Oklahoma 2022 Regular Session

Oklahoma House Bill HB3088 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	An Act
2		-	ENROLLED HOUSE
3		-	BILL NO. 3088 By: Hilbert, Lawson, Phillips,
4		-	and Roberts (Eric) of the
5		-	House
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	3	+	ENGR. S. A. TO ENGR. H. B. NO. 3088 Page 1 1
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	28	+	ENGROSSED SENATE AMENDMENT
	29	+	TO
	30	+	ENGROSSED HOUSE
	31	+	BILL NO. 3088 By: Hilbert, Lawson and
	32	+	Phillips of the House
6	33
7	34		and
8	35
9		-	Hall, Jett, and Stephens of
10		-	the Senate
11		-
12		-
13		-
14		-	An Act relating to revenue and taxation; providing
15		-	income tax credit for certain adoption expenses;
16		-	defining term; specifying amount of tax credit;
17		-	imposing limitation on maximum eligible expense
18		-	amounts; providing for limitation on expense amoun ts
19		-	based on income tax filing status; requiring Tax
20		-	Commission to adopt rules ; amending 68 O.S. 2021,
21		-	Section 2358, which relates to computation of
22		-	Oklahoma taxable income a nd adjusted gross income;
23		-	modifying provisions related to deduction for certain
24		-	adoption expenses; providing for codification; and
25		-	providing an effective date .
26		-
27		-
28		-	SUBJECT: Revenue and taxation
	36	+	Hall of the Senate
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	38	+
	39	+
	40	+
	41	+
	42	+	[ revenue and taxation - income tax credit - adoption
	43	+	expenses – codification - effective date ]
	44	+
	45	+
	46	+
	47	+
	48	+	AUTHOR: Add the following Senate Coauthors: Jett and Stephens
	49	+
	50	+	AMENDMENT NO. 1. Page 1, restore the title
	51	+
	52	+	Passed the Senate the 27th day of April, 2022.
	53	+
	54	+
	55	+
	56	+	Presiding Officer of the Senate
	57	+
	58	+
	59	+	Passed the House of Representatives the ____ day of __________,
	60	+	2022.
	61	+
	62	+
	63	+
	64	+	Presiding Officer of the House
	65	+	of Representatives
	66	+
	67	+	ENGR. H. B. NO. 3088 Page 1 1
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	92	+	ENGROSSED HOUSE
	93	+	BILL NO. 3088 By: Hilbert, Lawson and
	94	+	Phillips of the House
	95	+
	96	+	and
	97	+
	98	+	Hall of the Senate
	99	+
	100	+
	101	+
	102	+
	103	+
	104	+	[ revenue and taxation - income tax credit - adoption
	105	+	expenses – codification - effective date ]
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	107	+
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29	109
30	110		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
31		-
32	111		SECTION 1. NEW LAW A new sec tion of law to be codified
33	112		in the Oklahoma Statutes as Section 2357.601 of Title 68, unless
34	113		there is created a duplication in numbering, reads as follows:
35		-
36	114		A. As used in this section, "nonrecurring adoption expenses "
37		-	means adoption fees, court costs, medic al expenses, attorney fees ,
	115	+	means adoption fees, court costs, medic al expenses, attorney fees
38	116		and expenses which are directly related to th e legal process of
39	117		adoption of a child including, but not limited to, costs relating to
40	118		the adoption study, health and ps ychological examinations,
41		-	transportation, and reasonable costs o f lodging and food for the
	119	+	transportation and reasonable costs o f lodging and food for the
42	120		child or adoptive parents which are incurred to complete the
43	121		adoption process and are not reimbursed by other sourc es. The term
44		-	nonrecurring adoption expenses shall not include ~~attorn ey~~ fees
	122	+	"nonrecurring adoption expenses " shall not include attorney fees
45	123		incurred for the purpose of litigat ing a contested adoption, from
46		-	and after the point of the initiation of the contest, costs ENR. H. B. NO. 3088 Page 2
47		-	associated with physical remodeling, renovation , and alteration of
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	150	+	and after the point of the initiation of the contest, costs
	151	+	associated with physical remodeling, renovation and alteration of
48	152		the adoptive parents' home or property, except for a special needs
49	153		child as authorized by the court .
50		-
51	154		B. For taxable years beginning on or after January 1, 2023,
52	155		there shall be allowed a credit against the tax imposed pursuant to
53	156		Section 2355 of Title 68 of the Oklahoma Statutes for nonrecurring
54	157		adoption expenses paid by a resident individual taxpayer i n
55	158		connection with:
56		-
57	159		1. The adoption of a minor; or
58		-
59	160		2. A proposed adoption of a minor which did not result in a
60	161		decreed adoption.
61		-
62	162		C. The amount of the tax credit authorized by this section
63	163		shall be equal to ten percent (10%) of the qualified expenses but
64	164		the credit amount shall not exceed Two Thousand Dollars ($2 ,000.00)
65	165		per calendar year with respect to single filing status or married
66	166		filing separate income tax returns and shall not exceed Fou r
67	167		Thousand Dollars ($4 ,000.00) per calendar year with respect t o
68	168		married filing joint return filing status.
69		-
70		-	D. The Oklahoma Tax Commission shall promulgate rules to
71		-	implement the provisions of this section which shall contain a
72		-	specific list of nonrecurring adopti on expenses which may be
73		-	presumed to qualify for the tax credit. The Tax Commission shall
74		-	prescribe necessary requirements for verific ation.
	169	+	D. The Tax Commission shal l promulgate rules to implement the
	170	+	provisions of this section which shall contain a specific list of
	171	+	nonrecurring adoption expenses which may be presumed to qualify for
	172	+	the tax credit. The Tax Commission shall prescribe necessary
	173	+	requirements for verific ation.
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75	199
76	200		SECTION 2. AMENDATORY 68 O.S. 2021, S ection 2358, is
77	201		amended to read as follows:
78		-
79	202		Section 2358. For all tax years beginning after December 31,
80	203		1981, taxable income and adjusted gross income shall be adjusted to
81	204		arrive at Oklahoma taxable income and Oklah oma adjusted gross income
82	205		as required by this section.
83		-
84	206		A. The taxable income of any taxpa yer shall be adjusted to
85	207		arrive at Oklahoma taxable inco me for corporations and Oklahoma
86	208		adjusted gross income for individuals, as foll ows:
87		-
88	209		1. There shall be added i nterest income on obligations of any
89	210		state or political subdivision thereto which is not o therwise
90		-	exempted pursuant to other laws of this state, to the extent that ~~ENR. H. B. NO. 3088 Page 3~~
	211	+	exempted pursuant to other laws of this state, to the extent that
91	212		such interest is not included in taxable income and adjusted gross
92	213		income.
93		-
94	214		2. There shall be deducted amounts included in such in come that
95	215		the state is prohibited from taxing becau se of the provisions of the
96	216		Federal Constitution, the St ate Constitution, federal laws or laws
97	217		of Oklahoma.
98		-
99	218		3. The amount of any feder al net operating loss deduction shall
100	219		be adjusted as follows:
101		-
102	220		a. For carryovers and carrybacks to taxable years
103	221		beginning before January 1, 1981, the amount of any
104	222		net operating loss deduction allowed to a taxpayer for
105	223		federal income tax purposes shall be reduced to an
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106	250		amount which is the same portion thereof as the loss
107	251		from sources within this state, as determined pursuant
108	252		to this section and Section 2362 of this title, for
109	253		the taxable year in which such loss is sustained is of
110	254		the total loss for such yea r;
111		-
112	255		b. For carryovers and carryb acks to taxable years
113	256		beginning after December 31, 1980, the amount of any
114	257		net operating loss deduction allowed for the taxable
115	258		year shall be an amount equal to the aggregate of the
116	259		Oklahoma net operating loss carryovers and carrybacks
117	260		to such year. Oklahoma net operating losses shall be
118	261		separately determined by reference to Section 172 of
119	262		the Internal Revenue Code, 26 U.S.C., Section 172, as
120	263		modified by the Oklahoma Income Tax Act, Section 2351
121	264		et seq. of this title, and sha ll be allowed without
122	265		regard to the existence of a federal net operati ng
123	266		loss. For tax years beginning after December 31 ,
124	267		2000, and ending before January 1, 2008, the years to
125	268		which such losses may be carried shall be determined
126	269		solely by reference to Sec tion 172 of the Internal
127	270		Revenue Code, 26 U.S.C., Section 172, with th e
128	271		exception that the terms "net operating loss" and
129	272		"taxable income" shall be replaced with "Oklahoma net
130	273		operating loss" and "Oklahoma taxable income ". For
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131	300		tax years beginning after De cember 31, 2007, and
132	301		ending before January 1, 2009, years to which suc h
133	302		losses may be carried back shall be limited to tw o (2)
134	303		years. For tax years beginning after December 31,
135		-	2008, the years to which such losses may be carried ~~ENR. H. B. NO. 3088 Page 4~~
	304	+	2008, the years to which such losses may be carried
136	305		back shall be determined s olely by reference to
137	306		Section 172 of the Internal Revenue Code, 26 U.S .C.,
138	307		Section 172, with the exception that the terms "net
139	308		operating loss" and "taxable income" shall be replaced
140	309		with "Oklahoma net operating loss " and "Oklahoma
141	310		taxable income".
142		-
143	311		4. Items of the following nature shall be allocated as
144	312		indicated. Allowable deductions attributable to items separately
145	313		allocable in subparagraphs a, b and c of this paragraph, whethe r or
146	314		not such items of income were actually received, shall be allocated
147	315		on the same basis as those items:
148		-
149	316		a. Income from real and tangible personal property, such
150	317		as rents, oil and mining production or royalties, and
151	318		gains or losses from sales of such pro perty, shall be
152	319		allocated in accordance with the situs of such
153	320		property;
154		-
155	321		b. Income from intangible personal pr operty, such as
156	322		interest, dividends, pa tent or copyright royalties,
157	323		and gains or losses fr om sales of such property, shall
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158	350		be allocated in accorda nce with the domiciliary situs
159	351		of the taxpayer, except that:
160		-
161	352		(1) where such property has acquired a nonunitary
162	353		business or commercial situs apart fro m the
163	354		domicile of the taxpayer such income shall be
164	355		allocated in accordance with such business or
165	356		commercial situs; interest income from
166	357		investments held to generate working capital for
167	358		a unitary business enterprise s hall be included
168	359		in apportionable incom e; a resident trust or
169	360		resident estate shall be tre ated as having a
170	361		separate commercial or business situs i nsofar as
171	362		undistributed income is concerned, but shall not
172	363		be treated as having a separate commercial or
173	364		business situs insofar as distributed income is
174	365		concerned,
175		-
176	366		(2) for taxable years beginning afte r December 31,
177	367		2003, capital or ordinary gains or losses from
178	368		the sale of an ownership interest in a publicly
179	369		traded partnership, as de fined by Section 7704(b)
180		-	of the Internal Revenue Code, ~~sha ll~~ be ~~allocated ENR. H. B. NO. 3088 Page 5~~
	370	+	of the Internal Revenue Code, shall be alloca ted
181	371		to this state in the ratio of the original cost
182	372		of such partnership's tangible property in this
183	373		state to the original cost of such partnership 's
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184	400		tangible property everywhere, as dete rmined at
185	401		the time of the sale; if more than fifty percent
186	402		(50%) of the value of the partnership's assets
187	403		consists of intangible assets, capital or
188	404		ordinary gains or losses from the sale of an
189	405		ownership interest in the partnership shall be
190	406		allocated to this state in accordance with the
191	407		sales factor of the partnership for its first
192	408		full tax period immediately preceding its ta x
193	409		period during which the ownership interest in the
194	410		partnership was sold; the provisions of this
195	411		division shall only apply if the capit al or
196	412		ordinary gains or losses from the sale of an
197	413		ownership interest in a partnership do not
198	414		constitute qualifying gain receiving capital
199	415		treatment as defined in subparagraph a of
200	416		paragraph 2 of subsection F of this section,
201		-
202	417		(3) income from such property which is required to be
203	418		allocated pursuant to the provisions of paragr aph
204	419		5 of this subsection shall be allocated as here in
205	420		provided;
206		-
207	421		c. Net income or loss from a business activ ity which is
208	422		not a part of business carried on within or without
209	423		the state of a unitary character shall be sep arately
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210	450		allocated to the state in which such activity is
211	451		conducted;
212		-
213	452		d. In the case of a manufacturing or processing
214	453		enterprise the business of whi ch in Oklahoma consists
215	454		solely of marketing its products by:
216		-
217	455		(1) sales having a situs without this state, ship ped
218	456		directly to a point from without th e state to a
219	457		purchaser within the state, commonly k nown as
220	458		interstate sales,
221		-
222	459		(2) sales of the product store d in public warehouses
223	460		within the state pursuant to "in transit"
224		-	tariffs, as prescribed and allowed by the ~~ENR. H. B. NO. 3088 Page 6~~
	461	+	tariffs, as prescribed and allowed by the
225	462		Interstate Commerce Commission, to a purch aser
226	463		within the state,
227		-
228	464		(3) sales of the product sto red in public warehouses
229	465		within the state where the ship ment to such
230	466		warehouses is not covered by "in transit"
231	467		tariffs, as prescribed a nd allowed by the
232	468		Interstate Commerce Commission, to a purchaser
233	469		within or without the state,
234		-
235	470		the Oklahoma net income sha ll, at the option of the
236	471		taxpayer, be that portion of th e total net income of
237	472		the taxpayer for federal income tax purposes derived
238	473		from the manufacture and/or process ing and sales
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239	500		everywhere as determined by the ratio of the sales
240	501		defined in this section m ade to the purchaser within
241	502		the state to the total sales everywhere. The term
242	503		"public warehouse" as used in this subparagraph means
243	504		a licensed public warehouse, the principal business of
244	505		which is warehousing merchandise for the public;
245		-
246	506		e. In the case of insurance companies, Oklahoma taxable
247	507		income shall be taxable income of the taxpayer for
248	508		federal tax purposes, as adjusted for the adjus tments
249	509		provided pursuant to the provisions of paragraphs 1
250	510		and 2 of this subsection, apportioned as follows:
251		-
252	511		(1) except as otherwise provided by division (2) of
253	512		this subparagraph, taxable income of an insurance
254	513		company for a taxable year shall be apportion ed
255	514		to this state by multiplying such income by a
256	515		fraction, the numerat or of which is the direct
257	516		premiums written for insu rance on property or
258	517		risks in this state, and the denomi nator of which
259	518		is the direct premiums written for insurance on
260	519		property or risks everywhere. For purposes of
261	520		this subsection, the term "direct premiums
262	521		written" means the total amount of direct
263	522		premiums written, assessments and annuity
264	523		considerations as reported for the taxable year
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265	550		on the annual statement filed by the company with
266	551		the Insurance Commissioner in t he form approved
267	552		by the National Associ ation of Insurance
268	553		Commissioners, or such other for m as may be
269		-	prescribed in lieu thereof, ENR. H. B. NO. 3088 Page 7
270		-
	554	+	prescribed in lieu thereof,
271	555		(2) if the principal source of premiums written by an
272	556		insurance company consists of premiums fo r
273	557		reinsurance accepted by it, t he taxable income of
274	558		such company shall be apportioned to this state
275	559		by multiplying such income by a fraction, the
276	560		numerator of which is the sum o f (a) direct
277	561		premiums written for insurance on property or
278	562		risks in this state, plus (b) premiums written
279	563		for reinsurance accepted in respect of prop erty
280	564		or risks in this state, and the denominator o f
281	565		which is the sum of (c) direct premiums written
282	566		for insurance on property or risks everywhere,
283	567		plus (d) premiums written for reinsuran ce
284	568		accepted in respect of prope rty or risks
285	569		everywhere. For purposes of this paragraph,
286	570		premiums written for reinsuranc e accepted in
287	571		respect of property or risks in this state,
288	572		whether or not otherwise determinable, may at the
289	573		election of the company be d etermined on the
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290	600		basis of the proportion which premiums written
291	601		for insurance accepted from companies
292	602		commercially domiciled in Oklahoma bears to
293	603		premiums written for reinsuranc e accepted from
294	604		all sources, or alternatively in the proportion
295	605		which the sum of the direct premiums written f or
296	606		insurance on property or risks in th is state by
297	607		each ceding company from which reinsur ance is
298	608		accepted bears to the sum of the total direct
299	609		premiums written by each such ceding company for
300	610		the taxable year.
301		-
302	611		5. The net income or loss remaining after the separate
303	612		allocation in paragraph 4 of this subsection, being that which is
304	613		derived from a unitary business enterprise, shall be apportioned to
305	614		this state on the basis of the arithmetical average of three factors
306	615		consisting of property, payroll and sales o r gross revenue
307	616		enumerated as subparagr aphs a, b and c of this paragraph. Net
308	617		income or loss as used in this paragraph includes that derived from
309	618		patent or copyright royalties, purchase discounts, and interest on
310	619		accounts receivable relating to or arising from a business activity,
311	620		the income from which is apportioned pursuant to this subsect ion,
312	621		including the sale or other disposition of such prope rty and any
313	622		other property used in the unitary enterprise . Deductions used in
314		-	computing such net income or lo ss shall not include taxes based on ENR. H. B. NO. 3088 Page 8
	623	+	computing such net income or lo ss shall not include taxes based on
	624	+
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	638	+	14
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	643	+	19
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	645	+	21
	646	+	22
	647	+	23
	648	+	24
	649	+
315	650		or measured by income. Provided, for corporations w hose property
316	651		for purposes of the tax imposed by Section 2 355 of this title has an
317	652		initial investment cost equaling or exceeding Two Hund red Million
318	653		Dollars ($200,000,000.00) and such investment is made on o r after
319	654		July 1, 1997, or for corporations which e xpand their property or
320	655		facilities in this state and such expansion has an investment cost
321	656		equaling or exceeding Two Hundred Million Doll ars ($200,000,000.00)
322	657		over a period not to exceed three (3) years, and such expansion is
323	658		commenced on or after January 1, 2000, the three factors shall be
324	659		apportioned with prope rty and payroll, each comprising twenty -five
325	660		percent (25%) of the apportionment factor and sales comprising fi fty
326	661		percent (50%) of the apportionment factor. The apportionment
327	662		factors shall be compu ted as follows:
328		-
329	663		a. The property factor is a fraction, the numerator of
330	664		which is the average value of the taxpayer 's real and
331	665		tangible personal property owned or rented and used in
332	666		this state during the tax p eriod and the denominator
333	667		of which is the averag e value of all the taxpayer 's
334	668		real and tangible personal pr operty everywhere owned
335	669		or rented and used during the tax period.
336		-
337	670		(1) Property, the income from which is separ ately
338	671		allocated in paragraph 4 of this subsection,
339	672		shall not be included in determinin g this
340	673		fraction. The numerator of the fraction shall
	674	+
	675	+	ENGR. H. B. NO. 3088 Page 13 1
	676	+	2
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	678	+	4
	679	+	5
	680	+	6
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	684	+	10
	685	+	11
	686	+	12
	687	+	13
	688	+	14
	689	+	15
	690	+	16
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	693	+	19
	694	+	20
	695	+	21
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	699	+
341	700		include a portion of the investment in
342	701		transportation and other equipment having no
343	702		fixed situs, such as rolling sto ck, buses, trucks
344	703		and trailers, includi ng machinery and equipment
345	704		carried thereon, air planes, salespersons'
346	705		automobiles and other similar equipmen t, in the
347	706		proportion that miles traveled in Oklahoma by
348	707		such equipment bears to total miles traveled,
349		-
350	708		(2) Property owned by the taxpayer is valued at its
351	709		original cost. Property rented by the ta xpayer
352	710		is valued at eight times the net annual rental
353	711		rate. Net annual rental rate is the annual
354	712		rental rate paid by the taxpayer, less any annual
355	713		rental rate received by the taxpayer from
356	714		subrentals,
357		-
358	715		(3) The average value of property shall be determined
359		-	by averaging the values at the beginning and ~~ENR. H. B. NO. 3088 Page 9~~
	716	+	by averaging the values at the beginning and
360	717		ending of the tax period but the Oklahoma Tax
361	718		Commission may require the averaging of monthly
362	719		values during the tax period if reasonably
363	720		required to reflect properly the average value of
364	721		the taxpayer's property;
365		-
366	722		b. The payroll factor is a fraction, the numerator of
367	723		which is the total compensation for services rendered
	724	+
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	735	+	11
	736	+	12
	737	+	13
	738	+	14
	739	+	15
	740	+	16
	741	+	17
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	744	+	20
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	749	+
368	750		in the state during the tax per iod, and the
369	751		denominator of which is the total compensation for
370	752		services rendered everywhere during the tax period .
371	753		"Compensation", as used in this subsection means those
372	754		paid-for services to the extent related to the unitary
373	755		business but does not include officers' salaries,
374	756		wages and other compensation.
375		-
376	757		(1) In the case of a transportation enterprise, the
377	758		numerator of the fraction shall include a portion
378	759		of such expenditure in c onnection with employees
379	760		operating equipment over a fixed route, such as
380	761		railroad employees, airline pilots, o r bus
381	762		drivers, in this state only a par t of the time,
382	763		in the proportion that milea ge traveled in
383	764		Oklahoma bears to total mileage traveled by such
384	765		employees,
385		-
386	766		(2) In any case the numerator of the fraction shall
387	767		include a portion of such expenditures in
388	768		connection with itinerant employees, such as
389	769		traveling salespersons, in this state onl y a part
390	770		of the time, in the proportion that time spent in
391	771		Oklahoma bears to total time spent in furtherance
392	772		of the enterprise by such employees ;
	773	+
	774	+	ENGR. H. B. NO. 3088 Page 15 1
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	783	+	10
	784	+	11
	785	+	12
	786	+	13
	787	+	14
	788	+	15
	789	+	16
	790	+	17
	791	+	18
	792	+	19
	793	+	20
	794	+	21
	795	+	22
	796	+	23
	797	+	24
393	798
394	799		c. The sales factor is a frac tion, the numerator of which
395	800		is the total sales or gross revenue of the taxpayer in
396	801		this state during the tax period, and the denominator
397	802		of which is the total sales or gross revenue of the
398	803		taxpayer everywhere during the tax period. "Sales",
399	804		as used in this subsection does not include sales or
400	805		gross revenue which are separately alloc ated in
401	806		paragraph 4 of this subsection.
402		-
403	807		(1) Sales of tangible pers onal property have a situs
404		-	in this state if the property is delivered or ~~ENR. H. B. NO. 3088 Page 10~~
	808	+	in this state if the property is delivered or
405	809		shipped to a purchaser other than the United
406	810		States government, within this state regardless
407	811		of the FOB point or other conditions of the sale;
408	812		or the property is shipped from an offic e, store,
409	813		warehouse, factory or other place of storage in
410	814		this state and (a) th e purchaser is the United
411	815		States government or (b) the taxpayer is not
412	816		doing business in the state of the destination of
413	817		the shipment.
414		-
415	818		(2) In the case of a railroad or interurba n railway
416	819		enterprise, the numerator of the fraction shall
417	820		not be less than the allocation of revenues to
418	821		this state as shown in its annual report to the
419	822		Corporation Commission.
	823	+
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420	848
421	849		(3) In the case of an airline, truck or bus
422	850		enterprise or freight car, tank car , refrigerator
423	851		car or other railroad equipment enterprise, the
424	852		numerator of the fraction shall include a porti on
425	853		of revenue from interstate transport ation in the
426	854		proportion that interstate mileage traveled in
427	855		Oklahoma bears to total interstate mileage
428	856		traveled.
429		-
430	857		(4) In the case of an oil, gasoline or gas pipeline
431	858		enterprise, the numer ator of the fraction shall
432	859		be either the total of traffic units of the
433	860		enterprise within Oklahoma or the revenue
434	861		allocated to Oklahoma based upon miles moved, at
435	862		the option of the taxpayer, and the denominator
436	863		of which shall be the total of traffic units o f
437	864		the enterprise or the revenue of the enterprise
438	865		everywhere as approp riate to the numerator. A
439	866		"traffic unit" is hereby defined as the
440	867		transportation for a distance of one (1) mile of
441	868		one (1) barrel of oil, one (1) gallon of gasoline
442	869		or one thousand (1,0 00) cubic feet of natural or
443	870		casinghead gas, as the case may be.
444		-
445	871		(5) In the case of a telephone or telegraph or other
446	872		communication enterprise, the numerator of the
	873	+
	874	+	ENGR. H. B. NO. 3088 Page 17 1
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	884	+	11
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	887	+	14
	888	+	15
	889	+	16
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	891	+	18
	892	+	19
	893	+	20
	894	+	21
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	898	+
447	899		fraction shall include that portion of the
448	900		interstate revenue as is allocated pursuant to
449		-	the accounting procedures prescr ibed by the ~~ENR. H. B. NO. 3088 Page 11~~
	901	+	the accounting procedures prescr ibed by the
450	902		Federal Communications Comm ission; provided that
451	903		in respect to each corporation or business entity
452	904		required by the Federal Communicati ons Commission
453	905		to keep its books and records in accordance with
454	906		a uniform system of accounts prescribed by suc h
455	907		Commission, the intrastate net income shall be
456	908		determined separately in the manner provided by
457	909		such uniform system of accounts and only the
458	910		interstate income shall be subject to allocation
459	911		pursuant to the provisions of this subsection.
460	912		Provided further, that the gross revenue factors
461	913		shall be those as are determined pursuant to the
462	914		accounting procedures prescribed by the Federal
463	915		Communications Commission.
464		-
465	916		In any case where the apportionment of the three factors
466	917		prescribed in this paragraph attributes to Oklahoma a portion of net
467	918		income of the enterprise out of all appropriate proportion to the
468	919		property owned and/or business transacted within this state, because
469	920		of the fact that one or more of the factors so prescribed are no t
470	921		employed to any appreciable e xtent in furtherance of the enterprise;
471	922		or because one or more factors not so prescribed are employed to a
	923	+
	924	+	ENGR. H. B. NO. 3088 Page 18 1
	925	+	2
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	948	+
472	949		considerable extent in furtherance of t he enterprise; or because of
473	950		other reasons, the Tax Commission is empowered to permit, after a
474	951		showing by taxpayer that an excessive portion of net i ncome has been
475	952		attributed to Oklahoma, or require, when in its judgment an
476	953		insufficient portion of net inco me has been attributed to Oklahoma,
477	954		the elimination, substitution, or use of ad ditional factors, or
478	955		reduction or increase in the weight of such presc ribed factors.
479	956		Provided, however, that any such variance from such prescribed
480	957		factors which has the effect of increasing the portion of net income
481	958		attributable to Oklahoma must not be i nherently arbitrary, and
482	959		application of the recomputed final apportion ment to the net income
483	960		of the enterprise must attribute to Oklahoma only a reasonable
484	961		portion thereof.
485		-
486	962		6. For calendar years 1997 and 1998, the owner of a new or
487	963		expanded agricultural c ommodity processing facility in this state
488	964		may exclude from Oklahoma t axable income, or in the case of an
489	965		individual, the Oklahoma adjusted gross income, fifteen percent
490	966		(15%) of the investment by the owner in the new or expanded
491	967		agricultural commodity pro cessing facility. For calendar year 1999,
492	968		and all subsequent years, t he percentage, not to exceed fifteen
493	969		percent (15%), available to the owner of a new or expanded
494		-	agricultural commodity processing facility in this state claiming ~~ENR. H. B. NO. 3088 Page 12~~
	970	+	agricultural commodity processing facility in this state claiming
495	971		the exemption shall be a djusted annually so that the to tal estimated
496	972		reduction in tax liabilit y does not exceed One Million Dollars
	973	+
	974	+	ENGR. H. B. NO. 3088 Page 19 1
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	993	+	20
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	996	+	23
	997	+	24
	998	+
497	999		($1,000,000.00) annually. The Tax Commission shall promulgate rules
498	1000		for determining the percentage of the investment which each eligible
499	1001		taxpayer may exclude. The exclusion provided by this paragraph
500	1002		shall be taken in the taxable year when the investment is made. In
501	1003		the event the total reduction in tax liability authoriz ed by this
502	1004		paragraph exceeds One Million Dollars ($1,000,000.00) in any
503	1005		calendar year, the Tax Commission shal l permit any excess over One
504	1006		Million Dollars ($1,000,000.00) and shall factor such excess into
505	1007		the percentage for subsequent years . Any amount of the exemption
506	1008		permitted to be excluded pursuant to the provisions of this
507	1009		paragraph but not used in any year may be carried forward as an
508	1010		exemption from income pursuant to the provisions of this paragraph
509	1011		for a period not exceeding six (6) years following the year in which
510	1012		the investment was originally made.
511		-
512	1013		For purposes of this par agraph:
513		-
514	1014		a. "Agricultural commodity processing facility " means
515	1015		building, structures, fixtures and improvements used
516	1016		or operated primarily for the processing or production
517	1017		of marketable products from agricultural commodities .
518	1018		The term shall also mean a dair y operation that
519	1019		requires a depreciable investment of at least Two
520	1020		Hundred Fifty Thousand Dollars ($250,000.00) and which
521	1021		produces milk from dairy cows . The term does not
522	1022		include a facility that provides only, and nothing
	1023	+
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523	1049		more than, storage, cleaning, dry ing or transportation
524	1050		of agricultural commodities, and
525		-
526	1051		b. "Facility" means each part of the facility which is
527	1052		used in a process primarily for:
528		-
529	1053		(1) the processing of agricultural commodities,
530	1054		including receiving or storing agricultural
531	1055		commodities, or the p roduction of milk at a dairy
532	1056		operation,
533		-
534	1057		(2) transporting the agricultu ral commodities or
535	1058		product before, during or after the processing,
536	1059		or
537		-
538	1060		(3) packaging or otherwise preparing the product for
539		-	sale or shipment. ENR. H. B. NO. 3088 Page 13
540		-
	1061	+	sale or shipment.
541	1062		7. Despite any provision to the contrary in paragraph 3 of this
542	1063		subsection, for taxable years beginning after Dece mber 31, 1999, in
543	1064		the case of a taxpayer which has a farming loss, such farming loss
544	1065		shall be considered a net operating loss carryback in accordance
545	1066		with and to the extent of the Intern al Revenue Code, 26 U.S.C.,
546	1067		Section 172(b)(G). However, the amount of the net operating loss
547	1068		carryback shall not exceed the lesser of:
548		-
549	1069		a. Sixty Thousand Dollars ($60,000.00), o r
550		-
551	1070		b. the loss properly shown on Schedule F of the Internal
552	1071		Revenue Service Form 1040 reduced by one-half (1/2) of
	1072	+
	1073	+	ENGR. H. B. NO. 3088 Page 21 1
	1074	+	2
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	1081	+	9
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	1097	+
553	1098		the income from all other sources o ther than reflected
554	1099		on Schedule F.
555		-
556	1100		8. In taxable years beginning after December 31, 1995, all
557	1101		qualified wages equal to the federal income tax credit set forth in
558	1102		26 U.S.C.A., Section 45 A, shall be deducted from taxab le income.
559	1103		The deduction allowed pursu ant to this paragraph shall only be
560	1104		permitted for the tax years in which the federal tax credit pursuant
561	1105		to 26 U.S.C.A., Section 45A, is allowed . For purposes of this
562	1106		paragraph, "qualified wages" means those wages us ed to calculate the
563	1107		federal credit pursuant to 26 U.S.C.A., Section 45A.
564		-
565	1108		9. In taxable years beginning after December 31, 2005, an
566	1109		employer that is eligible for and utilizes the Safety Pays OSHA
567	1110		Consultation Service provided by the Oklahoma Department of Labor
568	1111		shall receive an exemption from t axable income in the amount of One
569	1112		Thousand Dollars ($1,000.00) for the tax year that the service is
570	1113		utilized.
571		-
572	1114		10. For taxable years beginning on or after January 1, 2010,
573	1115		there shall be added to Oklahoma taxable inc ome an amount equal to
574	1116		the amount of deferred income not included in such taxable income
575	1117		pursuant to Section 108(i)(1) of the Internal Revenue Cod e of 1986
576	1118		as amended by Section 1231 of the American Recovery and Reinvestment
577	1119		Act of 2009 (P.L. No. 111 -5). There shall be subtracted from
578	1120		Oklahoma taxable income an amount equal to the amount of de ferred
579	1121		income included in such taxable income pursuant t o Section 108(i)(1)
	1122	+
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	1147	+
580	1148		of the Internal Revenue Code by Section 1231 of the America n
581	1149		Recovery and Reinvestment Act of 2009 (P.L. No. 111 -5).
582		-
583	1150		11. For taxable years beginning on or after January 1, 2019,
584		-	there shall be subtracted from Oklahoma taxable income or adjusted ~~ENR. H. B. NO. 3088 Page 14~~
	1151	+	there shall be subtracted from Oklahoma taxable income or adjusted
585	1152		gross income any item of income or gain, and there shall be added to
586	1153		Oklahoma taxable income or adju sted gross income any item of loss or
587	1154		deduction that in the absence of an election pursuan t to the
588	1155		provisions of the Pass -Through Entity Tax Equit y Act of 2019 would
589	1156		be allocated to a member or to an indirect member of an ele cting
590	1157		pass-through entity pursu ant to Section 2351 et seq. of this tit le,
591	1158		if (i) the electing pass-through entity has acc ounted for such item
592	1159		in computing its Oklahoma net entit y income or loss pursuant to the
593	1160		provisions of the Pass -Through Entity Tax Equi ty Act of 2019, and
594	1161		(ii) the total amount of tax attributable to any r esulting Oklahoma
595	1162		net entity income has been paid . The Oklahoma Tax Commission shall
596	1163		promulgate rules for the reporting of such exclusion to direct and
597	1164		indirect members of the electing pass-through entity. As used in
598	1165		this paragraph, "electing pass-through entity", "indirect member",
599	1166		and "member" shall be defined in the same manner as prescribed by
600	1167		Section 2355.1P-2 of this title. Notwithstanding the application of
601	1168		this paragraph, the a djusted tax basis of any owners hip interest in
602	1169		a pass-through entity for purposes of Section 2351 et seq. of this
603	1170		title shall be equal to its adjusted tax basis for federal inco me
604	1171		tax purposes.
605	1172
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606	1198		B. 1. The taxable income of any corporation shall be further
607	1199		adjusted to arrive at Oklahoma taxable income, except those
608	1200		corporations electing treatment as provided in subchapter S of the
609	1201		Internal Revenue Code, 26 U.S.C., Section 1361 et seq., and Section
610	1202		2365 of this title, deductions pursuant to the provisions of the
611	1203		Accelerated Cost Recovery System as defined and allowed in the
612	1204		Economic Recovery Tax Act of 1981, Public Law 97 -34, 26 U.S.C.,
613	1205		Section 168, for depreciation of assets place d into service after
614	1206		December 31, 1981, shall not be allowed in calculating Okl ahoma
615	1207		taxable income. Such corporations shall be allowed a deduction for
616	1208		depreciation of assets placed into service afte r December 31, 1981,
617	1209		in accordance with provisions of th e Internal Revenue Code, 26
618	1210		U.S.C., Section 1 et seq., in effect immediately pr ior to the
619	1211		enactment of the Acc elerated Cost Recovery System . The Oklahoma tax
620	1212		basis for all such assets placed into ser vice after December 31,
621	1213		1981, calculated in this section shall be retained and utilized for
622	1214		all Oklahoma income tax purposes through th e final disposition of
623	1215		such assets.
624		-
625	1216		Notwithstanding any other provisio ns of the Oklahoma Income Tax
626	1217		Act, Section 2351 et seq. of this title, or of the Internal Revenue
627	1218		Code to the contrary, this subsection shall control calculation of
628	1219		depreciation of asset s placed into service after Dec ember 31, 1981,
629		-	and before January 1, 19 83. ENR. H. B. NO. 3088 Page 15
	1220	+	and before January 1, 1 983.
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630	1246
631	1247		For assets placed in service and held by a cor poration in which
632	1248		accelerated cost recovery system was p reviously disallowed, an
633	1249		adjustment to taxable income is required in the first taxable year
634	1250		beginning after December 31, 1982, to reconcile the basis of such
635	1251		assets to the basis allowed in the Interna l Revenue Code. The
636	1252		purpose of this adjustment is to eq ualize the basis and allowance
637	1253		for depreciation accounts between that reported to the Internal
638	1254		Revenue Service and that reported to Oklahoma.
639		-
640	1255		2. For tax years beginning on or after January 1, 2009, a nd
641	1256		ending on or before December 31, 2009, there shall be added to
642	1257		Oklahoma taxable income any amount in excess of One Hundred Seventy -
643	1258		five Thousand Dollars ($175,000. 00) which has been deducted as a
644	1259		small business expense under Internal Revenue Code, Secti on 179 as
645	1260		provided in the American Recovery and Reinvest ment Act of 2009.
646		-
647	1261		C. 1. For taxable years beginning after December 31, 1987, the
648	1262		taxable income of any corpo ration shall be further adjusted to
649	1263		arrive at Oklahoma taxable income for transfers of tec hnology to
650	1264		qualified small businesses located in Oklahom a. Such transferor
651	1265		corporation shall be allowed an exemption from taxable inco me of an
652	1266		amount equal to the am ount of royalty payment received as a r esult
653	1267		of such transfer; provided, however, such amo unt shall not exceed
654	1268		ten percent (10%) of the amount of gross proceeds received by such
655	1269		transferor corporation as a result of the techn ology transfer. Such
656	1270		exemption shall be allowed for a period not to e xceed ten (10) years
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657	1297		from the date of receipt of th e first royalty payment accruing from
658	1298		such transfer. No exemption may be claimed for transfers of
659	1299		technology to qualified small busine sses made prior to January 1,
660	1300		1988.
661		-
662	1301		2. For purposes of this subsectio n:
663		-
664	1302		a. "Qualified small business" means an entity, whether
665	1303		organized as a corporation, partnership, or
666	1304		proprietorship, organized for profit with its
667	1305		principal place of business located wi thin this state
668	1306		and which meets the following criteria:
669		-
670	1307		(1) Capitalization of not more than Two Hundred Fifty
671	1308		Thousand Dollars ($250,000.00),
672		-	ENR. H. B. NO. 3088 Page 16
673	1309		(2) Having at least fifty percent ( 50%) of its
674	1310		employees and assets located in Oklahoma at the
675	1311		time of the transfer, and
676		-
677	1312		(3) Not a subsidiary or affiliate of the transferor
678	1313		corporation;
679		-
680	1314		b. "Technology" means a proprietary process, form ula,
681	1315		pattern, device or compilation of scientific or
682	1316		technical information which is not in the public
683	1317		domain;
684		-
685	1318		c. "Transferor corporatio n" means a corporation which is
686	1319		the exclusive and undisputed owner of the technology
687	1320		at the time the transfer is made; an d
688	1321
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689	1347		d. "Gross proceeds" means the total amount of
690	1348		consideration for the transfer of technology, whether
691	1349		the consideration is in money or otherwise.
692		-
693	1350		D. 1. For taxable years beginning after December 31, 2005 , the
694	1351		taxable income of any corporation, estate or trust, shall be further
695	1352		adjusted for qualifying gains re ceiving capital treatment . Such
696	1353		corporations, estates or trusts shall be allow ed a deduction from
697	1354		Oklahoma taxable income for the amount of qualifyi ng gains receiving
698	1355		capital treatment earned by the corporation, estate or trust during
699	1356		the taxable year and included in the federal taxable income of such
700	1357		corporation, estate or trust.
701		-
702	1358		2. As used in this subsection:
703		-
704	1359		a. "qualifying gains receiving capital treatment" means
705	1360		the amount of net capital gains, a s defined in Section
706	1361		1222(11) of the Internal Revenue Co de, included in the
707	1362		federal income tax return of the corporation, estate
708	1363		or trust that result from:
709		-
710	1364		(1) the sale of real property or tangible persona l
711	1365		property located within Oklahoma that has been
712	1366		directly or indirectly owned by the corporation,
713	1367		estate or trust for a holding period of at least
714	1368		five (5) years prior to the date of the
715	1369		transaction from which such ne t capital gains
716	1370		arise,
717		-	ENR. H. B. NO. 3088 Page 17
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718	1397		(2) the sale of stock or on the sale of an ownership
719	1398		interest in an Oklahoma company, limited
720	1399		liability company, or partner ship where such
721	1400		stock or ownership interest has been directly or
722	1401		indirectly owned by the corporation, estate o r
723	1402		trust for a holding period of at leas t three (3)
724	1403		years prior to the date of the transact ion from
725	1404		which the net capital gains arise, or
726		-
727	1405		(3) the sale of real property, tangible personal
728	1406		property or intangible personal propert y located
729	1407		within Oklahoma as pa rt of the sale of all or
730	1408		substantially all of the assets of an Oklahoma
731	1409		company, limited liability company, or
732	1410		partnership where such property has been directly
733	1411		or indirectly owned by such entity owned by the
734	1412		owners of such entity, and used in or derived
735	1413		from such entity for a period of at leas t three
736	1414		(3) years prior to the date of the transact ion
737	1415		from which the net capital gains arise,
738		-
739	1416		b. "holding period" means an uninterrupted period of
740	1417		time. The holding period shall includ e any additional
741	1418		period when the property was held by another
742	1419		individual or entity, if such additional period is
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	1445	+
743	1446		included in the taxpayer's holding period for the
744	1447		asset pursuant to the Internal Revenue Code,
745		-
746	1448		c. "Oklahoma company", "limited liability compan y", or
747	1449		"partnership" means an entity whose primary
748	1450		headquarters have been located in Oklahoma for at
749	1451		least three (3) unin terrupted years prior to the date
750	1452		of the transaction fro m which the net capital gains
751	1453		arise,
752		-
753	1454		d. "direct" means the taxpayer directly ow ns the asset,
754	1455		and
755		-
756	1456		e. "indirect" means the taxpayer owns an interest in a
757	1457		pass-through entity (or chain of pass-through
758	1458		entities) that sells the asset that gives rise to the
759	1459		qualifying gains receiving capital treatment.
760		-
761	1460		(1) With respect to sales of real pro perty or
762		-	tangible personal prop erty located within ~~ENR. H. B. NO. 3088 Page 18~~
	1461	+	tangible personal prop erty located within
763	1462		Oklahoma, the deduction described in this
764	1463		subsection shall not apply u nless the pass-
765	1464		through entity that makes the sale has he ld the
766	1465		property for not less than five (5) uninterrupted
767	1466		years prior to the dat e of the transaction that
768	1467		created the capital gain, and each pass -through
769	1468		entity included in the chain of ownership has
770	1469		been a member, partner, or shareholder of the
	1470	+
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771	1496		pass-through entity in the tier immediately below
772	1497		it for an uninterrupted period of not le ss than
773	1498		five (5) years.
774		-
775	1499		(2) With respect to sales of stock or owne rship
776	1500		interest in or sales of all or substantially all
777	1501		of the assets of an Oklahoma company, limited
778	1502		liability company, or partnership, the deduction
779	1503		described in this subsection shall not a pply
780	1504		unless the pass-through entity that makes the
781	1505		sale has held the stock or ownership interest or
782	1506		the assets for not le ss than three (3)
783	1507		uninterrupted years prior to the date of the
784	1508		transaction that created the capital gain, and
785	1509		each pass-through entity included in the chain of
786	1510		ownership has been a member, partner or
787	1511		shareholder of the pass-through entity in the
788	1512		tier immediately below it for an uninterrupted
789	1513		period of not less than three (3) years.
790		-
791	1514		E. The Oklahoma adjusted gross income of any individual
792	1515		taxpayer shall be further adjus ted as follows to arrive at Oklaho ma
793	1516		taxable income:
794		-
795	1517		1. a. In the case of individuals, the re shall be added or
796	1518		deducted, as the case may be, the d ifference necessary
797	1519		to allow personal exemptions of One Thousand Dollars
	1520	+
	1521	+	ENGR. H. B. NO. 3088 Page 30 1
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	1531	+	11
	1532	+	12
	1533	+	13
	1534	+	14
	1535	+	15
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	1544	+	24
	1545	+
798	1546		($1,000.00) in lieu of the personal e xemptions allowed
799	1547		by the Internal Revenue Code.
800		-
801	1548		b. There shall be allowed an additional ex emption of One
802	1549		Thousand Dollars ($1,000.00) for each tax payer or
803	1550		spouse who is blind at the close of the tax year . For
804	1551		purposes of this subparagraph, an individual i s blind
805	1552		only if the central visu al acuity of the individual
806	1553		does not exceed 20/200 in the better eye with
807		-	correcting lenses, or if the visual acui ty of the ~~ENR. H. B. NO. 3088 Page 19~~
	1554	+	correcting lenses, or if the visual acui ty of the
808	1555		individual is greater than 20/200, but is accompanied
809	1556		by a limitation in the fields of vision such t hat the
810	1557		widest diameter of the v isual field subtends an angle
811	1558		no greater than twenty (20) degrees.
812		-
813	1559		c. There shall be allowed an additional exempti on of One
814	1560		Thousand Dollars ($1,000.00) for each taxpayer or
815	1561		spouse who is sixty-five (65) years of age or olde r at
816	1562		the close of the tax year based upon the filing status
817	1563		and federal adjusted gross inc ome of the taxpayer.
818	1564		Taxpayers with the following filin g status may claim
819	1565		this exemption if the federal adjusted gross income
820	1566		does not exceed:
821		-
822	1567		(1) Twenty-five Thousand Dollars ($25,000.00) if
823	1568		married and filing jointly;
824	1569
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	1594	+
825	1595		(2) Twelve Thousand Five Hundred Do llars ($12,500.00)
826	1596		if married and filing separately;
827		-
828	1597		(3) Fifteen Thousand Dollars ($15,000.00) if single;
829	1598		and
830		-
831	1599		(4) Nineteen Thousand Dol lars ($19,000.00) if a
832	1600		qualifying head of household.
833		-
834	1601		Provided, for taxable years beginning after December
835	1602		31, 1999, amounts included in the calculation of
836	1603		federal adjusted gross income pursuant to the
837	1604		conversion of a traditional individual retirement
838	1605		account to a Roth individual retirem ent account shall
839	1606		be excluded from federal adjusted gross income for
840	1607		purposes of the incom e thresholds provided in this
841	1608		subparagraph.
842		-
843	1609		2. a. For taxable years beginning on or before December 31,
844	1610		2005, in the case of individual s who use the standard
845	1611		deduction in determining taxable income, there shall
846	1612		be added or deducted, as the case may be, the
847	1613		difference necessary to allow a standard deduction in
848	1614		lieu of the standard deduction allowed by the Internal
849	1615		Revenue Code, in an amoun t equal to the larger of
850	1616		fifteen percent (15%) of the Ok lahoma adjusted gross
851	1617		income or One Thousand Dollars ($1,000.00), but not to
852		-	exceed Two Thousand Dollars ($2,000.00), exc ept that ENR. H. B. NO. 3088 Page 20
	1618	+	exceed Two Thousand Dollars ($2,000.00), exc ept that
	1619	+
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853	1645		in the case of a married individual filing a separate
854	1646		return such deduction shall be the larger of fi fteen
855	1647		percent (15%) of such Oklahoma adjusted gross income
856	1648		or Five Hundred Dollars ($500.0 0), but not to exceed
857	1649		the maximum amount of One Thousand Dollars
858	1650		($1,000.00).
859		-
860	1651		b. For taxable years beginning on or after January 1,
861	1652		2006, and before January 1, 2007, in the case of
862	1653		individuals who use the standard deduction in
863	1654		determining taxable income, t here shall be added or
864	1655		deducted, as the case may be, the difference necessary
865	1656		to allow a standard deduction in lieu of the standard
866	1657		deduction allowed by the Internal Revenue Code, in an
867	1658		amount equal to:
868		-
869	1659		(1) Three Thousand Dollars ($3,000.00), if the filing
870	1660		status is married filing joint, head of household
871	1661		or qualifying widow; or
872		-
873	1662		(2) Two Thousand Dollars ($2,000.00), if the filing
874	1663		status is single or married filing sepa rate.
875		-
876	1664		c. For the taxable year beginning on January 1, 2007, and
877	1665		ending December 31, 2007, in the case of individuals
878	1666		who use the standard deductio n in determining taxable
879	1667		income, there shall be added or deducted, as the case
880	1668		may be, the difference necessar y to allow a standard
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	1694	+
881	1695		deduction in lieu of the standard deduction allowed by
882	1696		the Internal Revenue Code, in an amount equal to:
883		-
884	1697		(1) Five Thousand Five Hundred Dollars ($5,500.00),
885	1698		if the filing status is married filing joint o r
886	1699		qualifying widow; or
887		-
888	1700		(2) Four Thousand One Hundred Twenty-five Dollars
889	1701		($4,125.00) for a head of household; or
890		-
891	1702		(3) Two Thousand Seven Hundred Fifty Dollars
892	1703		($2,750.00), if the filing status is single or
893	1704		married filing separate.
894		-
895	1705		d. For the taxable year be ginning on January 1, 2008, and
896	1706		ending December 31, 2008, in the case of individuals
897		-	who use the standard deduction in de termining taxable ~~ENR. H. B. NO. 3088 Page 21~~
	1707	+	who use the standard deduction in de termining taxable
898	1708		income, there shall be added or deduct ed, as the case
899	1709		may be, the difference necessary to allow a standard
900	1710		deduction in lieu of the standard deducti on allowed by
901	1711		the Internal Revenue Code , in an amount equal to:
902		-
903	1712		(1) Six Thousand Five Hund red Dollars ($6,500.00), if
904	1713		the filing status is married filing joint or
905	1714		qualifying widow, or
906		-
907	1715		(2) Four Thousand Eight Hundred Seventy -five Dollars
908	1716		($4,875.00) for a head of household, or
	1717	+
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	1719	+	2
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	1724	+	7
	1725	+	8
	1726	+	9
	1727	+	10
	1728	+	11
	1729	+	12
	1730	+	13
	1731	+	14
	1732	+	15
	1733	+	16
	1734	+	17
	1735	+	18
	1736	+	19
	1737	+	20
	1738	+	21
	1739	+	22
	1740	+	23
	1741	+	24
909	1742
910	1743		(3) Three Thousand Two Hundred Fifty Dollars
911	1744		($3,250.00), if the fili ng status is single or
912	1745		married filing separate.
913		-
914	1746		e. For the taxable year beginning on January 1, 2009, and
915	1747		ending December 31, 2009, in the case of individuals
916	1748		who use the standard deduction in determining taxable
917	1749		income, there shall be added or deducted, a s the case
918	1750		may be, the difference necessary to allow a s tandard
919	1751		deduction in lieu of the standard deduction allowed by
920	1752		the Internal Revenue Code, in an amount equal t o:
921		-
922	1753		(1) Eight Thousand Five Hundred Doll ars ($8,500.00),
923	1754		if the filing status is married fi ling joint or
924	1755		qualifying widow, or
925		-
926	1756		(2) Six Thousand Three Hundred Seventy-five Dollars
927	1757		($6,375.00) for a head of household, or
928		-
929	1758		(3) Four Thousand Two Hundred Fifty Dol lars
930	1759		($4,250.00), if the filing status is single or
931	1760		married filing separate.
932		-
933	1761		Oklahoma adjusted gross income shall be increased by
934	1762		any amounts paid for motor vehicle excise taxes which
935	1763		were deducted as allowed by the Internal Revenue Code.
936		-
937	1764		f. For taxable years beginning on or after January 1,
938	1765		2010, and ending on December 31, 2016, in the case of
939	1766		individuals who use the standard deduction in
	1767	+
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	1780	+	13
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	1786	+	19
	1787	+	20
	1788	+	21
	1789	+	22
	1790	+	23
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	1792	+
940	1793		determining taxable income, there shall be added or
941	1794		deducted, as the case may be, the di fference necessary
942		-	to allow a standard deduction equal to the standard ~~ENR. H. B. NO. 3088 Page 22~~
	1795	+	to allow a standard deduction equal to the standard
943	1796		deduction allowed by the Internal Revenue Code, ba sed
944	1797		upon the amount and filing status prescribed by such
945	1798		Code for purposes of filing federal individual income
946	1799		tax returns.
947		-
948	1800		g. For taxable years beginning on or after January 1,
949	1801		2017, in the case of indivi duals who use the standard
950	1802		deduction in determining taxable income, there shall
951	1803		be added or deducted, as th e case may be, the
952	1804		difference necessary to allow a standard deduction in
953	1805		lieu of the standard deduction allowe d by the Internal
954	1806		Revenue Code, as foll ows:
955		-
956	1807		(1) Six Thousand Three Hundred Fifty Dollars
957	1808		($6,350.00) for single or married filing
958	1809		separately,
959		-
960	1810		(2) Twelve Thousand Seven Hundred Dollars
961	1811		($12,700.00) for married filing jointly o r
962	1812		qualifying widower with depen dent child, and
963		-
964	1813		(3) Nine Thousand Three Hundred Fifty Dollars
965	1814		($9,350.00) for head of hous ehold.
966		-
967	1815		3. a. In the case of resident and part -year resident
968	1816		individuals having adjusted gross income from sources
	1817	+
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	1819	+	2
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	1822	+	5
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	1826	+	9
	1827	+	10
	1828	+	11
	1829	+	12
	1830	+	13
	1831	+	14
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	1842	+
969	1843		both within and witho ut the state, the itemized or
970	1844		standard deductions and personal exempti ons shall be
971	1845		reduced to an amount which is the same portion of the
972	1846		total thereof as Oklahoma adjusted gross income is of
973	1847		adjusted gross income . To the extent itemized
974	1848		deductions include allowable moving expense, pror ation
975	1849		of moving expense shall not be re quired or permitted
976	1850		but allowable moving expense sh all be fully deductible
977	1851		for those taxpayers moving withi n or into Oklahoma and
978	1852		no part of moving expense shall be deductible for
979	1853		those taxpayers moving without or out of Oklahoma.
980	1854		All other itemized or st andard deductions and personal
981	1855		exemptions shall be subject to proration as provided
982	1856		by law.
983		-
984	1857		b. For taxable years beginning on or after January 1,
985	1858		2018, the net amount of itemized deducti ons allowable
986	1859		on an Oklahoma income tax return, subject to the
987		-	provisions of paragraph 24 of this subsection, shall ~~ENR. H. B. NO. 3088 Page 23~~
	1860	+	provisions of paragraph 24 of this subsection, shall
988	1861		not exceed Seventeen Thousand Dollars ($17,000.00) .
989	1862		For purposes of this subparagraph, charitable
990	1863		contributions and medical expenses deduct ible for
991	1864		federal income tax pur poses shall be excluded from the
992	1865		amount of Seventeen Thousand Dollars ($17,000.00) as
993	1866		specified by this subparagraph.
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994	1892
995	1893		4. A resident individual wi th a physical disability
996	1894		constituting a substantial handicap to employment may deduct from
997	1895		Oklahoma adjusted gross income such expenditures to modify a motor
998	1896		vehicle, home or workplace as are necessar y to compensate for his or
999	1897		her handicap. A veteran certified by the Department of Veterans
1000	1898		Affairs of the federal government as having a service-connected
1001	1899		disability shall be conclusively presumed to be a n individual with a
1002	1900		physical disability constitutin g a substantial handicap to
1003	1901		employment. The Tax Commission shall promulgate rules containing a
1004	1902		list of combinations of common disabili ties and modifications which
1005	1903		may be presumed to qualify for this deduc tion. The Tax Commission
1006	1904		shall prescribe necessary requirements for verification.
1007		-
1008	1905		5. a. Before July 1, 2010, the first One Thousand Five
1009	1906		Hundred Dollars ($1,500.00) received by any pers on
1010	1907		from the United States as sa lary or compensation in
1011	1908		any form, other than retirement benefits, as a member
1012	1909		of any component of the Armed Forces of the United
1013	1910		States shall be deducted from taxable income.
1014		-
1015	1911		b. On or after July 1, 2010, one hundred percent ( 100%)
1016	1912		of the income received b y any person from the United
1017	1913		States as salary or compensation in any form, other
1018	1914		than retirement benefits, as a member of any component
1019	1915		of the Armed Forces of the United States shall be
1020	1916		deducted from taxable income.
1021	1917
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	1929	+	12
	1930	+	13
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	1934	+	17
	1935	+	18
	1936	+	19
	1937	+	20
	1938	+	21
	1939	+	22
	1940	+	23
	1941	+	24
	1942	+
1022	1943		c. Whenever the filing of a timely inco me tax return by a
1023	1944		member of the Armed Fo rces of the United States is
1024	1945		made impracticable or impossible of accomplishment by
1025	1946		reason of:
1026		-
1027	1947		(1) absence from the United States, which term
1028	1948		includes only the states and the District of
1029	1949		Columbia;
1030		-
1031	1950		(2) absence from the State of Oklahoma while on
1032		-	active duty; or ENR. H. B. NO. 3088 Page 24
1033		-
	1951	+	active duty; or
1034	1952		(3) confinement in a hospital within the United
1035	1953		States for treatment of wounds, injuries or
1036	1954		disease,
1037		-
1038	1955		the time for filing a return and paying an income tax
1039	1956		shall be and is hereby exte nded without incurring
1040	1957		liability for interest or penalties, to the fif teenth
1041	1958		day of the third month following the month i n which:
1042		-
1043	1959		(a) Such individual shall return to the United
1044	1960		States if the extension is granted pursuant
1045	1961		to subparagraph a of this paragraph , return
1046	1962		to the State of Oklahoma if the extension is
1047	1963		granted pursuant to subparagraph b of this
1048	1964		paragraph or be discharg ed from such
1049	1965		hospital if the extension is granted
	1966	+
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	1991	+
1050	1992		pursuant to subparagraph c of this
1051	1993		paragraph; or
1052		-
1053	1994		(b) An executor, administrator, or c onservator
1054	1995		of the estate of the taxpayer is appointed,
1055	1996		whichever event occurs the earliest.
1056		-
1057	1997		Provided, that the Tax Commis sion may, in its discretion, grant
1058	1998		any member of the Arm ed Forces of the United States an extension of
1059	1999		time for filing of income tax re turns and payment of i ncome tax
1060	2000		without incurring liabilities for inte rest or penalties. Such
1061	2001		extension may be granted o nly when in the judgment of the Tax
1062	2002		Commission a good ca use exists therefor and may be for a period in
1063	2003		excess of six (6) months . A record of every such exte nsion granted,
1064	2004		and the reason therefor, shall be kept.
1065		-
1066	2005		6. Before July 1, 2010, the salary or any o ther form of
1067	2006		compensation, received from the United Stat es by a member of any
1068	2007		component of the Armed Forces of the United States, shall be
1069	2008		deducted from taxable income during the time in which the person i s
1070	2009		detained by the enemy in a conflict, is a prisone r of war or is
1071	2010		missing in action and not deceased; provi ded, after July 1, 2010,
1072	2011		all such salary or compensation shall be subject to th e deduction as
1073	2012		provided pursuant to paragraph 5 of this subsection.
1074		-
1075	2013		7. a. An individual taxpayer, whether resident or
1076		-	nonresident, may deduct an amount equal to the federal ENR. H. B. NO. 3088 Page 25
	2014	+	nonresident, may deduct an amount equal to the federal
	2015	+
	2016	+	ENGR. H. B. NO. 3088 Page 40 1
	2017	+	2
	2018	+	3
	2019	+	4
	2020	+	5
	2021	+	6
	2022	+	7
	2023	+	8
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	2027	+	12
	2028	+	13
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	2036	+	21
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	2038	+	23
	2039	+	24
	2040	+
1077	2041		income taxes paid by the taxpayer during the taxable
1078	2042		year.
1079		-
1080	2043		b. Federal taxes as desc ribed in subparagraph a of this
1081	2044		paragraph shall be deductible by any i ndividual
1082	2045		taxpayer, whether resident or nonresident , only to the
1083	2046		extent they relate to income subject to ta xation
1084	2047		pursuant to the provisions of the Oklahoma Income Tax
1085	2048		Act. The maximum amount allowable in the preceding
1086	2049		paragraph shall be prorated on the r atio of the
1087	2050		Oklahoma adjusted gross income to feder al adjusted
1088	2051		gross income.
1089		-
1090	2052		c. For the purpose of this par agraph, "federal income
1091	2053		taxes paid" shall mean federal income taxes, surtaxes
1092	2054		imposed on incomes or excess profits taxes, as though
1093	2055		the taxpayer was on the accrual basis. In determining
1094	2056		the amount of deduction for federal income taxes for
1095	2057		tax year 2001, the amount of the deduction shall not
1096	2058		be adjusted by the amount of any accelerat ed ten
1097	2059		percent (10%) tax rate bracket credit or advanced
1098	2060		refund of the credit received during the tax year
1099	2061		provided pursuant to the federal Economic Growth and
1100	2062		Tax Relief Reconciliation Act of 2001, P.L. No. 107 -
1101	2063		16, and the advanced refund of such credit s hall not
1102	2064		be subject to taxation.
1103	2065
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	2090	+
1104	2091		d. The provisions of this paragraph s hall apply to all
1105	2092		taxable years ending after Decemb er 31, 1978, and
1106	2093		beginning before January 1, 2006.
1107		-
1108	2094		8. Retirement benefits not to exceed Five Thousand Five Hundred
1109	2095		Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five
1110	2096		Hundred Dollars ($7,500.00 ) for the 2005 tax year and Ten Thousand
1111	2097		Dollars ($10,000.00) for the 2006 tax year and all subsequent tax
1112	2098		years, which are received by an individual from the civil service of
1113	2099		the United States, the Oklahoma Public Employees Retirement System,
1114	2100		the Teachers' Retirement System of Oklahoma, the Oklahoma Law
1115	2101		Enforcement Retirement System, the Oklahoma Firefighters Pension and
1116	2102		Retirement System, the Oklahoma Police Pension and Retirement
1117	2103		System, the employee retirement systems created by counties pursuant
1118	2104		to Section 951 et seq. of Title 19 of the Oklahoma Statut es, the
1119	2105		Uniform Retirement System for Justices and Judge s, the Oklahoma
1120	2106		Wildlife Conservation Department Retirement Fund, the Oklahoma
1121		-	Employment Security Commission Retirement Plan, or the employee ~~ENR. H. B. NO. 3088 Page 26~~
	2107	+	Employment Security Commission Retirement Plan, or the employee
1122	2108		retirement systems created by municipalities pursuant to Section 48-
1123	2109		101 et seq. of Title 11 of the Oklahoma Statu tes shall be exempt
1124	2110		from taxable income.
1125		-
1126	2111		9. In taxable years beginning after D ecember 3l, 1984, Social
1127	2112		Security benefits received by an individual s hall be exempt from
1128	2113		taxable income, to the extent s uch benefits are included in the
	2114	+
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	2128	+	14
	2129	+	15
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	2132	+	18
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	2134	+	20
	2135	+	21
	2136	+	22
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	2138	+	24
	2139	+
1129	2140		federal adjusted gross income pursuant to the provisions of Section
1130	2141		86 of the Internal Revenue Code, 2 6 U.S.C., Section 86.
1131		-
1132	2142		10. For taxable years beginning after December 31, 1994, lump-
1133	2143		sum distributions from employer plan s of deferred compensation,
1134	2144		which are not qualified plan s within the meaning of Section 401(a)
1135	2145		of the Internal Revenue Code, 26 U.S.C., Section 401(a), and which
1136	2146		are deposited in and accounted for within a separate bank account or
1137	2147		brokerage account in a fi nancial institution within this state,
1138	2148		shall be excluded from taxable income in the same manner as a
1139	2149		qualifying rollover contribution t o an individual retirement account
1140	2150		within the meaning of Section 408 o f the Internal Revenue Code, 26
1141	2151		U.S.C., Section 408. Amounts withdrawn from such bank or brokerage
1142	2152		account, including any earnings thereon, shall be included in
1143	2153		taxable income when with drawn in the same manner as withdrawals from
1144	2154		individual retirement acc ounts within the meaning of Section 408 of
1145	2155		the Internal Revenue Code.
1146		-
1147	2156		11. In taxable years beginning after December 31, 1995,
1148	2157		contributions made to and interest received from a medical savings
1149	2158		account established pursuant to Sections 2621 through 2623 of Title
1150	2159		63 of the Oklahoma Statutes shall be exempt f rom taxable income.
1151		-
1152	2160		12. For taxable years beginning aft er December 31, 1996, the
1153	2161		Oklahoma adjusted gross income of any individual taxp ayer who is a
1154	2162		swine or poultry producer may be further adjusted for th e deduction
1155	2163		for depreciation allowed for new constr uction or expansion costs
	2164	+
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	2171	+	7
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	2173	+	9
	2174	+	10
	2175	+	11
	2176	+	12
	2177	+	13
	2178	+	14
	2179	+	15
	2180	+	16
	2181	+	17
	2182	+	18
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	2184	+	20
	2185	+	21
	2186	+	22
	2187	+	23
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	2189	+
1156	2190		which may be computed using th e same depreciation method elected for
1157	2191		federal income tax purposes except that the useful life shall be
1158	2192		seven (7) years for purposes of this paragrap h. If depreciation is
1159	2193		allowed as a deduction in de termining the adjusted gross income of
1160	2194		an individual, any depreciation calculated and claimed pursuant to
1161	2195		this section shall in no even t be a duplication of any depreciation
1162	2196		allowed or permitted on the fed eral income tax return of the
1163	2197		individual.
1164		-	ENR. H. B. NO. 3088 Page 27
1165	2198		13. a. In taxable years beginning after December 31, 2002,
1166	2199		nonrecurring adoption expenses paid by a resident
1167	2200		individual taxpayer in connection w ith:
1168		-
1169	2201		(1) the adoption of a mino r, or
1170		-
1171	2202		(2) a proposed adoption of a mino r which did not
1172	2203		result in a decreed adoption,
1173		-
1174	2204		may be deducted from the Oklahoma adjusted gross
1175	2205		income.
1176		-
1177	2206		b. The deductions for adoptions and proposed adoptions
1178	2207		authorized by this paragraph shall not exceed Twenty
1179	2208		Thousand Dollars ($20,000.00) per calendar ye ar.
1180		-
1181	2209		c. The Tax Commission shall promulgate rules to implement
1182	2210		the provisions of this paragraph which shall contain a
1183	2211		specific list of nonrecurring adoption expenses which
1184	2212		may be presumed to qualify for the deduction . The Tax
	2213	+
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	2216	+	3
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	2218	+	5
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	2220	+	7
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	2222	+	9
	2223	+	10
	2224	+	11
	2225	+	12
	2226	+	13
	2227	+	14
	2228	+	15
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	2230	+	17
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	2234	+	21
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	2238	+
1185	2239		Commission shall prescribe nec essary requirements for
1186	2240		verification.
1187		-
1188	2241		d. "Nonrecurring adoption expenses " means adoption fees,
1189	2242		court costs, medical expenses, attorney fees and
1190	2243		expenses which are directly related to the legal
1191	2244		process of adoption of a child including, but not
1192	2245		limited to, costs relating to the adoption study,
1193	2246		health and psychological examinations, transportation
1194	2247		and reasonable costs of lodging and food for the child
1195	2248		or adoptive parents which are incurred t o complete the
1196	2249		adoption process and are not reimbursed by other
1197	2250		sources. The term "nonrecurring adoption expenses "
1198	2251		shall not include attorney fees incurred for the
1199	2252		purpose of litigating a contested adoption, from and
1200	2253		after the point of the initiation of t he contest,
1201	2254		costs associated with physical remodeling, renovation
1202	2255		and alteration of the adoptive parents' home or
1203	2256		property, except for a special needs child as
1204	2257		authorized by the court.
1205		-
1206	2258		14. a. In taxable years beginning before January 1, 2005,
1207	2259		retirement benefits not to exceed the amount s
1208	2260		specified in this paragraph, which ar e received by an
1209		-	individual sixty-five (65) years of age or older and ~~ENR. H. B. NO. 3088 Page 28~~
	2261	+	individual sixty-five (65) years of age or older and
1210	2262		whose Oklahoma adjusted gross income is Twenty-five
	2263	+
	2264	+	ENGR. H. B. NO. 3088 Page 45 1
	2265	+	2
	2266	+	3
	2267	+	4
	2268	+	5
	2269	+	6
	2270	+	7
	2271	+	8
	2272	+	9
	2273	+	10
	2274	+	11
	2275	+	12
	2276	+	13
	2277	+	14
	2278	+	15
	2279	+	16
	2280	+	17
	2281	+	18
	2282	+	19
	2283	+	20
	2284	+	21
	2285	+	22
	2286	+	23
	2287	+	24
	2288	+
1211	2289		Thousand Dollars ($25,000.00) or less if the filing
1212	2290		status is single, head of household, or mar ried filing
1213	2291		separate, or Fifty Thousand Dollars ($50,000.00) or
1214	2292		less if the filing status is married filing joint or
1215	2293		qualifying widow, shall be ex empt from taxable income .
1216	2294		In taxable years beginning after December 31, 2004,
1217	2295		retirement benefits not to exce ed the amounts
1218	2296		specified in this paragr aph, which are received by an
1219	2297		individual whose Okla homa adjusted gross income is
1220	2298		less than the qualifying a mount specified in this
1221	2299		paragraph, shall be exempt from taxable income.
1222		-
1223	2300		b. For purposes of this paragraph, the qualifying amount
1224	2301		shall be as follows:
1225		-
1226	2302		(1) in taxable years beginning after December 31,
1227	2303		2004, and prior to January 1, 2007, the
1228	2304		qualifying amount shall be Thirty-seven Thousand
1229	2305		Five Hundred Dollars ($37,500.00) or less if t he
1230	2306		filing status is single, hea d of household, or
1231	2307		married filing separ ate, or Seventy-five Thousand
1232	2308		Dollars ($75,000.00) or less if the filing status
1233	2309		is married filing jointly o r qualifying widow,
1234		-
1235	2310		(2) in the taxable year beginning January 1, 2007,
1236	2311		the qualifying amount shall be Fifty Th ousand
1237	2312		Dollars ($50,000.00) or less if the filing status
	2313	+
	2314	+	ENGR. H. B. NO. 3088 Page 46 1
	2315	+	2
	2316	+	3
	2317	+	4
	2318	+	5
	2319	+	6
	2320	+	7
	2321	+	8
	2322	+	9
	2323	+	10
	2324	+	11
	2325	+	12
	2326	+	13
	2327	+	14
	2328	+	15
	2329	+	16
	2330	+	17
	2331	+	18
	2332	+	19
	2333	+	20
	2334	+	21
	2335	+	22
	2336	+	23
	2337	+	24
	2338	+
1238	2339		is single, head of household, or married filing
1239	2340		separate, or One Hundred Thousand Dollars
1240	2341		($100,000.00) or less if the filing status is
1241	2342		married filing jointly or qualif ying widow,
1242		-
1243	2343		(3) in the taxable year beginning January 1, 2008,
1244	2344		the qualifying amount shall be Sixty-two Thousand
1245	2345		Five Hundred Dollars ($62,500.00) or less if the
1246	2346		filing status is single, head of household, or
1247	2347		married filing separate, or One Hundred Twenty -
1248	2348		five Thousand Dollars ($125,000 .00) or less if
1249	2349		the filing status is ma rried filing jointly or
1250	2350		qualifying widow,
1251		-
1252	2351		(4) in the taxable year beginning January 1, 2009,
1253	2352		the qualifying amount shall be One Hundred
1254		-	Thousand Dollars ($100,000.00) or less if the ~~ENR. H. B. NO. 3088 Page 29~~
	2353	+	Thousand Dollars ($100,000.00) or less if the
1255	2354		filing status is single, head of ho usehold, or
1256	2355		married filing separate, or Two Hundred Thousand
1257	2356		Dollars ($200,000.00) or less if the filing
1258	2357		status is married filing jointly or quali fying
1259	2358		widow, and
1260		-
1261	2359		(5) in the taxable year beginning January 1, 2010,
1262	2360		and subsequent taxable years, there shall be no
1263	2361		limitation upon the qualifying am ount.
1264	2362
	2363	+	ENGR. H. B. NO. 3088 Page 47 1
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	2365	+	3
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	2372	+	10
	2373	+	11
	2374	+	12
	2375	+	13
	2376	+	14
	2377	+	15
	2378	+	16
	2379	+	17
	2380	+	18
	2381	+	19
	2382	+	20
	2383	+	21
	2384	+	22
	2385	+	23
	2386	+	24
	2387	+
1265	2388		c. For purposes of this paragraph, "retirement benefits"
1266	2389		means the total distributions or withdrawals from the
1267	2390		following:
1268		-
1269	2391		(1) an employee pension benefit plan which satisfies
1270	2392		the requirements of Section 401 of t he Internal
1271	2393		Revenue Code, 26 U.S.C., Se ction 401,
1272		-
1273	2394		(2) an eligible deferred compensation pl an that
1274	2395		satisfies the requirements of Section 457 of the
1275	2396		Internal Revenue Code, 26 U.S.C., Section 457,
1276		-
1277	2397		(3) an individual retirem ent account, annuity or
1278	2398		trust or simplified employee pension that
1279	2399		satisfies the requirements of Section 408 of the
1280	2400		Internal Revenue Code, 26 U.S.C., Section 408,
1281		-
1282	2401		(4) an employee annuity subject to the provisions of
1283	2402		Section 403(a) or (b) of the Internal Re venue
1284	2403		Code, 26 U.S.C., Section 403(a) or (b),
1285		-
1286	2404		(5) United States Retirement Bo nds which satisfy the
1287	2405		requirements of Section 86 of the Internal
1288	2406		Revenue Code, 26 U.S.C., Section 86, or
1289		-
1290	2407		(6) lump-sum distributions from a retirement plan
1291	2408		which satisfies the re quirements of Section
1292	2409		402(e) of the Internal Revenue Code, 26 U.S.C.,
1293	2410		Section 402(e).
1294	2411
	2412	+	ENGR. H. B. NO. 3088 Page 48 1
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	2414	+	3
	2415	+	4
	2416	+	5
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	2418	+	7
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	2420	+	9
	2421	+	10
	2422	+	11
	2423	+	12
	2424	+	13
	2425	+	14
	2426	+	15
	2427	+	16
	2428	+	17
	2429	+	18
	2430	+	19
	2431	+	20
	2432	+	21
	2433	+	22
	2434	+	23
	2435	+	24
	2436	+
1295	2437		d. The amount of the exemption provided by t his paragraph
1296	2438		shall be limited to Five Thousand Five Hun dred Dollars
1297	2439		($5,500.00) for the 2004 tax year, Seven Thousand Five
1298	2440		Hundred Dollars ($7,500.00) for the 2005 t ax year and
1299		-	Ten Thousand Dollars ($10,00 0.00) for the tax year ~~ENR. H. B. NO. 3088 Page 30~~
	2441	+	Ten Thousand Dollars ($10,0 00.00) for the tax year
1300	2442		2006 and for all subsequent tax years. Any individual
1301	2443		who claims the exemption pro vided for in paragraph 8
1302	2444		of this subsection shall not be permitted to claim a
1303	2445		combined total exemption pursuan t to this paragraph
1304	2446		and paragraph 8 of this subsection in an amount
1305	2447		exceeding Five Thousan d Five Hundred Dollars
1306	2448		($5,500.00) for the 2004 tax year , Seven Thousand Five
1307	2449		Hundred Dollars ($7,500.00) for the 2005 tax ye ar and
1308	2450		Ten Thousand Dollars ($10,000.00) for the 2006 tax
1309	2451		year and all subsequen t tax years.
1310		-
1311	2452		15. 14. In taxable years beginning af ter December 31, 1999, for
1312	2453		an individual engaged in prod uction agriculture who has filed a
1313	2454		Schedule F form with the taxpayer 's federal income tax return for
1314	2455		such taxable year, there shall be excluded from taxable income any
1315	2456		amount which was included as fed eral taxable income or federal
1316	2457		adjusted gross income and which consists of the discharge of an
1317	2458		obligation by a creditor of the t axpayer incurred to finance the
1318	2459		production of agricultural products.
1319	2460
	2461	+	ENGR. H. B. NO. 3088 Page 49 1
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	2463	+	3
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	2465	+	5
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	2467	+	7
	2468	+	8
	2469	+	9
	2470	+	10
	2471	+	11
	2472	+	12
	2473	+	13
	2474	+	14
	2475	+	15
	2476	+	16
	2477	+	17
	2478	+	18
	2479	+	19
	2480	+	20
	2481	+	21
	2482	+	22
	2483	+	23
	2484	+	24
	2485	+
1320	2486		16. 15. In taxable years beginning December 31, 2000, an a mount
1321	2487		equal to one hundred percent (100%) of the amount o f any scholarship
1322	2488		or stipend received from participation in the Oklahoma P olice Corps
1323	2489		Program, as established in Section 2-140.3 of Title 47 of the
1324	2490		Oklahoma Statutes shall be exempt from taxable inco me.
1325		-
1326	2491		17.
1327		-
1328	2492		16. a. In taxable years beginning after December 31, 2001,
1329	2493		and before January 1, 2005, there shall be allowed a
1330	2494		deduction in the amount of contributions to a ccounts
1331	2495		established pursuant to the Okl ahoma College Savings
1332	2496		Plan Act. The deduction shall equal the amount of
1333	2497		contributions to accounts, but in no event shall the
1334	2498		deduction for each contributor exceed Two Thousand
1335	2499		Five Hundred Dollars ($2,500.00) each ta xable year for
1336	2500		each account.
1337		-
1338	2501		b. In taxable years beginning after December 31, 2004,
1339	2502		each taxpayer shall be allowed a deduction for
1340	2503		contributions to accounts established pursuant to the
1341	2504		Oklahoma College Savings Plan Act . The maximum annual
1342	2505		deduction shall equal the amount of contributions to
1343	2506		all such accounts plus any contributions to such
1344		-	accounts by the taxpayer for prior taxable years ~~aft er ENR. H. B. NO. 3088 Page 31~~
	2507	+	accounts by the taxpayer for prior taxable years after
1345	2508		December 31, 2004, which were not deducted, but in no
1346	2509		event shall the deduction for each tax year exceed Ten
	2510	+
	2511	+	ENGR. H. B. NO. 3088 Page 50 1
	2512	+	2
	2513	+	3
	2514	+	4
	2515	+	5
	2516	+	6
	2517	+	7
	2518	+	8
	2519	+	9
	2520	+	10
	2521	+	11
	2522	+	12
	2523	+	13
	2524	+	14
	2525	+	15
	2526	+	16
	2527	+	17
	2528	+	18
	2529	+	19
	2530	+	20
	2531	+	21
	2532	+	22
	2533	+	23
	2534	+	24
	2535	+
1347	2536		Thousand Dollars ($10,000.00) for each indivi dual
1348	2537		taxpayer or Twenty Thousand Dollars ($20,000.0 0) for
1349	2538		taxpayers filing a joint return . Any amount of a
1350	2539		contribution that is not deducted by the taxpayer in
1351	2540		the year for which the c ontribution is made may be
1352	2541		carried forward as a deduction from income f or the
1353	2542		succeeding five (5) years. For taxable years
1354	2543		beginning after December 31, 2005, deductions may be
1355	2544		taken for contributions and rollovers made during a
1356	2545		taxable year and up to Apri l 15 of the succeeding
1357	2546		year, or the due date of a taxpayer's state income tax
1358	2547		return, excluding extensions, whichever is l ater.
1359	2548		Provided, a deduction for the same contribution may
1360	2549		not be taken for two (2) different taxable years.
1361		-
1362	2550		c. In taxable years begi nning after December 31, 2006,
1363	2551		deductions for contributions made pursuan t to
1364	2552		subparagraph b of this paragraph shall be limi ted as
1365	2553		follows:
1366		-
1367	2554		(1) for a taxpayer who qualified for the f ive-year
1368	2555		carryforward election and who takes a rollover or
1369	2556		nonqualified withdrawal during that period, the
1370	2557		tax deduction otherwise available pursua nt to
1371	2558		subparagraph b of this paragraph shall be red uced
	2559	+
	2560	+	ENGR. H. B. NO. 3088 Page 51 1
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	2566	+	7
	2567	+	8
	2568	+	9
	2569	+	10
	2570	+	11
	2571	+	12
	2572	+	13
	2573	+	14
	2574	+	15
	2575	+	16
	2576	+	17
	2577	+	18
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	2579	+	20
	2580	+	21
	2581	+	22
	2582	+	23
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	2584	+
1372	2585		by the amount which is equal to the rollover or
1373	2586		nonqualified withdrawal, and
1374		-
1375	2587		(2) for a taxpayer who elects to take a rollover or
1376	2588		nonqualified withdrawal within t he same tax year
1377	2589		in which a contributio n was made to the
1378	2590		taxpayer's account, the tax deduc tion otherwise
1379	2591		available pursuant to subparagraph b of thi s
1380	2592		paragraph shall be reduced by the amount of the
1381	2593		contribution which is e qual to the rollover or
1382	2594		nonqualified withdrawal.
1383		-
1384	2595		d. If a taxpayer elects t o take a rollover on a
1385	2596		contribution for which a ded uction has been taken
1386	2597		pursuant to subparagraph b of this p aragraph within
1387	2598		one (1) year of the date of contribution, the amount
1388		-	of such rollover shall be included in t he adjusted ~~ENR. H. B. NO. 3088 Page 32~~
	2599	+	of such rollover shall be included in t he adjusted
1389	2600		gross income of the taxpaye r in the taxable year of
1390	2601		the rollover.
1391		-
1392	2602		e. If a taxpayer makes a nonqualified withdrawal of
1393	2603		contributions for which a deduction was taken pursuant
1394	2604		to subparagraph b of this paragrap h, such nonqualified
1395	2605		withdrawal and any earnings thereon shall be included
1396	2606		in the adjusted gross income of the taxpayer in the
1397	2607		taxable year of the nonqualified withdrawal.
1398		-
1399	2608		f. As used in this paragraph:
	2609	+
	2610	+	ENGR. H. B. NO. 3088 Page 52 1
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	2612	+	3
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	2614	+	5
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	2616	+	7
	2617	+	8
	2618	+	9
	2619	+	10
	2620	+	11
	2621	+	12
	2622	+	13
	2623	+	14
	2624	+	15
	2625	+	16
	2626	+	17
	2627	+	18
	2628	+	19
	2629	+	20
	2630	+	21
	2631	+	22
	2632	+	23
	2633	+	24
1400	2634
1401	2635		(1) "non-qualified withdrawal " means a withdrawal
1402	2636		from an Oklahoma College Savings Plan acc ount
1403	2637		other than one of the following:
1404		-
1405	2638		(a) a qualified withdrawal,
1406		-
1407	2639		(b) a withdrawal made as a result of the death
1408	2640		or disability of the designated ben eficiary
1409	2641		of an account,
1410		-
1411	2642		(c) a withdrawal that is made on the accou nt of
1412	2643		a scholarship or the allowance or pa yment
1413	2644		described in Section 135(d)(1)(B) or (C) or
1414	2645		by the Internal Revenue Code, received b y
1415	2646		the designated beneficiary to the extent the
1416	2647		amount of the refund does not exceed the
1417	2648		amount of the scholarship, allowance , or
1418	2649		payment, or
1419		-
1420	2650		(d) a rollover or change of designated
1421	2651		beneficiary as permitted by subsection F of
1422	2652		Section 3970.7 of Title 70 of Ok lahoma
1423	2653		Statutes, and
1424		-
1425	2654		(2) "rollover" means the transfer of funds from the
1426	2655		Oklahoma College Savings Plan to any other plan
1427	2656		under Section 529 of the Internal Revenue Cod e.
1428		-
1429	2657		18. 17. For taxable years beginning after December 31, 2005,
1430	2658		retirement benefits recei ved by an individual from any component of
	2659	+
	2660	+	ENGR. H. B. NO. 3088 Page 53 1
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	2663	+	4
	2664	+	5
	2665	+	6
	2666	+	7
	2667	+	8
	2668	+	9
	2669	+	10
	2670	+	11
	2671	+	12
	2672	+	13
	2673	+	14
	2674	+	15
	2675	+	16
	2676	+	17
	2677	+	18
	2678	+	19
	2679	+	20
	2680	+	21
	2681	+	22
	2682	+	23
	2683	+	24
	2684	+
1431	2685		the Armed Forces of the United States in an amount not to exceed the
1432	2686		greater of seventy-five percent (75%) of such benefits or Ten
1433		-	Thousand Dollars ($10,000.00) ~~shall~~ be exempt from taxable income ~~ENR. H. B. NO. 3088 Page 33~~
	2687	+	Thousand Dollars ($10,000.00) s hall be exempt from taxable income
1434	2688		but in no case less than the amount of the exemption provided by
1435	2689		paragraph 14 13 of this subsection.
1436		-
1437	2690		19. 18. For taxable years beginning after Dec ember 31, 2006,
1438	2691		retirement benefits received by federal civi l service retirees,
1439	2692		including survivor annuities, paid in lieu of Social Security
1440	2693		benefits shall be exempt from taxable income t o the extent such
1441	2694		benefits are included in the federal adjusted gros s income pursuant
1442	2695		to the provisions of Section 86 of the Int ernal Revenue Code, 26
1443	2696		U.S.C., Section 86, according to the follo wing schedule:
1444		-
1445	2697		a. in the taxable year beginning January 1, 2007 , twenty
1446	2698		percent (20%) of such benefits shall be exempt,
1447		-
1448	2699		b. in the taxable year beginning January 1, 20 08, forty
1449	2700		percent (40%) of such benefits shall be exempt,
1450		-
1451	2701		c. in the taxable year beginning January 1, 2009, sixty
1452	2702		percent (60%) of such benefits shall be exempt,
1453		-
1454	2703		d. in the taxable year beginning January 1, 2010, eight y
1455	2704		percent (80%) of such benefits shall be exempt, and
1456		-
1457	2705		e. in the taxable year beginning January 1, 2011, and
1458	2706		subsequent taxable ye ars, one hundred percent (100%)
1459	2707		of such benefits shall be exemp t.
1460		-
1461	2708		20. 19.
	2709	+
	2710	+	ENGR. H. B. NO. 3088 Page 54 1
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	2715	+	6
	2716	+	7
	2717	+	8
	2718	+	9
	2719	+	10
	2720	+	11
	2721	+	12
	2722	+	13
	2723	+	14
	2724	+	15
	2725	+	16
	2726	+	17
	2727	+	18
	2728	+	19
	2729	+	20
	2730	+	21
	2731	+	22
	2732	+	23
	2733	+	24
1462	2734
1463	2735		a. For taxable years beginning after December 31, 2007, a
1464	2736		resident individual may deduct up to Ten Thousand
1465	2737		Dollars ($10,000.00) from Oklahoma adjusted gross
1466	2738		income if the individua l, or the dependent of the
1467	2739		individual, while living, donates one or more human
1468	2740		organs of the individual to another human being for
1469	2741		human organ transplantation . As used in this
1470	2742		paragraph, "human organ" means all or part of a liver,
1471	2743		pancreas, kidney, intest ine, lung, or bone marrow . A
1472	2744		deduction that is claimed under th is paragraph may be
1473	2745		claimed in the taxable year in which the human organ
1474	2746		transplantation occurs.
1475		-
1476	2747		b. An individual may claim this ded uction only once, and
1477		-	the deduction may be claimed only for unreimbursed ~~ENR. H. B. NO. 3088 Page 34~~
	2748	+	the deduction may be claimed only for unreimbursed
1478	2749		expenses that are incurred by the individual and
1479	2750		related to the organ donation of the individual.
1480		-
1481	2751		c. The Oklahoma Tax Commission shall promulgate rules t o
1482	2752		implement the provisions of this paragraph which shall
1483	2753		contain a specific list of expens es which may be
1484	2754		presumed to qualify for the deduction . The Tax
1485	2755		Commission shall prescribe necessary requirements for
1486	2756		verification.
1487		-
1488	2757		21. 20. For taxable years beginni ng after December 31, 2009,
1489	2758		there shall be exempt from taxable income any amount received by the
	2759	+
	2760	+	ENGR. H. B. NO. 3088 Page 55 1
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	2766	+	7
	2767	+	8
	2768	+	9
	2769	+	10
	2770	+	11
	2771	+	12
	2772	+	13
	2773	+	14
	2774	+	15
	2775	+	16
	2776	+	17
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	2779	+	20
	2780	+	21
	2781	+	22
	2782	+	23
	2783	+	24
	2784	+
1490	2785		beneficiary of the death benefit for an emergency medical technician
1491	2786		or a registered emergency medical responder provided by Section 1-
1492	2787		2505.1 of Title 63 of th e Oklahoma Statutes.
1493		-
1494	2788		22. 21. For taxable years beginning after December 31, 2008,
1495	2789		taxable income shall be increased by any unemployment compensation
1496	2790		exempted under Section 85(c) of the Internal Revenue Code, 26
1497	2791		U.S.C., Section 85(c)(2009).
1498		-
1499	2792		23. 22. For taxable years beginning after December 31 , 2008,
1500	2793		there shall be exempt from taxable income a ny payment in an amount
1501	2794		less than Six Hundred Dollars ($600.00) rec eived by a person as an
1502	2795		award for participation in a competitive liv estock show event. For
1503	2796		purposes of this paragraph, the payment shall be treated as a
1504	2797		scholarship amount paid by the enti ty sponsoring the event and the
1505	2798		sponsoring entity shall cause the p ayment to be categorized as a
1506	2799		scholarship in its books and records.
1507		-
1508	2800		24. 23. For taxable years begi nning on or after January 1,
1509	2801		2016, taxable income shall be increased by any amount of stat e and
1510	2802		local sales or income taxes deducted under 26 U.S.C., Section 164 of
1511	2803		the Internal Revenue Code . If the amount of state and local taxes
1512	2804		deducted on the federal return is limited, taxable income on th e
1513	2805		state return shall be increased only by the amoun t actually deducted
1514	2806		after any such limitations are applied.
1515		-
1516	2807		25. 24. For taxable years beginning after December 31, 2020,
1517	2808		each taxpayer shall be allowed a deduction f or contributions to
	2809	+
	2810	+	ENGR. H. B. NO. 3088 Page 56 1
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	2834	+
1518	2835		accounts established pursuant to the Achieving a Better Life
1519	2836		Experience (ABLE) Program as established in Section 4001.1 et seq.
1520	2837		of Title 56 of the Oklahoma Statutes . For any tax year, the
1521	2838		deduction provided for in this paragraph shall not exceed Ten
1522		-	Thousand Dollars ($10,~~000~~.00) for an individual taxpayer or Twenty ~~ENR. H. B. NO. 3088 Page 35~~
	2839	+	Thousand Dollars ($10,00 0.00) for an individual taxpayer or Twenty
1523	2840		Thousand Dollars ($20,000.00) for taxpayers filing a joint return .
1524	2841		Any amount of contribution not deducted by the taxpayer in the tax
1525	2842		year for which the contribution is made may be carried forward as a
1526	2843		deduction from income for up to five (5) tax years. Deductions may
1527	2844		be taken for contributions made during the tax year and throug h
1528	2845		April 15 of the succeeding tax year, or through the due date of a
1529	2846		taxpayer's state income tax r eturn excluding extensions, whichever
1530	2847		is later. Provided, a deduction for the same contri bution may not
1531	2848		be taken in more than one (1) tax year.
1532		-
1533	2849		F. 1. For taxable years beginning after December 31, 2004, a
1534	2850		deduction from the Oklahoma adjusted gross income of any individual
1535	2851		taxpayer shall be allowed for qualifying gains receiving capital
1536	2852		treatment that are included in the federal adjusted gross income of
1537	2853		such individual taxpayer during the taxable year.
1538		-
1539	2854		2. As used in this subsection:
1540		-
1541	2855		a. "qualifying gains receiving capital treatment " means
1542	2856		the amount of net capital gains, as defined in Section
1543	2857		1222(11) of the Internal Revenue Code, included in an
	2858	+
	2859	+	ENGR. H. B. NO. 3088 Page 57 1
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	2881	+	23
	2882	+	24
	2883	+
1544	2884		individual taxpayer's federal income tax return that
1545	2885		result from:
1546		-
1547	2886		(1) the sale of real property or tangible perso nal
1548	2887		property located within Oklahoma t hat has been
1549	2888		directly or indirectly owned by the in dividual
1550	2889		taxpayer for a holding period of at least five
1551	2890		(5) years prior to the date of the transaction
1552	2891		from which such net capital gains arise,
1553		-
1554	2892		(2) the sale of stock or the sale of a direct or
1555	2893		indirect ownership interest in an Oklahoma
1556	2894		company, limited lia bility company, or
1557	2895		partnership where such stock or ownership
1558	2896		interest has been directly or indirectly owned by
1559	2897		the individual taxpayer f or a holding period of
1560	2898		at least two (2) years prior to the date of th e
1561	2899		transaction from which the net capital gains
1562	2900		arise, or
1563		-
1564	2901		(3) the sale of real property, tangible personal
1565	2902		property or intangible personal property located
1566	2903		within Oklahoma as part of the s ale of all or
1567		-	substantially all of the assets of an Oklahoma ~~ENR. H. B. NO. 3088 Page 36~~
	2904	+	substantially all of the assets of an Oklahoma
1568	2905		company, limited liability company, or
1569	2906		partnership or an Ok lahoma proprietorship
1570	2907		business enterprise where such property has been
	2908	+
	2909	+	ENGR. H. B. NO. 3088 Page 58 1
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	2918	+	10
	2919	+	11
	2920	+	12
	2921	+	13
	2922	+	14
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	2931	+	23
	2932	+	24
	2933	+
1571	2934		directly or indirectly owned by such entity or
1572	2935		business enterprise or owned by the owners of
1573	2936		such entity or business enterprise for a period
1574	2937		of at least two (2) years prior to the date of
1575	2938		the transaction from which the net capital gains
1576	2939		arise,
1577		-
1578	2940		b. "holding period" means an uninterrupted period of
1579	2941		time. The holding period shall include any additional
1580	2942		period when the property was held by a nother
1581	2943		individual or entity, if such additional per iod is
1582	2944		included in the taxpayer 's holding period for the
1583	2945		asset pursuant to the Internal Revenue Code,
1584		-
1585	2946		c. "Oklahoma company," "limited liability company," or
1586	2947		"partnership" means an entity whose primary
1587	2948		headquarters have been located in Oklahoma for at
1588	2949		least three (3) uninterrupted years prior to the date
1589	2950		of the transaction fr om which the net capital gains
1590	2951		arise,
1591		-
1592	2952		d. "direct" means the individual taxpayer directly owns
1593	2953		the asset,
1594		-
1595	2954		e. "indirect" means the individual taxpayer owns an
1596	2955		interest in a pass-through entity (or chain of pass -
1597	2956		through entities) that sells the asset that giv es rise
1598	2957		to the qualifying gains receiving capital treatment.
	2958	+
	2959	+	ENGR. H. B. NO. 3088 Page 59 1
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1599	2983
1600	2984		(1) With respect to sales of real pr operty or
1601	2985		tangible personal property l ocated within
1602	2986		Oklahoma, the deduction described in this
1603	2987		subsection shall not apply unless the pass -
1604	2988		through entity that ma kes the sale has held the
1605	2989		property for not less than five (5) u ninterrupted
1606	2990		years prior to the da te of the transaction that
1607	2991		created the capital gain, and each pass-through
1608	2992		entity included in the chain of ownership has
1609	2993		been a member, partner, or shareholder of the
1610	2994		pass-through entity in the tier immediately below
1611	2995		it for an uninterrupted period of not l ess than
1612		-	five (5) years. ENR. H. B. NO. 3088 Page 37
1613		-
	2996	+	five (5) years.
1614	2997		(2) With respect to sales of stock or ownership
1615	2998		interest in or sales of all or substantially all
1616	2999		of the assets of an Oklahoma company, limited
1617	3000		liability company, partnership or Oklahoma
1618	3001		proprietorship business enterprise, the deduc tion
1619	3002		described in this subsection shal l not apply
1620	3003		unless the pass-through entity that mak es the
1621	3004		sale has held the stock or ownership interest for
1622	3005		not less than two (2) uninterrupted years prior
1623	3006		to the date of the transact ion that created the
1624	3007		capital gain, and each pass-through entity
	3008	+
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	3013	+	5
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	3015	+	7
	3016	+	8
	3017	+	9
	3018	+	10
	3019	+	11
	3020	+	12
	3021	+	13
	3022	+	14
	3023	+	15
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	3025	+	17
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	3027	+	19
	3028	+	20
	3029	+	21
	3030	+	22
	3031	+	23
	3032	+	24
	3033	+
1625	3034		included in the chain of ownership has been a
1626	3035		member, partner or shareholder of the pass -
1627	3036		through entity in the tier immediately be low it
1628	3037		for an uninterrupted period of not less than two
1629	3038		(2) years. For purposes of this division ,
1630	3039		uninterrupted ownership prior to Jul y 1, 2007,
1631	3040		shall be included in the determination o f the
1632	3041		required holding period prescribed by this
1633	3042		division, and
1634		-
1635	3043		f. "Oklahoma proprietorship business enterprise " means a
1636	3044		business enterprise whose income and expenses h ave
1637	3045		been reported on Schedule C or F o f an individual
1638	3046		taxpayer's federal income tax retur n, or any similar
1639	3047		successor schedule published by the Internal Revenue
1640	3048		Service and whose primary headquarters have been
1641	3049		located in Oklahoma for at least three (3)
1642	3050		uninterrupted years prior to the date of t he
1643	3051		transaction from which the net capital gains ari se.
1644		-
1645	3052		G. 1. For purposes of computing its Oklahoma taxable income
1646	3053		under this section, the dividends -paid deduction otherwise allow ed
1647	3054		by federal law in computing net in come of a real estate investment
1648	3055		trust that is subject to federal income tax shall be add ed back in
1649	3056		computing the tax imposed by this state under this title if the real
1650	3057		estate investment trust is a captive real estate i nvestment trust.
1651	3058
	3059	+	ENGR. H. B. NO. 3088 Page 61 1
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	3082	+	24
	3083	+
1652	3084		2. For purposes of computing its Oklahoma taxable income under
1653	3085		this section, a taxpayer shall add back other wise deductible rents
1654	3086		and interest expenses paid to a captive real est ate investment trust
1655	3087		that is not subject to the provisions of paragraph 1 of this
1656	3088		subsection. As used in this subsection:
1657		-	ENR. H. B. NO. 3088 Page 38
1658	3089		a. the term "real estate investment trust" or "REIT"
1659	3090		means the meaning ascribed to such term in Section 856
1660	3091		of the Internal Revenue C ode,
1661		-
1662	3092		b. the term "captive real estate investment trust " means
1663	3093		a real estate investment trust, the shares or
1664	3094		beneficial interests of whi ch are not regularly traded
1665	3095		on an established secur ities market and more than
1666	3096		fifty percent (50%) of the voting power or value of
1667	3097		the beneficial interests or shares of which are owned
1668	3098		or controlled, directly or indirec tly, or
1669	3099		constructively, by a single en tity that is:
1670		-
1671	3100		(1) treated as an association taxable as a
1672	3101		corporation under the Internal Revenue Code, and
1673		-
1674	3102		(2) not exempt from federal income tax pursuant to
1675	3103		the provisions of Section 501(a) of the Internal
1676	3104		Revenue Code.
1677		-
1678	3105		The term shall not include a real es tate investment
1679	3106		trust that is intended to be regula rly traded on an
1680	3107		established securities market, and that satisfies the
	3108	+
	3109	+	ENGR. H. B. NO. 3088 Page 62 1
	3110	+	2
	3111	+	3
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	3113	+	5
	3114	+	6
	3115	+	7
	3116	+	8
	3117	+	9
	3118	+	10
	3119	+	11
	3120	+	12
	3121	+	13
	3122	+	14
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	3128	+	20
	3129	+	21
	3130	+	22
	3131	+	23
	3132	+	24
	3133	+
1681	3134		requirements of Section 856(a)(5) and (6) of the U.S.
1682	3135		Internal Revenue Code by reason of Section 856(h)(2)
1683	3136		of the Internal Revenue Cod e,
1684		-
1685	3137		c. the term "association taxable as a corporatio n" shall
1686	3138		not include the following entities:
1687		-
1688	3139		(1) any real estate inves tment trust as defined in
1689	3140		paragraph a of this subsec tion other than a
1690	3141		"captive real estate invest ment trust", or
1691		-
1692	3142		(2) any qualified real estate investment trust
1693	3143		subsidiary under Section 8 56(i) of the Internal
1694	3144		Revenue Code, other than a qualified REIT
1695	3145		subsidiary of a "captive real estate investment
1696	3146		trust", or
1697		-
1698	3147		(3) any Listed Australian Property Trust (me aning an
1699	3148		Australian unit trust registe red as a "Managed
1700	3149		Investment Scheme" under the Australian
1701	3150		Corporations Act in which the principal class of
1702		-	units is listed on a recognized stock exchange in ~~ENR. H. B. NO. 3088 Page 39~~
	3151	+	units is listed on a recognized stock exchange in
1703	3152		Australia and is regularly traded on an
1704	3153		established securitie s market), or an entity
1705	3154		organized as a trust, provided that a Listed
1706	3155		Australian Property Trust owns or controls,
1707	3156		directly or indirectly, seventy -five percent
	3157	+
	3158	+	ENGR. H. B. NO. 3088 Page 63 1
	3159	+	2
	3160	+	3
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	3162	+	5
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	3164	+	7
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	3167	+	10
	3168	+	11
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	3170	+	13
	3171	+	14
	3172	+	15
	3173	+	16
	3174	+	17
	3175	+	18
	3176	+	19
	3177	+	20
	3178	+	21
	3179	+	22
	3180	+	23
	3181	+	24
	3182	+
1708	3183		(75%) or more of the voting power or value of the
1709	3184		beneficial interests or shares of such trust, or
1710		-
1711	3185		(4) any Qualified Foreign Entity, mea ning a
1712	3186		corporation, trust, association or partnersh ip
1713	3187		organized outside the laws of the United States
1714	3188		and which satisfies the following criteria:
1715		-
1716	3189		(a) at least seventy-five percent (75%) of the
1717	3190		entity's total asset value at the close of
1718	3191		its taxable year is represented by real
1719	3192		estate assets, as defined in Se ction
1720	3193		856(c)(5)(B) of the Internal Revenue Code,
1721	3194		thereby including sha res or certificates of
1722	3195		beneficial interest in an y real estate
1723	3196		investment trust, cash and cash equ ivalents,
1724	3197		and U.S. Government securiti es,
1725		-
1726	3198		(b) the entity receives a dividend-paid
1727	3199		deduction comparable to Section 561 of the
1728	3200		Internal Revenue Code, or is exemp t from
1729	3201		entity level tax,
1730		-
1731	3202		(c) the entity is required to distribute at
1732	3203		least eighty-five percent (85%) of its
1733	3204		taxable income, as computed in the
1734	3205		jurisdiction in which it is organized, to
	3206	+
	3207	+	ENGR. H. B. NO. 3088 Page 64 1
	3208	+	2
	3209	+	3
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	3211	+	5
	3212	+	6
	3213	+	7
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	3215	+	9
	3216	+	10
	3217	+	11
	3218	+	12
	3219	+	13
	3220	+	14
	3221	+	15
	3222	+	16
	3223	+	17
	3224	+	18
	3225	+	19
	3226	+	20
	3227	+	21
	3228	+	22
	3229	+	23
	3230	+	24
	3231	+
1735	3232		the holders of its shares or certificates of
1736	3233		beneficial interest on an annual basis,
1737		-
1738	3234		(d) not more than ten percent ( 10%) of the
1739	3235		voting power or value in such entity is held
1740	3236		directly or indirectly or constru ctively by
1741	3237		a single entity or individual, or the sh ares
1742	3238		or beneficial interests of such entity are
1743	3239		regularly traded on an established
1744	3240		securities market, and
1745		-
1746	3241		(e) the entity is organized in a country which
1747		-	has a tax treaty with the United States. ENR. H. B. NO. 3088 Page 40
1748		-
	3242	+	has a tax treaty with the United States.
1749	3243		3. For purposes of this subsection, the constructive ownershi p
1750	3244		rules of Section 318(a) of the Internal Revenue Code, as modified by
1751	3245		Section 856(d)(5) of the Internal Revenue Code, shall apply in
1752	3246		determining the ownership of stoc k, assets, or net profits of any
1753	3247		person.
1754		-
1755	3248		4. A real estate investment trust that does not become
1756	3249		regularly traded on an established securities market within on e (1)
1757	3250		year of the date on which it first b ecomes a real estate inv estment
1758	3251		trust shall be deemed n ot to have been regularly traded on an
1759	3252		established securities market, retroactive to the date it first
1760	3253		became a real estate investment trust, and shall file an amended
1761	3254		return reflecting such retroactiv e designation for any ta x year or
1762	3255		part year occurring d uring its initial year of status as a real
	3256	+
	3257	+	ENGR. H. B. NO. 3088 Page 65 1
	3258	+	2
	3259	+	3
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	3268	+	12
	3269	+	13
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	3272	+	16
	3273	+	17
	3274	+	18
	3275	+	19
	3276	+	20
	3277	+	21
	3278	+	22
	3279	+	23
	3280	+	24
	3281	+
1763	3282		estate investment trust. For purposes of this subsection, a real
1764	3283		estate investment trust becomes a real estate inve stment trust on
1765	3284		the first day it has both met the requirements of Section 856 of the
1766	3285		Internal Revenue Code and has elected to be treate d as a real estate
1767	3286		investment trust pursuant to Sec tion 856(c)(1) of the Internal
1768	3287		Revenue Code.
1769		-
1770	3288		SECTION 3. This act shall become effective November 1, 2022.
1771		-	ENR. H. B. NO. 3088 Page 41
1772		-	Passed the House of Representatives the 19th day of May, 2022.
	3289	+	Passed the House of Representatives the 8th day of March, 2022.
1773	3290
1774	3291
1775	3292
1776	3293
1777	3294		Presiding Officer of the House
1778	3295		of Representatives
1779	3296
1780	3297
1781		-	Passed the Senate the ~~27th~~ day of ~~April~~, 2022.
	3298	+	Passed the Senate the ___ day of __________, 2022.
1782	3299
1783	3300
1784	3301
1785	3302
1786	3303		Presiding Officer of the Senate
1787	3304
1788	3305
1789		-	OFFICE OF THE GOVERNOR
1790		-	Received by the Office of the Governor this ____________________
1791		-	day of ___________________, 20_______, at _______ o'clock _______ M.
1792		-	By: _________________________________
1793		-	Approved by the Governor of the Sta te of Oklahoma this _____ ____
1794		-	day of ___________________, 20_______, at _______ o'clock _______ M.
1795		-
1796		-
1797		-	_________________________________
1798		-	Governor of the State of Oklahoma
1799		-
1800		-	OFFICE OF THE SECRETARY OF STATE
1801		-	Received by the Office of the Secretary of State th is __________
1802		-	day of ___________________, 20_______, at _______ o'clock _______ M.
1803		-	By: _________________________________
1804	3306