Oklahoma 2022 Regular Session

Oklahoma House Bill HB2178 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	An Act
2		-	ENROLLED HOUSE
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	3	+	ENGR. S. A. TO ENGR. H. B. NO. 2178 Page 1 1
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	28	+	ENGROSSED SENATE AMENDMENT
	29	+	TO
	30	+	ENGROSSED HOUSE
3	31		BILL NO. 2178 By: Hilbert and Lawson of the
4	32		House
5	33
6	34		and
7	35
8	36		Montgomery of the Senate
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14		-	An Act relating to revenue and taxation; amending 68
15		-	O.S. 2011, Section 2358, as last amended by Section
16		-	5, Chapter 201, O.S.L. 2019 (68 O.S. Supp. 2 020,
17		-	Section 2358), which relates to Oklahoma taxable
18		-	income and Oklahoma adjusted gross income;
19		-	authorizing income tax deduction for contributions to
20		-	ABLE accounts; specifying amount of deduction;
21		-	providing for carryover; prohibiting use of deduction
22		-	for same contribution amount in more than one tax
23		-	year; and providing an effective date.
24		-
25		-
26		-
27		-	SUBJECT: Revenue and taxation
	42	+	[ revenue and taxation - Oklahoma taxable income and
	43	+	Oklahoma adjusted gross income - ABLE accounts -
	44	+	effective date ]
	45	+
	46	+
	47	+	AMENDMENT NO. 1. Page 1, restore the title
	48	+
	49	+	Passed the Senate the 21st day of April, 2021.
	50	+
	51	+
	52	+
	53	+	Presiding Officer of the Senate
	54	+
	55	+
	56	+	Passed the House of Representatives the ____ day of __________,
	57	+	2021.
	58	+
	59	+
	60	+
	61	+	Presiding Officer of the House
	62	+	of Representatives
	63	+
	64	+	ENGR. H. B. NO. 2178 Page 1 1
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	89	+	ENGROSSED HOUSE
	90	+	BILL NO. 2178 By: Hilbert and Lawson of the
	91	+	House
	92	+
	93	+	and
	94	+
	95	+	Montgomery of the Senate
	96	+
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	100	+
	101	+
	102	+
	103	+	[ revenue and taxation - Oklahoma taxable income and
	104	+	Oklahoma adjusted gross income - ABLE accounts -
	105	+	effective date ]
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28	109
29	110		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
30		-
31	111		SECTION 1. AMENDATORY 68 O.S. 2011, Section 2358, as
32	112		last amended by Section 5, Chapter 201, O.S.L. 2019 (68 O.S. Supp.
33	113		2020, Section 2358), is amended to read as follows:
34		-
35	114		Section 2358. For all tax years beginning after December 31,
36	115		1981, taxable income and adjusted gross income shall be adjusted to
37	116		arrive at Oklahoma taxable income and Oklahoma adjusted gross income
38	117		as required by this section.
39		-
40	118		A. The taxable income of any taxpayer shall be adju sted to
41	119		arrive at Oklahoma taxable income for corporations and Oklahoma
42	120		adjusted gross income for individuals, as follows:
43	121
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44	147		1. There shall be added interest income on obligations of any
45	148		state or political subdivision thereto which is not otherwise
46		-	exempted pursuant to other laws of this state, to the extent that ~~ENR. H. B. NO. 2178 Page 2~~
	149	+	exempted pursuant to other laws of this state, to the extent that
47	150		such interest is not included in taxable income and adjusted gross
48	151		income.
49		-
50	152		2. There shall be deducted amounts included in such income that
51	153		the state is prohibited from taxing because of the provisi ons of the
52	154		Federal Constitution, the State Constitution, federal laws or laws
53	155		of Oklahoma.
54		-
55	156		3. The amount of any federal net operating loss deduction shall
56	157		be adjusted as follows:
57		-
58	158		a. For carryovers and carrybacks to taxable years
59	159		beginning before January 1 , 1981, the amount of any
60	160		net operating loss deduction allowed to a taxpayer for
61	161		federal income tax purposes shall be reduced to an
62	162		amount which is the same portion thereof as the loss
63	163		from sources within this state, as determined pursuant
64	164		to this section and Section 2362 of this title, for
65	165		the taxable year in which such loss is sustained is of
66	166		the total loss for such year;
67		-
68	167		b. For carryovers and carrybacks to taxable years
69	168		beginning after December 31, 1980, the amount of any
70	169		net operating loss deduction all owed for the taxable
71	170		year shall be an amount equal to the aggregate of the
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72	197		Oklahoma net operating loss carryovers and carrybacks
73	198		to such year. Oklahoma net operating losses shall be
74	199		separately determined by reference to Section 172 of
75	200		the Internal Revenue Code, 26 U.S.C., Section 172, as
76	201		modified by the Oklahoma Income Tax Act, Section 2351
77	202		et seq. of this title, and shall be allowed without
78	203		regard to the existence of a federal net operating
79	204		loss. For tax years beginning after December 31,
80	205		2000, and ending before January 1, 2008, the years to
81	206		which such losses may be carried shall be determined
82	207		solely by reference to Section 172 of the Internal
83	208		Revenue Code, 26 U.S.C., Section 172, with the
84	209		exception that the terms "net operating loss" and
85	210		"taxable income" shall be replaced with "Oklahoma net
86	211		operating loss" and "Oklahoma taxable income ". For
87	212		tax years beginning after December 31, 2007, and
88	213		ending before January 1, 2009, years to which such
89	214		losses may be carried back shall be limited to two (2)
90	215		years. For tax years beginning after December 31,
91		-	2008, the years to which such losses may be carried ~~ENR. H. B. NO. 2178 Page 3~~
	216	+	2008, the years to which such losses may be carried
92	217		back shall be determined solely by reference to
93	218		Section 172 of the Internal Revenue Code, 26 U.S.C.,
94	219		Section 172, with the exception that the terms "net
95	220		operating loss" and "taxable income" shall be replaced
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96	247		with "Oklahoma net operating loss " and "Oklahoma
97	248		taxable income".
98		-
99	249		4. Items of the following nature shall be allocated as
100	250		indicated. Allowable deductions attributable to items separately
101	251		allocable in subparagrap hs a, b and c of this paragraph, whether or
102	252		not such items of income were actually received, shall be allocated
103	253		on the same basis as those items:
104		-
105	254		a. Income from real and tangible personal property, such
106	255		as rents, oil and mining production or royalties, and
107	256		gains or losses from sales of such property, shall be
108	257		allocated in accordance with the situs of such
109	258		property;
110		-
111	259		b. Income from intangible personal property, such as
112	260		interest, dividends, patent or copyright royalties,
113	261		and gains or losses from sales of such property, shall
114	262		be allocated in accordance with the domiciliary situs
115	263		of the taxpayer, except that:
116		-
117	264		(1) where such property has acquired a nonunitary
118	265		business or commercial situs apart from the
119	266		domicile of the taxpayer such income shall be
120	267		allocated in accordance with such business or
121	268		commercial situs; interest income from
122	269		investments held to generate working capital for
123	270		a unitary business enterprise shall be included
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124	297		in apportionable income; a resident trust or
125	298		resident estate shall be treated as having a
126	299		separate commercial or business situs insofar as
127	300		undistributed income is concerned, but shall not
128	301		be treated as having a separate commercial or
129	302		business situs insofar as distributed income is
130	303		concerned,
131		-
132	304		(2) for taxable years beginning after December 31,
133	305		2003, capital or ordinary gains or losses from
134	306		the sale of an ownership interest in a publicly
135	307		traded partnership, as defined by Section 7704(b)
136		-	of the Internal Revenue Code, shall be allocated ~~ENR. H. B. NO. 2178 Page 4~~
	308	+	of the Internal Revenue Code, shall be allocated
137	309		to this state in the ratio of the original cost
138	310		of such partnership's tangible property in this
139	311		state to the original cost of such partnership 's
140	312		tangible property everywhere, as determined at
141	313		the time of the sale; if more than fifty percent
142	314		(50%) of the value of the partnership 's assets
143	315		consists of intangible assets, c apital or
144	316		ordinary gains or losses from the sale of an
145	317		ownership interest in the partnership shall be
146	318		allocated to this state in accordance with the
147	319		sales factor of the partnership for its first
148	320		full tax period immediately preceding its tax
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149	347		period during which the ownership interest in the
150	348		partnership was sold; the provisions of this
151	349		division shall only apply if the capital or
152	350		ordinary gains or losses from the sale of an
153	351		ownership interest in a partnership do not
154	352		constitute qualifying gain receiving capital
155	353		treatment as defined in subparagraph a of
156	354		paragraph 2 of subsection F of this section,
157		-
158	355		(3) income from such property which is required to be
159	356		allocated pursuant to the provisions of paragraph
160	357		5 of this subsection shall be allocated as herein
161	358		provided;
162		-
163	359		c. Net income or loss from a business activity which is
164	360		not a part of business carried on within or without
165	361		the state of a unitary character shall be separately
166	362		allocated to the state in which such activity is
167	363		conducted;
168		-
169	364		d. In the case of a manufacturing or pr ocessing
170	365		enterprise the business of which in Oklahoma consists
171	366		solely of marketing its products by:
172		-
173	367		(1) sales having a situs without this state, shipped
174	368		directly to a point from without the state to a
175	369		purchaser within the state, commonly known as
176	370		interstate sales,
177	371
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178	397		(2) sales of the product stored in public warehouses
179	398		within the state pursuant to "in transit"
180		-	tariffs, as prescribed and allowed by the ~~ENR. H. B. NO. 2178 Page 5~~
	399	+	tariffs, as prescribed and allowed by the
181	400		Interstate Commerce Commission, to a purchaser
182	401		within the state,
183		-
184	402		(3) sales of the product stored in public war ehouses
185	403		within the state where the shipment to such
186	404		warehouses is not covered by "in transit"
187	405		tariffs, as prescribed and allowed by the
188	406		Interstate Commerce Commission, to a purchaser
189	407		within or without the state,
190		-
191	408		the Oklahoma net income shall, at the option of the
192	409		taxpayer, be that portion of the total net income of
193	410		the taxpayer for federal income tax purposes derived
194	411		from the manufacture and/or processing and sales
195	412		everywhere as determined by the ratio of the sales
196	413		defined in this section made to the purcha ser within
197	414		the state to the total sales everywhere. The term
198	415		"public warehouse" as used in this subparagraph means
199	416		a licensed public warehouse, the principal business of
200	417		which is warehousing merchandise for the public;
201		-
202	418		e. In the case of insurance companie s, Oklahoma taxable
203	419		income shall be taxable income of the taxpayer for
204	420		federal tax purposes, as adjusted for the adjustments
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205	447		provided pursuant to the provisions of paragraphs 1
206	448		and 2 of this subsection, apportioned as follows:
207		-
208	449		(1) except as otherwise provi ded by division (2) of
209	450		this subparagraph, taxable income of an insurance
210	451		company for a taxable year shall be apportioned
211	452		to this state by multiplying such income by a
212	453		fraction, the numerator of which is the direct
213	454		premiums written for insurance on property or
214	455		risks in this state, and the denominator of which
215	456		is the direct premiums written for insurance on
216	457		property or risks everywhere. For purposes of
217	458		this subsection, the term "direct premiums
218	459		written" means the total amount of direct
219	460		premiums written, asse ssments and annuity
220	461		considerations as reported for the taxable year
221	462		on the annual statement filed by the company with
222	463		the Insurance Commissioner in the form approved
223	464		by the National Association of Insurance
224	465		Commissioners, or such other form as may be
225		-	prescribed in lieu thereof, ENR. H. B. NO. 2178 Page 6
226		-
	466	+	prescribed in lieu thereof,
227	467		(2) if the principal source of premiums written by an
228	468		insurance company consists of premiums for
229	469		reinsurance accepted by it, the taxable income of
230	470		such company shall be apportioned to this state
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231	497		by multiplying such income by a fracti on, the
232	498		numerator of which is the sum of (a) direct
233	499		premiums written for insurance on property or
234	500		risks in this state, plus (b) premiums written
235	501		for reinsurance accepted in respect of property
236	502		or risks in this state, and the denominator of
237	503		which is the sum of (c) direct premiums written
238	504		for insurance on property or risks everywhere,
239	505		plus (d) premiums written for reinsurance
240	506		accepted in respect of property or risks
241	507		everywhere. For purposes of this paragraph,
242	508		premiums written for reinsurance accepted in
243	509		respect of property or risks in this state,
244	510		whether or not otherwise determinable, may at the
245	511		election of the company be determined on the
246	512		basis of the proportion which premiums written
247	513		for insurance accepted from companies
248	514		commercially domiciled in Oklahoma b ears to
249	515		premiums written for reinsurance accepted from
250	516		all sources, or alternatively in the proportion
251	517		which the sum of the direct premiums written for
252	518		insurance on property or risks in this state by
253	519		each ceding company from which reinsurance is
254	520		accepted bears to the sum of the total direct
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255	547		premiums written by each such ceding company for
256	548		the taxable year.
257		-
258	549		5. The net income or loss remaining after the separate
259	550		allocation in paragraph 4 of this subsection, being that which is
260	551		derived from a unitary business enterprise, shall be apportioned to
261	552		this state on the basis of the arithmetical average of three factors
262	553		consisting of property, payroll and sales or gross revenue
263	554		enumerated as subparagraphs a, b and c of this paragraph. Net
264	555		income or loss as used in th is paragraph includes that derived from
265	556		patent or copyright royalties, purchase discounts, and interest on
266	557		accounts receivable relating to or arising from a business activity,
267	558		the income from which is apportioned pursuant to this subsection,
268	559		including the sale or other disposition of such property and any
269	560		other property used in the unitary enterprise. Deductions used in
270		-	computing such net income or loss shall not include taxes based on ~~ENR. H. B. NO. 2178 Page 7~~
	561	+	computing such net income or loss shall not include taxes based on
271	562		or measured by income. Provided, for corporations whose property
272	563		for purposes of the tax imposed by Section 2355 of this title has an
273	564		initial investment cost equaling or exceeding Two Hundred Million
274	565		Dollars ($200,000,000.00) and such investment is made on or after
275	566		July 1, 1997, or for corporations which expand their propert y or
276	567		facilities in this state and such expansion has an investment cost
277	568		equaling or exceeding Two Hundred Million Dollars ($200,000,000.00)
278	569		over a period not to exceed three (3) years, and such expansion is
279	570		commenced on or after January 1, 2000, the three factors shall be
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280	597		apportioned with property and payroll, each comprising twenty -five
281	598		percent (25%) of the apportionment factor and sales comprising fifty
282	599		percent (50%) of the apportionment factor. The apportionment
283	600		factors shall be computed as follows:
284		-
285	601		a. The property factor is a fraction, the numerator of
286	602		which is the average value of the taxpayer 's real and
287	603		tangible personal property owned or rented and used in
288	604		this state during the tax period and the denominator
289	605		of which is the average value of all the t axpayer's
290	606		real and tangible personal property everywhere owned
291	607		or rented and used during the tax period.
292		-
293	608		(1) Property, the income from which is separately
294	609		allocated in paragraph 4 of this subsection,
295	610		shall not be included in determining this
296	611		fraction. The numerator of the fraction shall
297	612		include a portion of the investment in
298	613		transportation and other equipment having no
299	614		fixed situs, such as rolling stock, buses, trucks
300	615		and trailers, including machinery and equipment
301	616		carried thereon, airplanes, salespersons '
302	617		automobiles and other similar equipment, in the
303	618		proportion that miles traveled in Oklahoma by
304	619		such equipment bears to total miles traveled,
305	620
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	635	+	15
	636	+	16
	637	+	17
	638	+	18
	639	+	19
	640	+	20
	641	+	21
	642	+	22
	643	+	23
	644	+	24
	645	+
306	646		(2) Property owned by the taxpayer is valued at its
307	647		original cost. Property rented by the taxpayer
308	648		is valued at eight times the net annual rental
309	649		rate. Net annual rental rate is the annual
310	650		rental rate paid by the taxpayer, less any annual
311	651		rental rate received by the taxpayer from
312	652		subrentals,
313		-
314	653		(3) The average value of property shall be determined
315		-	by averaging the ~~values~~ at the beginning and ~~ENR. H. B. NO. 2178 Page 8~~
	654	+	by averaging the value s at the beginning and
316	655		ending of the tax period but the Oklahoma Tax
317	656		Commission may require the averaging of monthly
318	657		values during the tax period if reasonably
319	658		required to reflect properly the average value of
320	659		the taxpayer's property;
321		-
322	660		b. The payroll factor is a fraction, the numerator of
323	661		which is the total compensation for services rendered
324	662		in the state during the tax period, and the
325	663		denominator of which is the total compensation for
326	664		services rendered everywhere during the tax period.
327	665		"Compensation", as used in this subsection means those
328	666		paid-for services to the extent related to the unitary
329	667		business but does not include officers ' salaries,
330	668		wages and other compensation.
331	669
	670	+	ENGR. H. B. NO. 2178 Page 13 1
	671	+	2
	672	+	3
	673	+	4
	674	+	5
	675	+	6
	676	+	7
	677	+	8
	678	+	9
	679	+	10
	680	+	11
	681	+	12
	682	+	13
	683	+	14
	684	+	15
	685	+	16
	686	+	17
	687	+	18
	688	+	19
	689	+	20
	690	+	21
	691	+	22
	692	+	23
	693	+	24
	694	+
332	695		(1) In the case of a transportation enterprise, the
333	696		numerator of the fraction shall inc lude a portion
334	697		of such expenditure in connection with employees
335	698		operating equipment over a fixed route, such as
336	699		railroad employees, airline pilots, or bus
337	700		drivers, in this state only a part of the time,
338	701		in the proportion that mileage traveled in
339	702		Oklahoma bears to total mileage traveled by such
340	703		employees,
341		-
342	704		(2) In any case the numerator of the fraction shall
343	705		include a portion of such expenditures in
344	706		connection with itinerant employees, such as
345	707		traveling salespersons, in this state only a part
346	708		of the time, in the proportion that time spent in
347	709		Oklahoma bears to total time spent in furtherance
348	710		of the enterprise by such employees;
349		-
350	711		c. The sales factor is a fraction, the numerator of which
351	712		is the total sales or gross revenue of the taxpayer in
352	713		this state during the t ax period, and the denominator
353	714		of which is the total sales or gross revenue of the
354	715		taxpayer everywhere during the tax period. "Sales",
355	716		as used in this subsection does not include sales or
356	717		gross revenue which are separately allocated in
357	718		paragraph 4 of this subsection.
358	719
	720	+	ENGR. H. B. NO. 2178 Page 14 1
	721	+	2
	722	+	3
	723	+	4
	724	+	5
	725	+	6
	726	+	7
	727	+	8
	728	+	9
	729	+	10
	730	+	11
	731	+	12
	732	+	13
	733	+	14
	734	+	15
	735	+	16
	736	+	17
	737	+	18
	738	+	19
	739	+	20
	740	+	21
	741	+	22
	742	+	23
	743	+	24
	744	+
359	745		(1) Sales of tangible personal property have a situs
360		-	in this state if the property is delivered or ~~ENR. H. B. NO. 2178 Page 9~~
	746	+	in this state if the property is delivered or
361	747		shipped to a purchaser other than the United
362	748		States government, within this state regardless
363	749		of the FOB point or other conditions of the sale;
364	750		or the property is shipped from an office, store,
365	751		warehouse, factory or other place of storage in
366	752		this state and (a) the purchaser is the United
367	753		States government or (b) the taxpayer is not
368	754		doing business in the state of the destination of
369	755		the shipment.
370		-
371	756		(2) In the case of a railroad or interurban railway
372	757		enterprise, the numerator of the fraction shall
373	758		not be less than the allocation of revenues to
374	759		this state as shown in its annual report to the
375	760		Corporation Commission.
376		-
377	761		(3) In the case of an airline, truck or bus
378	762		enterprise or freight car, tank car, refrigerator
379	763		car or other railroad equipment enterprise, the
380	764		numerator of the fraction shall include a portion
381	765		of revenue from interstate transportation in the
382	766		proportion that interstate mileage traveled in
383	767		Oklahoma bears to total interstate mileage
384	768		traveled.
	769	+
	770	+	ENGR. H. B. NO. 2178 Page 15 1
	771	+	2
	772	+	3
	773	+	4
	774	+	5
	775	+	6
	776	+	7
	777	+	8
	778	+	9
	779	+	10
	780	+	11
	781	+	12
	782	+	13
	783	+	14
	784	+	15
	785	+	16
	786	+	17
	787	+	18
	788	+	19
	789	+	20
	790	+	21
	791	+	22
	792	+	23
	793	+	24
385	794
386	795		(4) In the case of an oil, gasoline or gas pipeline
387	796		enterprise, the numerator of the fraction shall
388	797		be either the total of traffic units of the
389	798		enterprise within Oklahoma or the revenue
390	799		allocated to Oklahoma bas ed upon miles moved, at
391	800		the option of the taxpayer, and the denominator
392	801		of which shall be the total of traffic units of
393	802		the enterprise or the revenue of the enterprise
394	803		everywhere as appropriate to the numerator. A
395	804		"traffic unit" is hereby defined as the
396	805		transportation for a distance of one (1) mile of
397	806		one (1) barrel of oil, one (1) gallon of gasoline
398	807		or one thousand (1,000) cubic feet of natural or
399	808		casinghead gas, as the case may be.
400		-
401	809		(5) In the case of a telephone or telegraph or other
402	810		communication enterp rise, the numerator of the
403	811		fraction shall include that portion of the
404	812		interstate revenue as is allocated pursuant to
405		-	the accounting procedures prescribed by the ~~ENR. H. B. NO. 2178 Page 10~~
	813	+	the accounting procedures prescribed by the
406	814		Federal Communications Commission; provided that
407	815		in respect to each corporation or business ent ity
408	816		required by the Federal Communications Commission
409	817		to keep its books and records in accordance with
410	818		a uniform system of accounts prescribed by such
	819	+
	820	+	ENGR. H. B. NO. 2178 Page 16 1
	821	+	2
	822	+	3
	823	+	4
	824	+	5
	825	+	6
	826	+	7
	827	+	8
	828	+	9
	829	+	10
	830	+	11
	831	+	12
	832	+	13
	833	+	14
	834	+	15
	835	+	16
	836	+	17
	837	+	18
	838	+	19
	839	+	20
	840	+	21
	841	+	22
	842	+	23
	843	+	24
	844	+
411	845		Commission, the intrastate net income shall be
412	846		determined separately in the manner provided by
413	847		such uniform system of accounts and only the
414	848		interstate income shall be subject to allocation
415	849		pursuant to the provisions of this subsection.
416	850		Provided further, that the gross revenue factors
417	851		shall be those as are determined pursuant to the
418	852		accounting procedures pres cribed by the Federal
419	853		Communications Commission.
420		-
421	854		In any case where the apportionment of the three factors
422	855		prescribed in this paragraph attributes to Oklahoma a portion of net
423	856		income of the enterprise out of all appropriate proportion to the
424	857		property owned and/or business transacted within this state, because
425	858		of the fact that one or more of the factors so prescribed are not
426	859		employed to any appreciable extent in furtherance of the enterprise;
427	860		or because one or more factors not so prescribed are employed to a
428	861		considerable extent in furtherance of the enterprise; or because of
429	862		other reasons, the Tax Commission is empowered to permit, after a
430	863		showing by taxpayer that an excessive portion of net income has been
431	864		attributed to Oklahoma, or require, when in its judgm ent an
432	865		insufficient portion of net income has been attributed to Oklahoma,
433	866		the elimination, substitution, or use of additional factors, or
434	867		reduction or increase in the weight of such prescribed factors.
435	868		Provided, however, that any such variance from such prescribed
	869	+
	870	+	ENGR. H. B. NO. 2178 Page 17 1
	871	+	2
	872	+	3
	873	+	4
	874	+	5
	875	+	6
	876	+	7
	877	+	8
	878	+	9
	879	+	10
	880	+	11
	881	+	12
	882	+	13
	883	+	14
	884	+	15
	885	+	16
	886	+	17
	887	+	18
	888	+	19
	889	+	20
	890	+	21
	891	+	22
	892	+	23
	893	+	24
	894	+
436	895		factors which has the effect of increasing the portion of net income
437	896		attributable to Oklahoma must not be inherently arbitrary, and
438	897		application of the recomputed final apportionment to the net income
439	898		of the enterprise must attribute to Oklahoma only a reasonable
440	899		portion thereof.
441		-
442	900		6. For calendar years 1997 and 1998, the owner of a new or
443	901		expanded agricultural commodity processing facility in this state
444	902		may exclude from Oklahoma taxable income, or in the case of an
445	903		individual, the Oklahoma adjuste d gross income, fifteen percent
446	904		(15%) of the investment by the owner in the new or expanded
447	905		agricultural commodity processing facility. For calendar year 1999,
448	906		and all subsequent years, the percentage, not to exceed fifteen
449	907		percent (15%), available to the owner of a new or expanded
450		-	agricultural commodity processing facility in ~~thi s~~ state claiming ~~ENR. H. B. NO. 2178 Page 11~~
	908	+	agricultural commodity processing facility in this state claiming
451	909		the exemption shall be adjusted annually so that the total estimated
452	910		reduction in tax liability does not exceed One Million Dollars
453	911		($1,000,000.00) annually. The Tax Commission shall promulgate rules
454	912		for determining the percentage of the investment which each eligible
455	913		taxpayer may exclude. The exclusion provided by this paragraph
456	914		shall be taken in the taxable year when the investment is made. In
457	915		the event the total reduction in tax liability authorized by this
458	916		paragraph exceeds One Million Dollars ($1,000,000.00) in any
459	917		calendar year, the Tax Commission shall permit any excess over One
460	918		Million Dollars ($1,000,000.00) and shall factor such excess into
	919	+
	920	+	ENGR. H. B. NO. 2178 Page 18 1
	921	+	2
	922	+	3
	923	+	4
	924	+	5
	925	+	6
	926	+	7
	927	+	8
	928	+	9
	929	+	10
	930	+	11
	931	+	12
	932	+	13
	933	+	14
	934	+	15
	935	+	16
	936	+	17
	937	+	18
	938	+	19
	939	+	20
	940	+	21
	941	+	22
	942	+	23
	943	+	24
	944	+
461	945		the percentage for subsequent years. Any amount of the exemption
462	946		permitted to be excluded pursuant to the provisions of this
463	947		paragraph but not used in any year may be carried forward as an
464	948		exemption from income pursuant to the provisions of this paragraph
465	949		for a period not exceeding six (6) years following the year in which
466	950		the investment was originally made.
467		-
468	951		For purposes of this paragraph:
469		-
470	952		a. "Agricultural commodity processing facility " means
471	953		building, structures, fixtures and improvements used
472	954		or operated primarily f or the processing or production
473	955		of marketable products from agricultural commodities.
474	956		The term shall also mean a dairy operation that
475	957		requires a depreciable investment of at least Two
476	958		Hundred Fifty Thousand Dollars ($250,000.00) and which
477	959		produces milk from dairy cows. The term does not
478	960		include a facility that provides only, and nothing
479	961		more than, storage, cleaning, drying or transportation
480	962		of agricultural commodities, and
481		-
482	963		b. "Facility" means each part of the facility which is
483	964		used in a process primarily for:
484		-
485	965		(1) the processing of agricultural commodities,
486	966		including receiving or storing agricultural
487	967		commodities, or the production of milk at a dairy
488	968		operation,
489	969
	970	+	ENGR. H. B. NO. 2178 Page 19 1
	971	+	2
	972	+	3
	973	+	4
	974	+	5
	975	+	6
	976	+	7
	977	+	8
	978	+	9
	979	+	10
	980	+	11
	981	+	12
	982	+	13
	983	+	14
	984	+	15
	985	+	16
	986	+	17
	987	+	18
	988	+	19
	989	+	20
	990	+	21
	991	+	22
	992	+	23
	993	+	24
	994	+
490	995		(2) transporting the agricultural commodities or
491	996		product before, during or after the processing,
492	997		or
493		-
494	998		(3) packaging or otherwise preparing the product for
495		-	sale or shipment. ENR. H. B. NO. 2178 Page 12
496		-
	999	+	sale or shipment.
497	1000		7. Despite any provision to the contrary in paragraph 3 of this
498	1001		subsection, for taxable years beginning after December 31, 1999, in
499	1002		the case of a taxpayer which has a farming loss, s uch farming loss
500	1003		shall be considered a net operating loss carryback in accordance
501	1004		with and to the extent of the Internal Revenue Code, 26 U.S.C.,
502	1005		Section 172(b)(G). However, the amount of the net operating loss
503	1006		carryback shall not exceed the lesser of:
504		-
505	1007		a. Sixty Thousand Dollars ($60,000.00), or
506		-
507	1008		b. the loss properly shown on Schedule F of the Internal
508	1009		Revenue Service Form 1040 reduced by one -half (1/2) of
509	1010		the income from all other sources other than reflected
510	1011		on Schedule F.
511		-
512	1012		8. In taxable years beginning af ter December 31, 1995, all
513	1013		qualified wages equal to the federal income tax credit set forth in
514	1014		26 U.S.C.A., Section 45A, shall be deducted from taxable income.
515	1015		The deduction allowed pursuant to this paragraph shall only be
516	1016		permitted for the tax years in w hich the federal tax credit pursuant
517	1017		to 26 U.S.C.A., Section 45A, is allowed. For purposes of this
	1018	+
	1019	+	ENGR. H. B. NO. 2178 Page 20 1
	1020	+	2
	1021	+	3
	1022	+	4
	1023	+	5
	1024	+	6
	1025	+	7
	1026	+	8
	1027	+	9
	1028	+	10
	1029	+	11
	1030	+	12
	1031	+	13
	1032	+	14
	1033	+	15
	1034	+	16
	1035	+	17
	1036	+	18
	1037	+	19
	1038	+	20
	1039	+	21
	1040	+	22
	1041	+	23
	1042	+	24
	1043	+
518	1044		paragraph, "qualified wages" means those wages used to calculate the
519	1045		federal credit pursuant to 26 U.S.C.A., Section 45A.
520		-
521	1046		9. In taxable years beginning aft er December 31, 2005, an
522	1047		employer that is eligible for and utilizes the Safety Pays OSHA
523	1048		Consultation Service provided by the Oklahoma Department of Labor
524	1049		shall receive an exemption from taxable income in the amount of One
525	1050		Thousand Dollars ($1,000.00) for the tax year that the service is
526	1051		utilized.
527		-
528	1052		10. For taxable years beginning on or after January 1, 2010,
529	1053		there shall be added to Oklahoma taxable income an amount equal to
530	1054		the amount of deferred income not included in such taxable income
531	1055		pursuant to Section 108(i)(1) of the Internal Revenue Code of 1986
532	1056		as amended by Section 1231 of the American Recovery and Reinvestment
533	1057		Act of 2009 (P.L. No. 111 -5). There shall be subtracted from
534	1058		Oklahoma taxable income an amount equal to the amount of deferred
535	1059		income included in such taxable income pursuant to Section 108(i)(1)
536	1060		of the Internal Revenue Code by Section 1231 of the American
537	1061		Recovery and Reinvestment Act of 2009 (P.L. No. 111 -5).
538		-
539	1062		11. For taxable years beginning on or after January 1, 2019,
540		-	there shall be subtracted from Oklahoma taxable income or adjusted ~~ENR. H. B. NO. 2178 Page 13~~
	1063	+	there shall be subtracted from Oklahoma taxable income or adjusted
541	1064		gross income any item of income or gain, and there shall be added to
542	1065		Oklahoma taxable income or adjusted gross income any item of loss or
543	1066		deduction that in the absence of an election pursuant to the
544	1067		provisions of the Pass-Through Entity Tax Equity Act of 2019 would
	1068	+
	1069	+	ENGR. H. B. NO. 2178 Page 21 1
	1070	+	2
	1071	+	3
	1072	+	4
	1073	+	5
	1074	+	6
	1075	+	7
	1076	+	8
	1077	+	9
	1078	+	10
	1079	+	11
	1080	+	12
	1081	+	13
	1082	+	14
	1083	+	15
	1084	+	16
	1085	+	17
	1086	+	18
	1087	+	19
	1088	+	20
	1089	+	21
	1090	+	22
	1091	+	23
	1092	+	24
	1093	+
545	1094		be allocated to a member or to an indirect member of an electing
546	1095		pass-through entity pursuant to Section 2351 et seq. of this title,
547	1096		if (i) the electing pass -through entity has accounted for such i tem
548	1097		in computing its Oklahoma net entity income or loss pursuant to the
549	1098		provisions of the Pass -Through Entity Tax Equity Act of 2019, and
550	1099		(ii) the total amount of tax attributable to any resulting Oklahoma
551	1100		net entity income has been paid. The Oklahoma Tax Commission shall
552	1101		promulgate rules for the reporting of such exclusion to direct and
553	1102		indirect members of the electing pass -through entity. As used in
554	1103		this paragraph, "electing pass-through entity", "indirect member",
555	1104		and "member" shall be defined in the s ame manner as prescribed by
556	1105		Section 2 2355.1P-2 of this act title. Notwithstanding the
557	1106		application of this paragraph, the adjusted tax basis of any
558	1107		ownership interest in a pass -through entity for purposes of Section
559	1108		2351 et seq. of this title shall be equ al to its adjusted tax basis
560	1109		for federal income tax purposes.
561		-
562	1110		B. 1. The taxable income of any corporation shall be further
563	1111		adjusted to arrive at Oklahoma taxable income, except those
564	1112		corporations electing treatment as provided in subchapter S of the
565	1113		Internal Revenue Code, 26 U.S.C., Section 1361 et seq., and Section
566	1114		2365 of this title, deductions pursuant to the provisions of the
567	1115		Accelerated Cost Recovery System as defined and allowed in the
568	1116		Economic Recovery Tax Act of 1981, Public Law 97 -34, 26 U.S.C.,
569	1117		Section 168, for depreciation of assets placed into service after
	1118	+
	1119	+	ENGR. H. B. NO. 2178 Page 22 1
	1120	+	2
	1121	+	3
	1122	+	4
	1123	+	5
	1124	+	6
	1125	+	7
	1126	+	8
	1127	+	9
	1128	+	10
	1129	+	11
	1130	+	12
	1131	+	13
	1132	+	14
	1133	+	15
	1134	+	16
	1135	+	17
	1136	+	18
	1137	+	19
	1138	+	20
	1139	+	21
	1140	+	22
	1141	+	23
	1142	+	24
	1143	+
570	1144		December 31, 1981, shall not be allowed in calculating Oklahoma
571	1145		taxable income. Such corporations shall be allowed a deduction for
572	1146		depreciation of assets placed into service after December 31, 1981,
573	1147		in accordance with provisions of the Internal Revenue Code, 26
574	1148		U.S.C., Section 1 et seq., in effect immediately prior to the
575	1149		enactment of the Accelerated Cost Recovery System. The Oklahoma tax
576	1150		basis for all such assets placed into service after December 31,
577	1151		1981, calculated in this section shall be retained and utilized for
578	1152		all Oklahoma income tax purposes through the final disposition of
579	1153		such assets.
580		-
581	1154		Notwithstanding any other provisions of the Oklahoma Income Tax
582	1155		Act, Section 2351 et seq. of thi s title, or of the Internal Revenue
583	1156		Code to the contrary, this subsection shall control calculation of
584	1157		depreciation of assets placed into service after December 31, 1981,
585		-	and before January 1, 1983. ENR. H. B. NO. 2178 Page 14
586		-
	1158	+	and before January 1, 1983.
587	1159		For assets placed in service and held by a corporation in which
588	1160		accelerated cost recovery system was previously disallowed, an
589	1161		adjustment to taxable income is required in the first taxable year
590	1162		beginning after December 31, 1982, to reconcile the basis of such
591	1163		assets to the basis allowed in the Internal Revenue C ode. The
592	1164		purpose of this adjustment is to equalize the basis and allowance
593	1165		for depreciation accounts between that reported to the Internal
594	1166		Revenue Service and that reported to Oklahoma.
595	1167
	1168	+	ENGR. H. B. NO. 2178 Page 23 1
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	1170	+	3
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	1176	+	9
	1177	+	10
	1178	+	11
	1179	+	12
	1180	+	13
	1181	+	14
	1182	+	15
	1183	+	16
	1184	+	17
	1185	+	18
	1186	+	19
	1187	+	20
	1188	+	21
	1189	+	22
	1190	+	23
	1191	+	24
	1192	+
596	1193		2. For tax years beginning on or after January 1, 2009, and
597	1194		ending on or before December 31, 2009, there shall be added to
598	1195		Oklahoma taxable income any amount in excess of One Hundred Seventy -
599	1196		five Thousand Dollars ($175,000.00) which has been deducted as a
600	1197		small business expense under Internal Revenue Code, Section 179 as
601	1198		provided in the American Recovery and Reinvestment Act of 2009.
602		-
603	1199		C. 1. For taxable years beginning after December 31, 1987, the
604	1200		taxable income of any corporation shall be further adjusted to
605	1201		arrive at Oklahoma taxable income for transfers of technology to
606	1202		qualified small businesses located in Oklahoma. Such transferor
607	1203		corporation shall be allowed an exemption from taxable income of an
608	1204		amount equal to the amount of royalty payment received as a result
609	1205		of such transfer; provided, however, such amount shall n ot exceed
610	1206		ten percent (10%) of the amount of gross proceeds received by such
611	1207		transferor corporation as a result of the technology transfer. Such
612	1208		exemption shall be allowed for a period not to exceed ten (10) years
613	1209		from the date of receipt of the first roy alty payment accruing from
614	1210		such transfer. No exemption may be claimed for transfers of
615	1211		technology to qualified small businesses made prior to January 1,
616	1212		1988.
617		-
618	1213		2. For purposes of this subsection:
619		-
620	1214		a. "Qualified small business " means an entity, whether
621	1215		organized as a corporation, partnership, or
622	1216		proprietorship, organized for profit with its
	1217	+
	1218	+	ENGR. H. B. NO. 2178 Page 24 1
	1219	+	2
	1220	+	3
	1221	+	4
	1222	+	5
	1223	+	6
	1224	+	7
	1225	+	8
	1226	+	9
	1227	+	10
	1228	+	11
	1229	+	12
	1230	+	13
	1231	+	14
	1232	+	15
	1233	+	16
	1234	+	17
	1235	+	18
	1236	+	19
	1237	+	20
	1238	+	21
	1239	+	22
	1240	+	23
	1241	+	24
	1242	+
623	1243		principal place of business located within this state
624	1244		and which meets the following criteria:
625		-
626	1245		(1) Capitalization of not more than Two Hundred Fifty
627	1246		Thousand Dollars ($250 ,000.00),
628		-	ENR. H. B. NO. 2178 Page 15
629	1247		(2) Having at least fifty percent (50%) of its
630	1248		employees and assets located in Oklahoma at the
631	1249		time of the transfer, and
632		-
633	1250		(3) Not a subsidiary or affiliate of the transferor
634	1251		corporation;
635		-
636	1252		b. "Technology" means a proprietary process, formula,
637	1253		pattern, device or compilation of scientific or
638	1254		technical information which is not in the public
639	1255		domain;
640		-
641	1256		c. "Transferor corporation " means a corporation which is
642	1257		the exclusive and undisputed owner of the technology
643	1258		at the time the transfer is made; and
644		-
645	1259		d. "Gross proceeds" means the total amount of
646	1260		consideration for the transfer of technology, whether
647	1261		the consideration is in money or otherwise.
648		-
649	1262		D. 1. For taxable years beginning after December 31, 2005, the
650	1263		taxable income of any corporation, estate or trust, shal l be further
651	1264		adjusted for qualifying gains receiving capital treatment. Such
652	1265		corporations, estates or trusts shall be allowed a deduction from
653	1266		Oklahoma taxable income for the amount of qualifying gains receiving
	1267	+
	1268	+	ENGR. H. B. NO. 2178 Page 25 1
	1269	+	2
	1270	+	3
	1271	+	4
	1272	+	5
	1273	+	6
	1274	+	7
	1275	+	8
	1276	+	9
	1277	+	10
	1278	+	11
	1279	+	12
	1280	+	13
	1281	+	14
	1282	+	15
	1283	+	16
	1284	+	17
	1285	+	18
	1286	+	19
	1287	+	20
	1288	+	21
	1289	+	22
	1290	+	23
	1291	+	24
	1292	+
654	1293		capital treatment earned by the corporation , estate or trust during
655	1294		the taxable year and included in the federal taxable income of such
656	1295		corporation, estate or trust.
657		-
658	1296		2. As used in this subsection:
659		-
660	1297		a. "qualifying gains receiving capital treatment " means
661	1298		the amount of net capital gains, as defined i n Section
662	1299		1222(11) of the Internal Revenue Code, included in the
663	1300		federal income tax return of the corporation, estate
664	1301		or trust that result from:
665		-
666	1302		(1) the sale of real property or tangible personal
667	1303		property located within Oklahoma that has been
668	1304		directly or indirectly owned by the corporation,
669	1305		estate or trust for a holding period of at least
670	1306		five (5) years prior to the date of the
671	1307		transaction from which such net capital gains
672	1308		arise,
673		-	ENR. H. B. NO. 2178 Page 16
674	1309		(2) the sale of stock or on the sale of an ownership
675	1310		interest in an Oklahoma c ompany, limited
676	1311		liability company, or partnership where such
677	1312		stock or ownership interest has been directly or
678	1313		indirectly owned by the corporation, estate or
679	1314		trust for a holding period of at least three (3)
680	1315		years prior to the date of the transaction from
681	1316		which the net capital gains arise, or
	1317	+
	1318	+	ENGR. H. B. NO. 2178 Page 26 1
	1319	+	2
	1320	+	3
	1321	+	4
	1322	+	5
	1323	+	6
	1324	+	7
	1325	+	8
	1326	+	9
	1327	+	10
	1328	+	11
	1329	+	12
	1330	+	13
	1331	+	14
	1332	+	15
	1333	+	16
	1334	+	17
	1335	+	18
	1336	+	19
	1337	+	20
	1338	+	21
	1339	+	22
	1340	+	23
	1341	+	24
682	1342
683	1343		(3) the sale of real property, tangible personal
684	1344		property or intangible personal property located
685	1345		within Oklahoma as part of the sale of all or
686	1346		substantially all of the assets of an Oklahoma
687	1347		company, limited liability co mpany, or
688	1348		partnership where such property has been directly
689	1349		or indirectly owned by such entity owned by the
690	1350		owners of such entity, and used in or derived
691	1351		from such entity for a period of at least three
692	1352		(3) years prior to the date of the transaction
693	1353		from which the net capital gains arise,
694		-
695	1354		b. "holding period" means an uninterrupted period of
696	1355		time. The holding period shall include any additional
697	1356		period when the property was held by another
698	1357		individual or entity, if such additional period is
699	1358		included in the taxpayer's holding period for the
700	1359		asset pursuant to the Internal Revenue Code,
701		-
702	1360		c. "Oklahoma company", "limited liability company ", or
703	1361		"partnership" means an entity whose primary
704	1362		headquarters have been located in Oklahoma for at
705	1363		least three (3) uninterrupted y ears prior to the date
706	1364		of the transaction from which the net capital gains
707	1365		arise,
708	1366
	1367	+	ENGR. H. B. NO. 2178 Page 27 1
	1368	+	2
	1369	+	3
	1370	+	4
	1371	+	5
	1372	+	6
	1373	+	7
	1374	+	8
	1375	+	9
	1376	+	10
	1377	+	11
	1378	+	12
	1379	+	13
	1380	+	14
	1381	+	15
	1382	+	16
	1383	+	17
	1384	+	18
	1385	+	19
	1386	+	20
	1387	+	21
	1388	+	22
	1389	+	23
	1390	+	24
	1391	+
709	1392		d. "direct" means the taxpayer directly owns the asset,
710	1393		and
711		-
712	1394		e. "indirect" means the taxpayer owns an interest in a
713	1395		pass-through entity (or chain of pass -through
714	1396		entities) that sells the asset that gives rise to the
715	1397		qualifying gains receiving capital treatment.
716		-
717	1398		(1) With respect to sales of real property or
718		-	tangible personal property located within ~~ENR. H. B. NO. 2178 Page 17~~
	1399	+	tangible personal property located within
719	1400		Oklahoma, the deduction described in this
720	1401		subsection shall not apply unless the p ass-
721	1402		through entity that makes the sale has held the
722	1403		property for not less than five (5) uninterrupted
723	1404		years prior to the date of the transaction that
724	1405		created the capital gain, and each pass -through
725	1406		entity included in the chain of ownership has
726	1407		been a member, partner, or shareholder of the
727	1408		pass-through entity in the tier immediately below
728	1409		it for an uninterrupted period of not less than
729	1410		five (5) years.
730		-
731	1411		(2) With respect to sales of stock or ownership
732	1412		interest in or sales of all or substantially all
733	1413		of the assets of an Oklahoma company, limited
734	1414		liability company, or partnership, the deduction
735	1415		described in this subsection shall not apply
	1416	+
	1417	+	ENGR. H. B. NO. 2178 Page 28 1
	1418	+	2
	1419	+	3
	1420	+	4
	1421	+	5
	1422	+	6
	1423	+	7
	1424	+	8
	1425	+	9
	1426	+	10
	1427	+	11
	1428	+	12
	1429	+	13
	1430	+	14
	1431	+	15
	1432	+	16
	1433	+	17
	1434	+	18
	1435	+	19
	1436	+	20
	1437	+	21
	1438	+	22
	1439	+	23
	1440	+	24
	1441	+
736	1442		unless the pass-through entity that makes the
737	1443		sale has held the stock or ownership interest or
738	1444		the assets for not less than thr ee (3)
739	1445		uninterrupted years prior to the date of the
740	1446		transaction that created the capital gain, and
741	1447		each pass-through entity included in the chain of
742	1448		ownership has been a member, partner or
743	1449		shareholder of the pass -through entity in the
744	1450		tier immediately belo w it for an uninterrupted
745	1451		period of not less than three (3) years.
746		-
747	1452		E. The Oklahoma adjusted gross income of any individual
748	1453		taxpayer shall be further adjusted as follows to arrive at Oklahoma
749	1454		taxable income:
750		-
751	1455		1. a. In the case of individuals, there shall be added or
752	1456		deducted, as the case may be, the difference necessary
753	1457		to allow personal exemptions of One Thousand Dollars
754	1458		($1,000.00) in lieu of the personal exemptions allowed
755	1459		by the Internal Revenue Code.
756		-
757	1460		b. There shall be allowed an additional exemption of One
758	1461		Thousand Dollars ($1,000.00) for each taxpayer or
759	1462		spouse who is blind at the close of the tax year. For
760	1463		purposes of this subparagraph, an individual is blind
761	1464		only if the central visual acuity of the individual
762	1465		does not exceed 20/200 in the better eye with
763		-	correcting lenses, or if the vi sual acuity of the ENR. H. B. NO. 2178 Page 18
	1466	+
	1467	+	ENGR. H. B. NO. 2178 Page 29 1
	1468	+	2
	1469	+	3
	1470	+	4
	1471	+	5
	1472	+	6
	1473	+	7
	1474	+	8
	1475	+	9
	1476	+	10
	1477	+	11
	1478	+	12
	1479	+	13
	1480	+	14
	1481	+	15
	1482	+	16
	1483	+	17
	1484	+	18
	1485	+	19
	1486	+	20
	1487	+	21
	1488	+	22
	1489	+	23
	1490	+	24
	1491	+
	1492	+	correcting lenses, or if the visual acuity of the
764	1493		individual is greater than 20/200, but is accompanied
765	1494		by a limitation in the fields of vision such that the
766	1495		widest diameter of the visual field subtends an angle
767	1496		no greater than twenty (20) degrees.
768		-
769	1497		c. There shall be allowed an additional exemption of One
770	1498		Thousand Dollars ($1,000.00) for each taxpayer or
771	1499		spouse who is sixty-five (65) years of age or older at
772	1500		the close of the tax year based upon the filing status
773	1501		and federal adjusted gross income of the taxpayer.
774	1502		Taxpayers with the following filing status may claim
775	1503		this exemption if the federal adjusted gross income
776	1504		does not exceed:
777		-
778	1505		(1) Twenty-five Thousand Dollars ($25,000.00) if
779	1506		married and filing jointly;
780		-
781	1507		(2) Twelve Thousand Five Hundred Dollars ($12, 500.00)
782	1508		if married and filing separately;
783		-
784	1509		(3) Fifteen Thousand Dollars ($15,000.00) if single;
785	1510		and
786		-
787	1511		(4) Nineteen Thousand Dollars ($19,000.00) if a
788	1512		qualifying head of household.
789		-
790	1513		Provided, for taxable years beginning after December
791	1514		31, 1999, amounts included in the calculation of
792	1515		federal adjusted gross income pursuant to the
	1516	+
	1517	+	ENGR. H. B. NO. 2178 Page 30 1
	1518	+	2
	1519	+	3
	1520	+	4
	1521	+	5
	1522	+	6
	1523	+	7
	1524	+	8
	1525	+	9
	1526	+	10
	1527	+	11
	1528	+	12
	1529	+	13
	1530	+	14
	1531	+	15
	1532	+	16
	1533	+	17
	1534	+	18
	1535	+	19
	1536	+	20
	1537	+	21
	1538	+	22
	1539	+	23
	1540	+	24
	1541	+
793	1542		conversion of a traditional individual retirement
794	1543		account to a Roth individual retirement account shall
795	1544		be excluded from federal adjusted gross income for
796	1545		purposes of the income threshold s provided in this
797	1546		subparagraph.
798		-
799	1547		2. a. For taxable years beginning on or before December 31,
800	1548		2005, in the case of individuals who use the standard
801	1549		deduction in determining taxable income, there shall
802	1550		be added or deducted, as the case may be, the
803	1551		difference necessary to allow a standard deduction in
804	1552		lieu of the standard deduction allowed by the Internal
805	1553		Revenue Code, in an amount equal to the larger of
806	1554		fifteen percent (15%) of the Oklahoma adjusted gross
807	1555		income or One Thousand Dollars ($1,000.00), but not to
808		-	exceed Two Thousand Dollars ($2,000.00), except that ~~ENR. H. B. NO. 2178 Page 19~~
	1556	+	exceed Two Thousand Dollars ($2,000.00), except that
809	1557		in the case of a married individual filing a separate
810	1558		return such deduction shall be the larger of fifteen
811	1559		percent (15%) of such Oklahoma adjusted gross income
812	1560		or Five Hundred Dollars ($500.00), but not to exceed
813	1561		the maximum amount of One Thousand Dollars
814	1562		($1,000.00).
815		-
816	1563		b. For taxable years beginning on or after January 1,
817	1564		2006, and before January 1, 2007, in the case of
818	1565		individuals who use the standard deduction in
	1566	+
	1567	+	ENGR. H. B. NO. 2178 Page 31 1
	1568	+	2
	1569	+	3
	1570	+	4
	1571	+	5
	1572	+	6
	1573	+	7
	1574	+	8
	1575	+	9
	1576	+	10
	1577	+	11
	1578	+	12
	1579	+	13
	1580	+	14
	1581	+	15
	1582	+	16
	1583	+	17
	1584	+	18
	1585	+	19
	1586	+	20
	1587	+	21
	1588	+	22
	1589	+	23
	1590	+	24
	1591	+
819	1592		determining taxable income, there shall be added or
820	1593		deducted, as the case may be, the difference necessary
821	1594		to allow a standard deduction in lieu of the standard
822	1595		deduction allowed by the Internal Revenue Code, in an
823	1596		amount equal to:
824		-
825	1597		(1) Three Thousand Dollars ($3,000.00), if the filing
826	1598		status is married filing joint, head of household
827	1599		or qualifying widow; or
828		-
829	1600		(2) Two Thousand Dollars ($2,000.00), if the filing
830	1601		status is single or married filing separate.
831		-
832	1602		c. For the taxable year beginning on January 1, 2007, and
833	1603		ending December 31, 2007, in the case of individuals
834	1604		who use the standard deduction in determining taxable
835	1605		income, there shall be added or deducted, as the case
836	1606		may be, the difference necessary to allow a standard
837	1607		deduction in lieu of the standard deduction allowed by
838	1608		the Internal Revenue Cod e, in an amount equal to:
839		-
840	1609		(1) Five Thousand Five Hundred Dollars ($5,500.00),
841	1610		if the filing status is married filing joint or
842	1611		qualifying widow; or
843		-
844	1612		(2) Four Thousand One Hundred Twenty -five Dollars
845	1613		($4,125.00) for a head of household; or
	1614	+
	1615	+	ENGR. H. B. NO. 2178 Page 32 1
	1616	+	2
	1617	+	3
	1618	+	4
	1619	+	5
	1620	+	6
	1621	+	7
	1622	+	8
	1623	+	9
	1624	+	10
	1625	+	11
	1626	+	12
	1627	+	13
	1628	+	14
	1629	+	15
	1630	+	16
	1631	+	17
	1632	+	18
	1633	+	19
	1634	+	20
	1635	+	21
	1636	+	22
	1637	+	23
	1638	+	24
846	1639
847	1640		(3) Two Thousand Seven Hundred Fifty Dollars
848	1641		($2,750.00), if the filing status is single or
849	1642		married filing separate.
850		-
851	1643		d. For the taxable year beginning on January 1, 2008, and
852	1644		ending December 31, 2008, in the case of individuals
853		-	who use the standard deduction in determining ~~taxable ENR. H. B. NO. 2178 Page 20~~
	1645	+	who use the standard deduction in determining t axable
854	1646		income, there shall be added or deducted, as the case
855	1647		may be, the difference necessary to allow a standard
856	1648		deduction in lieu of the standard deduction allowed by
857	1649		the Internal Revenue Code, in an amount equal to:
858		-
859	1650		(1) Six Thousand Five Hundred Dollars ($6,500.00), if
860	1651		the filing status is married filing joint or
861	1652		qualifying widow, or
862		-
863	1653		(2) Four Thousand Eight Hundred Seventy -five Dollars
864	1654		($4,875.00) for a head of household, or
865		-
866	1655		(3) Three Thousand Two Hundred Fifty Dollars
867	1656		($3,250.00), if the filing status i s single or
868	1657		married filing separate.
869		-
870	1658		e. For the taxable year beginning on January 1, 2009, and
871	1659		ending December 31, 2009, in the case of individuals
872	1660		who use the standard deduction in determining taxable
873	1661		income, there shall be added or deducted, as the case
874	1662		may be, the difference necessary to allow a standard
	1663	+
	1664	+	ENGR. H. B. NO. 2178 Page 33 1
	1665	+	2
	1666	+	3
	1667	+	4
	1668	+	5
	1669	+	6
	1670	+	7
	1671	+	8
	1672	+	9
	1673	+	10
	1674	+	11
	1675	+	12
	1676	+	13
	1677	+	14
	1678	+	15
	1679	+	16
	1680	+	17
	1681	+	18
	1682	+	19
	1683	+	20
	1684	+	21
	1685	+	22
	1686	+	23
	1687	+	24
	1688	+
875	1689		deduction in lieu of the standard deduction allowed by
876	1690		the Internal Revenue Code, in an amount equal to:
877		-
878	1691		(1) Eight Thousand Five Hundred Dollars ($8,500.00),
879	1692		if the filing status is married filing joint or
880	1693		qualifying widow, or
881		-
882	1694		(2) Six Thousand Three Hundred Seventy -five Dollars
883	1695		($6,375.00) for a head of household, or
884		-
885	1696		(3) Four Thousand Two Hundred Fifty Dollars
886	1697		($4,250.00), if the filing status is single or
887	1698		married filing separate.
888		-
889	1699		Oklahoma adjusted gross income shall be increased by
890	1700		any amounts paid for motor vehicle excise taxes which
891	1701		were deducted as allowed by the Internal Revenue Code.
892		-
893	1702		f. For taxable years beginning on or after January 1,
894	1703		2010, and ending on December 31, 2016, in the case of
895	1704		individuals who use the standard deduction in
896	1705		determining taxable income, there shall be added or
897	1706		deducted, as the case may be, the difference necessary
898		-	to allow a standard deduction equal to the standard ~~ENR. H. B. NO. 2178 Page 21~~
	1707	+	to allow a standard deduction equal to the standard
899	1708		deduction allowed by the Internal Revenue Code, based
900	1709		upon the amount and filing status prescribed by such
901	1710		Code for purposes of filing federal individual income
902	1711		tax returns.
	1712	+
	1713	+	ENGR. H. B. NO. 2178 Page 34 1
	1714	+	2
	1715	+	3
	1716	+	4
	1717	+	5
	1718	+	6
	1719	+	7
	1720	+	8
	1721	+	9
	1722	+	10
	1723	+	11
	1724	+	12
	1725	+	13
	1726	+	14
	1727	+	15
	1728	+	16
	1729	+	17
	1730	+	18
	1731	+	19
	1732	+	20
	1733	+	21
	1734	+	22
	1735	+	23
	1736	+	24
903	1737
904	1738		g. For taxable years beginning on or after January 1,
905	1739		2017, in the case of individuals who use the standard
906	1740		deduction in determining taxable in come, there shall
907	1741		be added or deducted, as the case may be, the
908	1742		difference necessary to allow a standard deduction in
909	1743		lieu of the standard deduction allowed by the Internal
910	1744		Revenue Code, as follows:
911		-
912	1745		(1) Six Thousand Three Hundred Fifty Dollars
913	1746		($6,350.00) for single or married filing
914	1747		separately,
915		-
916	1748		(2) Twelve Thousand Seven Hundred Dollars
917	1749		($12,700.00) for married filing jointly or
918	1750		qualifying widower with dependent child, and
919		-
920	1751		(3) Nine Thousand Three Hundred Fifty Dollars
921	1752		($9,350.00) for head of household.
922		-
923	1753		3. a. In the case of resident and part -year resident
924	1754		individuals having adjusted gross income from sources
925	1755		both within and without the state, the itemized or
926	1756		standard deductions and personal exemptions shall be
927	1757		reduced to an amount which is the same portion of the
928	1758		total thereof as Oklahoma adjusted gross income is of
929	1759		adjusted gross income. To the extent itemized
930	1760		deductions include allowable moving expense, proration
931	1761		of moving expense shall not be required or permitted
	1762	+
	1763	+	ENGR. H. B. NO. 2178 Page 35 1
	1764	+	2
	1765	+	3
	1766	+	4
	1767	+	5
	1768	+	6
	1769	+	7
	1770	+	8
	1771	+	9
	1772	+	10
	1773	+	11
	1774	+	12
	1775	+	13
	1776	+	14
	1777	+	15
	1778	+	16
	1779	+	17
	1780	+	18
	1781	+	19
	1782	+	20
	1783	+	21
	1784	+	22
	1785	+	23
	1786	+	24
	1787	+
932	1788		but allowable moving expense shall be full y deductible
933	1789		for those taxpayers moving within or into Oklahoma and
934	1790		no part of moving expense shall be deductible for
935	1791		those taxpayers moving without or out of Oklahoma.
936	1792		All other itemized or standard deductions and personal
937	1793		exemptions shall be subject to proration as provided
938	1794		by law.
939		-
940	1795		b. For taxable years beginning on or after January 1,
941	1796		2018, the net amount of itemized deductions allowable
942	1797		on an Oklahoma income tax return, subject to the
943		-	provisions of paragraph 24 of this subsection, shall ~~ENR. H. B. NO. 2178 Page 22~~
	1798	+	provisions of paragraph 24 of this subsection, shall
944	1799		not exceed Seventeen Thousand Dollars ($17,000.00).
945	1800		For purposes of this subparagraph, charitable
946	1801		contributions and medical expenses deductible for
947	1802		federal income tax purposes shall be excluded from the
948	1803		amount of Seventeen Thousand Dollars ($17,000.00) as
949	1804		specified by this subparagraph.
950		-
951	1805		4. A resident individual with a physical disability
952	1806		constituting a substantial handicap to employment may deduct from
953	1807		Oklahoma adjusted gross income such expenditures to modify a motor
954	1808		vehicle, home or workplace as are necessary to compen sate for his or
955	1809		her handicap. A veteran certified by the Department of Veterans
956	1810		Affairs of the federal government as having a service -connected
957	1811		disability shall be conclusively presumed to be an individual with a
	1812	+
	1813	+	ENGR. H. B. NO. 2178 Page 36 1
	1814	+	2
	1815	+	3
	1816	+	4
	1817	+	5
	1818	+	6
	1819	+	7
	1820	+	8
	1821	+	9
	1822	+	10
	1823	+	11
	1824	+	12
	1825	+	13
	1826	+	14
	1827	+	15
	1828	+	16
	1829	+	17
	1830	+	18
	1831	+	19
	1832	+	20
	1833	+	21
	1834	+	22
	1835	+	23
	1836	+	24
	1837	+
958	1838		physical disability constituting a substan tial handicap to
959	1839		employment. The Tax Commission shall promulgate rules containing a
960	1840		list of combinations of common disabilities and modifications which
961	1841		may be presumed to qualify for this deduction. The Tax Commission
962	1842		shall prescribe necessary requiremen ts for verification.
963		-
964	1843		5. a. Before July 1, 2010, the first One Thousand Five
965	1844		Hundred Dollars ($1,500.00) received by any person
966	1845		from the United States as salary or compensation in
967	1846		any form, other than retirement benefits, as a member
968	1847		of any component of the Armed Forces of the United
969	1848		States shall be deducted from taxable income.
970		-
971	1849		b. On or after July 1, 2010, one hundred percent (100%)
972	1850		of the income received by any person from the United
973	1851		States as salary or compensation in any form, other
974	1852		than retirement benef its, as a member of any component
975	1853		of the Armed Forces of the United States shall be
976	1854		deducted from taxable income.
977		-
978	1855		c. Whenever the filing of a timely income tax return by a
979	1856		member of the Armed Forces of the United States is
980	1857		made impracticable or impossible of accomplishment by
981	1858		reason of:
982		-
983	1859		(1) absence from the United States, which term
984	1860		includes only the states and the District of
985	1861		Columbia;
986	1862
	1863	+	ENGR. H. B. NO. 2178 Page 37 1
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	1866	+	4
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	1869	+	7
	1870	+	8
	1871	+	9
	1872	+	10
	1873	+	11
	1874	+	12
	1875	+	13
	1876	+	14
	1877	+	15
	1878	+	16
	1879	+	17
	1880	+	18
	1881	+	19
	1882	+	20
	1883	+	21
	1884	+	22
	1885	+	23
	1886	+	24
	1887	+
987	1888		(2) absence from the State of Oklahoma while on
988		-	active duty; or ENR. H. B. NO. 2178 Page 23
989		-
	1889	+	active duty; or
990	1890		(3) confinement in a hospital within the United
991	1891		States for treatment of wounds, injuries or
992	1892		disease,
993		-
994	1893		the time for filing a return and paying an income tax
995	1894		shall be and is hereby extended without incurring
996	1895		liability for interest or penalties, to the fifteenth
997	1896		day of the third month following the month in which:
998		-
999	1897		(a) Such individual shall return to the United
1000	1898		States if the extension is granted pursuant
1001	1899		to subparagraph a of this paragraph, return
1002	1900		to the State of Oklahoma if the extension is
1003	1901		granted pursuant to subparagraph b of this
1004	1902		paragraph or be discharged from suc h
1005	1903		hospital if the extension is granted
1006	1904		pursuant to subparagraph c of this
1007	1905		paragraph; or
1008		-
1009	1906		(b) An executor, administrator, or conservator
1010	1907		of the estate of the taxpayer is appointed,
1011	1908		whichever event occurs the earliest.
1012		-
1013	1909		Provided, that the Tax Commission may, i n its discretion, grant
1014	1910		any member of the Armed Forces of the United States an extension of
1015	1911		time for filing of income tax returns and payment of income tax
	1912	+
	1913	+	ENGR. H. B. NO. 2178 Page 38 1
	1914	+	2
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	1916	+	4
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	1918	+	6
	1919	+	7
	1920	+	8
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	1922	+	10
	1923	+	11
	1924	+	12
	1925	+	13
	1926	+	14
	1927	+	15
	1928	+	16
	1929	+	17
	1930	+	18
	1931	+	19
	1932	+	20
	1933	+	21
	1934	+	22
	1935	+	23
	1936	+	24
	1937	+
1016	1938		without incurring liabilities for interest or penalties. Such
1017	1939		extension may be granted only when in the judgment of the Tax
1018	1940		Commission a good cause exists therefor and may be for a period in
1019	1941		excess of six (6) months. A record of every such extension granted,
1020	1942		and the reason therefor, shall be kept.
1021		-
1022	1943		6. Before July 1, 2010, the salary or any other form o f
1023	1944		compensation, received from the United States by a member of any
1024	1945		component of the Armed Forces of the United States, shall be
1025	1946		deducted from taxable income during the time in which the person is
1026	1947		detained by the enemy in a conflict, is a prisoner of war or is
1027	1948		missing in action and not deceased; provided, after July 1, 2010,
1028	1949		all such salary or compensation shall be subject to the deduction as
1029	1950		provided pursuant to paragraph 5 of this subsection.
1030		-
1031	1951		7. a. An individual taxpayer, whether resident or
1032		-	nonresident, may deduct an amount equal to the federal ~~ENR. H. B. NO. 2178 Page 24~~
	1952	+	nonresident, may deduct an amount equal to the federal
1033	1953		income taxes paid by the taxpayer during the taxable
1034	1954		year.
1035		-
1036	1955		b. Federal taxes as described in subparagraph a of this
1037	1956		paragraph shall be deductible by any individual
1038	1957		taxpayer, whether resident or nonresident, only to t he
1039	1958		extent they relate to income subject to taxation
1040	1959		pursuant to the provisions of the Oklahoma Income Tax
1041	1960		Act. The maximum amount allowable in the preceding
1042	1961		paragraph shall be prorated on the ratio of the
	1962	+
	1963	+	ENGR. H. B. NO. 2178 Page 39 1
	1964	+	2
	1965	+	3
	1966	+	4
	1967	+	5
	1968	+	6
	1969	+	7
	1970	+	8
	1971	+	9
	1972	+	10
	1973	+	11
	1974	+	12
	1975	+	13
	1976	+	14
	1977	+	15
	1978	+	16
	1979	+	17
	1980	+	18
	1981	+	19
	1982	+	20
	1983	+	21
	1984	+	22
	1985	+	23
	1986	+	24
	1987	+
1043	1988		Oklahoma adjusted gross income to federal adjusted
1044	1989		gross income.
1045		-
1046	1990		c. For the purpose of this paragraph, "federal income
1047	1991		taxes paid" shall mean federal income taxes, surtaxes
1048	1992		imposed on incomes or excess profits taxes, as though
1049	1993		the taxpayer was on the accrual basis. In determining
1050	1994		the amount of deduction for federal income taxes for
1051	1995		tax year 2001, the amount of the deduction shall not
1052	1996		be adjusted by the amount of any accelerated ten
1053	1997		percent (10%) tax rate bracket credit or advanced
1054	1998		refund of the credit received during the tax year
1055	1999		provided pursuant to the federal Economic Growth and
1056	2000		Tax Relief Reconciliation Act of 2001, P.L. No. 107 -
1057	2001		16, and the advanced refund of such credit shall not
1058	2002		be subject to taxation.
1059		-
1060	2003		d. The provisions of this paragraph shall apply to all
1061	2004		taxable years ending after December 31, 1978 , and
1062	2005		beginning before January 1, 2006.
1063		-
1064	2006		8. Retirement benefits not to exceed Five Thousand Five Hundred
1065	2007		Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five
1066	2008		Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Thousand
1067	2009		Dollars ($10,000.00) for the 2006 tax year and all subsequent tax
1068	2010		years, which are received by an individual from the civil service of
1069	2011		the United States, the Oklahoma Public Employees Retirement System,
	2012	+
	2013	+	ENGR. H. B. NO. 2178 Page 40 1
	2014	+	2
	2015	+	3
	2016	+	4
	2017	+	5
	2018	+	6
	2019	+	7
	2020	+	8
	2021	+	9
	2022	+	10
	2023	+	11
	2024	+	12
	2025	+	13
	2026	+	14
	2027	+	15
	2028	+	16
	2029	+	17
	2030	+	18
	2031	+	19
	2032	+	20
	2033	+	21
	2034	+	22
	2035	+	23
	2036	+	24
	2037	+
1070	2038		the Teachers' Retirement System of Oklahoma, the Oklahoma Law
1071	2039		Enforcement Retirement System, the Oklahoma Firefighters Pension and
1072	2040		Retirement System, the Oklahoma Police Pension and Retirement
1073	2041		System, the employee retirement systems created by counties pursuant
1074	2042		to Section 951 et seq. of Title 19 of the Oklahoma Statutes, the
1075	2043		Uniform Retirement System for Justices and Judges, the Oklahoma
1076	2044		Wildlife Conservation Department Retirement Fund, the Oklahoma
1077		-	Employment Security Commission Retirement Plan, or the employee ~~ENR. H. B. NO. 2178 Page 25~~
	2045	+	Employment Security Commission Retirement Plan, or the employee
1078	2046		retirement systems created by municipalities pursuant to Section 48 -
1079	2047		101 et seq. of Title 11 of the Oklahoma Statutes shall be exempt
1080	2048		from taxable income.
1081		-
1082	2049		9. In taxable years beginning after December 3l, 1984, Social
1083	2050		Security benefits received by an individual shall be exempt from
1084	2051		taxable income, to the extent such benefit s are included in the
1085	2052		federal adjusted gross income pursuant to the provisions of Section
1086	2053		86 of the Internal Revenue Code, 26 U.S.C., Section 86.
1087		-
1088	2054		10. For taxable years beginning after December 31, 1994, lump -
1089	2055		sum distributions from employer plans of deferr ed compensation,
1090	2056		which are not qualified plans within the meaning of Section 401(a)
1091	2057		of the Internal Revenue Code, 26 U.S.C., Section 401(a), and which
1092	2058		are deposited in and accounted for within a separate bank account or
1093	2059		brokerage account in a financial ins titution within this state,
1094	2060		shall be excluded from taxable income in the same manner as a
1095	2061		qualifying rollover contribution to an individual retirement account
	2062	+
	2063	+	ENGR. H. B. NO. 2178 Page 41 1
	2064	+	2
	2065	+	3
	2066	+	4
	2067	+	5
	2068	+	6
	2069	+	7
	2070	+	8
	2071	+	9
	2072	+	10
	2073	+	11
	2074	+	12
	2075	+	13
	2076	+	14
	2077	+	15
	2078	+	16
	2079	+	17
	2080	+	18
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	2082	+	20
	2083	+	21
	2084	+	22
	2085	+	23
	2086	+	24
	2087	+
1096	2088		within the meaning of Section 408 of the Internal Revenue Code, 26
1097	2089		U.S.C., Section 408. Amounts withdrawn from such bank or brokerage
1098	2090		account, including any earnings thereon, shall be included in
1099	2091		taxable income when withdrawn in the same manner as withdrawals from
1100	2092		individual retirement accounts within the meaning of Section 408 of
1101	2093		the Internal Revenue Code.
1102		-
1103	2094		11. In taxable years beginning after December 31, 1995,
1104	2095		contributions made to and interest received from a medical savings
1105	2096		account established pursuant to Sections 2621 through 2623 of Title
1106	2097		63 of the Oklahoma Statutes shall be exempt from taxable income.
1107		-
1108	2098		12. For taxable years beginning after December 31, 1996, the
1109	2099		Oklahoma adjusted gross income of any individual taxpayer who is a
1110	2100		swine or poultry producer may be further adjusted for the deduction
1111	2101		for depreciation allowed for new construction or e xpansion costs
1112	2102		which may be computed using the same depreciation method elected for
1113	2103		federal income tax purposes except that the useful life shall be
1114	2104		seven (7) years for purposes of this paragraph. If depreciation is
1115	2105		allowed as a deduction in determining t he adjusted gross income of
1116	2106		an individual, any depreciation calculated and claimed pursuant to
1117	2107		this section shall in no event be a duplication of any depreciation
1118	2108		allowed or permitted on the federal income tax return of the
1119	2109		individual.
1120		-	ENR. H. B. NO. 2178 Page 26
	2110	+
	2111	+	ENGR. H. B. NO. 2178 Page 42 1
	2112	+	2
	2113	+	3
	2114	+	4
	2115	+	5
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	2120	+	10
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	2122	+	12
	2123	+	13
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	2135	+
1121	2136		13. a. In taxable years beginning after December 31, 2002,
1122	2137		nonrecurring adoption expenses paid by a resident
1123	2138		individual taxpayer in connection with:
1124		-
1125	2139		(1) the adoption of a minor, or
1126		-
1127	2140		(2) a proposed adoption of a minor which did not
1128	2141		result in a decreed adoption,
1129		-
1130	2142		may be deducted from the Oklahoma adjusted gross
1131	2143		income.
1132		-
1133	2144		b. The deductions for adoptions and proposed adoptions
1134	2145		authorized by this paragraph shall not exceed Twenty
1135	2146		Thousand Dollars ($20,000.00) per calendar year.
1136		-
1137	2147		c. The Tax Commission shall promulgate rules to implement
1138	2148		the provisions of this paragraph which shall contain a
1139	2149		specific list of nonrecurring adoption expenses which
1140	2150		may be presumed to qualify for the deduction. The Tax
1141	2151		Commission shall prescribe necessary requirements for
1142	2152		verification.
1143		-
1144	2153		d. "Nonrecurring adoptio n expenses" means adoption fees,
1145	2154		court costs, medical expenses, attorney fees and
1146	2155		expenses which are directly related to the legal
1147	2156		process of adoption of a child including, but not
1148	2157		limited to, costs relating to the adoption study,
1149	2158		health and psychological examinations, transportation
1150	2159		and reasonable costs of lodging and food for the child
	2160	+
	2161	+	ENGR. H. B. NO. 2178 Page 43 1
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	2185	+
1151	2186		or adoptive parents which are incurred to complete the
1152	2187		adoption process and are not reimbursed by other
1153	2188		sources. The term "nonrecurring adoption expenses "
1154	2189		shall not include attorney fees incurred for the
1155	2190		purpose of litigating a contested adoption, from and
1156	2191		after the point of the initiation of the contest,
1157	2192		costs associated with physical remodeling, renovation
1158	2193		and alteration of the adoptive parents ' home or
1159	2194		property, except for a special needs child as
1160	2195		authorized by the court.
1161		-
1162	2196		14. a. In taxable years beginning before January 1, 2005,
1163	2197		retirement benefits not to exceed the amounts
1164	2198		specified in this paragraph, which are received by an
1165		-	individual sixty-five (65) years of age or ~~older~~ and ~~ENR. H. B. NO. 2178 Page 27~~
	2199	+	individual sixty-five (65) years of age or ol der and
1166	2200		whose Oklahoma adjusted gross income is Twenty -five
1167	2201		Thousand Dollars ($25,000.00) or less if the filing
1168	2202		status is single, head of household, or married filing
1169	2203		separate, or Fifty Thousand Dollars ($50,000.00) or
1170	2204		less if the filing status is married filing joint or
1171	2205		qualifying widow, shall be exempt from taxable income.
1172	2206		In taxable years beginning after December 31, 2004,
1173	2207		retirement benefits not to exceed the amounts
1174	2208		specified in this paragraph, which are received by an
1175	2209		individual whose Oklahoma adjust ed gross income is
	2210	+
	2211	+	ENGR. H. B. NO. 2178 Page 44 1
	2212	+	2
	2213	+	3
	2214	+	4
	2215	+	5
	2216	+	6
	2217	+	7
	2218	+	8
	2219	+	9
	2220	+	10
	2221	+	11
	2222	+	12
	2223	+	13
	2224	+	14
	2225	+	15
	2226	+	16
	2227	+	17
	2228	+	18
	2229	+	19
	2230	+	20
	2231	+	21
	2232	+	22
	2233	+	23
	2234	+	24
	2235	+
1176	2236		less than the qualifying amount specified in this
1177	2237		paragraph, shall be exempt from taxable income.
1178		-
1179	2238		b. For purposes of this paragraph, the qualifying amount
1180	2239		shall be as follows:
1181		-
1182	2240		(1) in taxable years beginning after December 31,
1183	2241		2004, and prior to January 1, 2007, the
1184	2242		qualifying amount shall be Thirty -seven Thousand
1185	2243		Five Hundred Dollars ($37,500.00) or less if the
1186	2244		filing status is single, head of household, or
1187	2245		married filing separate, or Seventy -five Thousand
1188	2246		Dollars ($75,000.00) or less if the filing status
1189	2247		is married filing jointly or qualifying widow,
1190		-
1191	2248		(2) in the taxable year beginning January 1, 2007,
1192	2249		the qualifying amount shall be Fifty Thousand
1193	2250		Dollars ($50,000.00) or less if the filing status
1194	2251		is single, head of household, or married fil ing
1195	2252		separate, or One Hundred Thousand Dollars
1196	2253		($100,000.00) or less if the filing status is
1197	2254		married filing jointly or qualifying widow,
1198		-
1199	2255		(3) in the taxable year beginning January 1, 2008,
1200	2256		the qualifying amount shall be Sixty -two Thousand
1201	2257		Five Hundred Dollars ($62,500.00) or less if the
1202	2258		filing status is single, head of household, or
1203	2259		married filing separate, or One Hundred Twenty -
	2260	+
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	2272	+	12
	2273	+	13
	2274	+	14
	2275	+	15
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	2280	+	20
	2281	+	21
	2282	+	22
	2283	+	23
	2284	+	24
	2285	+
1204	2286		five Thousand Dollars ($125,000.00) or less if
1205	2287		the filing status is married filing jointly or
1206	2288		qualifying widow,
1207		-
1208	2289		(4) in the taxable year beginning January 1, 2009,
1209	2290		the qualifying amount shall be One Hundred
1210		-	Thousand Dollars ($100,000.00) or less if the ~~ENR. H. B. NO. 2178 Page 28~~
	2291	+	Thousand Dollars ($100,000.00) or less if the
1211	2292		filing status is single, head of household, or
1212	2293		married filing separate, or Two Hundred Thousand
1213	2294		Dollars ($200,000.00) or less if the fil ing
1214	2295		status is married filing jointly or qualifying
1215	2296		widow, and
1216		-
1217	2297		(5) in the taxable year beginning January 1, 2010,
1218	2298		and subsequent taxable years, there shall be no
1219	2299		limitation upon the qualifying amount.
1220		-
1221	2300		c. For purposes of this paragraph, "retirement benefits"
1222	2301		means the total distributions or withdrawals from the
1223	2302		following:
1224		-
1225	2303		(1) an employee pension benefit plan which satisfies
1226	2304		the requirements of Section 401 of the Internal
1227	2305		Revenue Code, 26 U.S.C., Section 401,
1228		-
1229	2306		(2) an eligible deferred compensation plan that
1230	2307		satisfies the requirements of Section 457 of the
1231	2308		Internal Revenue Code, 26 U.S.C., Section 457,
	2309	+
	2310	+	ENGR. H. B. NO. 2178 Page 46 1
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	2316	+	7
	2317	+	8
	2318	+	9
	2319	+	10
	2320	+	11
	2321	+	12
	2322	+	13
	2323	+	14
	2324	+	15
	2325	+	16
	2326	+	17
	2327	+	18
	2328	+	19
	2329	+	20
	2330	+	21
	2331	+	22
	2332	+	23
	2333	+	24
1232	2334
1233	2335		(3) an individual retirement account, annuity or
1234	2336		trust or simplified employee pension that
1235	2337		satisfies the requirements of Section 408 of the
1236	2338		Internal Revenue Code, 26 U.S.C., Section 408,
1237		-
1238	2339		(4) an employee annuity subject to the provisions of
1239	2340		Section 403(a) or (b) of the Internal Revenue
1240	2341		Code, 26 U.S.C., Section 403(a) or (b),
1241		-
1242	2342		(5) United States Retirement Bonds which satisfy the
1243	2343		requirements of Section 86 of the Intern al
1244	2344		Revenue Code, 26 U.S.C., Section 86, or
1245		-
1246	2345		(6) lump-sum distributions from a retirement plan
1247	2346		which satisfies the requirements of Section
1248	2347		402(e) of the Internal Revenue Code, 26 U.S.C.,
1249	2348		Section 402(e).
1250		-
1251	2349		d. The amount of the exemption provided by this paragra ph
1252	2350		shall be limited to Five Thousand Five Hundred Dollars
1253	2351		($5,500.00) for the 2004 tax year, Seven Thousand Five
1254	2352		Hundred Dollars ($7,500.00) for the 2005 tax year and
1255		-	Ten Thousand Dollars ($10,000.00) for the tax year ~~ENR. H. B. NO. 2178 Page 29~~
	2353	+	Ten Thousand Dollars ($10,000.00) for the tax year
1256	2354		2006 and for all subsequent tax years. Any individual
1257	2355		who claims the exemption provided for in paragraph 8
1258	2356		of this subsection shall not be permitted to claim a
1259	2357		combined total exemption pursuant to this paragraph
1260	2358		and paragraph 8 of this subsection in an amount
	2359	+
	2360	+	ENGR. H. B. NO. 2178 Page 47 1
	2361	+	2
	2362	+	3
	2363	+	4
	2364	+	5
	2365	+	6
	2366	+	7
	2367	+	8
	2368	+	9
	2369	+	10
	2370	+	11
	2371	+	12
	2372	+	13
	2373	+	14
	2374	+	15
	2375	+	16
	2376	+	17
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	2379	+	20
	2380	+	21
	2381	+	22
	2382	+	23
	2383	+	24
	2384	+
1261	2385		exceeding Five Thousand Five Hund red Dollars
1262	2386		($5,500.00) for the 2004 tax year, Seven Thousand Five
1263	2387		Hundred Dollars ($7,500.00) for the 2005 tax year and
1264	2388		Ten Thousand Dollars ($10,000.00) for the 2006 tax
1265	2389		year and all subsequent tax years.
1266		-
1267	2390		15. In taxable years beginning after December 31 , 1999, for an
1268	2391		individual engaged in production agriculture who has filed a
1269	2392		Schedule F form with the taxpayer 's federal income tax return for
1270	2393		such taxable year, there shall be excluded from taxable income any
1271	2394		amount which was included as federal taxable in come or federal
1272	2395		adjusted gross income and which consists of the discharge of an
1273	2396		obligation by a creditor of the taxpayer incurred to finance the
1274	2397		production of agricultural products.
1275		-
1276	2398		16. In taxable years beginning December 31, 2000, an amount
1277	2399		equal to one hundred percent (100%) of the amount of any scholarship
1278	2400		or stipend received from participation in the Oklahoma Police Corps
1279	2401		Program, as established in Section 2 -140.3 of Title 47 of the
1280	2402		Oklahoma Statutes shall be exempt from taxable income.
1281		-
1282	2403		17. a. In taxable years beginning after December 31, 2001,
1283	2404		and before January 1, 2005, there shall be allowed a
1284	2405		deduction in the amount of contributions to accounts
1285	2406		established pursuant to the Oklahoma College Savings
1286	2407		Plan Act. The deduction shall equal the amount of
1287	2408		contributions to accounts, but in no event shall the
	2409	+
	2410	+	ENGR. H. B. NO. 2178 Page 48 1
	2411	+	2
	2412	+	3
	2413	+	4
	2414	+	5
	2415	+	6
	2416	+	7
	2417	+	8
	2418	+	9
	2419	+	10
	2420	+	11
	2421	+	12
	2422	+	13
	2423	+	14
	2424	+	15
	2425	+	16
	2426	+	17
	2427	+	18
	2428	+	19
	2429	+	20
	2430	+	21
	2431	+	22
	2432	+	23
	2433	+	24
	2434	+
1288	2435		deduction for each contributor exceed Two Thousand
1289	2436		Five Hundred Dollars ($2,500.00) each taxable year for
1290	2437		each account.
1291		-
1292	2438		b. In taxable years beginning after December 31, 2004,
1293	2439		each taxpayer shall be allowed a deduction for
1294	2440		contributions to accounts established pursuant to the
1295	2441		Oklahoma College Savings Plan Act. The maximum annual
1296	2442		deduction shall equal the amount of contributions to
1297	2443		all such accounts plus any contributions to such
1298	2444		accounts by the taxpayer for prior taxable years after
1299	2445		December 31, 2004, which were not deducted, but in no
1300		-	event shall the deduction for each tax year exceed Ten ~~ENR. H. B. NO. 2178 Page 30~~
	2446	+	event shall the deduction for each tax year exceed Ten
1301	2447		Thousand Dollars ($10,000.00) for each individual
1302	2448		taxpayer or Twenty Thousand Dollars ($20,000.00) for
1303	2449		taxpayers filing a joint return. Any amount of a
1304	2450		contribution that is not deducted by the taxpayer in
1305	2451		the year for which the contribution is made may be
1306	2452		carried forward as a deduction from income for the
1307	2453		succeeding five (5) years. For taxable years
1308	2454		beginning after Decemb er 31, 2005, deductions may be
1309	2455		taken for contributions and rollovers made during a
1310	2456		taxable year and up to April 15 of the succeeding
1311	2457		year, or the due date of a taxpayer 's state income tax
1312	2458		return, excluding extensions, whichever is later.
	2459	+
	2460	+	ENGR. H. B. NO. 2178 Page 49 1
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	2484	+
1313	2485		Provided, a deduction for the same contribution may
1314	2486		not be taken for two (2) different taxable years.
1315		-
1316	2487		c. In taxable years beginning after December 31, 2006,
1317	2488		deductions for contributions made pursuant to
1318	2489		subparagraph b of this paragraph shall be limited as
1319	2490		follows:
1320		-
1321	2491		(1) for a taxpayer who qualified for the five -year
1322	2492		carryforward election and who takes a rollover or
1323	2493		nonqualified withdrawal during that period, the
1324	2494		tax deduction otherwise available pursuant to
1325	2495		subparagraph b of this paragraph shall be reduced
1326	2496		by the amount which is equal to the rollover or
1327	2497		nonqualified withdrawal, and
1328		-
1329	2498		(2) for a taxpayer who elects to take a rollover or
1330	2499		nonqualified withdrawal within the same tax year
1331	2500		in which a contribution was made to the
1332	2501		taxpayer's account, the tax deduction otherwise
1333	2502		available pursuant to subparagraph b of this
1334	2503		paragraph shall be reduced by the amount of the
1335	2504		contribution which is equal to the rollover or
1336	2505		nonqualified withdrawal.
1337		-
1338	2506		d. If a taxpayer elects to take a rollover on a
1339	2507		contribution for which a deduction has been taken
1340	2508		pursuant to subparagraph b of this paragraph within
	2509	+
	2510	+	ENGR. H. B. NO. 2178 Page 50 1
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	2512	+	3
	2513	+	4
	2514	+	5
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	2516	+	7
	2517	+	8
	2518	+	9
	2519	+	10
	2520	+	11
	2521	+	12
	2522	+	13
	2523	+	14
	2524	+	15
	2525	+	16
	2526	+	17
	2527	+	18
	2528	+	19
	2529	+	20
	2530	+	21
	2531	+	22
	2532	+	23
	2533	+	24
	2534	+
1341	2535		one (1) year of the date of contribution, the amount
1342	2536		of such rollover shall be included in the adjusted
1343	2537		gross income of the taxpayer in the taxable year of
1344	2538		the rollover.
1345		-	ENR. H. B. NO. 2178 Page 31
1346	2539		e. If a taxpayer makes a nonqualifie d withdrawal of
1347	2540		contributions for which a deduction was taken pursuant
1348	2541		to subparagraph b of this paragraph, such nonqualified
1349	2542		withdrawal and any earnings thereon shall be included
1350	2543		in the adjusted gross income of the taxpayer in the
1351	2544		taxable year of the nonq ualified withdrawal.
1352		-
1353	2545		f. As used in this paragraph:
1354		-
1355	2546		(1) "non-qualified withdrawal " means a withdrawal
1356	2547		from an Oklahoma College Savings Plan account
1357	2548		other than one of the following:
1358		-
1359	2549		(a) a qualified withdrawal,
1360		-
1361	2550		(b) a withdrawal made as a result of the death
1362	2551		or disability of the designated beneficiary
1363	2552		of an account,
1364		-
1365	2553		(c) a withdrawal that is made on the account of
1366	2554		a scholarship or the allowance or payment
1367	2555		described in Section 135(d)(1)(B) or (C) or
1368	2556		by the Internal Revenue Code, received by
1369	2557		the designated benefic iary to the extent the
1370	2558		amount of the refund does not exceed the
	2559	+
	2560	+	ENGR. H. B. NO. 2178 Page 51 1
	2561	+	2
	2562	+	3
	2563	+	4
	2564	+	5
	2565	+	6
	2566	+	7
	2567	+	8
	2568	+	9
	2569	+	10
	2570	+	11
	2571	+	12
	2572	+	13
	2573	+	14
	2574	+	15
	2575	+	16
	2576	+	17
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	2579	+	20
	2580	+	21
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	2583	+	24
	2584	+
1371	2585		amount of the scholarship, allowance, or
1372	2586		payment, or
1373		-
1374	2587		(d) a rollover or change of designated
1375	2588		beneficiary as permitted by subsection F of
1376	2589		Section 3970.7 of Title 70 of Oklahoma
1377	2590		Statutes, and
1378		-
1379	2591		(2) "rollover" means the transfer of funds from the
1380	2592		Oklahoma College Savings Plan to any other plan
1381	2593		under Section 529 of the Internal Revenue Code.
1382		-
1383	2594		18. For taxable years beginning after December 31, 2005,
1384	2595		retirement benefits received by an individual from an y component of
1385	2596		the Armed Forces of the United States in an amount not to exceed the
1386	2597		greater of seventy-five percent (75%) of such benefits or Ten
1387	2598		Thousand Dollars ($10,000.00) shall be exempt from taxable income
1388	2599		but in no case less than the amount of the e xemption provided by
1389	2600		paragraph 14 of this subsection.
1390		-	ENR. H. B. NO. 2178 Page 32
1391	2601		19. For taxable years beginning after December 31, 2006,
1392	2602		retirement benefits received by federal civil service retirees,
1393	2603		including survivor annuities, paid in lieu of Social Security
1394	2604		benefits shall be exempt from taxable income to the extent such
1395	2605		benefits are included in the federal adjusted gross income pursuant
1396	2606		to the provisions of Section 86 of the Internal Revenue Code, 26
1397	2607		U.S.C., Section 86, according to the following schedule:
1398	2608
	2609	+	ENGR. H. B. NO. 2178 Page 52 1
	2610	+	2
	2611	+	3
	2612	+	4
	2613	+	5
	2614	+	6
	2615	+	7
	2616	+	8
	2617	+	9
	2618	+	10
	2619	+	11
	2620	+	12
	2621	+	13
	2622	+	14
	2623	+	15
	2624	+	16
	2625	+	17
	2626	+	18
	2627	+	19
	2628	+	20
	2629	+	21
	2630	+	22
	2631	+	23
	2632	+	24
	2633	+
1399	2634		a. in the taxable year beginning January 1, 2007, twenty
1400	2635		percent (20%) of such benefits shall be exempt,
1401		-
1402	2636		b. in the taxable year beginning January 1, 2008, forty
1403	2637		percent (40%) of such benefits shall be exempt,
1404		-
1405	2638		c. in the taxable year beginning January 1, 2009, sixty
1406	2639		percent (60%) of such benefits shall be exempt,
1407		-
1408	2640		d. in the taxable year beginning January 1, 2010, eighty
1409	2641		percent (80%) of such benefits shall be exempt, and
1410		-
1411	2642		e. in the taxable year beginning January 1, 2011, and
1412	2643		subsequent taxable years, one hundred percent (100%)
1413	2644		of such benefits shall be exempt.
1414		-
1415	2645		20. a. For taxable years beginning after December 31, 2007, a
1416	2646		resident individual may deduct up to Ten Thousand
1417	2647		Dollars ($10,000.00) from Oklahoma adjusted gross
1418	2648		income if the individual, or the dependent of the
1419	2649		individual, while living, donates one or more human
1420	2650		organs of the individual to another human being for
1421	2651		human organ transplantation. As used in this
1422	2652		paragraph, "human organ" means all or part of a liver,
1423	2653		pancreas, kidney, intestine, lung, or bone marrow. A
1424	2654		deduction that is claimed under this paragraph may be
1425	2655		claimed in the taxable year in which the human organ
1426	2656		transplantation occurs.
1427	2657
	2658	+	ENGR. H. B. NO. 2178 Page 53 1
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	2677	+	20
	2678	+	21
	2679	+	22
	2680	+	23
	2681	+	24
	2682	+
1428	2683		b. An individual may claim this deduction only once, and
1429	2684		the deduction may be claimed only for unreimbursed
1430	2685		expenses that are incurred by the individual and
1431	2686		related to the organ donation of the individual.
1432		-
1433	2687		c. The Oklahoma Tax Commission shall promulgate rules to
1434	2688		implement the provisions of this paragraph which shall
1435		-	contain a specific list of expenses which may be ~~ENR. H. B. NO. 2178 Page 33~~
	2689	+	contain a specific list of expenses which may be
1436	2690		presumed to qualify for the deduction. The Tax
1437	2691		Commission shall prescribe necessary requirements for
1438	2692		verification.
1439		-
1440	2693		21. For taxable years beginning after December 31, 2009, there
1441	2694		shall be exempt from taxable income any amount received by the
1442	2695		beneficiary of the death benefit for an emergency medical technician
1443	2696		or a registered emergency medical responder provided by Section 1 -
1444	2697		2505.1 of Title 63 of the Oklahoma Statutes.
1445		-
1446	2698		22. For taxable years beginning after December 31, 2008,
1447	2699		taxable income shall be increased by any unemployment c ompensation
1448	2700		exempted under Section 85(c) of the Internal Revenue Code, 26
1449	2701		U.S.C., Section 85(c)(2009).
1450		-
1451	2702		23. For taxable years beginning after December 31, 2008, there
1452	2703		shall be exempt from taxable income any payment in an amount less
1453	2704		than Six Hundred Dollar s ($600.00) received by a person as an award
1454	2705		for participation in a competitive livestock show event. For
1455	2706		purposes of this paragraph, the payment shall be treated as a
	2707	+
	2708	+	ENGR. H. B. NO. 2178 Page 54 1
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	2710	+	3
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	2717	+	10
	2718	+	11
	2719	+	12
	2720	+	13
	2721	+	14
	2722	+	15
	2723	+	16
	2724	+	17
	2725	+	18
	2726	+	19
	2727	+	20
	2728	+	21
	2729	+	22
	2730	+	23
	2731	+	24
	2732	+
1456	2733		scholarship amount paid by the entity sponsoring the event and the
1457	2734		sponsoring entity sh all cause the payment to be categorized as a
1458	2735		scholarship in its books and records.
1459		-
1460	2736		24. For taxable years beginning on or after January 1, 2016,
1461	2737		taxable income shall be increased by any amount of state and local
1462	2738		sales or income taxes deducted under 26 U.S. C., Section 164 of the
1463	2739		Internal Revenue Code. If the amount of state and local taxes
1464	2740		deducted on the federal return is limited, taxable income on the
1465	2741		state return shall be increased only by the amount actually deducted
1466	2742		after any such limitations are appli ed.
1467		-
1468	2743		25. For taxable years beginning after December 31, 2020, each
1469	2744		taxpayer shall be allowed a deduction for contributions to accounts
1470	2745		established pursuant to the Achieving a Better Life Experience
1471	2746		(ABLE) Program as established in Section 4001.1 et seq. of Title 56
1472	2747		of the Oklahoma Statutes. For any tax year, the deduction provided
1473	2748		for in this paragraph shall not exceed Ten Thousand Dollars
1474	2749		($10,000.00) for an individual taxpayer or Twenty Thousand Dollars
1475	2750		($20,000.00) for taxpayers filing a joint return. Any amount of
1476	2751		contribution not deducted by the taxpayer in the tax year for which
1477	2752		the contribution is made may be carried forward as a deduction from
1478	2753		income for up to five (5) tax years. Deductions may be taken for
1479	2754		contributions made during the tax year a nd through April 15 of the
1480		-	succeeding tax year, or through the due date of a taxpayer 's state ~~ENR. H. B. NO. 2178 Page 34~~
	2755	+	succeeding tax year, or through the due date of a taxpayer 's state
1481	2756		income tax return excluding extensions, whichever is later.
	2757	+
	2758	+	ENGR. H. B. NO. 2178 Page 55 1
	2759	+	2
	2760	+	3
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	2765	+	8
	2766	+	9
	2767	+	10
	2768	+	11
	2769	+	12
	2770	+	13
	2771	+	14
	2772	+	15
	2773	+	16
	2774	+	17
	2775	+	18
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	2777	+	20
	2778	+	21
	2779	+	22
	2780	+	23
	2781	+	24
	2782	+
1482	2783		Provided, a deduction for the same contribution may not be taken in
1483	2784		more than one (1) tax year.
1484		-
1485	2785		F. 1. For taxable years beginning after December 31, 2004, a
1486	2786		deduction from the Oklahoma adjusted gross income of any individual
1487	2787		taxpayer shall be allowed for qualifying gains receiving capital
1488	2788		treatment that are included in the federal adjusted gross income o f
1489	2789		such individual taxpayer during the taxable year.
1490		-
1491	2790		2. As used in this subsection:
1492		-
1493	2791		a. "qualifying gains receiving capital treatment " means
1494	2792		the amount of net capital gains, as defined in Section
1495	2793		1222(11) of the Internal Revenue Code, included in an
1496	2794		individual taxpayer's federal income tax return that
1497	2795		result from:
1498		-
1499	2796		(1) the sale of real property or tangible personal
1500	2797		property located within Oklahoma that has been
1501	2798		directly or indirectly owned by the individual
1502	2799		taxpayer for a holding period of at least five
1503	2800		(5) years prior to the date of the transaction
1504	2801		from which such net capital gains arise,
1505		-
1506	2802		(2) the sale of stock or the sale of a direct or
1507	2803		indirect ownership interest in an Oklahoma
1508	2804		company, limited liability company, or
1509	2805		partnership where such stock or ownership
1510	2806		interest has been directly or indirectly owned by
	2807	+
	2808	+	ENGR. H. B. NO. 2178 Page 56 1
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	2811	+	4
	2812	+	5
	2813	+	6
	2814	+	7
	2815	+	8
	2816	+	9
	2817	+	10
	2818	+	11
	2819	+	12
	2820	+	13
	2821	+	14
	2822	+	15
	2823	+	16
	2824	+	17
	2825	+	18
	2826	+	19
	2827	+	20
	2828	+	21
	2829	+	22
	2830	+	23
	2831	+	24
	2832	+
1511	2833		the individual taxpayer for a holding period of
1512	2834		at least two (2) years prior to the date of the
1513	2835		transaction from which the net capital gains
1514	2836		arise, or
1515		-
1516	2837		(3) the sale of real property, tangible personal
1517	2838		property or intangible personal property located
1518	2839		within Oklahoma as part of the sale of all or
1519	2840		substantially all of the assets of an Oklahoma
1520	2841		company, limited liability company, or
1521	2842		partnership or an Oklahoma proprietorship
1522	2843		business enterprise where such property has been
1523	2844		directly or indirectly owned by such entity or
1524	2845		business enterprise or owned by the owners of
1525		-	such entity or business enterprise for a period ~~ENR. H. B. NO. 2178 Page 35~~
	2846	+	such entity or business enterprise for a period
1526	2847		of at least two (2) years prior to the date of
1527	2848		the transaction from which the net capital gains
1528	2849		arise,
1529		-
1530	2850		b. "holding period" means an uninterrupted period of
1531	2851		time. The holding period shall include any additional
1532	2852		period when the property was held by another
1533	2853		individual or entity, if such additional period is
1534	2854		included in the taxpayer 's holding period for the
1535	2855		asset pursuant to the Internal Revenue Code,
1536	2856
	2857	+	ENGR. H. B. NO. 2178 Page 57 1
	2858	+	2
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	2879	+	23
	2880	+	24
	2881	+
1537	2882		c. "Oklahoma company," "limited liability company, " or
1538	2883		"partnership" means an entity whose primary
1539	2884		headquarters have been located in Oklahoma for at
1540	2885		least three (3) uninterrupted years prior to the date
1541	2886		of the transaction from which the net capital gains
1542	2887		arise,
1543		-
1544	2888		d. "direct" means the individual taxpayer directly owns
1545	2889		the asset,
1546		-
1547	2890		e. "indirect" means the individual taxpayer owns an
1548	2891		interest in a pass-through entity (or chain of pass -
1549	2892		through entities) that sells the asset that gives rise
1550	2893		to the qualifying gains receiving capital treatment.
1551		-
1552	2894		(1) With respect to sales of real property or
1553	2895		tangible personal property located within
1554	2896		Oklahoma, the deduction described in this
1555	2897		subsection shall not apply unless the pass -
1556	2898		through entity that makes the sale has held the
1557	2899		property for not less than five (5) uninterrupted
1558	2900		years prior to the date of the transaction that
1559	2901		created the capital gain, and each pass -through
1560	2902		entity included in the chain of ownership has
1561	2903		been a member, partner, or sh areholder of the
1562	2904		pass-through entity in the tier immediately below
	2905	+
	2906	+	ENGR. H. B. NO. 2178 Page 58 1
	2907	+	2
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	2915	+	10
	2916	+	11
	2917	+	12
	2918	+	13
	2919	+	14
	2920	+	15
	2921	+	16
	2922	+	17
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	2924	+	19
	2925	+	20
	2926	+	21
	2927	+	22
	2928	+	23
	2929	+	24
	2930	+
1563	2931		it for an uninterrupted period of not less than
1564	2932		five (5) years.
1565		-
1566	2933		(2) With respect to sales of stock or ownership
1567	2934		interest in or sales of all or substantially all
1568	2935		of the assets of an Oklahoma company, limited
1569	2936		liability company, partnership or Oklahoma
1570		-	proprietorship business enterprise, the deduction ~~ENR. H. B. NO. 2178 Page 36~~
	2937	+	proprietorship business enterprise, the deduction
1571	2938		described in this subsection shall not apply
1572	2939		unless the pass-through entity that makes the
1573	2940		sale has held the stock or ownership interest for
1574	2941		not less than two (2) uninterrupted years prior
1575	2942		to the date of the transaction that created the
1576	2943		capital gain, and each pass -through entity
1577	2944		included in the chain of ownership has been a
1578	2945		member, partner or shareholder of the pass -
1579	2946		through entity in the tier immed iately below it
1580	2947		for an uninterrupted period of not less than two
1581	2948		(2) years. For purposes of this division,
1582	2949		uninterrupted ownership prior to July 1, 2007,
1583	2950		shall be included in the determination of the
1584	2951		required holding period prescribed by this
1585	2952		division, and
1586		-
1587	2953		f. "Oklahoma proprietorship business enterprise " means a
1588	2954		business enterprise whose income and expenses have
	2955	+
	2956	+	ENGR. H. B. NO. 2178 Page 59 1
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	2964	+	9
	2965	+	10
	2966	+	11
	2967	+	12
	2968	+	13
	2969	+	14
	2970	+	15
	2971	+	16
	2972	+	17
	2973	+	18
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	2975	+	20
	2976	+	21
	2977	+	22
	2978	+	23
	2979	+	24
	2980	+
1589	2981		been reported on Schedule C or F of an individual
1590	2982		taxpayer's federal income tax return, or any similar
1591	2983		successor schedule published by the Interna l Revenue
1592	2984		Service and whose primary headquarters have been
1593	2985		located in Oklahoma for at least three (3)
1594	2986		uninterrupted years prior to the date of the
1595	2987		transaction from which the net capital gains arise.
1596		-
1597	2988		G. 1. For purposes of computing its Oklahoma taxable in come
1598	2989		under this section, the dividends -paid deduction otherwise allowed
1599	2990		by federal law in computing net income of a real estate investment
1600	2991		trust that is subject to federal income tax shall be added back in
1601	2992		computing the tax imposed by this state under this title if the real
1602	2993		estate investment trust is a captive real estate investment trust.
1603		-
1604	2994		2. For purposes of computing its Oklahoma taxable income under
1605	2995		this section, a taxpayer shall add back otherwise deductible rents
1606	2996		and interest expenses paid to a captive real estate investment trust
1607	2997		that is not subject to the provisions of paragraph 1 of this
1608	2998		subsection. As used in this subsection:
1609		-
1610	2999		a. the term "real estate investment trust " or "REIT"
1611	3000		means the meaning ascribed to such term in Section 856
1612	3001		of the Internal Revenue Code,
1613		-
1614	3002		b. the term "captive real estate investment trust " means
1615		-	a real estate investment trust, the shares or ~~ENR. H. B. NO. 2178 Page 37~~
	3003	+	a real estate investment trust, the shares or
1616	3004		beneficial interests of which are not regularly traded
	3005	+
	3006	+	ENGR. H. B. NO. 2178 Page 60 1
	3007	+	2
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	3009	+	4
	3010	+	5
	3011	+	6
	3012	+	7
	3013	+	8
	3014	+	9
	3015	+	10
	3016	+	11
	3017	+	12
	3018	+	13
	3019	+	14
	3020	+	15
	3021	+	16
	3022	+	17
	3023	+	18
	3024	+	19
	3025	+	20
	3026	+	21
	3027	+	22
	3028	+	23
	3029	+	24
	3030	+
1617	3031		on an established securities market and more than
1618	3032		fifty percent (50%) of the voting power or value of
1619	3033		the beneficial interests or shares of which are owned
1620	3034		or controlled, directly or indirectly, or
1621	3035		constructively, by a single entity that is:
1622		-
1623	3036		(1) treated as an association taxable as a
1624	3037		corporation under the Internal Revenue Code, and
1625		-
1626	3038		(2) not exempt from federal income tax pursuant to
1627	3039		the provisions of Section 501(a) of the Internal
1628	3040		Revenue Code.
1629		-
1630	3041		The term shall not include a real estate investment
1631	3042		trust that is intended to be regularly traded on an
1632	3043		established securities market, and that sati sfies the
1633	3044		requirements of Section 856(a)(5) and (6) of the U.S.
1634	3045		Internal Revenue Code by reason of Section 856(h)(2)
1635	3046		of the Internal Revenue Code,
1636		-
1637	3047		c. the term "association taxable as a corporation " shall
1638	3048		not include the following entities:
1639		-
1640	3049		(1) any real estate investment trust as defined in
1641	3050		paragraph a of this subsection other than a
1642	3051		"captive real estate investment trust ", or
1643		-
1644	3052		(2) any qualified real estate investment trust
1645	3053		subsidiary under Section 856(i) of the Internal
1646	3054		Revenue Code, other than a qualified RE IT
	3055	+
	3056	+	ENGR. H. B. NO. 2178 Page 61 1
	3057	+	2
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	3059	+	4
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	3061	+	6
	3062	+	7
	3063	+	8
	3064	+	9
	3065	+	10
	3066	+	11
	3067	+	12
	3068	+	13
	3069	+	14
	3070	+	15
	3071	+	16
	3072	+	17
	3073	+	18
	3074	+	19
	3075	+	20
	3076	+	21
	3077	+	22
	3078	+	23
	3079	+	24
	3080	+
1647	3081		subsidiary of a "captive real estate investment
1648	3082		trust", or
1649		-
1650	3083		(3) any Listed Australian Property Trust (meaning an
1651	3084		Australian unit trust registered as a "Managed
1652	3085		Investment Scheme" under the Australian
1653	3086		Corporations Act in which the principal class of
1654	3087		units is listed on a recognized stock exchange in
1655	3088		Australia and is regularly traded on an
1656	3089		established securities market), or an entity
1657	3090		organized as a trust, provided that a Listed
1658	3091		Australian Property Trust owns or controls,
1659		-	directly or indirectly, seventy -five percent ~~ENR. H. B. NO. 2178 Page 38~~
	3092	+	directly or indirectly, seventy -five percent
1660	3093		(75%) or more of the voting power or value of the
1661	3094		beneficial interests or shares of such trust, or
1662		-
1663	3095		(4) any Qualified Foreign Entity, meaning a
1664	3096		corporation, trust, association or partnership
1665	3097		organized outside the laws of the United States
1666	3098		and which satisfies the following criteria:
1667		-
1668	3099		(a) at least seventy-five percent (75%) of the
1669	3100		entity's total asset value at the close of
1670	3101		its taxable year is represented by real
1671	3102		estate assets, as defined in Section
1672	3103		856(c)(5)(B) of the Internal Revenue Code,
1673	3104		thereby including shares or certificates of
	3105	+
	3106	+	ENGR. H. B. NO. 2178 Page 62 1
	3107	+	2
	3108	+	3
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	3112	+	7
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	3114	+	9
	3115	+	10
	3116	+	11
	3117	+	12
	3118	+	13
	3119	+	14
	3120	+	15
	3121	+	16
	3122	+	17
	3123	+	18
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	3125	+	20
	3126	+	21
	3127	+	22
	3128	+	23
	3129	+	24
	3130	+
1674	3131		beneficial interest in any real estate
1675	3132		investment trust, cash and cash equivalents,
1676	3133		and U.S. Government securities,
1677		-
1678	3134		(b) the entity receives a dividend -paid
1679	3135		deduction comparable to Section 561 of the
1680	3136		Internal Revenue Code, or is exempt from
1681	3137		entity level tax,
1682		-
1683	3138		(c) the entity is required to distribute at
1684	3139		least eighty-five percent (85%) of its
1685	3140		taxable income, as computed in the
1686	3141		jurisdiction in which it is organized, to
1687	3142		the holders of its shares or certificates of
1688	3143		beneficial interest on an annual basis,
1689		-
1690	3144		(d) not more than ten percent (10%) of the
1691	3145		voting power or value in such entity is held
1692	3146		directly or indirectly or constructively by
1693	3147		a single entity or individual, or the shares
1694	3148		or beneficial interests of such entity are
1695	3149		regularly traded on an established
1696	3150		securities market, and
1697		-
1698	3151		(e) the entity is organized in a country which
1699	3152		has a tax treaty with the United States.
1700		-
1701	3153		3. For purposes of this subsection, the constructive ownership
1702	3154		rules of Section 318(a) of the Internal Revenue Code, as mo dified by
1703		-	Section 856(d)(5) of the Internal Revenue Code, shall apply in ENR. H. B. NO. 2178 Page 39
	3155	+
	3156	+	ENGR. H. B. NO. 2178 Page 63 1
	3157	+	2
	3158	+	3
	3159	+	4
	3160	+	5
	3161	+	6
	3162	+	7
	3163	+	8
	3164	+	9
	3165	+	10
	3166	+	11
	3167	+	12
	3168	+	13
	3169	+	14
	3170	+	15
	3171	+	16
	3172	+	17
	3173	+	18
	3174	+	19
	3175	+	20
	3176	+	21
	3177	+	22
	3178	+	23
	3179	+	24
	3180	+
	3181	+	Section 856(d)(5) of the Internal Revenue Code, shall apply in
1704	3182		determining the ownership of stock, assets, or net profits of any
1705	3183		person.
1706		-
1707	3184		4. A real estate investment trust that does not become
1708	3185		regularly traded on an established securities market within one (1)
1709	3186		year of the date on which it first becomes a real estate investment
1710	3187		trust shall be deemed not to have been regularly traded on an
1711	3188		established securities market, retroactive to the date it first
1712	3189		became a real estate investment trust, and shal l file an amended
1713	3190		return reflecting such retroactive designation for any tax year or
1714	3191		part year occurring during its initial year of status as a real
1715	3192		estate investment trust. For purposes of this subsection, a real
1716	3193		estate investment trust becomes a real es tate investment trust on
1717	3194		the first day it has both met the requirements of Section 856 of the
1718	3195		Internal Revenue Code and has elected to be treated as a real estate
1719	3196		investment trust pursuant to Section 856(c)(1) of the Internal
1720	3197		Revenue Code.
1721		-
1722	3198		SECTION 2. This act shall become effective November 1, 2021.
1723		-	ENR. H. B. NO. 2178 Page 40
1724		-	Passed the House of Representatives the 3rd day of May, 2021.
	3199	+
	3200	+
	3201	+	ENGR. H. B. NO. 2178 Page 64 1
	3202	+	2
	3203	+	3
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	3209	+	9
	3210	+	10
	3211	+	11
	3212	+	12
	3213	+	13
	3214	+	14
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	3218	+	18
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	3221	+	21
	3222	+	22
	3223	+	23
	3224	+	24
	3225	+
	3226	+
	3227	+	Passed the House of Representatives the 16th day of February,
	3228	+	2021.
1725	3229
1726	3230
1727	3231
1728	3232
1729	3233		Presiding Officer of the House
1730	3234		of Representatives
1731	3235
1732	3236
1733		-	Passed the Senate the ~~21st~~ day of ~~April~~, 2021.
	3237	+	Passed the Senate the ___ day of __________, 2021.
1734	3238
1735	3239
1736	3240
1737	3241
1738	3242		Presiding Officer of the Senate
1739	3243
1740	3244
1741	3245
1742		-	OFFICE OF THE GOVERNOR
1743		-	Received by the Office of the Governor this ____________________
1744		-	day of ___________________, 20_______, at _______ o'clock _______ M.
1745		-	By: _________________________________
1746		-	Approved by the Governor of the State of Oklahoma this _________
1747		-	day of ___________________, 20_______, at _______ o'clock _______ M.
1748		-
1749		-
1750		-	_________________________________
1751		-	Governor of the State of Ok lahoma
1752		-
1753		-	OFFICE OF THE SECRETARY OF STATE
1754		-	Received by the Office of the Secretary of State this __________
1755		-	day of ___________________, 20_______, at _______ o'clock _______ M.
1756		-	By: _________________________________
1757	3246