year shall be apportioned
408	398		to this state by multiplying such income by a
409	399		fraction, the numerator of which is the direct
410	400		premiums written for insurance on property or
411	401		risks in this state, and the denominator of which
412	402		is the direct premiums written for insurance on
413	403		property or risks everywhere. For purposes of
414	404		this subsection, the term "direct premiums
415	405		written" means the total amount of direct
416	406		premiums written, assessments and annuity
417	407		considerations as reported for the taxable year
418	408		on the annual statement filed by the company with
419	409		the Insurance Commissioner in the form approved
420	410		by the National Association of Insurance
421	411
422		-	HB1909 HFLR Page 9
423		-	BOLD FACE denotes Committee Amendments. 1
	412	+	Req. No. 6022 Page 9 1
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448	437		Commissioners, or such other form as may be
449	438		prescribed in lieu thereof,
450	439		(2) if the principal source of premiums writt en by an
451	440		insurance company consists of premiums for
452	441		reinsurance accepted by it, the taxable income of
453	442		such company shall be apportioned to this state
454	443		by multiplying such income by a fraction, the
455	444		numerator of which is the sum of (a) direct
456	445		premiums written for insurance on property or
457	446		risks in this state, plus (b) premiums written
458	447		for reinsurance accepted in respect of property
459	448		or risks in this state, and the denominator of
460	449		which is the sum of (c) direct premiums written
461	450		for insurance on property or risks e verywhere,
462	451		plus (d) premiums written for reinsurance
463	452		accepted in respect of property or risks
464	453		everywhere. For purposes of this paragraph,
465	454		premiums written for reinsurance accepted in
466	455		respect of property or risks in this state,
467	456		whether or not otherwise det erminable, may at the
468	457		election of the company be determined on the
469	458		basis of the proportion which premiums written
470	459		for insurance accepted from companies
471	460		commercially domiciled in Oklahoma bears to
472	461
473		-	HB1909 HFLR Page 10
474		-	BOLD FACE denotes Committee Amendments. 1
	462	+	Req. No. 6022 Page 10 1
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499	487		premiums written for reinsurance accepted from
500	488		all sources, or alternatively in the proportion
501	489		which the sum of the direct premiums written for
502	490		insurance on property or risks in this state by
503	491		each ceding company from which reinsurance is
504	492		accepted bears to the sum of the total direct
505	493		premiums written by each such ce ding company for
506	494		the taxable year.
507	495		5. The net income or loss remaining after the separate
508	496		allocation in paragraph 4 of this subsection, being that which is
509	497		derived from a unitary business enterprise, shall be apportioned to
510	498		this state on the basis of the arithmetical average of three factors
511	499		consisting of property, payroll and sales or gross revenue
512	500		enumerated as subparagraphs a, b and c of this paragraph. Net
513	501		income or loss as used in this paragraph includes that derived from
514	502		patent or copyright royaltie s, purchase discounts, and interest on
515	503		accounts receivable relating to or arising from a business activity,
516	504		the income from which is apportioned pursuant to this subsection,
517	505		including the sale or other disposition of such property and any
518	506		other property used in the unitary enterprise. Deductions used in
519	507		computing such net income or loss shall not include taxes based on
520	508		or measured by income. Provided, for corporations whose property
521	509		for purposes of the tax imposed by Section 2355 of this title has an
522	510		initial investment cost equaling or exceeding Two Hundred Million
523	511
524		-	HB1909 HFLR Page 11
525		-	BOLD FACE denotes Committee Amendments. 1
	512	+	Req. No. 6022 Page 11 1
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550	537		Dollars ($200,000,000.00) and such investment is made on or after
551	538		July 1, 1997, or for corporations which expand their property or
552	539		facilities in this state and such expansion has an investment c ost
553	540		equaling or exceeding Two Hundred Million Dollars ($200,000,000.00)
554	541		over a period not to exceed three (3) years, and such expansion is
555	542		commenced on or after January 1, 2000, the three factors shall be
556	543		apportioned with property and payroll, each compris ing twenty-five
557	544		percent (25%) of the apportionment factor and sales comprising fifty
558	545		percent (50%) of the apportionment factor. The apportionment
559	546		factors shall be computed as follows:
560	547		a. The property factor is a fraction, the numerator of
561	548		which is the average value of the taxpayer 's real and
562	549		tangible personal property owned or rented and used in
563	550		this state during the tax period and the denominator
564	551		of which is the average value of all the taxpayer 's
565	552		real and tangible personal property everywhere owned
566	553		or rented and used during the tax period.
567	554		(1) Property, the income from which is separately
568	555		allocated in paragraph 4 of this subsection,
569	556		shall not be included in determining this
570	557		fraction. The numerator of the fraction shall
571	558		include a portion of the investment in
572	559		transportation and other equipment having no
573	560		fixed situs, such as rolling stock, buses, trucks
574	561
575		-	HB1909 HFLR Page 12
576		-	BOLD FACE denotes Committee Amendments. 1
	562	+	Req. No. 6022 Page 12 1
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601	587		and trailers, including machinery and equipment
602	588		carried thereon, airplanes, salespersons '
603	589		automobiles and other similar equipment, in the
604	590		proportion that miles traveled in Oklahoma by
605	591		such equipment bears to total miles traveled,
606	592		(2) Property owned by the taxpayer is valued at its
607	593		original cost. Property rented by the taxpayer
608	594		is valued at eight times the net annual rental
609	595		rate. Net annual rental rate is the annual
610	596		rental rate paid by the taxpayer, less any annual
611	597		rental rate received by the taxpayer from
612	598		subrentals,
613	599		(3) The average value of property shall be determined
614	600		by averaging the values at the beginning and
615	601		ending of the tax period but the Oklahoma Tax
616	602		Commission may require the averaging of monthly
617	603		values during the tax period if reasonably
618	604		required to reflect properly the average value of
619	605		the taxpayer's property;
620	606		b. The payroll factor is a fraction, the numerator of
621	607		which is the total compensation for services rendered
622	608		in the state during the tax period, and the
623	609		denominator of which is the total compensation for
624	610		services rendered everywhere during the tax period.
625	611
626		-	HB1909 HFLR Page 13
627		-	BOLD FACE denotes Committee Amendments. 1
	612	+	Req. No. 6022 Page 13 1
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629	614		3
630	615		4
631	616		5
632	617		6
633	618		7
634	619		8
635	620		9
636	621		10
637	622		11
638	623		12
639	624		13
640	625		14
641	626		15
642	627		16
643	628		17
644	629		18
645	630		19
646	631		20
647	632		21
648	633		22
649	634		23
650	635		24
651	636
652	637		"Compensation", as used in this subsection means those
653	638		paid-for services to the extent re lated to the unitary
654	639		business but does not include officers ' salaries,
655	640		wages and other compensation.
656	641		(1) In the case of a transportation enterprise, the
657	642		numerator of the fraction shall include a portion
658	643		of such expenditure in connection with employees
659	644		operating equipment over a fixed route, such as
660	645		railroad employees, airline pilots, or bus
661	646		drivers, in this state only a part of the time,
662	647		in the proportion that mileage traveled in
663	648		Oklahoma bears to total mileage traveled by such
664	649		employees,
665	650		(2) In any case the numerator of the fraction shall
666	651		include a portion of such expenditures in
667	652		connection with itinerant employees, such as
668	653		traveling salespersons, in this state only a part
669	654		of the time, in the proportion that time spent in
670	655		Oklahoma bears to total time spent in furtherance
671	656		of the enterprise by such employees;
672	657		c. The sales factor is a fraction, the numerator of which
673	658		is the total sales or gross revenue of the taxpayer in
674	659		this state during the tax period, and the denominator
675	660		of which is the total sales or gross revenue of the
676	661
677		-	HB1909 HFLR Page 14
678		-	BOLD FACE denotes Committee Amendments. 1
	662	+	Req. No. 6022 Page 14 1
679	663		2
680	664		3
681	665		4
682	666		5
683	667		6
684	668		7
685	669		8
686	670		9
687	671		10
688	672		11
689	673		12
690	674		13
691	675		14
692	676		15
693	677		16
694	678		17
695	679		18
696	680		19
697	681		20
698	682		21
699	683		22
700	684		23
701	685		24
702	686
703	687		taxpayer everywhere during the tax period. "Sales",
704	688		as used in this subsection does not include sales or
705	689		gross revenue which are separately allocated in
706	690		paragraph 4 of this subsection.
707	691		(1) Sales of tangible personal property have a situs
708	692		in this state if the property is delivered or
709	693		shipped to a purchaser other than the United
710	694		States government, within this state regardless
711	695		of the FOB point or other conditions of the sale;
712	696		or the property is shipped from an office, store,
713	697		warehouse, factory or other place of storage in
714	698		this state and (a) the purchaser is the United
715	699		States government or (b) the taxpayer is not
716	700		doing business in the state of the destination of
717	701		the shipment.
718	702		(2) In the case of a railroad or interurban railway
719	703		enterprise, the numerator of the fraction shall
720	704		not be less than the allocation of revenues to
721	705		this state as shown in its annual report to the
722	706		Corporation Commission.
723	707		(3) In the case of an airline, truck or bus
724	708		enterprise or freight car, tank car, refrigerator
725	709		car or other railroad equipment enterprise, the
726	710		numerator of the fraction shall include a portion
727	711
728		-	HB1909 HFLR Page 15
729		-	BOLD FACE denotes Committee Amendments. 1
	712	+	Req. No. 6022 Page 15 1
730	713		2
731	714		3
732	715		4
733	716		5
734	717		6
735	718		7
736	719		8
737	720		9
738	721		10
739	722		11
740	723		12
741	724		13
742	725		14
743	726		15
744	727		16
745	728		17
746	729		18
747	730		19
748	731		20
749	732		21
750	733		22
751	734		23
752	735		24
753	736
754	737		of revenue from interstate transportation in the
755	738		proportion that interstate mileage traveled in
756	739		Oklahoma bears to total interstate mileage
757	740		traveled.
758	741		(4) In the case of an oil, gasoline or gas pipeline
759	742		enterprise, the numerator of the fraction shall
760	743		be either the total of traffic units of the
761	744		enterprise within Oklahoma or the revenue
762	745		allocated to Oklahoma based upon miles moved, at
763	746		the option of the taxpayer, and the denomina tor
764	747		of which shall be the total of traffic units of
765	748		the enterprise or the revenue of the enterprise
766	749		everywhere as appropriate to the numerator. A
767	750		"traffic unit" is hereby defined as the
768	751		transportation for a distance of one (1) mile of
769	752		one (1) barrel of oi l, one (1) gallon of gasoline
770	753		or one thousand (1,000) cubic feet of natural or
771	754		casinghead gas, as the case may be.
772	755		(5) In the case of a telephone or telegraph or other
773	756		communication enterprise, the numerator of the
774	757		fraction shall include that portion of th e
775	758		interstate revenue as is allocated pursuant to
776	759		the accounting procedures prescribed by the
777	760		Federal Communications Commission; provided that
778	761
779		-	HB1909 HFLR Page 16
780		-	BOLD FACE denotes Committee Amendments. 1
	762	+	Req. No. 6022 Page 16 1
781	763		2
782	764		3
783	765		4
784	766		5
785	767		6
786	768		7
787	769		8
788	770		9
789	771		10
790	772		11
791	773		12
792	774		13
793	775		14
794	776		15
795	777		16
796	778		17
797	779		18
798	780		19
799	781		20
800	782		21
801	783		22
802	784		23
803	785		24
804	786
805	787		in respect to each corporation or business entity
806	788		required by the Federal Communications Commission
807	789		to keep its books and records in accordance with
808	790		a uniform system of accounts prescribed by such
809	791		Commission, the intrastate net income shall be
810	792		determined separately in the manner provided by
811	793		such uniform system of accounts and only the
812	794		interstate income shall be subjec t to allocation
813	795		pursuant to the provisions of this subsection.
814	796		Provided further, that the gross revenue factors
815	797		shall be those as are determined pursuant to the
816	798		accounting procedures prescribed by the Federal
817	799		Communications Commission.
818	800		In any case where the apportionment of the three factors
819	801		prescribed in this paragraph attributes to Oklahoma a portion of net
820	802		income of the enterprise out of all appropriate proportion to the
821	803		property owned and/or business transacted within this state, because
822	804		of the fact that one or more of the factors so prescribed are not
823	805		employed to any appreciable extent in furtherance of the enterprise;
824	806		or because one or more factors not so prescribed are employed to a
825	807		considerable extent in furtherance of the enterprise; or because of
826	808		other reasons, the Tax Commission is empowered to permit, after a
827	809		showing by taxpayer that an excessive portion of net income has been
828	810		attributed to Oklahoma, or require, when in its judgment an
829	811
830		-	HB1909 HFLR Page 17
831		-	BOLD FACE denotes Committee Amendments. 1
	812	+	Req. No. 6022 Page 17 1
832	813		2
833	814		3
834	815		4
835	816		5
836	817		6
837	818		7
838	819		8
839	820		9
840	821		10
841	822		11
842	823		12
843	824		13
844	825		14
845	826		15
846	827		16
847	828		17
848	829		18
849	830		19
850	831		20
851	832		21
852	833		22
853	834		23
854	835		24
855	836
856	837		insufficient portion of net income has been attributed to Okl ahoma,
857	838		the elimination, substitution, or use of additional factors, or
858	839		reduction or increase in the weight of such prescribed factors.
859	840		Provided, however, that any such variance from such prescribed
860	841		factors which has the effect of increasing the portion of net income
861	842		attributable to Oklahoma must not be inherently arbitrary, and
862	843		application of the recomputed final apportionment to the net income
863	844		of the enterprise must attribute to Oklahoma only a reasonable
864	845		portion thereof.
865	846		6. For calendar years 1997 and 1 998, the owner of a new or
866	847		expanded agricultural commodity processing facility in this state
867	848		may exclude from Oklahoma taxable income, or in the case of an
868	849		individual, the Oklahoma adjusted gross income, fifteen percent
869	850		(15%) of the investment by the owner in the new or expanded
870	851		agricultural commodity processing facility. For calendar year 1999,
871	852		and all subsequent years, the percentage, not to exceed fifteen
872	853		percent (15%), available to the owner of a new or expanded
873	854		agricultural commodity processing facili ty in this state claiming
874	855		the exemption shall be adjusted annually so that the total estimated
875	856		reduction in tax liability does not exceed One Million Dollars
876	857		($1,000,000.00) annually. The Tax Commission shall promulgate rules
877	858		for determining the percentag e of the investment which each eligible
878	859		taxpayer may exclude. The exclusion provided by this paragraph
879	860		shall be taken in the taxable year when the investment is made. In
880	861
881		-	HB1909 HFLR Page 18
882		-	BOLD FACE denotes Committee Amendments. 1
	862	+	Req. No. 6022 Page 18 1
883	863		2
884	864		3
885	865		4
886	866		5
887	867		6
888	868		7
889	869		8
890	870		9
891	871		10
892	872		11
893	873		12
894	874		13
895	875		14
896	876		15
897	877		16
898	878		17
899	879		18
900	880		19
901	881		20
902	882		21
903	883		22
904	884		23
905	885		24
906	886
907	887		the event the total reduction in tax liability authorized by this
908	888		paragraph exceeds One Million Dollars ($1,000,000.00) in any
909	889		calendar year, the Tax Commission shall permit any excess over One
910	890		Million Dollars ($1,000,000.00) and shall factor such excess into
911	891		the percentage for subsequent years. Any amount of the exemption
912	892		permitted to be excluded pursuant to the provisions of this
913	893		paragraph but not used in any year may be carried forward as an
914	894		exemption from income pursuant to the provisions of this paragraph
915	895		for a period not exceeding six (6) years following the year in which
916	896		the investment was originally made.
917	897		For purposes of this paragraph:
918	898		a. "Agricultural commodity processing facility " means
919	899		building, structures, fixtures and improvements used
920	900		or operated primarily for the processing or production
921	901		of marketable products from agricult ural commodities.
922	902		The term shall also mean a dairy operation that
923	903		requires a depreciable investment of at least Two
924	904		Hundred Fifty Thousand Dollars ($250,000.00) and which
925	905		produces milk from dairy cows. The term does not
926	906		include a facility that provides o nly, and nothing
927	907		more than, storage, cleaning, drying or transportation
928	908		of agricultural commodities, and
929	909		b. "Facility" means each part of the facility which is
930	910		used in a process primarily for:
931	911
932		-	HB1909 HFLR Page 19
933		-	BOLD FACE denotes Committee Amendments. 1
	912	+	Req. No. 6022 Page 19 1
934	913		2
935	914		3
936	915		4
937	916		5
938	917		6
939	918		7
940	919		8
941	920		9
942	921		10
943	922		11
944	923		12
945	924		13
946	925		14
947	926		15
948	927		16
949	928		17
950	929		18
951	930		19
952	931		20
953	932		21
954	933		22
955	934		23
956	935		24
957	936
958	937		(1) the processing of agricultural commodities,
959	938		including receiving or storing agricultural
960	939		commodities, or the production of milk at a dairy
961	940		operation,
962	941		(2) transporting the agricultural commodities or
963	942		product before, during or after the processing,
964	943		or
965	944		(3) packaging or otherwise preparing the product for
966	945		sale or shipment.
967	946		7. Despite any provision to the contrary in paragraph 3 of this
968	947		subsection, for taxable years beginning after December 31, 1999, in
969	948		the case of a taxpayer which has a farming loss, such farming loss
970	949		shall be considered a net operating loss carryback in accordance
971	950		with and to the extent of the Internal Revenue Code, 26 U.S.C.,
972	951		Section 172(b)(G). However, the amount of the net operating loss
973	952		carryback shall not exceed the lesser of:
974	953		a. Sixty Thousand Dollars ($60,000.00), or
975	954		b. the loss properly shown on Schedule F of the Internal
976	955		Revenue Service Form 1040 reduced by one -half (1/2) of
977	956		the income from all other sources other than reflected
978	957		on Schedule F.
979	958		8. In taxable years beginning after December 31, 1995, all
980	959		qualified wages equal to the federal inco me tax credit set forth in
981	960		26 U.S.C.A., Section 45A, shall be deducted from taxable income.
982	961
983		-	HB1909 HFLR Page 20
984		-	BOLD FACE denotes Committee Amendments. 1
	962	+	Req. No. 6022 Page 20 1
985	963		2
986	964		3
987	965		4
988	966		5
989	967		6
990	968		7
991	969		8
992	970		9
993	971		10
994	972		11
995	973		12
996	974		13
997	975		14
998	976		15
999	977		16
1000	978		17
1001	979		18
1002	980		19
1003	981		20
1004	982		21
1005	983		22
1006	984		23
1007	985		24
1008	986
1009	987		The deduction allowed pursuant to this paragraph shall only be
1010	988		permitted for the tax years in which the federal tax credit pursuant
1011	989		to 26 U.S.C.A., Section 45A, is allowed. For purposes of this
1012	990		paragraph, "qualified wages" means those wages used to calculate the
1013	991		federal credit pursuant to 26 U.S.C.A., Section 45A.
1014	992		9. In taxable years beginning after December 31, 2005, an
1015	993		employer that is eligible for and utilizes the Safety Pays OSHA
1016	994		Consultation Service provided by the Oklahoma Department of Labor
1017	995		shall receive an exemption from taxable income in the amount of One
1018	996		Thousand Dollars ($1,000.00) for the tax year that the service is
1019	997		utilized.
1020	998		10. For taxable years be ginning on or after January 1, 2010,
1021	999		there shall be added to Oklahoma taxable income an amount equal to
1022	1000		the amount of deferred income not included in such taxable income
1023	1001		pursuant to Section 108(i)(1) of the Internal Revenue Code of 1986
1024	1002		as amended by Section 1231 of the American Recovery and Reinvestment
1025	1003		Act of 2009 (P.L. No. 111 -5). There shall be subtracted from
1026	1004		Oklahoma taxable income an amount equal to the amount of deferred
1027	1005		income included in such taxable income pursuant to Section 108(i)(1)
1028	1006		of the Internal Revenue Code by Section 1231 of the American
1029	1007		Recovery and Reinvestment Act of 2009 (P.L. No. 111 -5).
1030	1008		11. For taxable years beginning on or after January 1, 2019,
1031	1009		there shall be subtracted from Oklahoma taxable income or adjusted
1032	1010		gross income any item of income or gain, and there shall be added to
1033	1011
1034		-	HB1909 HFLR Page 21
1035		-	BOLD FACE denotes Committee Amendments. 1
	1012	+	Req. No. 6022 Page 21 1
1036	1013		2
1037	1014		3
1038	1015		4
1039	1016		5
1040	1017		6
1041	1018		7
1042	1019		8
1043	1020		9
1044	1021		10
1045	1022		11
1046	1023		12
1047	1024		13
1048	1025		14
1049	1026		15
1050	1027		16
1051	1028		17
1052	1029		18
1053	1030		19
1054	1031		20
1055	1032		21
1056	1033		22
1057	1034		23
1058	1035		24
1059	1036
1060	1037		Oklahoma taxable income or adjusted gross income any item of loss or
1061	1038		deduction that in the absence of an election pursuant to the
1062	1039		provisions of the Pass -Through Entity Tax Equity Act of 2019 would
1063	1040		be allocated to a member or to an indirect member of an electing
1064	1041		pass-through entity pursuant to Section 2351 et seq. of this title,
1065	1042		if (i) the electing pass -through entity has accounted for such item
1066	1043		in computing its Oklahoma net entity income or loss pursuant to the
1067	1044		provisions of the Pass -Through Entity Tax Equity Act of 2019, and
1068	1045		(ii) the total amount of tax attributable to any resulting Oklahoma
1069	1046		net entity income has been paid. The Oklahoma Tax Commission shall
1070	1047		promulgate rules for the reporting of such exclusi on to direct and
1071	1048		indirect members of the electing pass -through entity. As used in
1072	1049		this paragraph, "electing pass-through entity", "indirect member",
1073	1050		and "member" shall be defined in the same manner as prescribed by
1074	1051		Section 2 2355.1P-2 of this act title. Notwithstanding the
1075	1052		application of this paragraph, the adjusted tax basis of any
1076	1053		ownership interest in a pass -through entity for purposes of Section
1077	1054		2351 et seq. of this title shall be equal to its adjusted tax basis
1078	1055		for federal income tax purposes.
1079	1056		B. 1. The taxable income of any corporation shall be further
1080	1057		adjusted to arrive at Oklahoma taxable income, except those
1081	1058		corporations electing treatment as provided in subchapter S of the
1082	1059		Internal Revenue Code, 26 U.S.C., Section 1361 et seq., and Section
1083	1060		2365 of this title, deductions pursuant to the provisions of the
1084	1061
1085		-	HB1909 HFLR Page 22
1086		-	BOLD FACE denotes Committee Amendments. 1
	1062	+	Req. No. 6022 Page 22 1
1087	1063		2
1088	1064		3
1089	1065		4
1090	1066		5
1091	1067		6
1092	1068		7
1093	1069		8
1094	1070		9
1095	1071		10
1096	1072		11
1097	1073		12
1098	1074		13
1099	1075		14
1100	1076		15
1101	1077		16
1102	1078		17
1103	1079		18
1104	1080		19
1105	1081		20
1106	1082		21
1107	1083		22
1108	1084		23
1109	1085		24
1110	1086
1111	1087		Accelerated Cost Recovery System as defined and allowed in the
1112	1088		Economic Recovery Tax Act of 1981, Public Law 97 -34, 26 U.S.C.,
1113	1089		Section 168, for depreciation of assets placed into service after
1114	1090		December 31, 1981, shall not be allowed in calculating Oklahoma
1115	1091		taxable income. Such corporations shall be allowed a deduction for
1116	1092		depreciation of assets placed into service after December 31, 1981,
1117	1093		in accordance with provisions of the Internal Revenue Code , 26
1118	1094		U.S.C., Section 1 et seq., in effect immediately prior to the
1119	1095		enactment of the Accelerated Cost Recovery System. The Oklahoma tax
1120	1096		basis for all such assets placed into service after December 31,
1121	1097		1981, calculated in this section shall be retained and utilized for
1122	1098		all Oklahoma income tax purposes through the final disposition of
1123	1099		such assets.
1124	1100		Notwithstanding any other provisions of the Oklahoma Income Tax
1125	1101		Act, Section 2351 et seq. of this title, or of the Internal Revenue
1126	1102		Code to the contrary, this subse ction shall control calculation of
1127	1103		depreciation of assets placed into service after December 31, 1981,
1128	1104		and before January 1, 1983.
1129	1105		For assets placed in service and held by a corporation in which
1130	1106		accelerated cost recovery system was previously disallowed, a n
1131	1107		adjustment to taxable income is required in the first taxable year
1132	1108		beginning after December 31, 1982, to reconcile the basis of such
1133	1109		assets to the basis allowed in the Internal Revenue Code. The
1134	1110		purpose of this adjustment is to equalize the basis and al lowance
1135	1111
1136		-	HB1909 HFLR Page 23
1137		-	BOLD FACE denotes Committee Amendments. 1
	1112	+	Req. No. 6022 Page 23 1
1138	1113		2
1139	1114		3
1140	1115		4
1141	1116		5
1142	1117		6
1143	1118		7
1144	1119		8
1145	1120		9
1146	1121		10
1147	1122		11
1148	1123		12
1149	1124		13
1150	1125		14
1151	1126		15
1152	1127		16
1153	1128		17
1154	1129		18
1155	1130		19
1156	1131		20
1157	1132		21
1158	1133		22
1159	1134		23
1160	1135		24
1161	1136
1162	1137		for depreciation accounts between that reported to the Internal
1163	1138		Revenue Service and that reported to Oklahoma.
1164	1139		2. For tax years beginning on or after January 1, 2009, and
1165	1140		ending on or before December 31, 2009, there shall be added to
1166	1141		Oklahoma taxable income any amount in excess of One Hundred Seventy -
1167	1142		five Thousand Dollars ($175,000.00) which has been deducted as a
1168	1143		small business expense under Internal Revenue Code, Section 179 as
1169	1144		provided in the American Recovery and Reinvestment Act of 2009.
1170	1145		C. 1. For taxable years beginning after December 31, 1987, the
1171	1146		taxable income of any corporation shall be further adjusted to
1172	1147		arrive at Oklahoma taxable income for transfers of technology to
1173	1148		qualified small businesses located in Oklahoma. Such transferor
1174	1149		corporation shall be allowed an exemption from taxable income of an
1175	1150		amount equal to the amount of royalty payment received as a result
1176	1151		of such transfer; provided, however, such amount shall not exceed
1177	1152		ten percent (10%) of the amount of gross proceeds received by such
1178	1153		transferor corporation as a result of the technology transfer. Such
1179	1154		exemption shall be allowed for a period not to exceed ten (10) years
1180	1155		from the date of receipt of the first royalty payment accruing from
1181	1156		such transfer. No exemption may be claim ed for transfers of
1182	1157		technology to qualified small businesses made prior to January 1,
1183	1158		1988.
1184	1159		2. For purposes of this subsection:
1185	1160
1186		-	HB1909 HFLR Page 24
1187		-	BOLD FACE denotes Committee Amendments. 1
	1161	+	Req. No. 6022 Page 24 1
1188	1162		2
1189	1163		3
1190	1164		4
1191	1165		5
1192	1166		6
1193	1167		7
1194	1168		8
1195	1169		9
1196	1170		10
1197	1171		11
1198	1172		12
1199	1173		13
1200	1174		14
1201	1175		15
1202	1176		16
1203	1177		17
1204	1178		18
1205	1179		19
1206	1180		20
1207	1181		21
1208	1182		22
1209	1183		23
1210	1184		24
1211	1185
1212	1186		a. "Qualified small business " means an entity, whether
1213	1187		organized as a corporation, partnership, or
1214	1188		proprietorship, organized fo r profit with its
1215	1189		principal place of business located within this state
1216	1190		and which meets the following criteria:
1217	1191		(1) Capitalization of not more than Two Hundred Fifty
1218	1192		Thousand Dollars ($250,000.00),
1219	1193		(2) Having at least fifty percent (50%) of its
1220	1194		employees and assets located in Oklahoma at the
1221	1195		time of the transfer, and
1222	1196		(3) Not a subsidiary or affiliate of the transferor
1223	1197		corporation;
1224	1198		b. "Technology" means a proprietary process, formula,
1225	1199		pattern, device or compilation of scientific or
1226	1200		technical information whic h is not in the public
1227	1201		domain;
1228	1202		c. "Transferor corporation " means a corporation which is
1229	1203		the exclusive and undisputed owner of the technology
1230	1204		at the time the transfer is made; and
1231	1205		d. "Gross proceeds" means the total amount of
1232	1206		consideration for the transfer of technology, whether
1233	1207		the consideration is in money or otherwise.
1234	1208		D. 1. For taxable years beginning after December 31, 2005, the
1235	1209		taxable income of any corporation, estate or trust, shall be further
1236	1210
1237		-	HB1909 HFLR Page 25
1238		-	BOLD FACE denotes Committee Amendments. 1
	1211	+	Req. No. 6022 Page 25 1
1239	1212		2
1240	1213		3
1241	1214		4
1242	1215		5
1243	1216		6
1244	1217		7
1245	1218		8
1246	1219		9
1247	1220		10
1248	1221		11
1249	1222		12
1250	1223		13
1251	1224		14
1252	1225		15
1253	1226		16
1254	1227		17
1255	1228		18
1256	1229		19
1257	1230		20
1258	1231		21
1259	1232		22
1260	1233		23
1261	1234		24
1262	1235
1263	1236		adjusted for qualifying gains receiving capital treatme nt. Such
1264	1237		corporations, estates or trusts shall be allowed a deduction from
1265	1238		Oklahoma taxable income for the amount of qualifying gains receiving
1266	1239		capital treatment earned by the corporation, estate or trust during
1267	1240		the taxable year and included in the federa l taxable income of such
1268	1241		corporation, estate or trust.
1269	1242		2. As used in this subsection:
1270	1243		a. "qualifying gains receiving capital treatment " means
1271	1244		the amount of net capital gains, as defined in Section
1272	1245		1222(11) of the Internal Revenue Code, included in the
1273	1246		federal income tax return of the corporation, estate
1274	1247		or trust that result from:
1275	1248		(1) the sale of real property or tangible personal
1276	1249		property located within Oklahoma that has been
1277	1250		directly or indirectly owned by the corporation,
1278	1251		estate or trust for a holding pe riod of at least
1279	1252		five (5) years prior to the date of the
1280	1253		transaction from which such net capital gains
1281	1254		arise,
1282	1255		(2) the sale of stock or on the sale of an ownership
1283	1256		interest in an Oklahoma company, limited
1284	1257		liability company, or partnership where such
1285	1258		stock or ownership interest has been directly or
1286	1259		indirectly owned by the corporation, estate or
1287	1260
1288		-	HB1909 HFLR Page 26
1289		-	BOLD FACE denotes Committee Amendments. 1
	1261	+	Req. No. 6022 Page 26 1
1290	1262		2
1291	1263		3
1292	1264		4
1293	1265		5
1294	1266		6
1295	1267		7
1296	1268		8
1297	1269		9
1298	1270		10
1299	1271		11
1300	1272		12
1301	1273		13
1302	1274		14
1303	1275		15
1304	1276		16
1305	1277		17
1306	1278		18
1307	1279		19
1308	1280		20
1309	1281		21
1310	1282		22
1311	1283		23
1312	1284		24
1313	1285
1314	1286		trust for a holding period of at least three (3)
1315	1287		years prior to the date of the transaction from
1316	1288		which the net capital gains arise, or
1317	1289		(3) the sale of real property, t angible personal
1318	1290		property or intangible personal property located
1319	1291		within Oklahoma as part of the sale of all or
1320	1292		substantially all of the assets of an Oklahoma
1321	1293		company, limited liability company, or
1322	1294		partnership where such property has been directly
1323	1295		or indirectly owned by such entity owned by the
1324	1296		owners of such entity, and used in or derived
1325	1297		from such entity for a period of at least three
1326	1298		(3) years prior to the date of the transaction
1327	1299		from which the net capital gains arise,
1328	1300		b. "holding period" means an uninterrupted period of
1329	1301		time. The holding period shall include any additional
1330	1302		period when the property was held by another
1331	1303		individual or entity, if such additional period is
1332	1304		included in the taxpayer 's holding period for the
1333	1305		asset pursuant to the Internal Revenu e Code,
1334	1306		c. "Oklahoma company", "limited liability company ", or
1335	1307		"partnership" means an entity whose primary
1336	1308		headquarters have been located in Oklahoma for at
1337	1309		least three (3) uninterrupted years prior to the date
1338	1310
1339		-	HB1909 HFLR Page 27
1340		-	BOLD FACE denotes Committee Amendments. 1
	1311	+	Req. No. 6022 Page 27 1
1341	1312		2
1342	1313		3
1343	1314		4
1344	1315		5
1345	1316		6
1346	1317		7
1347	1318		8
1348	1319		9
1349	1320		10
1350	1321		11
1351	1322		12
1352	1323		13
1353	1324		14
1354	1325		15
1355	1326		16
1356	1327		17
1357	1328		18
1358	1329		19
1359	1330		20
1360	1331		21
1361	1332		22
1362	1333		23
1363	1334		24
1364	1335
1365	1336		of the transaction from which the net capital gains
1366	1337		arise,
1367	1338		d. "direct" means the taxpayer directly owns the asset,
1368	1339		and
1369	1340		e. "indirect" means the taxpayer owns an interest in a
1370	1341		pass-through entity (or chain of pass -through
1371	1342		entities) that sells the asset that gives rise to the
1372	1343		qualifying gains receiving capital treatment.
1373	1344		(1) With respect to sales of real property or
1374	1345		tangible personal property located within
1375	1346		Oklahoma, the deduction described in this
1376	1347		subsection shall not apply unless the pass -
1377	1348		through entity that makes the sale has held the
1378	1349		property for not less than five (5) uninterrupted
1379	1350		years prior to the date of the transaction that
1380	1351		created the capital gain, and each pass -through
1381	1352		entity included in the chain of ownership has
1382	1353		been a member, partner, or shareholder of the
1383	1354		pass-through entity in the tier im mediately below
1384	1355		it for an uninterrupted period of not less than
1385	1356		five (5) years.
1386	1357		(2) With respect to sales of stock or ownership
1387	1358		interest in or sales of all or substantially all
1388	1359		of the assets of an Oklahoma company, limited
1389	1360
1390		-	HB1909 HFLR Page 28
1391		-	BOLD FACE denotes Committee Amendments. 1
	1361	+	Req. No. 6022 Page 28 1
1392	1362		2
1393	1363		3
1394	1364		4
1395	1365		5
1396	1366		6
1397	1367		7
1398	1368		8
1399	1369		9
1400	1370		10
1401	1371		11
1402	1372		12
1403	1373		13
1404	1374		14
1405	1375		15
1406	1376		16
1407	1377		17
1408	1378		18
1409	1379		19
1410	1380		20
1411	1381		21
1412	1382		22
1413	1383		23
1414	1384		24
1415	1385
1416	1386		liability company, or partnership , the deduction
1417	1387		described in this subsection shall not apply
1418	1388		unless the pass-through entity that makes the
1419	1389		sale has held the stock or ownership interest or
1420	1390		the assets for not less than three (3)
1421	1391		uninterrupted years prior to the date of the
1422	1392		transaction that created the capital gain, and
1423	1393		each pass-through entity included in the chain of
1424	1394		ownership has been a member, partner or
1425	1395		shareholder of the pass -through entity in the
1426	1396		tier immediately below it for an uninterrupted
1427	1397		period of not less than three (3) years.
1428	1398		E. The Oklahoma adjusted gross income of any individual
1429	1399		taxpayer shall be further adjusted as follows to arrive at Oklahoma
1430	1400		taxable income:
1431	1401		1. a. In the case of individuals, there shall be added or
1432	1402		deducted, as the case may be, the difference necessary
1433	1403		to allow personal exemptions of One Thousand Dollars
1434	1404		($1,000.00) in lieu of the personal exemptions allowed
1435	1405		by the Internal Revenue Code.
1436	1406		b. There shall be allowed an additional exemption of One
1437	1407		Thousand Dollars ($1,000.00) for each taxpayer or
1438	1408		spouse who is blind at the close of the tax year. For
1439	1409		purposes of this subparagraph, an individual is blind
1440	1410
1441		-	HB1909 HFLR Page 29
1442		-	BOLD FACE denotes Committee Amendments. 1
	1411	+	Req. No. 6022 Page 29 1
1443	1412		2
1444	1413		3
1445	1414		4
1446	1415		5
1447	1416		6
1448	1417		7
1449	1418		8
1450	1419		9
1451	1420		10
1452	1421		11
1453	1422		12
1454	1423		13
1455	1424		14
1456	1425		15
1457	1426		16
1458	1427		17
1459	1428		18
1460	1429		19
1461	1430		20
1462	1431		21
1463	1432		22
1464	1433		23
1465	1434		24
1466	1435
1467	1436		only if the central visual acuity of the individual
1468	1437		does not exceed 20/200 in the better eye with
1469	1438		correcting lenses, or if the visual acuity of the
1470	1439		individual is greater than 20/200, but is accompanied
1471	1440		by a limitation in the fields of vision such that the
1472	1441		widest diameter of the visual field subtends an angle
1473	1442		no greater than twenty (20) degrees.
1474	1443		c. There shall be allowed an additional exemption of One
1475	1444		Thousand Dollars ($1,000.00) for each taxpayer or
1476	1445		spouse who is sixty-five (65) years of age or older at
1477	1446		the close of the tax year based upon the filing status
1478	1447		and federal adjusted gross income of the taxpayer.
1479	1448		Taxpayers with the following filing status may claim
1480	1449		this exemption if the federal adjusted gross income
1481	1450		does not exceed:
1482	1451		(1) Twenty-five Thousand Dollars ($25,000.00) if
1483	1452		married and filing jointly;
1484	1453		(2) Twelve Thousand Five Hundred Dollars ($12,500.00)
1485	1454		if married and filing separately;
1486	1455		(3) Fifteen Thousand Dolla rs ($15,000.00) if single;
1487	1456		and
1488	1457		(4) Nineteen Thousand Dollars ($19,000.00) if a
1489	1458		qualifying head of household.
1490	1459
1491		-	HB1909 HFLR Page 30
1492		-	BOLD FACE denotes Committee Amendments. 1
	1460	+	Req. No. 6022 Page 30 1
1493	1461		2
1494	1462		3
1495	1463		4
1496	1464		5
1497	1465		6
1498	1466		7
1499	1467		8
1500	1468		9
1501	1469		10
1502	1470		11
1503	1471		12
1504	1472		13
1505	1473		14
1506	1474		15
1507	1475		16
1508	1476		17
1509	1477		18
1510	1478		19
1511	1479		20
1512	1480		21
1513	1481		22
1514	1482		23
1515	1483		24
1516	1484
1517	1485		Provided, for taxable years beginning after December
1518	1486		31, 1999, amounts included in the calculation of
1519	1487		federal adjusted gross income pursuant to the
1520	1488		conversion of a traditional individual retirement
1521	1489		account to a Roth individual retirement account shall
1522	1490		be excluded from federal adjusted gross income for
1523	1491		purposes of the income thresholds provided in this
1524	1492		subparagraph.
1525	1493		2. a. For taxable years beginning o n or before December 31,
1526	1494		2005, in the case of individuals who use the standard
1527	1495		deduction in determining taxable income, there shall
1528	1496		be added or deducted, as the case may be, the
1529	1497		difference necessary to allow a standard deduction in
1530	1498		lieu of the standard ded uction allowed by the Internal
1531	1499		Revenue Code, in an amount equal to the larger of
1532	1500		fifteen percent (15%) of the Oklahoma adjusted gross
1533	1501		income or One Thousand Dollars ($1,000.00), but not to
1534	1502		exceed Two Thousand Dollars ($2,000.00), except that
1535	1503		in the case of a married individual filing a separate
1536	1504		return such deduction shall be the larger of fifteen
1537	1505		percent (15%) of such Oklahoma adjusted gross income
1538	1506		or Five Hundred Dollars ($500.00), but not to exceed
1539	1507		the maximum amount of One Thousand Dollars
1540	1508		($1,000.00).
1541	1509
1542		-	HB1909 HFLR Page 31
1543		-	BOLD FACE denotes Committee Amendments. 1
	1510	+	Req. No. 6022 Page 31 1
1544	1511		2
1545	1512		3
1546	1513		4
1547	1514		5
1548	1515		6
1549	1516		7
1550	1517		8
1551	1518		9
1552	1519		10
1553	1520		11
1554	1521		12
1555	1522		13
1556	1523		14
1557	1524		15
1558	1525		16
1559	1526		17
1560	1527		18
1561	1528		19
1562	1529		20
1563	1530		21
1564	1531		22
1565	1532		23
1566	1533		24
1567	1534
1568	1535		b. For taxable years beginning on or after January 1,
1569	1536		2006, and before January 1, 2007, in the case of
1570	1537		individuals who use the standard deduction in
1571	1538		determining taxable income, there shall be added or
1572	1539		deducted, as the case may be, the difference necessary
1573	1540		to allow a standard deduction in lieu of the standard
1574	1541		deduction allowed by the Internal Revenue Code, in an
1575	1542		amount equal to:
1576	1543		(1) Three Thousand Dollars ($3,000.00), if the filing
1577	1544		status is married filing joint, head of household
1578	1545		or qualifying widow; or
1579	1546		(2) Two Thousand Dollars ($2,000.00), if the filing
1580	1547		status is single or married filing separate.
1581	1548		c. For the taxable year beginning on January 1, 2007, and
1582	1549		ending December 31, 2007, in the case of individuals
1583	1550		who use the standard deduction in determining taxabl e
1584	1551		income, there shall be added or deducted, as the case
1585	1552		may be, the difference necessary to allow a standard
1586	1553		deduction in lieu of the standard deduction allowed by
1587	1554		the Internal Revenue Code, in an amount equal to:
1588	1555		(1) Five Thousand Five Hundred Dollars ($5 ,500.00),
1589	1556		if the filing status is married filing joint or
1590	1557		qualifying widow; or
1591	1558
1592		-	HB1909 HFLR Page 32
1593		-	BOLD FACE denotes Committee Amendments. 1
	1559	+	Req. No. 6022 Page 32 1
1594	1560		2
1595	1561		3
1596	1562		4
1597	1563		5
1598	1564		6
1599	1565		7
1600	1566		8
1601	1567		9
1602	1568		10
1603	1569		11
1604	1570		12
1605	1571		13
1606	1572		14
1607	1573		15
1608	1574		16
1609	1575		17
1610	1576		18
1611	1577		19
1612	1578		20
1613	1579		21
1614	1580		22
1615	1581		23
1616	1582		24
1617	1583
1618	1584		(2) Four Thousand One Hundred Twenty -five Dollars
1619	1585		($4,125.00) for a head of household; or
1620	1586		(3) Two Thousand Seven Hundred Fifty Dollars
1621	1587		($2,750.00), if the filing status is singl e or
1622	1588		married filing separate.
1623	1589		d. For the taxable year beginning on January 1, 2008, and
1624	1590		ending December 31, 2008, in the case of individuals
1625	1591		who use the standard deduction in determining taxable
1626	1592		income, there shall be added or deducted, as the case
1627	1593		may be, the difference necessary to allow a standard
1628	1594		deduction in lieu of the standard deduction allowed by
1629	1595		the Internal Revenue Code, in an amount equal to:
1630	1596		(1) Six Thousand Five Hundred Dollars ($6,500.00), if
1631	1597		the filing status is married filing joint or
1632	1598		qualifying widow, or
1633	1599		(2) Four Thousand Eight Hundred Seventy -five Dollars
1634	1600		($4,875.00) for a head of household, or
1635	1601		(3) Three Thousand Two Hundred Fifty Dollars
1636	1602		($3,250.00), if the filing status is single or
1637	1603		married filing separate.
1638	1604		e. For the taxable year beginni ng on January 1, 2009, and
1639	1605		ending December 31, 2009, in the case of individuals
1640	1606		who use the standard deduction in determining taxable
1641	1607		income, there shall be added or deducted, as the case
1642	1608
1643		-	HB1909 HFLR Page 33
1644		-	BOLD FACE denotes Committee Amendments. 1
	1609	+	Req. No. 6022 Page 33 1
1645	1610		2
1646	1611		3
1647	1612		4
1648	1613		5
1649	1614		6
1650	1615		7
1651	1616		8
1652	1617		9
1653	1618		10
1654	1619		11
1655	1620		12
1656	1621		13
1657	1622		14
1658	1623		15
1659	1624		16
1660	1625		17
1661	1626		18
1662	1627		19
1663	1628		20
1664	1629		21
1665	1630		22
1666	1631		23
1667	1632		24
1668	1633
1669	1634		may be, the difference necessary to allow a standard
1670	1635		deduction in lieu of the standard deduction allowed by
1671	1636		the Internal Revenue Code, in an amount equal to:
1672	1637		(1) Eight Thousand Five Hundred Dollars ($8,500.00),
1673	1638		if the filing status is married filing joint or
1674	1639		qualifying widow, or
1675	1640		(2) Six Thousand Three Hundred Seventy -five Dollars
1676	1641		($6,375.00) for a head of household, or
1677	1642		(3) Four Thousand Two Hundred Fifty Dollars
1678	1643		($4,250.00), if the filing status is single or
1679	1644		married filing separate.
1680	1645		Oklahoma adjusted gross income shall be increased by
1681	1646		any amounts paid for motor vehicle exci se taxes which
1682	1647		were deducted as allowed by the Internal Revenue Code.
1683	1648		f. For taxable years beginning on or after January 1,
1684	1649		2010, and ending on December 31, 2016, in the case of
1685	1650		individuals who use the standard deduction in
1686	1651		determining taxable income, ther e shall be added or
1687	1652		deducted, as the case may be, the difference necessary
1688	1653		to allow a standard deduction equal to the standard
1689	1654		deduction allowed by the Internal Revenue Code, based
1690	1655		upon the amount and filing status prescribed by such
1691	1656		Code for purposes of f iling federal individual income
1692	1657		tax returns.
1693	1658
1694		-	HB1909 HFLR Page 34
1695		-	BOLD FACE denotes Committee Amendments. 1
	1659	+	Req. No. 6022 Page 34 1
1696	1660		2
1697	1661		3
1698	1662		4
1699	1663		5
1700	1664		6
1701	1665		7
1702	1666		8
1703	1667		9
1704	1668		10
1705	1669		11
1706	1670		12
1707	1671		13
1708	1672		14
1709	1673		15
1710	1674		16
1711	1675		17
1712	1676		18
1713	1677		19
1714	1678		20
1715	1679		21
1716	1680		22
1717	1681		23
1718	1682		24
1719	1683
1720	1684		g. For taxable years beginning on or after January 1,
1721	1685		2017, in the case of individuals who use the standard
1722	1686		deduction in determining taxable income, there shall
1723	1687		be added or deducted, as the case may be, the
1724	1688		difference necessary to allow a standard deduction in
1725	1689		lieu of the standard deduction allowed by the Internal
1726	1690		Revenue Code, as follows:
1727	1691		(1) Six Thousand Three Hundred Fifty Dollars
1728	1692		($6,350.00) for single or married filing
1729	1693		separately,
1730	1694		(2) Twelve Thousand Seven H undred Dollars
1731	1695		($12,700.00) for married filing jointly or
1732	1696		qualifying widower with dependent child, and
1733	1697		(3) Nine Thousand Three Hundred Fifty Dollars
1734	1698		($9,350.00) for head of household.
1735	1699		3. a. In the case of resident and part -year resident
1736	1700		individuals having adjusted gross income from sources
1737	1701		both within and without the state, the itemized or
1738	1702		standard deductions and personal exemptions shall be
1739	1703		reduced to an amount which is the same portion of the
1740	1704		total thereof as Oklahoma adjusted gross income is of
1741	1705		adjusted gross income. To the extent itemized
1742	1706		deductions include allowable moving expense, proration
1743	1707		of moving expense shall not be required or permitted
1744	1708
1745		-	HB1909 HFLR Page 35
1746		-	BOLD FACE denotes Committee Amendments. 1
	1709	+	Req. No. 6022 Page 35 1
1747	1710		2
1748	1711		3
1749	1712		4
1750	1713		5
1751	1714		6
1752	1715		7
1753	1716		8
1754	1717		9
1755	1718		10
1756	1719		11
1757	1720		12
1758	1721		13
1759	1722		14
1760	1723		15
1761	1724		16
1762	1725		17
1763	1726		18
1764	1727		19
1765	1728		20
1766	1729		21
1767	1730		22
1768	1731		23
1769	1732		24
1770	1733
1771	1734		but allowable moving expense shall be fully deductible
1772	1735		for those taxpayers moving within or into Oklahoma and
1773	1736		no part of moving expense shall be deductible for
1774	1737		those taxpayers moving without or out of Oklahoma.
1775	1738		All other itemized or standard deductions and personal
1776	1739		exemptions shall be subject to proration as provided
1777	1740		by law.
1778	1741		b. For taxable years beginning on or a fter January 1,
1779	1742		2018, the net amount of itemized deductions allowable
1780	1743		on an Oklahoma income tax return, subject to the
1781	1744		provisions of paragraph 24 of this subsection, shall
1782	1745		not exceed Seventeen Thousand Dollars ($17,000.00).
1783	1746		For purposes of this subparagra ph, charitable
1784	1747		contributions and medical expenses deductible for
1785	1748		federal income tax purposes shall be excluded from the
1786	1749		amount of Seventeen Thousand Dollars ($17,000.00) as
1787	1750		specified by this subparagraph.
1788	1751		4. A resident individual with a physical disabilit y
1789	1752		constituting a substantial handicap to employment may deduct from
1790	1753		Oklahoma adjusted gross income such expenditures to modify a motor
1791	1754		vehicle, home or workplace as are necessary to compensate for his or
1792	1755		her handicap. A veteran certified by the Department of Veterans
1793	1756		Affairs of the federal government as having a service -connected
1794	1757		disability shall be conclusively presumed to be an individual with a
1795	1758
1796		-	HB1909 HFLR Page 36
1797		-	BOLD FACE denotes Committee Amendments. 1
	1759	+	Req. No. 6022 Page 36 1
1798	1760		2
1799	1761		3
1800	1762		4
1801	1763		5
1802	1764		6
1803	1765		7
1804	1766		8
1805	1767		9
1806	1768		10
1807	1769		11
1808	1770		12
1809	1771		13
1810	1772		14
1811	1773		15
1812	1774		16
1813	1775		17
1814	1776		18
1815	1777		19
1816	1778		20
1817	1779		21
1818	1780		22
1819	1781		23
1820	1782		24
1821	1783
1822	1784		physical disability constituting a substantial handicap to
1823	1785		employment. The Tax Commission shall promulgate ru les containing a
1824	1786		list of combinations of common disabilities and modifications which
1825	1787		may be presumed to qualify for this deduction. The Tax Commission
1826	1788		shall prescribe necessary requirements for verification.
1827	1789		5. a. Before July 1, 2010, the first One Thousa nd Five
1828	1790		Hundred Dollars ($1,500.00) received by any person
1829	1791		from the United States as salary or compensation in
1830	1792		any form, other than retirement benefits, as a member
1831	1793		of any component of the Armed Forces of the United
1832	1794		States shall be deducted from taxable in come.
1833	1795		b. On or after July 1, 2010, one hundred percent (100%)
1834	1796		of the income received by any person from the United
1835	1797		States as salary or compensation in any form, other
1836	1798		than retirement benefits, as a member of any component
1837	1799		of the Armed Forces of the United States shall be
1838	1800		deducted from taxable income.
1839	1801		c. Whenever the filing of a timely income tax return by a
1840	1802		member of the Armed Forces of the United States is
1841	1803		made impracticable or impossible of accomplishment by
1842	1804		reason of:
1843	1805		(1) absence from the United States, which term
1844	1806		includes only the states and the District of
1845	1807		Columbia;
1846	1808
1847		-	HB1909 HFLR Page 37
1848		-	BOLD FACE denotes Committee Amendments. 1
	1809	+	Req. No. 6022 Page 37 1
1849	1810		2
1850	1811		3
1851	1812		4
1852	1813		5
1853	1814		6
1854	1815		7
1855	1816		8
1856	1817		9
1857	1818		10
1858	1819		11
1859	1820		12
1860	1821		13
1861	1822		14
1862	1823		15
1863	1824		16
1864	1825		17
1865	1826		18
1866	1827		19
1867	1828		20
1868	1829		21
1869	1830		22
1870	1831		23
1871	1832		24
1872	1833
1873	1834		(2) absence from the State of Oklahoma while on
1874	1835		active duty; or
1875	1836		(3) confinement in a hospital within the United
1876	1837		States for treatment of wounds, injuries or
1877	1838		disease,
1878	1839		the time for filing a ret urn and paying an income tax
1879	1840		shall be and is hereby extended without incurring
1880	1841		liability for interest or penalties, to the fifteenth
1881	1842		day of the third month following the month in which:
1882	1843		(a) Such individual shall return to the United
1883	1844		States if the extension is granted pursuant
1884	1845		to subparagraph a of this paragraph, return
1885	1846		to the State of Oklahoma if the extension is
1886	1847		granted pursuant to subparagraph b of this
1887	1848		paragraph or be discharged from such
1888	1849		hospital if the extension is granted
1889	1850		pursuant to subparagraph c of this
1890	1851		paragraph; or
1891	1852		(b) An executor, administrator, or conservator
1892	1853		of the estate of the taxpayer is appointed,
1893	1854		whichever event occurs the earliest.
1894	1855		Provided, that the Tax Commission may, in its discretion, grant
1895	1856		any member of the Armed Forces of the United States an extension of
1896	1857		time for filing of income tax returns and payment of income tax
1897	1858
1898		-	HB1909 HFLR Page 38
1899		-	BOLD FACE denotes Committee Amendments. 1
	1859	+	Req. No. 6022 Page 38 1
1900	1860		2
1901	1861		3
1902	1862		4
1903	1863		5
1904	1864		6
1905	1865		7
1906	1866		8
1907	1867		9
1908	1868		10
1909	1869		11
1910	1870		12
1911	1871		13
1912	1872		14
1913	1873		15
1914	1874		16
1915	1875		17
1916	1876		18
1917	1877		19
1918	1878		20
1919	1879		21
1920	1880		22
1921	1881		23
1922	1882		24
1923	1883
1924	1884		without incurring liabilities for interest or penalties. Such
1925	1885		extension may be granted only when in the judgment of the Tax
1926	1886		Commission a good cause exists therefor and may be for a period in
1927	1887		excess of six (6) months. A record of every such extension granted,
1928	1888		and the reason therefor, shall be kept.
1929	1889		6. Before July 1, 2010, the salary or any other form of
1930	1890		compensation, received from the United States by a member of any
1931	1891		component of the Armed Forces of the United States, shall be
1932	1892		deducted from taxable income during the time in which the person is
1933	1893		detained by the enemy in a conflict, is a prisoner of war or is
1934	1894		missing in action and not deceased; provided, after July 1, 2010 ,
1935	1895		all such salary or compensation shall be subject to the deduction as
1936	1896		provided pursuant to paragraph 5 of this subsection.
1937	1897		7. a. An individual taxpayer, whether resident or
1938	1898		nonresident, may deduct an amount equal to the federal
1939	1899		income taxes paid by the ta xpayer during the taxable
1940	1900		year.
1941	1901		b. Federal taxes as described in subparagraph a of this
1942	1902		paragraph shall be deductible by any individual
1943	1903		taxpayer, whether resident or nonresident, only to the
1944	1904		extent they relate to income subject to taxation
1945	1905		pursuant to the provisions of the Oklahoma Income Tax
1946	1906		Act. The maximum amount allowable in the preceding
1947	1907		paragraph shall be prorated on the ratio of the
1948	1908
1949		-	HB1909 HFLR Page 39
1950		-	BOLD FACE denotes Committee Amendments. 1
	1909	+	Req. No. 6022 Page 39 1
1951	1910		2
1952	1911		3
1953	1912		4
1954	1913		5
1955	1914		6
1956	1915		7
1957	1916		8
1958	1917		9
1959	1918		10
1960	1919		11
1961	1920		12
1962	1921		13
1963	1922		14
1964	1923		15
1965	1924		16
1966	1925		17
1967	1926		18
1968	1927		19
1969	1928		20
1970	1929		21
1971	1930		22
1972	1931		23
1973	1932		24
1974	1933
1975	1934		Oklahoma adjusted gross income to federal adjusted
1976	1935		gross income.
1977	1936		c. For the purpose of this paragraph, "federal income
1978	1937		taxes paid" shall mean federal income taxes, surtaxes
1979	1938		imposed on incomes or excess profits taxes, as though
1980	1939		the taxpayer was on the accrual basis. In determining
1981	1940		the amount of deduction for federal income taxes for
1982	1941		tax year 2001, the amount of the deduct ion shall not
1983	1942		be adjusted by the amount of any accelerated ten
1984	1943		percent (10%) tax rate bracket credit or advanced
1985	1944		refund of the credit received during the tax year
1986	1945		provided pursuant to the federal Economic Growth and
1987	1946		Tax Relief Reconciliation Act of 2001, P .L. No. 107-
1988	1947		16, and the advanced refund of such credit shall not
1989	1948		be subject to taxation.
1990	1949		d. The provisions of this paragraph shall apply to all
1991	1950		taxable years ending after December 31, 1978, and
1992	1951		beginning before January 1, 2006.
1993	1952		8. Retirement benefits not to exceed Five Thousand Five Hundred
1994	1953		Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five
1995	1954		Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Thousand
1996	1955		Dollars ($10,000.00) for the 2006 tax year and all subsequent tax
1997	1956		years, which are receiv ed by an individual from the civil service of
1998	1957		the United States, the Oklahoma Public Employees Retirement System,
1999	1958
2000		-	HB1909 HFLR Page 40
2001		-	BOLD FACE denotes Committee Amendments. 1
	1959	+	Req. No. 6022 Page 40 1
2002	1960		2
2003	1961		3
2004	1962		4
2005	1963		5
2006	1964		6
2007	1965		7
2008	1966		8
2009	1967		9
2010	1968		10
2011	1969		11
2012	1970		12
2013	1971		13
2014	1972		14
2015	1973		15
2016	1974		16
2017	1975		17
2018	1976		18
2019	1977		19
2020	1978		20
2021	1979		21
2022	1980		22
2023	1981		23
2024	1982		24
2025	1983
2026	1984		the Teachers' Retirement System of Oklahoma, the Oklahoma Law
2027	1985		Enforcement Retirement System, the Oklahoma Firefighters Pension and
2028	1986		Retirement System, the Oklahoma Police Pension and Retirement
2029	1987		System, the employee retirement systems created by counties pursuant
2030	1988		to Section 951 et seq. of Title 19 of the Oklahoma Statutes, the
2031	1989		Uniform Retirement System for Justices and Judges, the Oklahoma
2032	1990		Wildlife Conservation Department Retirement Fund, the Oklahoma
2033	1991		Employment Security Commission Retirement Plan, or the employee
2034	1992		retirement systems created by municipalities pursuant to Section 48 -
2035	1993		101 et seq. of Title 11 of the Oklahoma Statutes shall be exempt
2036	1994		from taxable income.
2037	1995		9. In taxable years beginning after December 3l, 1984, Social
2038	1996		Security benefits received by an individual shall be exempt from
2039	1997		taxable income, to the extent such benefits are included in the
2040	1998		federal adjusted gross income pursuant to the provisions of Section
2041	1999		86 of the Internal Revenue Code, 26 U.S.C., Section 86.
2042	2000		10. For taxable years beginning after December 31, 1994, lump -
2043	2001		sum distributions from employer plans of deferred compensation,
2044	2002		which are not qualified plans within the meaning of Section 401(a)
2045	2003		of the Internal Revenue Code, 26 U.S.C., Section 401(a), and which
2046	2004		are deposited in and accounted for within a separate bank account or
2047	2005		brokerage account in a financial institution within this state,
2048	2006		shall be excluded from taxable income in the same manner as a
2049	2007		qualifying rollover contribution to an individual retirement account
2050	2008
2051		-	HB1909 HFLR Page 41
2052		-	BOLD FACE denotes Committee Amendments. 1
	2009	+	Req. No. 6022 Page 41 1
2053	2010		2
2054	2011		3
2055	2012		4
2056	2013		5
2057	2014		6
2058	2015		7
2059	2016		8
2060	2017		9
2061	2018		10
2062	2019		11
2063	2020		12
2064	2021		13
2065	2022		14
2066	2023		15
2067	2024		16
2068	2025		17
2069	2026		18
2070	2027		19
2071	2028		20
2072	2029		21
2073	2030		22
2074	2031		23
2075	2032		24
2076	2033
2077	2034		within the meaning of Section 408 of the Internal Revenue Code, 26
2078	2035		U.S.C., Section 408. Amounts withdrawn from such bank or brokerage
2079	2036		account, including any earning s thereon, shall be included in
2080	2037		taxable income when withdrawn in the same manner as withdrawals from
2081	2038		individual retirement accounts within the meaning of Section 408 of
2082	2039		the Internal Revenue Code.
2083	2040		11. In taxable years beginning after December 31, 1995,
2084	2041		contributions made to and interest received from a medical savings
2085	2042		account established pursuant to Sections 2621 through 2623 of Title
2086	2043		63 of the Oklahoma Statutes shall be exempt from taxable income.
2087	2044		12. For taxable years beginning after December 31, 1996, t he
2088	2045		Oklahoma adjusted gross income of any individual taxpayer who is a
2089	2046		swine or poultry producer may be further adjusted for the deduction
2090	2047		for depreciation allowed for new construction or expansion costs
2091	2048		which may be computed using the same depreciation met hod elected for
2092	2049		federal income tax purposes except that the useful life shall be
2093	2050		seven (7) years for purposes of this paragraph. If depreciation is
2094	2051		allowed as a deduction in determining the adjusted gross income of
2095	2052		an individual, any depreciation calculat ed and claimed pursuant to
2096	2053		this section shall in no event be a duplication of any depreciation
2097	2054		allowed or permitted on the federal income tax return of the
2098	2055		individual.
2099	2056
2100		-	HB1909 HFLR Page 42
2101		-	BOLD FACE denotes Committee Amendments. 1
	2057	+	Req. No. 6022 Page 42 1
2102	2058		2
2103	2059		3
2104	2060		4
2105	2061		5
2106	2062		6
2107	2063		7
2108	2064		8
2109	2065		9
2110	2066		10
2111	2067		11
2112	2068		12
2113	2069		13
2114	2070		14
2115	2071		15
2116	2072		16
2117	2073		17
2118	2074		18
2119	2075		19
2120	2076		20
2121	2077		21
2122	2078		22
2123	2079		23
2124	2080		24
2125	2081
2126	2082		13. a. In taxable years beginning after December 31, 2002,
2127	2083		nonrecurring adoption expense s paid by a resident
2128	2084		individual taxpayer in connection with:
2129	2085		(1) the adoption of a minor, or
2130	2086		(2) a proposed adoption of a minor which did not
2131	2087		result in a decreed adoption,
2132	2088		may be deducted from the Oklahoma adjusted gross
2133	2089		income.
2134	2090		b. The deductions for adopt ions and proposed adoptions
2135	2091		authorized by this paragraph shall not exceed Twenty
2136	2092		Thousand Dollars ($20,000.00) per calendar year.
2137	2093		c. The Tax Commission shall promulgate rules to implement
2138	2094		the provisions of this paragraph which shall contain a
2139	2095		specific list of nonrecurring adoption expenses which
2140	2096		may be presumed to qualify for the deduction. The Tax
2141	2097		Commission shall prescribe necessary requirements for
2142	2098		verification.
2143	2099		d. "Nonrecurring adoption expenses " means adoption fees,
2144	2100		court costs, medical expenses, atto rney fees and
2145	2101		expenses which are directly related to the legal
2146	2102		process of adoption of a child including, but not
2147	2103		limited to, costs relating to the adoption study,
2148	2104		health and psychological examinations, transportation
2149	2105		and reasonable costs of lodging and foo d for the child
2150	2106
2151		-	HB1909 HFLR Page 43
2152		-	BOLD FACE denotes Committee Amendments. 1
	2107	+	Req. No. 6022 Page 43 1
2153	2108		2
2154	2109		3
2155	2110		4
2156	2111		5
2157	2112		6
2158	2113		7
2159	2114		8
2160	2115		9
2161	2116		10
2162	2117		11
2163	2118		12
2164	2119		13
2165	2120		14
2166	2121		15
2167	2122		16
2168	2123		17
2169	2124		18
2170	2125		19
2171	2126		20
2172	2127		21
2173	2128		22
2174	2129		23
2175	2130		24
2176	2131
2177	2132		or adoptive parents which are incurred to complete the
2178	2133		adoption process and are not reimbursed by other
2179	2134		sources. The term "nonrecurring adoption expenses "
2180	2135		shall not include attorney fees incurred for the
2181	2136		purpose of litigating a contested a doption, from and
2182	2137		after the point of the initiation of the contest,
2183	2138		costs associated with physical remodeling, renovation
2184	2139		and alteration of the adoptive parents ' home or
2185	2140		property, except for a special needs child as
2186	2141		authorized by the court.
2187	2142		14. a. In taxable years beginning before January 1, 2005,
2188	2143		retirement benefits not to exceed the amounts
2189	2144		specified in this paragraph, which are received by an
2190	2145		individual sixty-five (65) years of age or older and
2191	2146		whose Oklahoma adjusted gross income is Twenty -five
2192	2147		Thousand Dollars ($25,000.00) or less if the filing
2193	2148		status is single, head of household, or married filing
2194	2149		separate, or Fifty Thousand Dollars ($50,000.00) or
2195	2150		less if the filing status is married filing joint or
2196	2151		qualifying widow, shall be exempt from taxable incom e.
2197	2152		In taxable years beginning after December 31, 2004,
2198	2153		retirement benefits not to exceed the amounts
2199	2154		specified in this paragraph, which are received by an
2200	2155		individual whose Oklahoma adjusted gross income is
2201	2156
2202		-	HB1909 HFLR Page 44
2203		-	BOLD FACE denotes Committee Amendments. 1
	2157	+	Req. No. 6022 Page 44 1
2204	2158		2
2205	2159		3
2206	2160		4
2207	2161		5
2208	2162		6
2209	2163		7
2210	2164		8
2211	2165		9
2212	2166		10
2213	2167		11
2214	2168		12
2215	2169		13
2216	2170		14
2217	2171		15
2218	2172		16
2219	2173		17
2220	2174		18
2221	2175		19
2222	2176		20
2223	2177		21
2224	2178		22
2225	2179		23
2226	2180		24
2227	2181
2228	2182		less than the qualifying amount specified in this
2229	2183		paragraph, shall be exempt from taxable income.
2230	2184		b. For purposes of this paragraph, the qualifying amount
2231	2185		shall be as follows:
2232	2186		(1) in taxable years beginning after December 31,
2233	2187		2004, and prior to January 1, 2007, the
2234	2188		qualifying amount shall be Thirty -seven Thousand
2235	2189		Five Hundred Dollars ($37,500.00) or less if the
2236	2190		filing status is single, head of household, or
2237	2191		married filing separate, or Seventy -five Thousand
2238	2192		Dollars ($75,000.00) or less if the filing status
2239	2193		is married filing jointly or qualifying widow,
2240	2194		(2) in the taxable year beginning January 1, 2007,
2241	2195		the qualifying amount shall be Fifty Thousand
2242	2196		Dollars ($50,000.00) or less if the filing status
2243	2197		is single, head of household, or married filing
2244	2198		separate, or One Hundred Thousand Dollars
2245	2199		($100,000.00) or less if the filing status is
2246	2200		married filing jointly or qualifying widow,
2247	2201		(3) in the taxable year beginning January 1, 2008,
2248	2202		the qualifying amount shall be Sixty -two Thousand
2249	2203		Five Hundred Dollars ($62,500.00) or less if the
2250	2204		filing status is single, head of house hold, or
2251	2205		married filing separate, or One Hundred Twenty -
2252	2206
2253		-	HB1909 HFLR Page 45
2254		-	BOLD FACE denotes Committee Amendments. 1
	2207	+	Req. No. 6022 Page 45 1
2255	2208		2
2256	2209		3
2257	2210		4
2258	2211		5
2259	2212		6
2260	2213		7
2261	2214		8
2262	2215		9
2263	2216		10
2264	2217		11
2265	2218		12
2266	2219		13
2267	2220		14
2268	2221		15
2269	2222		16
2270	2223		17
2271	2224		18
2272	2225		19
2273	2226		20
2274	2227		21
2275	2228		22
2276	2229		23
2277	2230		24
2278	2231
2279	2232		five Thousand Dollars ($125,000.00) or less if
2280	2233		the filing status is married filing jointly or
2281	2234		qualifying widow,
2282	2235		(4) in the taxable year beginning January 1, 2009,
2283	2236		the qualifying amount shall be One Hu ndred
2284	2237		Thousand Dollars ($100,000.00) or less if the
2285	2238		filing status is single, head of household, or
2286	2239		married filing separate, or Two Hundred Thousand
2287	2240		Dollars ($200,000.00) or less if the filing
2288	2241		status is married filing jointly or qualifying
2289	2242		widow, and
2290	2243		(5) in the taxable year beginning January 1, 2010,
2291	2244		and subsequent taxable years, there shall be no
2292	2245		limitation upon the qualifying amount.
2293	2246		c. For purposes of this paragraph, "retirement benefits"
2294	2247		means the total distributions or withdrawals from the
2295	2248		following:
2296	2249		(1) an employee pension benefit plan which satisfies
2297	2250		the requirements of Section 401 of the Internal
2298	2251		Revenue Code, 26 U.S.C., Section 401,
2299	2252		(2) an eligible deferred compensation plan that
2300	2253		satisfies the requirements of Section 457 of the
2301	2254		Internal Revenue Code, 26 U.S.C., Section 457,
2302	2255
2303		-	HB1909 HFLR Page 46
2304		-	BOLD FACE denotes Committee Amendments. 1
	2256	+	Req. No. 6022 Page 46 1
2305	2257		2
2306	2258		3
2307	2259		4
2308	2260		5
2309	2261		6
2310	2262		7
2311	2263		8
2312	2264		9
2313	2265		10
2314	2266		11
2315	2267		12
2316	2268		13
2317	2269		14
2318	2270		15
2319	2271		16
2320	2272		17
2321	2273		18
2322	2274		19
2323	2275		20
2324	2276		21
2325	2277		22
2326	2278		23
2327	2279		24
2328	2280
2329	2281		(3) an individual retirement account, annuity or
2330	2282		trust or simplified employee pension that
2331	2283		satisfies the requirements of Section 408 of the
2332	2284		Internal Revenue Code, 26 U.S.C., Section 408,
2333	2285		(4) an employee annuity subject to the provi sions of
2334	2286		Section 403(a) or (b) of the Internal Revenue
2335	2287		Code, 26 U.S.C., Section 403(a) or (b),
2336	2288		(5) United States Retirement Bonds which satisfy the
2337	2289		requirements of Section 86 of the Internal
2338	2290		Revenue Code, 26 U.S.C., Section 86, or
2339	2291		(6) lump-sum distributions from a retirement plan
2340	2292		which satisfies the requirements of Section
2341	2293		402(e) of the Internal Revenue Code, 26 U.S.C.,
2342	2294		Section 402(e).
2343	2295		d. The amount of the exemption provided by this paragraph
2344	2296		shall be limited to Five Thousand Five Hundred Dollars
2345	2297		($5,500.00) for the 2004 tax year, Seven Thousand Five
2346	2298		Hundred Dollars ($7,500.00) for the 2005 tax year and
2347	2299		Ten Thousand Dollars ($10,000.00) for the tax year
2348	2300		2006 and for all subsequent tax years. Any individual
2349	2301		who claims the exemption provided for in paragraph 8
2350	2302		of this subsection shall not be permitted to claim a
2351	2303		combined total exemption pursuant to this paragraph
2352	2304		and paragraph 8 of this subsection in an amount
2353	2305
2354		-	HB1909 HFLR Page 47
2355		-	BOLD FACE denotes Committee Amendments. 1
	2306	+	Req. No. 6022 Page 47 1
2356	2307		2
2357	2308		3
2358	2309		4
2359	2310		5
2360	2311		6
2361	2312		7
2362	2313		8
2363	2314		9
2364	2315		10
2365	2316		11
2366	2317		12
2367	2318		13
2368	2319		14
2369	2320		15
2370	2321		16
2371	2322		17
2372	2323		18
2373	2324		19
2374	2325		20
2375	2326		21
2376	2327		22
2377	2328		23
2378	2329		24
2379	2330
2380	2331		exceeding Five Thousand Five Hundred Dollars
2381	2332		($5,500.00) for the 2004 tax year, Seven Thousand Five
2382	2333		Hundred Dollars ($7,500.00) for the 2005 tax year and
2383	2334		Ten Thousand Dollars ($10,000.00) for the 2006 tax
2384	2335		year and all subsequent tax years.
2385	2336		15. In taxable years beginning after December 31, 1999, for an
2386	2337		individual engaged in production agriculture who has filed a
2387	2338		Schedule F form with the taxpayer 's federal income tax return for
2388	2339		such taxable year, there shall be excluded from taxable income any
2389	2340		amount which was included as federal taxable income or federal
2390	2341		adjusted gross income and which consists of the disc harge of an
2391	2342		obligation by a creditor of the taxpayer incurred to finance the
2392	2343		production of agricultural products.
2393	2344		16. In taxable years beginning December 31, 2000, an amount
2394	2345		equal to one hundred percent (100%) of the amount of any scholarship
2395	2346		or stipend received from participation in the Oklahoma Police Corps
2396	2347		Program, as established in Section 2 -140.3 of Title 47 of the
2397	2348		Oklahoma Statutes shall be exempt from taxable income.
2398	2349		17. a. In taxable years beginning after December 31, 2001,
2399	2350		and before January 1, 20 05, there shall be allowed a
2400	2351		deduction in the amount of contributions to accounts
2401	2352		established pursuant to the Oklahoma College Savings
2402	2353		Plan Act. The deduction shall equal the amount of
2403	2354		contributions to accounts, but in no event shall the
2404	2355
2405		-	HB1909 HFLR Page 48
2406		-	BOLD FACE denotes Committee Amendments. 1
	2356	+	Req. No. 6022 Page 48 1
2407	2357		2
2408	2358		3
2409	2359		4
2410	2360		5
2411	2361		6
2412	2362		7
2413	2363		8
2414	2364		9
2415	2365		10
2416	2366		11
2417	2367		12
2418	2368		13
2419	2369		14
2420	2370		15
2421	2371		16
2422	2372		17
2423	2373		18
2424	2374		19
2425	2375		20
2426	2376		21
2427	2377		22
2428	2378		23
2429	2379		24
2430	2380
2431	2381		deduction for each contributor exceed Two Thousand
2432	2382		Five Hundred Dollars ($2,500.00) each taxable year for
2433	2383		each account.
2434	2384		b. In taxable years beginning after December 31, 2004,
2435	2385		each taxpayer shall be allowed a deduction for
2436	2386		contributions to accounts established pursuant to t he
2437	2387		Oklahoma College Savings Plan Act. The maximum annual
2438	2388		deduction shall equal the amount of contributions to
2439	2389		all such accounts plus any contributions to such
2440	2390		accounts by the taxpayer for prior taxable years after
2441	2391		December 31, 2004, which were not deducte d, but in no
2442	2392		event shall the deduction for each tax year exceed Ten
2443	2393		Thousand Dollars ($10,000.00) for each individual
2444	2394		taxpayer or Twenty Thousand Dollars ($20,000.00) for
2445	2395		taxpayers filing a joint return. Any amount of a
2446	2396		contribution that is not deducted b y the taxpayer in
2447	2397		the year for which the contribution is made may be
2448	2398		carried forward as a deduction from income for the
2449	2399		succeeding five (5) years. For taxable years
2450	2400		beginning after December 31, 2005, deductions may be
2451	2401		taken for contributions and rollovers made during a
2452	2402		taxable year and up to April 15 of the succeeding
2453	2403		year, or the due date of a taxpayer 's state income tax
2454	2404		return, excluding extensions, whichever is later.
2455	2405
2456		-	HB1909 HFLR Page 49
2457		-	BOLD FACE denotes Committee Amendments. 1
	2406	+	Req. No. 6022 Page 49 1
2458	2407		2
2459	2408		3
2460	2409		4
2461	2410		5
2462	2411		6
2463	2412		7
2464	2413		8
2465	2414		9
2466	2415		10
2467	2416		11
2468	2417		12
2469	2418		13
2470	2419		14
2471	2420		15
2472	2421		16
2473	2422		17
2474	2423		18
2475	2424		19
2476	2425		20
2477	2426		21
2478	2427		22
2479	2428		23
2480	2429		24
2481	2430
2482	2431		Provided, a deduction for the same contribution may
2483	2432		not be taken for two (2) differen t taxable years.
2484	2433		c. In taxable years beginning after December 31, 2006,
2485	2434		deductions for contributions made pursuant to
2486	2435		subparagraph b of this paragraph shall be limited as
2487	2436		follows:
2488	2437		(1) for a taxpayer who qualified for the five -year
2489	2438		carryforward election and who takes a rollover or
2490	2439		nonqualified withdrawal during that period, the
2491	2440		tax deduction otherwise available pursuant to
2492	2441		subparagraph b of this paragraph shall be reduced
2493	2442		by the amount which is equal to the rollover or
2494	2443		nonqualified withdrawal, and
2495	2444		(2) for a taxpayer who elects to take a rollover or
2496	2445		nonqualified withdrawal within the same tax year
2497	2446		in which a contribution was made to the
2498	2447		taxpayer's account, the tax deduction otherwise
2499	2448		available pursuant to subparagraph b of this
2500	2449		paragraph shall be reduced by th e amount of the
2501	2450		contribution which is equal to the rollover or
2502	2451		nonqualified withdrawal.
2503	2452		d. If a taxpayer elects to take a rollover on a
2504	2453		contribution for which a deduction has been taken
2505	2454		pursuant to subparagraph b of this paragraph within
2506	2455
2507		-	HB1909 HFLR Page 50
2508		-	BOLD FACE denotes Committee Amendments. 1
	2456	+	Req. No. 6022 Page 50 1
2509	2457		2
2510	2458		3
2511	2459		4
2512	2460		5
2513	2461		6
2514	2462		7
2515	2463		8
2516	2464		9
2517	2465		10
2518	2466		11
2519	2467		12
2520	2468		13
2521	2469		14
2522	2470		15
2523	2471		16
2524	2472		17
2525	2473		18
2526	2474		19
2527	2475		20
2528	2476		21
2529	2477		22
2530	2478		23
2531	2479		24
2532	2480
2533	2481		one (1) year of the date of contribution, the amount
2534	2482		of such rollover shall be included in the adjusted
2535	2483		gross income of the taxpayer in the taxable year of
2536	2484		the rollover.
2537	2485		e. If a taxpayer makes a nonqualified withdrawal of
2538	2486		contributions for which a deduction was taken pursua nt
2539	2487		to subparagraph b of this paragraph, such nonqualified
2540	2488		withdrawal and any earnings thereon shall be included
2541	2489		in the adjusted gross income of the taxpayer in the
2542	2490		taxable year of the nonqualified withdrawal.
2543	2491		f. As used in this paragraph:
2544	2492		(1) "non-qualified withdrawal" means a withdrawal
2545	2493		from an Oklahoma College Savings Plan account
2546	2494		other than one of the following:
2547	2495		(a) a qualified withdrawal,
2548	2496		(b) a withdrawal made as a result of the death
2549	2497		or disability of the designated beneficiary
2550	2498		of an account,
2551	2499		(c) a withdrawal that is made on the account of
2552	2500		a scholarship or the allowance or payment
2553	2501		described in Section 135(d)(1)(B) or (C) or
2554	2502		by the Internal Revenue Code, received by
2555	2503		the designated beneficiary to the extent the
2556	2504		amount of the refund does not exceed the
2557	2505
2558		-	HB1909 HFLR Page 51
2559		-	BOLD FACE denotes Committee Amendments. 1
	2506	+	Req. No. 6022 Page 51 1
2560	2507		2
2561	2508		3
2562	2509		4
2563	2510		5
2564	2511		6
2565	2512		7
2566	2513		8
2567	2514		9
2568	2515		10
2569	2516		11
2570	2517		12
2571	2518		13
2572	2519		14
2573	2520		15
2574	2521		16
2575	2522		17
2576	2523		18
2577	2524		19
2578	2525		20
2579	2526		21
2580	2527		22
2581	2528		23
2582	2529		24
2583	2530
2584	2531		amount of the scholarship, allowance, or
2585	2532		payment, or
2586	2533		(d) a rollover or change of designated
2587	2534		beneficiary as permitted by subsection F of
2588	2535		Section 3970.7 of Title 70 of Oklahoma
2589	2536		Statutes, and
2590	2537		(2) "rollover" means the transfer of funds from the
2591	2538		Oklahoma College Savings Plan to any other plan
2592	2539		under Section 529 of the Internal Revenue Code.
2593	2540		18. For taxable years beginning after December 31, 2005,
2594	2541		retirement benefits received by an individual from any component of
2595	2542		the Armed Forces of the United States in an amount no t to exceed the
2596	2543		greater of seventy-five percent (75%) of such benefits or Ten
2597	2544		Thousand Dollars ($10,000.00) shall be exempt from taxable income
2598	2545		but in no case less than the amount of the exemption provided by
2599	2546		paragraph 14 of this subsection.
2600	2547		19. For taxable years beginning after December 31, 2006,
2601	2548		retirement benefits received by federal civil service retirees,
2602	2549		including survivor annuities, paid in lieu of Social Security
2603	2550		benefits shall be exempt from taxable income to the extent such
2604	2551		benefits are included in the federal adjusted gross income pursuant
2605	2552		to the provisions of Section 86 of the Internal Revenue Code, 26
2606	2553		U.S.C., Section 86, according to the following schedule:
2607	2554
2608		-	HB1909 HFLR Page 52
2609		-	BOLD FACE denotes Committee Amendments. 1
	2555	+	Req. No. 6022 Page 52 1
2610	2556		2
2611	2557		3
2612	2558		4
2613	2559		5
2614	2560		6
2615	2561		7
2616	2562		8
2617	2563		9
2618	2564		10
2619	2565		11
2620	2566		12
2621	2567		13
2622	2568		14
2623	2569		15
2624	2570		16
2625	2571		17
2626	2572		18
2627	2573		19
2628	2574		20
2629	2575		21
2630	2576		22
2631	2577		23
2632	2578		24
2633	2579
2634	2580		a. in the taxable year beginning January 1, 2007, twenty
2635	2581		percent (20%) of such benefits shall be exempt,
2636	2582		b. in the taxable year beginning January 1, 2008, forty
2637	2583		percent (40%) of such benefits shall be exempt,
2638	2584		c. in the taxable year beginning January 1, 2009, sixty
2639	2585		percent (60%) of such benefits shall be exempt,
2640	2586		d. in the taxable year beginnin g January 1, 2010, eighty
2641	2587		percent (80%) of such benefits shall be exempt, and
2642	2588		e. in the taxable year beginning January 1, 2011, and
2643	2589		subsequent taxable years, one hundred percent (100%)
2644	2590		of such benefits shall be exempt.
2645	2591		20. a. For taxable years beginning af ter December 31, 2007, a
2646	2592		resident individual may deduct up to Ten Thousand
2647	2593		Dollars ($10,000.00) from Oklahoma adjusted gross
2648	2594		income if the individual, or the dependent of the
2649	2595		individual, while living, donates one or more human
2650	2596		organs of the individual to a nother human being for
2651	2597		human organ transplantation. As used in this
2652	2598		paragraph, "human organ" means all or part of a liver,
2653	2599		pancreas, kidney, intestine, lung, or bone marrow. A
2654	2600		deduction that is claimed under this paragraph may be
2655	2601		claimed in the taxable y ear in which the human organ
2656	2602		transplantation occurs.
2657	2603
2658		-	HB1909 HFLR Page 53
2659		-	BOLD FACE denotes Committee Amendments. 1
	2604	+	Req. No. 6022 Page 53 1
2660	2605		2
2661	2606		3
2662	2607		4
2663	2608		5
2664	2609		6
2665	2610		7
2666	2611		8
2667	2612		9
2668	2613		10
2669	2614		11
2670	2615		12
2671	2616		13
2672	2617		14
2673	2618		15
2674	2619		16
2675	2620		17
2676	2621		18
2677	2622		19
2678	2623		20
2679	2624		21
2680	2625		22
2681	2626		23
2682	2627		24
2683	2628
2684	2629		b. An individual may claim this deduction only once, and
2685	2630		the deduction may be claimed only for unreimbursed
2686	2631		expenses that are incurred by the individual and
2687	2632		related to the organ donation of the individua l.
2688	2633		c. The Oklahoma Tax Commission shall promulgate rules to
2689	2634		implement the provisions of this paragraph which shall
2690	2635		contain a specific list of expenses which may be
2691	2636		presumed to qualify for the deduction. The Tax
2692	2637		Commission shall prescribe necessary require ments for
2693	2638		verification.
2694	2639		21. For taxable years beginning after December 31, 2009, there
2695	2640		shall be exempt from taxable income any amount received by the
2696	2641		beneficiary of the death benefit for an emergency medical technician
2697	2642		or a registered emergency medical re sponder provided by Section 1 -
2698	2643		2505.1 of Title 63 of the Oklahoma Statutes.
2699	2644		22. For taxable years beginning after December 31, 2008,
2700	2645		taxable income shall be increased by any unemployment compensation
2701	2646		exempted under Section 85(c) of the Internal Revenue Cod e, 26
2702	2647		U.S.C., Section 85(c)(2009).
2703	2648		23. For taxable years beginning after December 31, 2008, there
2704	2649		shall be exempt from taxable income any payment in an amount less
2705	2650		than Six Hundred Dollars ($600.00) received by a person as an award
2706	2651		for participation in a competitive livestock show event. For
2707	2652		purposes of this paragraph, the payment shall be treated as a
2708	2653
2709		-	HB1909 HFLR Page 54
2710		-	BOLD FACE denotes Committee Amendments. 1
	2654	+	Req. No. 6022 Page 54 1
2711	2655		2
2712	2656		3
2713	2657		4
2714	2658		5
2715	2659		6
2716	2660		7
2717	2661		8
2718	2662		9
2719	2663		10
2720	2664		11
2721	2665		12
2722	2666		13
2723	2667		14
2724	2668		15
2725	2669		16
2726	2670		17
2727	2671		18
2728	2672		19
2729	2673		20
2730	2674		21
2731	2675		22
2732	2676		23
2733	2677		24
2734	2678
2735	2679		scholarship amount paid by the entity sponsoring the event and the
2736	2680		sponsoring entity shall cause the payment to be categorized as a
2737	2681		scholarship in its book s and records.
2738	2682		24. For taxable years beginning on or after January 1, 2016,
2739	2683		taxable income shall be increased by any amount of state and local
2740	2684		sales or income taxes deducted under 26 U.S.C., Section 164 of the
2741	2685		Internal Revenue Code. If the amount of stat e and local taxes
2742	2686		deducted on the federal return is limited, taxable income on the
2743	2687		state return shall be increased only by the amount actually deducted
2744	2688		after any such limitations are applied.
2745	2689		F. 1. For taxable years beginning after December 31, 2004, a
2746	2690		deduction from the Oklahoma adjusted gross income of any individual
2747	2691		taxpayer shall be allowed for qualifying gains receiving capital
2748	2692		treatment that are included in the federal adjusted gross income of
2749	2693		such individual taxpayer during the taxable year.
2750	2694		2. As used in this subsection:
2751	2695		a. "qualifying gains receiving capital treatment " means
2752	2696		the amount of net capital gains, as defined in Section
2753	2697		1222(11) of the Internal Revenue Code, included in an
2754	2698		individual taxpayer's federal income tax return that
2755	2699		result from:
2756	2700		(1) the sale of real property or tangible personal
2757	2701		property located within Oklahoma that has been
2758	2702		directly or indirectly owned by the individual
2759	2703
2760		-	HB1909 HFLR Page 55
2761		-	BOLD FACE denotes Committee Amendments. 1
	2704	+	Req. No. 6022 Page 55 1
2762	2705		2
2763	2706		3
2764	2707		4
2765	2708		5
2766	2709		6
2767	2710		7
2768	2711		8
2769	2712		9
2770	2713		10
2771	2714		11
2772	2715		12
2773	2716		13
2774	2717		14
2775	2718		15
2776	2719		16
2777	2720		17
2778	2721		18
2779	2722		19
2780	2723		20
2781	2724		21
2782	2725		22
2783	2726		23
2784	2727		24
2785	2728
2786	2729		taxpayer for a holding period of at least five
2787	2730		(5) years prior to the date of the transaction
2788	2731		from which such net capital gains arise,
2789	2732		(2) the sale of stock or the sale of a direct or
2790	2733		indirect ownership interest in an Oklahoma
2791	2734		company, limited liability company, or
2792	2735		partnership where such stock or ownership
2793	2736		interest has been directly or indirectly owned by
2794	2737		the individual taxpayer for a holding period of
2795	2738		at least two (2) years prior to the date of the
2796	2739		transaction from which the net capital gains
2797	2740		arise, or
2798	2741		(3) the sale of real property, tangible personal
2799	2742		property or intangible personal property located
2800	2743		within Oklahoma as part of the sale of all or
2801	2744		substantially all of the assets of an Oklahoma
2802	2745		company, limited liability company, or
2803	2746		partnership or an Oklahoma proprietorship
2804	2747		business enterprise where such property has been
2805	2748		directly or indirectly owned by such entity or
2806	2749		business enterprise or owned by the owners of
2807	2750		such entity or business enterprise for a period
2808	2751		of at least two (2) years prior to the date of
2809	2752
2810		-	HB1909 HFLR Page 56
2811		-	BOLD FACE denotes Committee Amendments. 1
	2753	+	Req. No. 6022 Page 56 1
2812	2754		2
2813	2755		3
2814	2756		4
2815	2757		5
2816	2758		6
2817	2759		7
2818	2760		8
2819	2761		9
2820	2762		10
2821	2763		11
2822	2764		12
2823	2765		13
2824	2766		14
2825	2767		15
2826	2768		16
2827	2769		17
2828	2770		18
2829	2771		19
2830	2772		20
2831	2773		21
2832	2774		22
2833	2775		23
2834	2776		24
2835	2777
2836	2778		the transaction from which the net capital gains
2837	2779		arise,
2838	2780		b. "holding period" means an uninterrupted period of
2839	2781		time. The holding period shall include any additional
2840	2782		period when the property was held by another
2841	2783		individual or entity, if such additional period is
2842	2784		included in the taxpayer 's holding period for the
2843	2785		asset pursuant to the Internal Revenue Code,
2844	2786		c. "Oklahoma company," "limited liability company, " or
2845	2787		"partnership" means an entity whose primary
2846	2788		headquarters have been located in Oklahoma for at
2847	2789		least three (3) uninterrupted years prior to the date
2848	2790		of the transaction from which the net capital gains
2849	2791		arise,
2850	2792		d. "direct" means the individual taxpayer directly owns
2851	2793		the asset,
2852	2794		e. "indirect" means the individual taxpayer owns an
2853	2795		interest in a pass-through entity (or chain of pass -
2854	2796		through entities) that sells the asset that gives rise
2855	2797		to the qualifying gains receiving capital treatment.
2856	2798		(1) With respect to sales of real property or
2857	2799		tangible personal property located within
2858	2800		Oklahoma, the deduction described in this
2859	2801		subsection shall not apply unless the pass -
2860	2802
2861		-	HB1909 HFLR Page 57
2862		-	BOLD FACE denotes Committee Amendments. 1
	2803	+	Req. No. 6022 Page 57 1
2863	2804		2
2864	2805		3
2865	2806		4
2866	2807		5
2867	2808		6
2868	2809		7
2869	2810		8
2870	2811		9
2871	2812		10
2872	2813		11
2873	2814		12
2874	2815		13
2875	2816		14
2876	2817		15
2877	2818		16
2878	2819		17
2879	2820		18
2880	2821		19
2881	2822		20
2882	2823		21
2883	2824		22
2884	2825		23
2885	2826		24
2886	2827
2887	2828		through entity that makes the sale has held the
2888	2829		property for not less t han five (5) uninterrupted
2889	2830		years prior to the date of the transaction that
2890	2831		created the capital gain, and each pass -through
2891	2832		entity included in the chain of ownership has
2892	2833		been a member, partner, or shareholder of the
2893	2834		pass-through entity in the tier immediate ly below
2894	2835		it for an uninterrupted period of not less than
2895	2836		five (5) years.
2896	2837		(2) With respect to sales of stock or ownership
2897	2838		interest in or sales of all or substantially all
2898	2839		of the assets of an Oklahoma company, limited
2899	2840		liability company, partnership or Oklaho ma
2900	2841		proprietorship business enterprise, the deduction
2901	2842		described in this subsection shall not apply
2902	2843		unless the pass-through entity that makes the
2903	2844		sale has held the stock or ownership interest for
2904	2845		not less than two (2) uninterrupted years prior
2905	2846		to the date of the transaction that created the
2906	2847		capital gain, and each pass -through entity
2907	2848		included in the chain of ownership has been a
2908	2849		member, partner or shareholder of the pass -
2909	2850		through entity in the tier immediately below it
2910	2851		for an uninterrupted period of not less th an two
2911	2852
2912		-	HB1909 HFLR Page 58
2913		-	BOLD FACE denotes Committee Amendments. 1
	2853	+	Req. No. 6022 Page 58 1
2914	2854		2
2915	2855		3
2916	2856		4
2917	2857		5
2918	2858		6
2919	2859		7
2920	2860		8
2921	2861		9
2922	2862		10
2923	2863		11
2924	2864		12
2925	2865		13
2926	2866		14
2927	2867		15
2928	2868		16
2929	2869		17
2930	2870		18
2931	2871		19
2932	2872		20
2933	2873		21
2934	2874		22
2935	2875		23
2936	2876		24
2937	2877
2938	2878		(2) years. For purposes of this division,
2939	2879		uninterrupted ownership prior to July 1, 2007,
2940	2880		shall be included in the determination of the
2941	2881		required holding period prescribed by this
2942	2882		division, and
2943	2883		f. "Oklahoma proprietorship business enterprise " means a
2944	2884		business enterprise whose income and expenses have
2945	2885		been reported on Schedule C or F of an individual
2946	2886		taxpayer's federal income tax return, or any similar
2947	2887		successor schedule published by the Internal Revenue
2948	2888		Service and whose primary headquarters have been
2949	2889		located in Oklahoma for at least three (3)
2950	2890		uninterrupted years prior to the date of the
2951	2891		transaction from which the net capital gains arise.
2952	2892		G. 1. For purposes of computing its Oklahoma taxable income
2953	2893		under this section, the dividends -paid deduction otherwise allowed
2954	2894		by federal law in computing net income of a real estate investment
2955	2895		trust that is subject to federal income tax shall be added back in
2956	2896		computing the tax imposed by this state under this title if the real
2957	2897		estate investment trust is a captive re al estate investment trust.
2958	2898		2. For purposes of computing its Oklahoma taxable income under
2959	2899		this section, a taxpayer shall add back otherwise deductible rents
2960	2900		and interest expenses paid to a captive real estate investment trust
2961	2901
2962		-	HB1909 HFLR Page 59
2963		-	BOLD FACE denotes Committee Amendments. 1
	2902	+	Req. No. 6022 Page 59 1
2964	2903		2
2965	2904		3
2966	2905		4
2967	2906		5
2968	2907		6
2969	2908		7
2970	2909		8
2971	2910		9
2972	2911		10
2973	2912		11
2974	2913		12
2975	2914		13
2976	2915		14
2977	2916		15
2978	2917		16
2979	2918		17
2980	2919		18
2981	2920		19
2982	2921		20
2983	2922		21
2984	2923		22
2985	2924		23
2986	2925		24
2987	2926
2988	2927		that is not subject to the p rovisions of paragraph 1 of this
2989	2928		subsection. As used in this subsection:
2990	2929		a. the term "real estate investment trust " or "REIT"
2991	2930		means the meaning ascribed to such term in Section 856
2992	2931		of the Internal Revenue Code,
2993	2932		b. the term "captive real estate investment trust" means
2994	2933		a real estate investment trust, the shares or
2995	2934		beneficial interests of which are not regularly traded
2996	2935		on an established securities market and more than
2997	2936		fifty percent (50%) of the voting power or value of
2998	2937		the beneficial interests or shares of wh ich are owned
2999	2938		or controlled, directly or indirectly, or
3000	2939		constructively, by a single entity that is:
3001	2940		(1) treated as an association taxable as a
3002	2941		corporation under the Internal Revenue Code, and
3003	2942		(2) not exempt from federal income tax pursuant to
3004	2943		the provisions of Section 501(a) of the Internal
3005	2944		Revenue Code.
3006	2945		The term shall not include a real estate investment
3007	2946		trust that is intended to be regularly traded on an
3008	2947		established securities market, and that satisfies the
3009	2948		requirements of Section 856(a)(5) and (6) of the U.S.
3010	2949		Internal Revenue Code by reason of Section 856(h)(2)
3011	2950		of the Internal Revenue Code,
3012	2951
3013		-	HB1909 HFLR Page 60
3014		-	BOLD FACE denotes Committee Amendments. 1
	2952	+	Req. No. 6022 Page 60 1
3015	2953		2
3016	2954		3
3017	2955		4
3018	2956		5
3019	2957		6
3020	2958		7
3021	2959		8
3022	2960		9
3023	2961		10
3024	2962		11
3025	2963		12
3026	2964		13
3027	2965		14
3028	2966		15
3029	2967		16
3030	2968		17
3031	2969		18
3032	2970		19
3033	2971		20
3034	2972		21
3035	2973		22
3036	2974		23
3037	2975		24
3038	2976
3039	2977		c. the term "association taxable as a corporation " shall
3040	2978		not include the following entities:
3041	2979		(1) any real estate investment trust as defined in
3042	2980		paragraph a of this sub section other than a
3043	2981		"captive real estate investment trust ", or
3044	2982		(2) any qualified real estate investment trust
3045	2983		subsidiary under Section 856(i) of the Internal
3046	2984		Revenue Code, other than a qualified REIT
3047	2985		subsidiary of a "captive real estate investment
3048	2986		trust", or
3049	2987		(3) any Listed Australian Property Trust (meaning an
3050	2988		Australian unit trust registered as a "Managed
3051	2989		Investment Scheme" under the Australian
3052	2990		Corporations Act in which the principal class of
3053	2991		units is listed on a recognized stock exchange in
3054	2992		Australia and is regularly traded on an
3055	2993		established securities market), or an entity
3056	2994		organized as a trust, provided that a Listed
3057	2995		Australian Property Trust owns or controls,
3058	2996		directly or indirectly, seventy -five percent
3059	2997		(75%) or more of the voting power or value of the
3060	2998		beneficial interests or shares of such trust, or
3061	2999		(4) any Qualified Foreign Entity, meaning a
3062	3000		corporation, trust, association or partnership
3063	3001
3064		-	HB1909 HFLR Page 61
3065		-	BOLD FACE denotes Committee Amendments. 1
	3002	+	Req. No. 6022 Page 61 1
3066	3003		2
3067	3004		3
3068	3005		4
3069	3006		5
3070	3007		6
3071	3008		7
3072	3009		8
3073	3010		9
3074	3011		10
3075	3012		11
3076	3013		12
3077	3014		13
3078	3015		14
3079	3016		15
3080	3017		16
3081	3018		17
3082	3019		18
3083	3020		19
3084	3021		20
3085	3022		21
3086	3023		22
3087	3024		23
3088	3025		24
3089	3026
3090	3027		organized outside the laws of the United States
3091	3028		and which satisfies the following criteria:
3092	3029		(a) at least seventy-five percent (75%) of the
3093	3030		entity's total asset value at the close of
3094	3031		its taxable year is represented by real
3095	3032		estate assets, as defined in Section
3096	3033		856(c)(5)(B) of the Internal Revenue Code,
3097	3034		thereby including shares or certificates of
3098	3035		beneficial interest in any real estate
3099	3036		investment trust, cash and cash equivalents,
3100	3037		and U.S. Government securities,
3101	3038		(b) the entity receives a dividend -paid
3102	3039		deduction comparable to Section 561 of the
3103	3040		Internal Revenue Code, or is exempt from
3104	3041		entity level tax,
3105	3042		(c) the entity is requir ed to distribute at
3106	3043		least eighty-five percent (85%) of its
3107	3044		taxable income, as computed in the
3108	3045		jurisdiction in which it is organized, to
3109	3046		the holders of its shares or certificates of
3110	3047		beneficial interest on an annual basis,
3111	3048		(d) not more than ten percent (10%) of the
3112	3049		voting power or value in such entity is held
3113	3050		directly or indirectly or constructively by
3114	3051
3115		-	HB1909 HFLR Page 62
3116		-	BOLD FACE denotes Committee Amendments. 1
	3052	+	Req. No. 6022 Page 62 1
3117	3053		2
3118	3054		3
3119	3055		4
3120	3056		5
3121	3057		6
3122	3058		7
3123	3059		8
3124	3060		9
3125	3061		10
3126	3062		11
3127	3063		12
3128	3064		13
3129	3065		14
3130	3066		15
3131	3067		16
3132	3068		17
3133	3069		18
3134	3070		19
3135	3071		20
3136	3072		21
3137	3073		22
3138	3074		23
3139	3075		24
3140	3076
3141	3077		a single entity or individual, or the shares
3142	3078		or beneficial interests of such entity are
3143	3079		regularly traded on an established
3144	3080		securities market, and
3145	3081		(e) the entity is organized in a country which
3146	3082		has a tax treaty with the United States.
3147	3083		3. For purposes of this subsection, the constructive ownership
3148	3084		rules of Section 318(a) of the Internal Revenue Code, as modified by
3149	3085		Section 856(d)(5) of the Internal Revenue Code, shall apply in
3150	3086		determining the ownership of stock, assets, or net profits of any
3151	3087		person.
3152	3088		4. A real estate investment trust that does not become
3153	3089		regularly traded on an established securities market within one (1)
3154	3090		year of the date on which it first becomes a real estate investment
3155	3091		trust shall be deemed not to have been regularly traded on an
3156	3092		established securities market, retroactive to the date it first
3157	3093		became a real estate investment trust, and shall file an amended
3158	3094		return reflecting such retroactive desig nation for any tax year or
3159	3095		part year occurring during its initial year of status as a real
3160	3096		estate investment trust. For purposes of this subsection, a real
3161	3097		estate investment trust becomes a real estate investment trust on
3162	3098		the first day it has both met the requirements of Section 856 of the
3163	3099		Internal Revenue Code and has elected to be treated as a real estate
3164	3100
3165		-	HB1909 HFLR Page 63
3166		-	BOLD FACE denotes Committee Amendments. 1
	3101	+	Req. No. 6022 Page 63 1
3167	3102		2
3168	3103		3
3169	3104		4
3170	3105		5
3171	3106		6
3172	3107		7
3173	3108		8
3174	3109		9
3175	3110		10
3176	3111		11
3177	3112		12
3178	3113		13
3179	3114		14
3180	3115		15
3181	3116		16
3182	3117		17
3183	3118		18
3184	3119		19
3185	3120		20
3186	3121		21
3187	3122		22
3188	3123		23
3189	3124		24
3190	3125
3191	3126		investment trust pursuant to Section 856(c)(1) of the Internal
3192	3127		Revenue Code.
3193	3128		H. For purposes of computing Oklahoma taxable income pursuant
3194	3129		to the provisions of this section, any limitations imposed pursuant
3195	3130		to Section 280E of the Internal Revenue Code of 1986, as amended,
3196	3131		shall not apply to entities holding a valid business license or
3197	3132		licenses in the categories provided pursuant to Section 427.14 of
3198	3133		Title 63 of the Oklahoma Statutes and any business expense
3199	3134		disallowed because of the restrictions of Section 280E that would
3200	3135		otherwise be deductible by other provisions of the Internal Revenue
3201	3136		Code of 1986, as amended, as ordinary and necessary business
3202	3137		expenses shall be fully deductible for purposes of the Oklahoma
3203	3138		income tax return.
3204	3139		SECTION 2. This act shall become effective November 1, 2021.
3205	3140
3206		-	COMMITTEE REPORT BY: COMMITTEE ON ALCOHOL, TOBACCO AND CO NTROLLED
3207		-	SUBSTANCES, dated 02/22/2021 - DO PASS.
	3141	+	58-1-6022 MAH 01/20/21