Oklahoma 2022 Regular Session

Oklahoma House Bill HB3347 Compare Versions

Version 1 (Old)

Version 2 (New)

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3		-	SENATE FLOOR VERSION - HB3347 SFLR Page 1
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29		-	SENATE FLOOR VERSION
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33	28		ENGROSSED HOUSE
34	29		BILL NO. 3347 By: Fetgatter of the House
35	30
36	31		and
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38	33		Rogers of the Senate
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43	40		[ revenue and taxation - Oklahoma taxable income –
44	41		adjustments - effective date ]
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49	46		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLA HOMA:
50	47		SECTION 1. AMENDATORY 68 O.S. 2021, Section 2358, is
51	48		amended to read as follows:
52	49		Section 2358. For all tax years beginning after December 31,
53	50		1981, taxable income and adjusted gross income shall be adjusted to
54	51		arrive at Oklahoma taxable income and O klahoma adjusted gross income
55	52		as required by this section.
56	53		A. The taxable income of any taxpayer shall be adjust ed to
57	54		arrive at Oklahoma taxable income for co rporations and Oklahoma
58	55		adjusted gross income for individuals, as follows:
59	56		1. There shall be added interest income on obligation s of any
60	57		state or political subdivision thereto which is not otherwise
61	58		exempted pursuant to other laws of this state, to the ex tent that
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63		-	SENATE FLOOR VERSION - HB3347 SFLR Page 2
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	60	+	ENGR. H. B. NO. 3347 Page 2 1
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89	85		such interest is not inclu ded in taxable income and adjusted gross
90	86		income.
91	87		2. There shall be deducted amounts included in such income that
92	88		the state is prohibited from taxing because of the provisi ons of the
93	89		Federal Constitution, the State Const itution, federal laws or laws
94	90		of Oklahoma.
95	91		3. The amount of any federal net operating loss deduc tion shall
96	92		be adjusted as follow s:
97	93		a. For carryovers and carrybacks to taxable years
98	94		beginning before January 1, 1981, the amount of any
99	95		net operating loss ded uction allowed to a taxpayer for
100	96		federal income tax purposes shall be reduced to an
101	97		amount which is the same portion thereof as t he loss
102	98		from sources within this state, as determined pursuant
103	99		to this section and Section 2362 of this title, for
104	100		the taxable year in which such loss is sustained is of
105	101		the total loss for such year;
106	102		b. For carryovers and ca rrybacks to taxable years
107	103		beginning after December 31, 1980, the amount of any
108	104		net operating loss deduction allowed for the taxable
109	105		year shall be an amount equ al to the aggregate of the
110	106		Oklahoma net operating loss carryovers and carrybacks
111	107		to such year. Oklahoma net operating losses sha ll be
112	108		separately determined by reference to Section 172 of
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114		-	SENATE FLOOR VERSION - HB3347 SFLR Page 3
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140	135		the Internal Revenue Code, 26 U.S.C., Section 172, as
141	136		modified by the Oklahoma Income Tax Act, Section 2 351
142	137		et seq. of this title, and shall be allowed without
143	138		regard to the existence of a federal net operating
144	139		loss. For tax years beginning after December 31,
145	140		2000, and ending before January 1, 2008, the years to
146	141		which such losses may be carried shall be det ermined
147	142		solely by reference to Section 172 of the Internal
148	143		Revenue Code, 26 U.S.C., Section 1 72, with the
149	144		exception that the terms "net operating loss" and
150	145		"taxable income" shall be replaced with "Oklahoma net
151	146		operating loss" and "Oklahoma taxable income ". For
152	147		tax years beginning after December 31, 2007, and
153	148		ending before January 1, 2009, years t o which such
154	149		losses may be carried back shall be limited to two (2)
155	150		years. For tax years beginning after December 31,
156	151		2008, the years to which such losses may be carried
157	152		back shall be determined solely by reference to
158	153		Section 172 of the Internal Revenue C ode, 26 U.S.C.,
159	154		Section 172, with the exception that the terms "net
160	155		operating loss" and "taxable income" shall be replaced
161	156		with "Oklahoma net operating loss " and "Oklahoma
162	157		taxable income".
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164		-	SENATE FLOOR VERSION - HB3347 SFLR Page 4
165		-	(Bold face denotes Committee Amendments) 1
	159	+	ENGR. H. B. NO. 3347 Page 4 1
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190	184		4. Items of the following nature s hall be allocated as
191	185		indicated. Allowable deductions attributable to items separately
192	186		allocable in subpara graphs a, b and c of this paragraph, whether or
193	187		not such items of income were actually r eceived, shall be allocated
194	188		on the same basis as those items:
195	189		a. Income from real and tangibl e personal property, such
196	190		as rents, oil and mining production or royalties , and
197	191		gains or losses from sales of such property, sh all be
198	192		allocated in accordance with the situs of such
199	193		property;
200	194		b. Income from intangible persona l property, such as
201	195		interest, dividends, patent or copyright royalties,
202	196		and gains or losses from sales of such property, shall
203	197		be allocated in accordance with the domiciliary situs
204	198		of the taxpayer, except that:
205	199		(1) where such property has acquired a nonuni tary
206	200		business or commercial situ s apart from the
207	201		domicile of the taxpayer such income shall be
208	202		allocated in accordance with such business or
209	203		commercial situs; interest income from
210	204		investments held to generate working capital for
211	205		a unitary business enterpri se shall be included
212	206		in apportionable income; a resident trust or
213	207		resident estate shall be treated as ha ving a
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215		-	SENATE FLOOR VERSION - HB3347 SFLR Page 5
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241	234		separate commercial or business situs insofar as
242	235		undistributed income is concerned, but shall not
243	236		be treated as having a separate commercial or
244	237		business situs insofar as distrib uted income is
245	238		concerned,
246	239		(2) for taxable years beginning after Decembe r 31,
247	240		2003, capital or ordinary gains or losses from
248	241		the sale of an ownership interest in a publicly
249	242		traded partnership, as defined by Section 7704(b)
250	243		of the Internal Revenue Code, shal l be allocated
251	244		to this state in the ratio of the original cost
252	245		of such partnership's tangible property in this
253	246		state to the original cost of such partnership 's
254	247		tangible property everywhere, as determined at
255	248		the time of the sale; if more than fifty percent
256	249		(50%) of the value of the partnership 's assets
257	250		consists of intangible a ssets, capital or
258	251		ordinary gains or losses from the sale of an
259	252		ownership interest in the par tnership shall be
260	253		allocated to this state in accordance with the
261	254		sales factor of the partners hip for its first
262	255		full tax period immediately preceding its tax
263	256		period during which the ownership interest in the
264	257		partnership was sold; the provisions of this
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266		-	SENATE FLOOR VERSION - HB3347 SFLR Page 6
267		-	(Bold face denotes Committee Amendments) 1
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292	284		division shall only apply if the capital or
293	285		ordinary gains or los ses from the sale of an
294	286		ownership interest in a partnership do not
295	287		constitute qualifying gain receiving capital
296	288		treatment as defined in subparagraph a of
297	289		paragraph 2 of subsection F of this secti on,
298	290		(3) income from such property which is required to be
299	291		allocated pursuant to the provision s of paragraph
300	292		5 of this subsection shall be allocated as herein
301	293		provided;
302	294		c. Net income or loss from a business activity which is
303	295		not a part of business carried o n within or without
304	296		the state of a unitary character shall be separately
305	297		allocated to the sta te in which such activity is
306	298		conducted;
307	299		d. In the case of a manufact uring or processing
308	300		enterprise the business of which in Okl ahoma consists
309	301		solely of marketing i ts products by:
310	302		(1) sales having a situs without this state, shipped
311	303		directly to a point from without the state to a
312	304		purchaser within the state, commonly known as
313	305		interstate sales,
314	306		(2) sales of the product stored in publ ic warehouses
315	307		within the state pursu ant to "in transit"
316	308
317		-	SENATE FLOOR VERSION - HB3347 SFLR Page 7
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343	334		tariffs, as prescribed and allowed by the
344	335		Interstate Commerce Commission, to a purchaser
345	336		within the state,
346	337		(3) sales of the product stored in public warehouses
347	338		within the state where the shipment to s uch
348	339		warehouses is not covered by "in transit"
349	340		tariffs, as prescribed and allowed by the
350	341		Interstate Commerce Commission, to a purc haser
351	342		within or without the state,
352	343		the Oklahoma net income shall , at the option of the
353	344		taxpayer, be that portion of the total n et income of
354	345		the taxpayer for federa l income tax purposes derived
355	346		from the manufacture and/or pro cessing and sales
356	347		everywhere as determined by the ratio of the sales
357	348		defined in this section mad e to the purchaser within
358	349		the state to the total sales everywhe re. The term
359	350		"public warehouse" as used in this subparagraph means
360	351		a licensed public warehouse, the principal business of
361	352		which is warehousing merchandise for the public;
362	353		e. In the case of insurance companies, O klahoma taxable
363	354		income shall be taxable inco me of the taxpayer for
364	355		federal tax purposes, as adjusted for the adjustments
365	356		provided pursuant to the provisions of paragraphs 1
366	357		and 2 of this subsection, apportioned as follows:
367	358
368		-	SENATE FLOOR VERSION - HB3347 SFLR Page 8
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394	384		(1) except as otherwise provided by division (2) of
395	385		this subparagraph, taxabl e income of an insurance
396	386		company for a taxable year shall be apportioned
397	387		to this state by multipl ying such income by a
398	388		fraction, the numerator of which is the direct
399	389		premiums written for insu rance on property or
400	390		risks in this state, and the denominator of which
401	391		is the direct premiums written for insurance on
402	392		property or risks everywhere . For purposes of
403	393		this subsection, the term "direct premiums
404	394		written" means the total amount of direct
405	395		premiums written, assessme nts and annuity
406	396		considerations as reported f or the taxable year
407	397		on the annual statement filed by the company with
408	398		the Insurance Commissioner in the form approved
409	399		by the National Association of Insurance
410	400		Commissioners, or such other for m as may be
411	401		prescribed in lieu thereof,
412	402		(2) if the principal sour ce of premiums written by an
413	403		insurance company consists of premiums for
414	404		reinsurance accepted by i t, the taxable income of
415	405		such company shall be apportioned to this state
416	406		by multiplying such income by a fraction, the
417	407		numerator of which is the sum of (a) dir ect
418	408
419		-	SENATE FLOOR VERSION - HB3347 SFLR Page 9
420		-	(Bold face denotes Committee Amendments) 1
	409	+	ENGR. H. B. NO. 3347 Page 9 1
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445	434		premiums written for insurance o n property or
446	435		risks in this state, plus (b) premiums written
447	436		for reinsurance accepted in resp ect of property
448	437		or risks in this state, and the denominator o f
449	438		which is the sum of (c) direct premiums written
450	439		for insurance on property or risks everywhere,
451	440		plus (d) premiums written for reinsurance
452	441		accepted in respect of p roperty or risks
453	442		everywhere. For purposes of this paragraph,
454	443		premiums written for reinsuranc e accepted in
455	444		respect of property or risks in this state,
456	445		whether or not otherwise determinable, may a t the
457	446		election of the company be determined on the
458	447		basis of the proportion which premiums wri tten
459	448		for insurance accepted from companies
460	449		commercially domiciled in Oklahoma bears to
461	450		premiums written for reinsurance accepte d from
462	451		all sources, or alternatively in the proportion
463	452		which the sum of the direct premiums writt en for
464	453		insurance on property or risks in this state by
465	454		each ceding company from which reinsur ance is
466	455		accepted bears to the sum of the total direct
467	456		premiums written by each such ceding company for
468	457		the taxable year.
469	458
470		-	SENATE FLOOR VERSION - HB3347 SFLR Page 10
471		-	(Bold face denotes Committee Amendments) 1
	459	+	ENGR. H. B. NO. 3347 Page 10 1
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496	484		5. The net income or loss remaining after the separate
497	485		allocation in paragraph 4 of this subsection, being that which is
498	486		derived from a unitary business ent erprise, shall be apportioned to
499	487		this state on the basis of the arithmetical ave rage of three factors
500	488		consisting of property, payroll and sal es or gross revenue
501	489		enumerated as subparagraphs a, b and c of this paragraph . Net
502	490		income or loss as used in this p aragraph includes that derived from
503	491		patent or copyright royalties, purchase disc ounts, and interest on
504	492		accounts receivable relating to or ari sing from a business activity,
505	493		the income from which is apportioned pursuant to this subsect ion,
506	494		including the sale or other disposition of such property and a ny
507	495		other property used in the unitar y enterprise. Deductions used in
508	496		computing such net income o r loss shall not include taxes b ased on
509	497		or measured by income . Provided, for corporations w hose property
510	498		for purposes of the tax imposed by Section 2355 of th is title has an
511	499		initial investment c ost equaling or exceeding Two Hundred Million
512	500		Dollars ($200,000,000.00) and such investment i s made on or after
513	501		July 1, 1997, or for corporations which e xpand their property or
514	502		facilities in this state and such expansion has an investment cost
515	503		equaling or exceeding Two Hundred Million Dollars ($200,000,000.00)
516	504		over a period not to exceed three (3) years, and such expansion is
517	505		commenced on or after January 1, 2000, the three fact ors shall be
518	506		apportioned with property and p ayroll, each comprising twenty -five
519	507		percent (25%) of the apportionment factor and sales comprisin g fifty
520	508
521		-	SENATE FLOOR VERSION - HB3347 SFLR Page 11
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547	534		percent (50%) of the app ortionment factor. The apportionment
548	535		factors shall be compu ted as follows:
549	536		a. The property factor is a fraction, the numerator of
550	537		which is the average value of th e taxpayer's real and
551	538		tangible personal property owned or ren ted and used in
552	539		this state during the tax period and the denominator
553	540		of which is the averag e value of all the taxpa yer's
554	541		real and tangible personal property ev erywhere owned
555	542		or rented and used du ring the tax period.
556	543		(1) Property, the income from which is s eparately
557	544		allocated in paragraph 4 of this subsection,
558	545		shall not be included in determinin g this
559	546		fraction. The numerator of the fraction shall
560	547		include a portion of the investment in
561	548		transportation and other equipment having no
562	549		fixed situs, such as rolling stock, buses, trucks
563	550		and trailers, including machinery and equipment
564	551		carried thereon, air planes, salespersons '
565	552		automobiles and other similar equipment, in the
566	553		proportion that miles traveled in O klahoma by
567	554		such equipment bears to total miles traveled,
568	555		(2) Property owned by the taxpayer i s valued at its
569	556		original cost. Property rented by the ta xpayer
570	557		is valued at eight times the net annual rental
571	558
572		-	SENATE FLOOR VERSION - HB3347 SFLR Page 12
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598	584		rate. Net annual rental rate is the annual
599	585		rental rate paid by the taxpayer, less any annual
600	586		rental rate received by the taxpayer from
601	587		subrentals,
602	588		(3) The average value of property shall be determined
603	589		by averaging the values at the beginning and
604	590		ending of the tax period but the Oklahoma Tax
605	591		Commission may require the averaging of monthly
606	592		values during the tax period if reasonably
607	593		required to reflect properly the average value of
608	594		the taxpayer's property;
609	595		b. The payroll factor is a fraction, the numerator of
610	596		which is the total compensation for services render ed
611	597		in the state during the tax period, and the
612	598		denominator of which is the total compensation for
613	599		services rendered everywhere during the tax period .
614	600		"Compensation", as used in this subsection means those
615	601		paid-for services to the extent related to the uni tary
616	602		business but does not include officers ' salaries,
617	603		wages and other compensation.
618	604		(1) In the case of a transportation enterprise, the
619	605		numerator of the fraction shall include a portion
620	606		of such expenditure in connection with employees
621	607		operating equipment over a fixed route, such as
622	608
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625	610		2
626	611		3
627	612		4
628	613		5
629	614		6
630	615		7
631	616		8
632	617		9
633	618		10
634	619		11
635	620		12
636	621		13
637	622		14
638	623		15
639	624		16
640	625		17
641	626		18
642	627		19
643	628		20
644	629		21
645	630		22
646	631		23
647	632		24
648	633
649	634		railroad employees, airline pilot s, or bus
650	635		drivers, in this state only a part of the time,
651	636		in the proportion that milea ge traveled in
652	637		Oklahoma bears to total mileage traveled by such
653	638		employees,
654	639		(2) In any case the numerator of t he fraction shall
655	640		include a portion of such expenditures in
656	641		connection with itinerant employe es, such as
657	642		traveling salespersons, in this state onl y a part
658	643		of the time, in the p roportion that time spent in
659	644		Oklahoma bears to total time spent in furtherance
660	645		of the enterprise by such employees;
661	646		c. The sales factor is a fraction, the numerator of which
662	647		is the total sales or gross revenue of the taxpayer in
663	648		this state during the tax p eriod, and the denominator
664	649		of which is the total sales or gross revenue of the
665	650		taxpayer everywhere during the tax period . "Sales",
666	651		as used in this subsection, does not include sales or
667	652		gross revenue which are separately alloc ated in
668	653		paragraph 4 of this su bsection.
669	654		(1) Sales of tangible personal pro perty have a situs
670	655		in this state if the property is delivered or
671	656		shipped to a purchaser other tha n the United
672	657		States government, within this state regardless
673	658
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676	660		2
677	661		3
678	662		4
679	663		5
680	664		6
681	665		7
682	666		8
683	667		9
684	668		10
685	669		11
686	670		12
687	671		13
688	672		14
689	673		15
690	674		16
691	675		17
692	676		18
693	677		19
694	678		20
695	679		21
696	680		22
697	681		23
698	682		24
699	683
700	684		of the FOB point or oth er conditions of the sale;
701	685		or the property is shipped from an office, store ,
702	686		warehouse, factory or other place of storage in
703	687		this state and (a) the purchaser is the United
704	688		States government or (b) the tax payer is not
705	689		doing business in the state of the dest ination of
706	690		the shipment.
707	691		(2) In the case of a railroad or interurban railwa y
708	692		enterprise, the numerator of the f raction shall
709	693		not be less than the allocation of revenues to
710	694		this state as shown in its annua l report to the
711	695		Corporation Commission.
712	696		(3) In the case of an airline, truck or bus
713	697		enterprise or freight car, tank car, refrig erator
714	698		car or other railroad equipme nt enterprise, the
715	699		numerator of the fraction shall include a portion
716	700		of revenue from intersta te transportation in the
717	701		proportion that interstat e mileage traveled in
718	702		Oklahoma bears to total interstate mileage
719	703		traveled.
720	704		(4) In the case of an oil, gasoline or gas pipeline
721	705		enterprise, the numerator of the fraction shall
722	706		be either the total of traffic units of the
723	707		enterprise within Oklahoma or the re venue
724	708
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727	710		2
728	711		3
729	712		4
730	713		5
731	714		6
732	715		7
733	716		8
734	717		9
735	718		10
736	719		11
737	720		12
738	721		13
739	722		14
740	723		15
741	724		16
742	725		17
743	726		18
744	727		19
745	728		20
746	729		21
747	730		22
748	731		23
749	732		24
750	733
751	734		allocated to Oklahoma based upon miles moved, at
752	735		the option of the taxpa yer, and the denominator
753	736		of which shall be the total of traffic units of
754	737		the enterprise or the re venue of the enterprise
755	738		everywhere as appropriate to the numerator . A
756	739		"traffic unit" is hereby defined as the
757	740		transportation for a distance of one (1) mile of
758	741		one (1) barrel of oil, one (1) gall on of gasoline
759	742		or one thousand (1,000) cubic feet of natural or
760	743		casinghead gas, as the case m ay be.
761	744		(5) In the case of a telephone or telegra ph or other
762	745		communication enterpris e, the numerator of the
763	746		fraction shall inclu de that portion of the
764	747		interstate revenue as is allocated pursuant to
765	748		the accounting procedures p rescribed by the
766	749		Federal Communications Commission; provided that
767	750		in respect to each corporation or business entity
768	751		required by the Federal Communications Comm ission
769	752		to keep its books and records in accordance with
770	753		a uniform system of accounts prescribed b y such
771	754		Commission, the intrastat e net income shall be
772	755		determined separately in t he manner provided by
773	756		such uniform system of accounts and only the
774	757		interstate income shall be subject to allocation
775	758
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778	760		2
779	761		3
780	762		4
781	763		5
782	764		6
783	765		7
784	766		8
785	767		9
786	768		10
787	769		11
788	770		12
789	771		13
790	772		14
791	773		15
792	774		16
793	775		17
794	776		18
795	777		19
796	778		20
797	779		21
798	780		22
799	781		23
800	782		24
801	783
802	784		pursuant to the provisions of this subsection .
803	785		Provided further, that the gross revenue fac tors
804	786		shall be those as are determined pursuant t o the
805	787		accounting procedures prescri bed by the Federal
806	788		Communications Commission .
807	789		In any case where the apportionmen t of the three factors
808	790		prescribed in this paragraph attribute s to Oklahoma a portion of net
809	791		income of the enterprise out of all appropriate proportion to the
810	792		property owned and/or business transacted within this state, b ecause
811	793		of the fact that one or more of the factors so prescribed are not
812	794		employed to any apprecia ble extent in furtherance of the enterprise;
813	795		or because one or more factors not so prescribed are employed to a
814	796		considerable extent in furtherance of the enter prise; or because of
815	797		other reasons, the Tax Commission is empowered to permit, after a
816	798		showing by taxpayer that an excessive port ion of net income has been
817	799		attributed to Oklaho ma, or require, when in its judgment an
818	800		insufficient portion of net income has b een attributed to Oklahoma,
819	801		the elimination, substitution, or use of additional factors, or
820	802		reduction or increase in the weight o f such prescribed factors .
821	803		Provided, however, that any such variance from such pre scribed
822	804		factors which has the effect of incr easing the portion of net income
823	805		attributable to Oklahoma must not be inherently arbitrary, and
824	806		application of the recomputed fin al apportionment to the net income
825	807
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828	809		2
829	810		3
830	811		4
831	812		5
832	813		6
833	814		7
834	815		8
835	816		9
836	817		10
837	818		11
838	819		12
839	820		13
840	821		14
841	822		15
842	823		16
843	824		17
844	825		18
845	826		19
846	827		20
847	828		21
848	829		22
849	830		23
850	831		24
851	832
852	833		of the enterprise must attribute to Oklahoma onl y a reasonable
853	834		portion thereof.
854	835		6. For calendar years 1997 and 1998, the owner of a new or
855	836		expanded agricultural commodity processing facili ty in this state
856	837		may exclude from Oklahoma taxable income, or in the case of a n
857	838		individual, the Oklahoma adjusted g ross income, fifteen percent
858	839		(15%) of the investment by the owner in the new or expanded
859	840		agricultural commodity processing facility . For calendar year 1999,
860	841		and all subsequent years, the percentage, not to exceed fifte en
861	842		percent (15%), available to the ow ner of a new or expanded
862	843		agricultural commodity processing facility in this stat e claiming
863	844		the exemption shall be adjusted annually so that t he total estimated
864	845		reduction in tax liability does not exceed One Million Doll ars
865	846		($1,000,000.00) annually . The Tax Commission shall promulgate rules
866	847		for determining the percentage of the invest ment which each eligible
867	848		taxpayer may exclude . The exclusion provided by this paragraph
868	849		shall be taken in the taxable year when the invest ment is made. In
869	850		the event the total reduction in tax liability authorized by th is
870	851		paragraph exceeds One Million Dol lars ($1,000,000.00) in any
871	852		calendar year, the Tax Commission shall permit any excess over On e
872	853		Million Dollars ($1,000,000.00) and shall fa ctor such excess into
873	854		the percentage for subsequent years . Any amount of the exe mption
874	855		permitted to be excluded purs uant to the provisions of this
875	856		paragraph but not used in any year may be carried forward as a n
876	857
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879	859		2
880	860		3
881	861		4
882	862		5
883	863		6
884	864		7
885	865		8
886	866		9
887	867		10
888	868		11
889	869		12
890	870		13
891	871		14
892	872		15
893	873		16
894	874		17
895	875		18
896	876		19
897	877		20
898	878		21
899	879		22
900	880		23
901	881		24
902	882
903	883		exemption from income pursuant to the provis ions of this paragraph
904	884		for a period not exceeding six (6) years following the yea r in which
905	885		the investment was origin ally made.
906	886		For purposes of this paragraph:
907	887		a. "Agricultural commodity processing facility " means
908	888		building, structures, fixtures and impro vements used
909	889		or operated primarily for the processing or production
910	890		of marketable products from agricultural commoditie s.
911	891		The term shall also mean a dairy operation that
912	892		requires a depreciable investment of at l east Two
913	893		Hundred Fifty Thousand Dollars ($25 0,000.00) and which
914	894		produces milk from dairy cows. The term does not
915	895		include a facility that provides only, and nothin g
916	896		more than, storage, cleaning, drying or transportation
917	897		of agricultural commodities, and
918	898		b. "Facility" means each part of the facility which is
919	899		used in a process primarily for :
920	900		(1) the processing of agricultural commodi ties,
921	901		including receiving or storing agricultural
922	902		commodities, or the production of milk at a dai ry
923	903		operation,
924	904		(2) transporting the agricultural commodities or
925	905		product before, during or after the processing,
926	906		or
927	907
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930	909		2
931	910		3
932	911		4
933	912		5
934	913		6
935	914		7
936	915		8
937	916		9
938	917		10
939	918		11
940	919		12
941	920		13
942	921		14
943	922		15
944	923		16
945	924		17
946	925		18
947	926		19
948	927		20
949	928		21
950	929		22
951	930		23
952	931		24
953	932
954	933		(3) packaging or otherwise preparing the prod uct for
955	934		sale or shipment.
956	935		7. Despite any provision to the contrary in paragraph 3 of this
957	936		subsection, for taxable years beginnin g after December 31, 1999, in
958	937		the case of a taxpayer which has a farming loss, such farming loss
959	938		shall be considered a net oper ating loss carryback in accordance
960	939		with and to the extent of the Internal Revenue Code, 26 U.S.C. ,
961	940		Section 172(b)(G). However, the amount of the net operating loss
962	941		carryback shall not exceed the lesser of:
963	942		a. Sixty Thousand Dollars ($60,000.00), or
964	943		b. the loss properly shown on Schedule F o f the Internal
965	944		Revenue Service Form 1040 reduced by one -half (1/2) of
966	945		the income from all oth er sources other than reflected
967	946		on Schedule F.
968	947		8. In taxable years beginning after December 31, 1995, all
969	948		qualified wages equa l to the federal income tax credit s et forth in
970	949		26 U.S.C.A., Section 45A, shall be deducted from taxable income.
971	950		The deduction allowed pursuant to this paragraph sh all only be
972	951		permitted for the tax years in whic h the federal tax credit pursuant
973	952		to 26 U.S.C.A., Section 45A, is allowed . For purposes of this
974	953		paragraph, "qualified wages" means those wages used to calculate the
975	954		federal credit pursuant to 26 U.S.C.A., Sec tion 45A.
976	955		9. In taxable years beginning after December 31, 2005, an
977	956		employer that is eligi ble for and utilizes the Safety Pays OSHA
978	957
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981	959		2
982	960		3
983	961		4
984	962		5
985	963		6
986	964		7
987	965		8
988	966		9
989	967		10
990	968		11
991	969		12
992	970		13
993	971		14
994	972		15
995	973		16
996	974		17
997	975		18
998	976		19
999	977		20
1000	978		21
1001	979		22
1002	980		23
1003	981		24
1004	982
1005	983		Consultation Service provided by the Oklahoma Departmen t of Labor
1006	984		shall receive an exem ption from taxable income in the am ount of One
1007	985		Thousand Dollars ($1,000.00) for the tax year that the service is
1008	986		utilized.
1009	987		10. For taxable years beginning on or a fter January 1, 2010,
1010	988		there shall be added to Oklahoma taxabl e income an amount equal to
1011	989		the amount of deferred income not incl uded in such taxable income
1012	990		pursuant to Section 1 08(i)(1) of the Internal Revenue Code of 198 6
1013	991		as amended by Section 1231 of the American Recovery and Reinvestment
1014	992		Act of 2009 (P.L. No. 111 -5). There shall be subtracted f rom
1015	993		Oklahoma taxable income an amo unt equal to the amount of deferred
1016	994		income included in such taxable income pursuant to Sectio n 108(i)(1)
1017	995		of the Internal Revenue Code by Section 1231 of the American
1018	996		Recovery and Reinvestmen t Act of 2009 (P.L. No. 111 -5).
1019	997		11. For taxable years beginning on or after January 1, 2019,
1020	998		there shall be subtra cted from Oklahoma taxable income or adjuste d
1021	999		gross income any item of income or gain, and there shall be added to
1022	1000		Oklahoma taxable income or adjusted gross income any item of loss or
1023	1001		deduction that in the absence of an election pursuant to the
1024	1002		provisions of the Pass-Through Entity Tax Equity Act of 2019 would
1025	1003		be allocated to a member or to an indirect member of an electing
1026	1004		pass-through entity pursuant to Section 2351 et seq. of this title,
1027	1005		if (i) the electing pass-through entity has accounted for such item
1028	1006		in computing its Oklahoma net entity income or loss pursuant to the
1029	1007
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1032	1009		2
1033	1010		3
1034	1011		4
1035	1012		5
1036	1013		6
1037	1014		7
1038	1015		8
1039	1016		9
1040	1017		10
1041	1018		11
1042	1019		12
1043	1020		13
1044	1021		14
1045	1022		15
1046	1023		16
1047	1024		17
1048	1025		18
1049	1026		19
1050	1027		20
1051	1028		21
1052	1029		22
1053	1030		23
1054	1031		24
1055	1032
1056	1033		provisions of the Pass-Through Entity Tax Equity Act of 2019, and
1057	1034		(ii) the total amount of tax attributa ble to any resulting Oklahoma
1058	1035		net entity income has been paid . The Oklahoma Tax Commission shall
1059	1036		promulgate rules for the repo rting of such exclusion to direct an d
1060	1037		indirect members of the electing pass -through entity. As used in
1061	1038		this paragraph, "electing pass-through entity", "indirect member",
1062	1039		and "member" shall be defined in the same manner as prescribed by
1063	1040		Section 2355.1P-2 of this title. Notwithstanding the a pplication of
1064	1041		this paragraph, the adjusted tax basis of any o wnership interest in
1065	1042		a pass-through entity for purposes of Sectio n 2351 et seq. of this
1066	1043		title shall be equal to its adjusted tax basis for federal income
1067	1044		tax purposes.
1068	1045		12. For taxable years beginning on or after January 1, 2023,
1069	1046		there shall be allowed a deduction from Oklahoma taxable income
1070	1047		equal to the amount of any deduction for business expense incurred
1071	1048		in conducting applicable licensed medical marijuana business
1072	1049		activity within this state which was disallowed for the same tax
1073	1050		year pursuant to the prov isions of Section 280E of the Interna l
1074	1051		Revenue Code of 1986, as amended.
1075	1052		B. 1. The taxable income of a ny corporation shall be further
1076	1053		adjusted to arrive at O klahoma taxable income, except tho se
1077	1054		corporations electing treatme nt as provided in subchapter S of the
1078	1055		Internal Revenue Code, 26 U.S.C., Section 1361 et seq., and Section
1079	1056		2365 of this title, deduction s pursuant to the provisions of the
1080	1057
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1083	1059		2
1084	1060		3
1085	1061		4
1086	1062		5
1087	1063		6
1088	1064		7
1089	1065		8
1090	1066		9
1091	1067		10
1092	1068		11
1093	1069		12
1094	1070		13
1095	1071		14
1096	1072		15
1097	1073		16
1098	1074		17
1099	1075		18
1100	1076		19
1101	1077		20
1102	1078		21
1103	1079		22
1104	1080		23
1105	1081		24
1106	1082
1107	1083		Accelerated Cost Recovery System as defined and allow ed in the
1108	1084		Economic Recovery Tax Act of 1981, Public Law 97 -34, 26 U.S.C.,
1109	1085		Section 168, for depreciation of assets placed into service after
1110	1086		December 31, 1981, shall no t be allowed in calculating Oklahoma
1111	1087		taxable income. Such corporations shall be allowed a deduction for
1112	1088		depreciation of assets placed into service afte r December 31, 1981,
1113	1089		in accordance with provisions of the Internal Revenue Code, 26
1114	1090		U.S.C., Section 1 et seq., in effect immediately prior to the
1115	1091		enactment of the Accelerated Cost Recovery Syst em. The Oklahoma tax
1116	1092		basis for all such assets placed into ser vice after December 31,
1117	1093		1981, calculated in this section shall be retained and utilized for
1118	1094		all Oklahoma income tax purposes through the final disposition of
1119	1095		such assets.
1120	1096		Notwithstanding any ot her provisions of the Oklahoma Income Tax
1121	1097		Act, Section 2351 et seq. of this title, or of the Internal Revenue
1122	1098		Code to the contrary, this subsection shall control calcu lation of
1123	1099		depreciation of assets placed into service af ter December 31, 1981,
1124	1100		and before January 1, 1983.
1125	1101		For assets placed in service and held by a cor poration in which
1126	1102		accelerated cost recovery system was previously disallowed, an
1127	1103		adjustment to taxable i ncome is required in the first taxable year
1128	1104		beginning after December 31, 1982, to reconci le the basis of such
1129	1105		assets to the basis allowed in the Interna l Revenue Code. The
1130	1106		purpose of this adjustment is to equalize the basis and allowance
1131	1107
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1134	1109		2
1135	1110		3
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1137	1112		5
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1144	1119		12
1145	1120		13
1146	1121		14
1147	1122		15
1148	1123		16
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1150	1125		18
1151	1126		19
1152	1127		20
1153	1128		21
1154	1129		22
1155	1130		23
1156	1131		24
1157	1132
1158	1133		for depreciation accounts between that reported to the Internal
1159	1134		Revenue Service and that reported to Oklah oma.
1160	1135		2. For tax years beginn ing on or after January 1, 2009, a nd
1161	1136		ending on or before December 31, 2009, there shall be added to
1162	1137		Oklahoma taxable income any amount in excess of One Hundred Seventy-
1163	1138		five Thousand Dollars ($1 75,000.00) which has been deducted as a
1164	1139		small business expense under Internal Revenue Code, Secti on 179 as
1165	1140		provided in the American Recovery and Reinvestment Act of 2009.
1166	1141		C. 1. For taxable years begi nning after December 31, 1987, the
1167	1142		taxable income of an y corporation shall be further adj usted to
1168	1143		arrive at Oklahoma taxable income for transfers of tec hnology to
1169	1144		qualified small businesses located in Oklahoma . Such transferor
1170	1145		corporation shall be allowed an exemption from taxable income of an
1171	1146		amount equal to the amount of royalty payment rec eived as a result
1172	1147		of such transfer; provided, however, such amo unt shall not exceed
1173	1148		ten percent (10%) of the amount of gross proceeds received by such
1174	1149		transferor corporation as a result of the technology transfer. Such
1175	1150		exemption shall be allowed for a per iod not to exceed ten (10) y ears
1176	1151		from the date of receipt of th e first royalty payment accruing from
1177	1152		such transfer. No exemption may be claimed for transfers of
1178	1153		technology to qualified small businesses made prior to Janua ry 1,
1179	1154		1988.
1180	1155		2. For purposes of this subsection:
1181	1156
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1184	1158		2
1185	1159		3
1186	1160		4
1187	1161		5
1188	1162		6
1189	1163		7
1190	1164		8
1191	1165		9
1192	1166		10
1193	1167		11
1194	1168		12
1195	1169		13
1196	1170		14
1197	1171		15
1198	1172		16
1199	1173		17
1200	1174		18
1201	1175		19
1202	1176		20
1203	1177		21
1204	1178		22
1205	1179		23
1206	1180		24
1207	1181
1208	1182		a. "Qualified small business" means an entity, whether
1209	1183		organized as a corporation, partnership, or
1210	1184		proprietorship, organized for profit with its
1211	1185		principal place of business located within this state
1212	1186		and which meets the following criteria:
1213	1187		(1) Capitalization of not more than Two Hundred Fifty
1214	1188		Thousand Dollars ($250,000.00),
1215	1189		(2) Having at least fifty percent (50%) of its
1216	1190		employees and assets located in Okla homa at the
1217	1191		time of the transfer, and
1218	1192		(3) Not a subsidiary or affiliate of the transferor
1219	1193		corporation;
1220	1194		b. "Technology" means a proprietary process, form ula,
1221	1195		pattern, device or compilation of scientific or
1222	1196		technical information which is not in the public
1223	1197		domain;
1224	1198		c. "Transferor corporation" means a corporation w hich is
1225	1199		the exclusive and undisput ed owner of the technology
1226	1200		at the time the transfer is made; an d
1227	1201		d. "Gross proceeds" means the total amount of
1228	1202		consideration for the transfer of technology, whether
1229	1203		the consideration is in money or otherwise.
1230	1204		D. 1. For taxable years beginning after Decem ber 31, 2005, the
1231	1205		taxable income of any corporation, estate or trust, shall be further
1232	1206
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1235	1208		2
1236	1209		3
1237	1210		4
1238	1211		5
1239	1212		6
1240	1213		7
1241	1214		8
1242	1215		9
1243	1216		10
1244	1217		11
1245	1218		12
1246	1219		13
1247	1220		14
1248	1221		15
1249	1222		16
1250	1223		17
1251	1224		18
1252	1225		19
1253	1226		20
1254	1227		21
1255	1228		22
1256	1229		23
1257	1230		24
1258	1231
1259	1232		adjusted for qualifying gains receiving capital treatment . Such
1260	1233		corporations, estates or trusts shall be allowed a deduction from
1261	1234		Oklahoma taxable income for the amount of qualifying gains receiving
1262	1235		capital treatment earned by the corporation, estate or trust during
1263	1236		the taxable year and included in the federal taxable income of such
1264	1237		corporation, estate or trust.
1265	1238		2. As used in this subse ction:
1266	1239		a. "qualifying gains receiv ing capital treatment" means
1267	1240		the amount of net capital gains, a s defined in Section
1268	1241		1222(11) of the Internal Revenue Code, included in the
1269	1242		federal income tax return of the corporation, estate
1270	1243		or trust that result from:
1271	1244		(1) the sale of real property or tang ible personal
1272	1245		property located within Oklahoma that has been
1273	1246		directly or indirectly owned by the corporation,
1274	1247		estate or trust for a holding period of at least
1275	1248		five (5) years prior to the date of the
1276	1249		transaction from which such net capital gains
1277	1250		arise,
1278	1251		(2) the sale of stock or on the sale of an ownership
1279	1252		interest in an Oklahoma company, limited
1280	1253		liability company, or partnership where such
1281	1254		stock or ownership interest has been directly or
1282	1255		indirectly owned by the corporation, e state or
1283	1256
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1286	1258		2
1287	1259		3
1288	1260		4
1289	1261		5
1290	1262		6
1291	1263		7
1292	1264		8
1293	1265		9
1294	1266		10
1295	1267		11
1296	1268		12
1297	1269		13
1298	1270		14
1299	1271		15
1300	1272		16
1301	1273		17
1302	1274		18
1303	1275		19
1304	1276		20
1305	1277		21
1306	1278		22
1307	1279		23
1308	1280		24
1309	1281
1310	1282		trust for a holding perio d of at least three (3)
1311	1283		years prior to the date of the transact ion from
1312	1284		which the net capital gains arise, or
1313	1285		(3) the sale of real property, tangible personal
1314	1286		property or intangible personal property located
1315	1287		within Oklahoma as part of the sale of all or
1316	1288		substantially all of the assets of an Oklahoma
1317	1289		company, limited liability company, or
1318	1290		partnership where such property has been directly
1319	1291		or indirectly owned by such entit y owned by the
1320	1292		owners of such entity, and used in or de rived
1321	1293		from such entity for a perio d of at least three
1322	1294		(3) years prior to the date of the transact ion
1323	1295		from which the net capital gains arise,
1324	1296		b. "holding period" means an uninterrupted period of
1325	1297		time. The holding period shall include any additional
1326	1298		period when the property was held by anot her
1327	1299		individual or entity, if such additional period is
1328	1300		included in the taxpayer's holding period for the
1329	1301		asset pursuant to the Internal Revenue Code,
1330	1302		c. "Oklahoma company", "limited liability company", or
1331	1303		"partnership" means an entity whose primary
1332	1304		headquarters have been located in Oklahoma for at
1333	1305		least three (3) unin terrupted years prior to the date
1334	1306
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1337	1308		2
1338	1309		3
1339	1310		4
1340	1311		5
1341	1312		6
1342	1313		7
1343	1314		8
1344	1315		9
1345	1316		10
1346	1317		11
1347	1318		12
1348	1319		13
1349	1320		14
1350	1321		15
1351	1322		16
1352	1323		17
1353	1324		18
1354	1325		19
1355	1326		20
1356	1327		21
1357	1328		22
1358	1329		23
1359	1330		24
1360	1331
1361	1332		of the transaction from which the net capital gains
1362	1333		arise,
1363	1334		d. "direct" means the taxpayer directly owns the asset,
1364	1335		and
1365	1336		e. "indirect" means the taxpayer owns an interest in a
1366	1337		pass-through entity (or chain of pass -through
1367	1338		entities) that sells the asset that gives rise to the
1368	1339		qualifying gains receiving capital treatment.
1369	1340		(1) With respect to sales of real property or
1370	1341		tangible personal property located within
1371	1342		Oklahoma, the deduction described in this
1372	1343		subsection shall not apply u nless the pass-
1373	1344		through entity that makes the sale has held the
1374	1345		property for not less than five (5) unint errupted
1375	1346		years prior to the date of the transaction tha t
1376	1347		created the capital gain, and ea ch pass-through
1377	1348		entity included in the chain of ownership has
1378	1349		been a member, partner, or shareholder of the
1379	1350		pass-through entity in the tier immediately below
1380	1351		it for an uninterrupted period of not less than
1381	1352		five (5) years.
1382	1353		(2) With respect to sales of stock or ownership
1383	1354		interest in or sales of all or substantially all
1384	1355		of the assets of an Oklahoma company, limited
1385	1356
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1388	1358		2
1389	1359		3
1390	1360		4
1391	1361		5
1392	1362		6
1393	1363		7
1394	1364		8
1395	1365		9
1396	1366		10
1397	1367		11
1398	1368		12
1399	1369		13
1400	1370		14
1401	1371		15
1402	1372		16
1403	1373		17
1404	1374		18
1405	1375		19
1406	1376		20
1407	1377		21
1408	1378		22
1409	1379		23
1410	1380		24
1411	1381
1412	1382		liability company, or partnership, the deduction
1413	1383		described in this subsection shall not apply
1414	1384		unless the pass-through entity that makes the
1415	1385		sale has held the stock or ownership interest or
1416	1386		the assets for not le ss than three (3)
1417	1387		uninterrupted years prior to the date of the
1418	1388		transaction that created the capital gain , and
1419	1389		each pass-through entity included in the chain of
1420	1390		ownership has been a member, part ner or
1421	1391		shareholder of the pass -through entity in the
1422	1392		tier immediately below it for an uninterrupted
1423	1393		period of not less than three (3) years.
1424	1394		E. The Oklahoma adjusted gross income of any individual
1425	1395		taxpayer shall be furthe r adjusted as follows to arrive at Oklahoma
1426	1396		taxable income:
1427	1397		1. a. In the case of individuals, the re shall be added or
1428	1398		deducted, as the case may be, the difference necessary
1429	1399		to allow personal exemptions of One Thousand Dollars
1430	1400		($1,000.00) in lieu of the per sonal exemptions allowed
1431	1401		by the Internal Revenue Code.
1432	1402		b. There shall be allowed an additional ex emption of One
1433	1403		Thousand Dollars ($1,000.00) for each taxpayer or
1434	1404		spouse who is blind at the close of the tax year. For
1435	1405		purposes of this subparagraph, an indiv idual is blind
1436	1406
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1439	1408		2
1440	1409		3
1441	1410		4
1442	1411		5
1443	1412		6
1444	1413		7
1445	1414		8
1446	1415		9
1447	1416		10
1448	1417		11
1449	1418		12
1450	1419		13
1451	1420		14
1452	1421		15
1453	1422		16
1454	1423		17
1455	1424		18
1456	1425		19
1457	1426		20
1458	1427		21
1459	1428		22
1460	1429		23
1461	1430		24
1462	1431
1463	1432		only if the central visual acuity of the individual
1464	1433		does not exceed 20/200 in the better eye with
1465	1434		correcting lenses, or if the visual acuity of the
1466	1435		individual is greater than 20/200, but is accompanied
1467	1436		by a limitation in the fields of vision such that the
1468	1437		widest diameter of the visual field subtends an angle
1469	1438		no greater than twenty (20) degrees.
1470	1439		c. There shall be allowed an additional exemption of One
1471	1440		Thousand Dollars ($1,000.00) for each taxpayer or
1472	1441		spouse who is sixty-five (65) years of age or older at
1473	1442		the close of the tax y ear based upon the filing status
1474	1443		and federal adjusted gross inc ome of the taxpayer.
1475	1444		Taxpayers with the following filing status may claim
1476	1445		this exemption if the federal adjusted gross income
1477	1446		does not exceed:
1478	1447		(1) Twenty-five Thousand Dollars ($25,000.00) if
1479	1448		married and filing jointly;
1480	1449		(2) Twelve Thousand Five Hundred Do llars ($12,500.00)
1481	1450		if married and filing separately;
1482	1451		(3) Fifteen Thousand Dollars ($15,000.00) if single ;
1483	1452		and
1484	1453		(4) Nineteen Thousand Dollars ($19,000.00) if a
1485	1454		qualifying head of household.
1486	1455
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1489	1457		2
1490	1458		3
1491	1459		4
1492	1460		5
1493	1461		6
1494	1462		7
1495	1463		8
1496	1464		9
1497	1465		10
1498	1466		11
1499	1467		12
1500	1468		13
1501	1469		14
1502	1470		15
1503	1471		16
1504	1472		17
1505	1473		18
1506	1474		19
1507	1475		20
1508	1476		21
1509	1477		22
1510	1478		23
1511	1479		24
1512	1480
1513	1481		Provided, for taxable years beginning after December
1514	1482		31, 1999, amounts included in the calculation of
1515	1483		federal adjusted gross income pursuant to the
1516	1484		conversion of a traditio nal individual retirement
1517	1485		account to a Roth individual retirement account shall
1518	1486		be excluded from federal adjusted gross income for
1519	1487		purposes of the incom e thresholds provided in this
1520	1488		subparagraph.
1521	1489		2. a. For taxable years beginning on or before December 31,
1522	1490		2005, in the case of individuals who use the standard
1523	1491		deduction in determining taxable income, there shall
1524	1492		be added or deducted, as the case may be, the
1525	1493		difference necessary to allow a standard deduction in
1526	1494		lieu of the standard deduction allowed by the Int ernal
1527	1495		Revenue Code, in an amount equal to the larger of
1528	1496		fifteen percent (15%) of the Ok lahoma adjusted gross
1529	1497		income or One Thousand Dollars ($1,000.00), but not to
1530	1498		exceed Two Thousand Dollars ($2,000.00), except that
1531	1499		in the case of a married individual fil ing a separate
1532	1500		return such deduction shall be the large r of fifteen
1533	1501		percent (15%) of such Oklahoma adjusted gross income
1534	1502		or Five Hundred Dollars ($500.0 0), but not to exceed
1535	1503		the maximum amount of One Thousand Dollars
1536	1504		($1,000.00).
1537	1505
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1540	1507		2
1541	1508		3
1542	1509		4
1543	1510		5
1544	1511		6
1545	1512		7
1546	1513		8
1547	1514		9
1548	1515		10
1549	1516		11
1550	1517		12
1551	1518		13
1552	1519		14
1553	1520		15
1554	1521		16
1555	1522		17
1556	1523		18
1557	1524		19
1558	1525		20
1559	1526		21
1560	1527		22
1561	1528		23
1562	1529		24
1563	1530
1564	1531		b. For taxable years begin ning on or after January 1,
1565	1532		2006, and before January 1, 2007, in the case of
1566	1533		individuals who use the standard deduction in
1567	1534		determining taxable income, t here shall be added or
1568	1535		deducted, as the case may be, the difference necessary
1569	1536		to allow a standard deduct ion in lieu of the standard
1570	1537		deduction allowed by the In ternal Revenue Code, in an
1571	1538		amount equal to:
1572	1539		(1) Three Thousand Dollars ($3,000.00), if the filing
1573	1540		status is married filing joint, head of household
1574	1541		or qualifying widow; or
1575	1542		(2) Two Thousand Dollars ($2, 000.00), if the filing
1576	1543		status is single or married fili ng separate.
1577	1544		c. For the taxable year beginning on January 1, 2007, and
1578	1545		ending December 31, 2007, in the case of individuals
1579	1546		who use the standard deduction in determining taxable
1580	1547		income, there shall be added or deducted, as the case
1581	1548		may be, the difference n ecessary to allow a standard
1582	1549		deduction in lieu of the standard deduction allowed by
1583	1550		the Internal Revenue Code, in an amount equal to:
1584	1551		(1) Five Thousand Five Hundred Dollars ($5,500.00),
1585	1552		if the filing status is married filing joint or
1586	1553		qualifying widow; or
1587	1554
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1590	1556		2
1591	1557		3
1592	1558		4
1593	1559		5
1594	1560		6
1595	1561		7
1596	1562		8
1597	1563		9
1598	1564		10
1599	1565		11
1600	1566		12
1601	1567		13
1602	1568		14
1603	1569		15
1604	1570		16
1605	1571		17
1606	1572		18
1607	1573		19
1608	1574		20
1609	1575		21
1610	1576		22
1611	1577		23
1612	1578		24
1613	1579
1614	1580		(2) Four Thousand One Hundred Twenty-five Dollars
1615	1581		($4,125.00) for a head of household; or
1616	1582		(3) Two Thousand Seven Hundred Fifty Dollars
1617	1583		($2,750.00), if the filing status is single or
1618	1584		married filing separ ate.
1619	1585		d. For the taxable year beginning on January 1, 20 08, and
1620	1586		ending December 31, 2008, in the case of individuals
1621	1587		who use the standard deduction in de termining taxable
1622	1588		income, there shall be added or deducted, as the case
1623	1589		may be, the difference necessary to allow a standard
1624	1590		deduction in lieu of the standard deduction allowed by
1625	1591		the Internal Revenue Code, in an amount equal to:
1626	1592		(1) Six Thousand Five Hund red Dollars ($6,500.00), if
1627	1593		the filing status is married filing joint or
1628	1594		qualifying widow, or
1629	1595		(2) Four Thousand Eight Hundred Seventy-five Dollars
1630	1596		($4,875.00) for a head of household, or
1631	1597		(3) Three Thousand Two Hundred Fifty Dollars
1632	1598		($3,250.00), if the fili ng status is single or
1633	1599		married filing separate.
1634	1600		e. For the taxable year beginning on January 1, 2009, an d
1635	1601		ending December 31, 2009, in the case of individuals
1636	1602		who use the standard deduction in determining taxable
1637	1603		income, there shall be added or deducted, a s the case
1638	1604
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1641	1606		2
1642	1607		3
1643	1608		4
1644	1609		5
1645	1610		6
1646	1611		7
1647	1612		8
1648	1613		9
1649	1614		10
1650	1615		11
1651	1616		12
1652	1617		13
1653	1618		14
1654	1619		15
1655	1620		16
1656	1621		17
1657	1622		18
1658	1623		19
1659	1624		20
1660	1625		21
1661	1626		22
1662	1627		23
1663	1628		24
1664	1629
1665	1630		may be, the difference necessary to allow a standard
1666	1631		deduction in lieu of the standard deduct ion allowed by
1667	1632		the Internal Revenue Code, in an amount equal to:
1668	1633		(1) Eight Thousand Five Hundred Dollars ($8,500.00),
1669	1634		if the filing status is married fi ling joint or
1670	1635		qualifying widow, or
1671	1636		(2) Six Thousand Three Hundred Seventy -five Dollars
1672	1637		($6,375.00) for a head of household, or
1673	1638		(3) Four Thousand Two Hundred Fi fty Dollars
1674	1639		($4,250.00), if the filing status is single or
1675	1640		married filing separate.
1676	1641		Oklahoma adjusted gross income shall be increased by
1677	1642		any amounts paid for motor vehicle excise taxes which
1678	1643		were deducted as allowed by the Internal Revenue Code.
1679	1644		f. For taxable years beginning on or after January 1,
1680	1645		2010, and ending on December 31, 2016, in the case of
1681	1646		individuals who use the standard deduction in
1682	1647		determining taxable income, there shall be added or
1683	1648		deducted, as the case may be, the difference necessary
1684	1649		to allow a standard deduction equal to the standard
1685	1650		deduction allowed by the Internal Revenue Code, ba sed
1686	1651		upon the amount and filing status prescribed by such
1687	1652		Code for purposes of filing federal individual income
1688	1653		tax returns.
1689	1654
1690		-	SENATE FLOOR VERSION - HB3347 SFLR Page 34
1691		-	(Bold face denotes Committee Amendments) 1
	1655	+	ENGR. H. B. NO. 3347 Page 34 1
1692	1656		2
1693	1657		3
1694	1658		4
1695	1659		5
1696	1660		6
1697	1661		7
1698	1662		8
1699	1663		9
1700	1664		10
1701	1665		11
1702	1666		12
1703	1667		13
1704	1668		14
1705	1669		15
1706	1670		16
1707	1671		17
1708	1672		18
1709	1673		19
1710	1674		20
1711	1675		21
1712	1676		22
1713	1677		23
1714	1678		24
1715	1679
1716	1680		g. For taxable years beginning on o r after January 1,
1717	1681		2017, in the case of individuals who use the standard
1718	1682		deduction in determining taxable income, there shall
1719	1683		be added or deducted, as the case may be, the
1720	1684		difference necessary to allow a standard deduction in
1721	1685		lieu of the standard deduction allowed by the Internal
1722	1686		Revenue Code, as follows:
1723	1687		(1) Six Thousand Three Hundred Fifty Dollars
1724	1688		($6,350.00) for single or married filing
1725	1689		separately,
1726	1690		(2) Twelve Thousand Seven Hundred Dollars
1727	1691		($12,700.00) for married filing jointly or
1728	1692		qualifying widower wit h dependent child, and
1729	1693		(3) Nine Thousand Three Hundred Fifty Dollars
1730	1694		($9,350.00) for head of hous ehold.
1731	1695		3. a. In the case of resident and part -year resident
1732	1696		individuals having adjusted gross income fro m sources
1733	1697		both within and without the state, the itemiz ed or
1734	1698		standard deductions and pers onal exemptions shall be
1735	1699		reduced to an amount which is the same portion of the
1736	1700		total thereof as Oklahoma adjusted gross income is of
1737	1701		adjusted gross income . To the extent itemized
1738	1702		deductions include allowable moving expens e, proration
1739	1703		of moving expense sha ll not be required or permitted
1740	1704
1741		-	SENATE FLOOR VERSION - HB3347 SFLR Page 35
1742		-	(Bold face denotes Committee Amendments) 1
	1705	+	ENGR. H. B. NO. 3347 Page 35 1
1743	1706		2
1744	1707		3
1745	1708		4
1746	1709		5
1747	1710		6
1748	1711		7
1749	1712		8
1750	1713		9
1751	1714		10
1752	1715		11
1753	1716		12
1754	1717		13
1755	1718		14
1756	1719		15
1757	1720		16
1758	1721		17
1759	1722		18
1760	1723		19
1761	1724		20
1762	1725		21
1763	1726		22
1764	1727		23
1765	1728		24
1766	1729
1767	1730		but allowable moving expense sh all be fully deductible
1768	1731		for those taxpayers moving within or into Oklahoma and
1769	1732		no part of moving expense shall be deductible for
1770	1733		those taxpayers moving without or out of Oklahoma.
1771	1734		All other itemized or standard deductions and personal
1772	1735		exemptions shall be subject to proration as provided
1773	1736		by law.
1774	1737		b. For taxable years beginning on or after January 1,
1775	1738		2018, the net amount of itemized deductions allowable
1776	1739		on an Oklahoma income tax return, subject to the
1777	1740		provisions of paragraph 24 of this subsection, shall
1778	1741		not exceed Seventeen Thousand Dollars ($17,000.00) .
1779	1742		For purposes of this subparagraph, charitable
1780	1743		contributions and medical expenses deductible for
1781	1744		federal income tax purposes shall be excluded fro m the
1782	1745		amount of Seventeen Thousand Dollars ($17,000.00) as
1783	1746		specified by this subparagraph.
1784	1747		4. A resident individual with a physical disability
1785	1748		constituting a substant ial handicap to employment may deduct from
1786	1749		Oklahoma adjusted gross income such expenditur es to modify a motor
1787	1750		vehicle, home or workplace as are necessar y to compensate for his or
1788	1751		her handicap. A veteran certified by the Department of Veterans
1789	1752		Affairs of the federal government as having a service-connected
1790	1753		disability shall be conclusively pres umed to be an individual with a
1791	1754
1792		-	SENATE FLOOR VERSION - HB3347 SFLR Page 36
1793		-	(Bold face denotes Committee Amendments) 1
	1755	+	ENGR. H. B. NO. 3347 Page 36 1
1794	1756		2
1795	1757		3
1796	1758		4
1797	1759		5
1798	1760		6
1799	1761		7
1800	1762		8
1801	1763		9
1802	1764		10
1803	1765		11
1804	1766		12
1805	1767		13
1806	1768		14
1807	1769		15
1808	1770		16
1809	1771		17
1810	1772		18
1811	1773		19
1812	1774		20
1813	1775		21
1814	1776		22
1815	1777		23
1816	1778		24
1817	1779
1818	1780		physical disability constitutin g a substantial handicap to
1819	1781		employment. The Tax Commission shall promulgate rules containing a
1820	1782		list of combinations of common disabilities and modifications w hich
1821	1783		may be presumed to qualify fo r this deduction. The Tax Commission
1822	1784		shall prescribe necessary requirements for verification.
1823	1785		5. a. Before July 1, 2010, the first One Thousand Five
1824	1786		Hundred Dollars ($1,500.00) received by any person
1825	1787		from the United State s as salary or compensation in
1826	1788		any form, other than retirement benefits, as a member
1827	1789		of any component of the Armed Forces of the United
1828	1790		States shall be deducted from taxable income.
1829	1791		b. On or after July 1, 2010, one hundred percent (100%)
1830	1792		of the income received by any person from the United
1831	1793		States as salary or compensation in any form, other
1832	1794		than retirement benefits, as a member of any component
1833	1795		of the Armed Forces of the United States shall be
1834	1796		deducted from taxable income.
1835	1797		c. Whenever the filing of a timely income tax return by a
1836	1798		member of the Armed Forces of the United States is
1837	1799		made impracticable or impossible of accomplishment by
1838	1800		reason of:
1839	1801		(1) absence from the United States, which term
1840	1802		includes only the states and the District of
1841	1803		Columbia;
1842	1804
1843		-	SENATE FLOOR VERSION - HB3347 SFLR Page 37
1844		-	(Bold face denotes Committee Amendments) 1
	1805	+	ENGR. H. B. NO. 3347 Page 37 1
1845	1806		2
1846	1807		3
1847	1808		4
1848	1809		5
1849	1810		6
1850	1811		7
1851	1812		8
1852	1813		9
1853	1814		10
1854	1815		11
1855	1816		12
1856	1817		13
1857	1818		14
1858	1819		15
1859	1820		16
1860	1821		17
1861	1822		18
1862	1823		19
1863	1824		20
1864	1825		21
1865	1826		22
1866	1827		23
1867	1828		24
1868	1829
1869	1830		(2) absence from the State of Oklahoma while on
1870	1831		active duty; or
1871	1832		(3) confinement in a hospital within the United
1872	1833		States for treatment of wounds, injuries or
1873	1834		disease,
1874	1835		the time for filing a return and paying an income tax
1875	1836		shall be and is hereby extended without incurring
1876	1837		liability for interest or penalties , to the fifteenth
1877	1838		day of the third month following the month i n which:
1878	1839		(a) Such individual shall return to the United
1879	1840		States if the extension is granted pursuant
1880	1841		to subparagraph a of this paragraph, return
1881	1842		to the State of Oklahoma if the extension is
1882	1843		granted pursuant to subparagraph b of this
1883	1844		paragraph or be discharg ed from such
1884	1845		hospital if the extension is granted
1885	1846		pursuant to subparagraph c of this
1886	1847		paragraph; or
1887	1848		(b) An executor, administrator, or conservator
1888	1849		of the estate of the taxpayer is appointed,
1889	1850		whichever event occurs the earliest.
1890	1851		Provided, that the Tax Commis sion may, in its discretion, grant
1891	1852		any member of the Armed Forces of the United States an extension of
1892	1853		time for filing of income tax returns and payment of i ncome tax
1893	1854
1894		-	SENATE FLOOR VERSION - HB3347 SFLR Page 38
1895		-	(Bold face denotes Committee Amendments) 1
	1855	+	ENGR. H. B. NO. 3347 Page 38 1
1896	1856		2
1897	1857		3
1898	1858		4
1899	1859		5
1900	1860		6
1901	1861		7
1902	1862		8
1903	1863		9
1904	1864		10
1905	1865		11
1906	1866		12
1907	1867		13
1908	1868		14
1909	1869		15
1910	1870		16
1911	1871		17
1912	1872		18
1913	1873		19
1914	1874		20
1915	1875		21
1916	1876		22
1917	1877		23
1918	1878		24
1919	1879
1920	1880		without incurring liabilit ies for interest or penalties . Such
1921	1881		extension may be granted o nly when in the judgment of the Tax
1922	1882		Commission a good cause exists therefor and may be for a period in
1923	1883		excess of six (6) months. A record of every such exte nsion granted,
1924	1884		and the reason theref or, shall be kept.
1925	1885		6. Before July 1, 2010, the salary or any o ther form of
1926	1886		compensation, received from the United States by a member of any
1927	1887		component of the Armed For ces of the United States, shall be
1928	1888		deducted from taxable income during the time in which the person is
1929	1889		detained by the enemy in a conflict, is a prisone r of war or is
1930	1890		missing in action and not deceased; provided, after July 1, 2010,
1931	1891		all such salary or comp ensation shall be subject to the deduction as
1932	1892		provided pursuant to paragraph 5 of this su bsection.
1933	1893		7. a. An individual taxpayer, whether resident or
1934	1894		nonresident, may deduct an amount equal to the federal
1935	1895		income taxes paid by the taxpayer during the taxable
1936	1896		year.
1937	1897		b. Federal taxes as described in subparagra ph a of this
1938	1898		paragraph shall be deducti ble by any individual
1939	1899		taxpayer, whether resident or nonresident , only to the
1940	1900		extent they relate to income subject to taxation
1941	1901		pursuant to the provisions of the Oklahom a Income Tax
1942	1902		Act. The maximum amount allowable in the preceding
1943	1903		paragraph shall be prora ted on the ratio of the
1944	1904
1945		-	SENATE FLOOR VERSION - HB3347 SFLR Page 39
1946		-	(Bold face denotes Committee Amendments) 1
	1905	+	ENGR. H. B. NO. 3347 Page 39 1
1947	1906		2
1948	1907		3
1949	1908		4
1950	1909		5
1951	1910		6
1952	1911		7
1953	1912		8
1954	1913		9
1955	1914		10
1956	1915		11
1957	1916		12
1958	1917		13
1959	1918		14
1960	1919		15
1961	1920		16
1962	1921		17
1963	1922		18
1964	1923		19
1965	1924		20
1966	1925		21
1967	1926		22
1968	1927		23
1969	1928		24
1970	1929
1971	1930		Oklahoma adjusted gross income to feder al adjusted
1972	1931		gross income.
1973	1932		c. For the purpose of this paragraph, "federal income
1974	1933		taxes paid" shall mean federal income taxes, surtaxes
1975	1934		imposed on incomes or excess profits taxes, as though
1976	1935		the taxpayer was on the accrual basis . In determining
1977	1936		the amount of deduction for federal income taxes for
1978	1937		tax year 2001, the amount of the deduction shall not
1979	1938		be adjusted by the amount of any accelerated ten
1980	1939		percent (10%) tax rate bracket credit or advanced
1981	1940		refund of the credit received during the tax year
1982	1941		provided pursuant to the federal Economic Growth and
1983	1942		Tax Relief Reconciliation Act of 2001, P.L. No. 107 -
1984	1943		16, and the advanced refund of such credit shall not
1985	1944		be subject to taxation.
1986	1945		d. The provisions of this paragraph shall apply to all
1987	1946		taxable years ending after Decemb er 31, 1978, and
1988	1947		beginning before January 1, 2006.
1989	1948		8. Retirement benefits not to exceed Five Thousand F ive Hundred
1990	1949		Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five
1991	1950		Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Thousand
1992	1951		Dollars ($10,000.00) for the 2006 tax year and all subsequent tax
1993	1952		years, which are received by an individual from the civil service of
1994	1953		the United States, the Oklahoma Public Employees Retirement System,
1995	1954
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1997		-	(Bold face denotes Committee Amendments) 1
	1955	+	ENGR. H. B. NO. 3347 Page 40 1
1998	1956		2
1999	1957		3
2000	1958		4
2001	1959		5
2002	1960		6
2003	1961		7
2004	1962		8
2005	1963		9
2006	1964		10
2007	1965		11
2008	1966		12
2009	1967		13
2010	1968		14
2011	1969		15
2012	1970		16
2013	1971		17
2014	1972		18
2015	1973		19
2016	1974		20
2017	1975		21
2018	1976		22
2019	1977		23
2020	1978		24
2021	1979
2022	1980		the Teachers' Retirement System of Oklahoma, the Oklahoma Law
2023	1981		Enforcement Retirement System, the Oklahoma Firefighters Pension and
2024	1982		Retirement System, the Oklahoma Poli ce Pension and Retirement
2025	1983		System, the employee retirement systems created by counties pur suant
2026	1984		to Section 951 et seq. of Title 19 of the Oklahoma Statut es, the
2027	1985		Uniform Retirement System for Justices and Judges, the Oklahoma
2028	1986		Wildlife Conservation Department Retirement Fund, the Oklahoma
2029	1987		Employment Security Commission Retirement Plan, or the emp loyee
2030	1988		retirement systems created by municipalities pursuant to Section 48-
2031	1989		101 et seq. of Title 11 of the Oklahoma Statutes shall be exempt
2032	1990		from taxable income.
2033	1991		9. In taxable years beginning after December 3l, 1984, Social
2034	1992		Security benefits received by an individual shall be exempt from
2035	1993		taxable income, to the extent s uch benefits are included in the
2036	1994		federal adjusted gross income pursuant to the provisions of Section
2037	1995		86 of the Internal Revenue Code, 26 U.S.C., Section 86.
2038	1996		10. For taxable years beginning aft er December 31, 1994, lump-
2039	1997		sum distributions from employer plan s of deferred compensation,
2040	1998		which are not qualified plans within the meaning of Section 401(a)
2041	1999		of the Internal Revenue Code, 26 U.S.C., Section 401(a), and which
2042	2000		are deposited in and accounted for within a separate bank account or
2043	2001		brokerage account in a fi nancial institution within this state,
2044	2002		shall be excluded from taxable income in the same manner as a
2045	2003		qualifying rollover contribution to an individual retirement account
2046	2004
2047		-	SENATE FLOOR VERSION - HB3347 SFLR Page 41
2048		-	(Bold face denotes Committee Amendments) 1
	2005	+	ENGR. H. B. NO. 3347 Page 41 1
2049	2006		2
2050	2007		3
2051	2008		4
2052	2009		5
2053	2010		6
2054	2011		7
2055	2012		8
2056	2013		9
2057	2014		10
2058	2015		11
2059	2016		12
2060	2017		13
2061	2018		14
2062	2019		15
2063	2020		16
2064	2021		17
2065	2022		18
2066	2023		19
2067	2024		20
2068	2025		21
2069	2026		22
2070	2027		23
2071	2028		24
2072	2029
2073	2030		within the meaning of S ection 408 of the Internal Revenue Code, 26
2074	2031		U.S.C., Section 408. Amounts withdrawn from such bank or brokerage
2075	2032		account, including any earnings thereon, shall be inclu ded in
2076	2033		taxable income when withdrawn in the same manner as withdrawals from
2077	2034		individual retirement accounts within the meaning of Section 408 of
2078	2035		the Internal Revenue Code.
2079	2036		11. In taxable years beginning after December 31, 1995,
2080	2037		contributions made to and in terest received from a medical savings
2081	2038		account established pursuant to Sections 2621 thro ugh 2623 of Title
2082	2039		63 of the Oklahoma Statutes shall be exempt f rom taxable income.
2083	2040		12. For taxable years beginning after December 31, 1996, the
2084	2041		Oklahoma adjusted gros s income of any individual taxpayer who is a
2085	2042		swine or poultry producer may be further adj usted for the deduction
2086	2043		for depreciation allowed for new constr uction or expansion costs
2087	2044		which may be computed using the same depreciation method elected for
2088	2045		federal income tax purposes except that the useful life shall be
2089	2046		seven (7) years for purposes of t his paragraph. If depreciation is
2090	2047		allowed as a deduction in de termining the adjusted gross income of
2091	2048		an individual, any depreciation calculated and claimed pursuant t o
2092	2049		this section shall in no event be a duplication of any depreciation
2093	2050		allowed or permitted on the federal income tax return of the
2094	2051		individual.
2095	2052
2096		-	SENATE FLOOR VERSION - HB3347 SFLR Page 42
2097		-	(Bold face denotes Committee Amendments) 1
	2053	+	ENGR. H. B. NO. 3347 Page 42 1
2098	2054		2
2099	2055		3
2100	2056		4
2101	2057		5
2102	2058		6
2103	2059		7
2104	2060		8
2105	2061		9
2106	2062		10
2107	2063		11
2108	2064		12
2109	2065		13
2110	2066		14
2111	2067		15
2112	2068		16
2113	2069		17
2114	2070		18
2115	2071		19
2116	2072		20
2117	2073		21
2118	2074		22
2119	2075		23
2120	2076		24
2121	2077
2122	2078		13. a. In taxable years beginning after December 31, 2002,
2123	2079		nonrecurring adoption expenses paid by a resident
2124	2080		individual taxpayer in connection with:
2125	2081		(1) the adoption of a minor, or
2126	2082		(2) a proposed adoption of a minor which did not
2127	2083		result in a decreed adoption,
2128	2084		may be deducted from the Oklahoma adjusted gross
2129	2085		income.
2130	2086		b. The deductions for adoptions and proposed adoptio ns
2131	2087		authorized by this paragraph shall not exceed Twenty
2132	2088		Thousand Dollars ($20,000.00) per calendar year.
2133	2089		c. The Tax Commission shall promulgate rules to implement
2134	2090		the provisions of this paragraph which shall contain a
2135	2091		specific list of nonrecurring adoption expenses which
2136	2092		may be presumed to qualify for the deduction. The Tax
2137	2093		Commission shall prescribe necessary requirements for
2138	2094		verification.
2139	2095		d. "Nonrecurring adoption expenses " means adoption fees,
2140	2096		court costs, medical expenses, attorney fees and
2141	2097		expenses which are directly related to the legal
2142	2098		process of adoption of a child including, but not
2143	2099		limited to, costs relating to the adoption study,
2144	2100		health and psychological examinations, transportation
2145	2101		and reasonable costs of lodging and food for the child
2146	2102
2147		-	SENATE FLOOR VERSION - HB3347 SFLR Page 43
2148		-	(Bold face denotes Committee Amendments) 1
	2103	+	ENGR. H. B. NO. 3347 Page 43 1
2149	2104		2
2150	2105		3
2151	2106		4
2152	2107		5
2153	2108		6
2154	2109		7
2155	2110		8
2156	2111		9
2157	2112		10
2158	2113		11
2159	2114		12
2160	2115		13
2161	2116		14
2162	2117		15
2163	2118		16
2164	2119		17
2165	2120		18
2166	2121		19
2167	2122		20
2168	2123		21
2169	2124		22
2170	2125		23
2171	2126		24
2172	2127
2173	2128		or adoptive parents which are incurred to complete the
2174	2129		adoption process and are not reimbursed by other
2175	2130		sources. The term "nonrecurring adoption expenses "
2176	2131		shall not include attorney fees incurred for the
2177	2132		purpose of litigating a contested adoption, from and
2178	2133		after the point of the initiation of the contest,
2179	2134		costs associated with physical remodeling, ren ovation
2180	2135		and alteration of the adoptive parents ' home or
2181	2136		property, except for a special needs child as
2182	2137		authorized by the court.
2183	2138		14. a. In taxable years beginning before January 1, 2005,
2184	2139		retirement benefits not to exceed the amounts
2185	2140		specified in this paragra ph, which are received by an
2186	2141		individual sixty-five (65) years of age or older and
2187	2142		whose Oklahoma adjusted gross income is Twenty -five
2188	2143		Thousand Dollars ($25,000.00) or less if the filing
2189	2144		status is single, head of household, or married filing
2190	2145		separate, or Fifty Thousand Dollars ($50,000.00) or
2191	2146		less if the filing status is married filing joint or
2192	2147		qualifying widow, shall be exempt from taxable income .
2193	2148		In taxable years begi nning after December 31, 2004,
2194	2149		retirement benefits not to exceed the amounts
2195	2150		specified in this paragraph, which are received by an
2196	2151		individual whose Okla homa adjusted gross income is
2197	2152
2198		-	SENATE FLOOR VERSION - HB3347 SFLR Page 44
2199		-	(Bold face denotes Committee Amendments) 1
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2200	2154		2
2201	2155		3
2202	2156		4
2203	2157		5
2204	2158		6
2205	2159		7
2206	2160		8
2207	2161		9
2208	2162		10
2209	2163		11
2210	2164		12
2211	2165		13
2212	2166		14
2213	2167		15
2214	2168		16
2215	2169		17
2216	2170		18
2217	2171		19
2218	2172		20
2219	2173		21
2220	2174		22
2221	2175		23
2222	2176		24
2223	2177
2224	2178		less than the qualifying amount specified in this
2225	2179		paragraph, shall be exem pt from taxable income.
2226	2180		b. For purposes of this paragra ph, the qualifying amount
2227	2181		shall be as follows:
2228	2182		(1) in taxable years beginning after December 31,
2229	2183		2004, and prior to January 1, 2007, the
2230	2184		qualifying amount shall be Thirty -seven Thousand
2231	2185		Five Hundred Dollars ($37,500.00) or less if the
2232	2186		filing status is sing le, head of household, or
2233	2187		married filing separate, or Seventy-five Thousand
2234	2188		Dollars ($75,000.00) or less if the filing status
2235	2189		is married filing jointly or qualifying widow,
2236	2190		(2) in the taxable year begi nning January 1, 2007,
2237	2191		the qualifying amount shall be F ifty Thousand
2238	2192		Dollars ($50,000.00) or less if the filing status
2239	2193		is single, head of household, or married filing
2240	2194		separate, or One Hundred Thousand Dollars
2241	2195		($100,000.00) or less if the filing status is
2242	2196		married filing jointly or qualifying widow,
2243	2197		(3) in the taxable year beginning January 1, 2 008,
2244	2198		the qualifying amount shall be Sixty -two Thousand
2245	2199		Five Hundred Dollars ($62,500.00) or less if the
2246	2200		filing status is single, head of household, or
2247	2201		married filing separate, or One Hundred Twenty-
2248	2202
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2274	2227
2275	2228		five Thousand Dollars ($ 125,000.00) or less if
2276	2229		the filing status is married filing jointly or
2277	2230		qualifying widow,
2278	2231		(4) in the taxable year beginning January 1, 2009,
2279	2232		the qualifying amount shall be One Hundred
2280	2233		Thousand Dollars ($100,000.00) or less if the
2281	2234		filing status is single, hea d of household, or
2282	2235		married filing separate, or Two Hundred Thousand
2283	2236		Dollars ($200,000.00) or less if the filing
2284	2237		status is married filing jointly or qualifying
2285	2238		widow, and
2286	2239		(5) in the taxable year beginni ng January 1, 2010,
2287	2240		and subsequent taxable years, there shall be no
2288	2241		limitation upon the q ualifying amount.
2289	2242		c. For purposes of this paragraph, "retirement benefits"
2290	2243		means the total distributions or withdrawals from the
2291	2244		following:
2292	2245		(1) an employee pension ben efit plan which satisfies
2293	2246		the requirements of Section 4 01 of the Internal
2294	2247		Revenue Code, 26 U.S.C., Section 401,
2295	2248		(2) an eligible deferred compensation pl an that
2296	2249		satisfies the requirements of Section 457 of the
2297	2250		Internal Revenue Code, 26 U.S.C., Section 457,
2298	2251
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2324	2276
2325	2277		(3) an individual retirement account, annuity or
2326	2278		trust or simplified employee pension tha t
2327	2279		satisfies the requirements of Section 408 of the
2328	2280		Internal Revenue Code, 26 U.S.C., Section 408,
2329	2281		(4) an employee annuity subject to the provisions of
2330	2282		Section 403(a) or (b) of the Internal Revenue
2331	2283		Code, 26 U.S.C., Section 403(a) or (b),
2332	2284		(5) United States Retirement Bonds which satisfy the
2333	2285		requirements of Section 86 of the Internal
2334	2286		Revenue Code, 26 U.S.C., Section 86, or
2335	2287		(6) lump-sum distributions from a retirement plan
2336	2288		which satisfies the requirements of Section
2337	2289		402(e) of the Internal Revenue Code, 26 U.S.C .,
2338	2290		Section 402(e).
2339	2291		d. The amount of the exemption provided by t his paragraph
2340	2292		shall be limited to Five Thousand Five Hundred Dollars
2341	2293		($5,500.00) for the 2004 tax year, Seven Thousand Five
2342	2294		Hundred Dollars ($7,500.00) for the 2005 tax year and
2343	2295		Ten Thousand Dollars ($10,000.00) for the tax year
2344	2296		2006 and for all subsequent tax years. Any individual
2345	2297		who claims the exemption provided for in paragraph 8
2346	2298		of this subsection shal l not be permitted to claim a
2347	2299		combined total exemption pursuant to this paragraph
2348	2300		and paragraph 8 of this subsection in an amount
2349	2301
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2372	2323		22
2373	2324		23
2374	2325		24
2375	2326
2376	2327		exceeding Five Thousan d Five Hundred Dollars
2377	2328		($5,500.00) for the 2004 tax year, Seven Thousand Five
2378	2329		Hundred Dollars ($7,500.00 ) for the 2005 tax year and
2379	2330		Ten Thousand Dollars ($10,0 00.00) for the 2006 tax
2380	2331		year and all subsequent tax years.
2381	2332		15. In taxable years beginning after December 31, 1999, for an
2382	2333		individual engaged in production agriculture who has filed a
2383	2334		Schedule F form with the taxpayer's federal income tax return for
2384	2335		such taxable year, there shall be exclud ed from taxable income any
2385	2336		amount which was included as federal taxable income or federal
2386	2337		adjusted gross income and which consists of the discharge of an
2387	2338		obligation by a creditor of the taxpayer incurred to finance the
2388	2339		production of agricultural products.
2389	2340		16. In taxable years beginning December 31, 2000, an amount
2390	2341		equal to one hundred percent (100%) of the amount of any scholarship
2391	2342		or stipend received from participatio n in the Oklahoma Police Corps
2392	2343		Program, as established in Section 2-140.3 of Title 47 of the
2393	2344		Oklahoma Statutes shall be exempt from taxable income.
2394	2345		17. a. In taxable years beginning after December 31, 2001,
2395	2346		and before January 1, 2005, there shall be allowe d a
2396	2347		deduction in the amount of contributions to account s
2397	2348		established pursuant to the Okla homa College Savings
2398	2349		Plan Act. The deduction shall equal the a mount of
2399	2350		contributions to accounts, but in no event shall the
2400	2351
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2425	2375		24
2426	2376
2427	2377		deduction for each contributor exceed Two Thousand
2428	2378		Five Hundred Dollars ($2,500.00) each taxable year for
2429	2379		each account.
2430	2380		b. In taxable years beginning after December 31, 2004,
2431	2381		each taxpayer shall be allowed a deduction for
2432	2382		contributions to accounts established pursuant to the
2433	2383		Oklahoma College Savin gs Plan Act. The maximum annual
2434	2384		deduction shall equal the amount of contributions to
2435	2385		all such accounts plus any contributions to such
2436	2386		accounts by the taxpayer for prior taxable years after
2437	2387		December 31, 2004, which were not deducted, but in no
2438	2388		event shall the deduction for each tax year exceed Ten
2439	2389		Thousand Dollars ($10,000.00) for each individ ual
2440	2390		taxpayer or Twenty Thousand Dollars ($20,000.00) for
2441	2391		taxpayers filing a joint return . Any amount of a
2442	2392		contribution that is not deducted by the taxpayer in
2443	2393		the year for which the contribution is made may be
2444	2394		carried forward as a deduction from income fo r the
2445	2395		succeeding five (5) years . For taxable years
2446	2396		beginning after December 31, 2005, deductions may be
2447	2397		taken for contributions and rollovers made during a
2448	2398		taxable year and up to April 15 of the succeeding
2449	2399		year, or the due date of a taxpayer's state income tax
2450	2400		return, excluding extensions, whichever is later .
2451	2401
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2477	2426
2478	2427		Provided, a deduction for the same contribution may
2479	2428		not be taken for two (2) different taxable years.
2480	2429		c. In taxable years beginning after December 31, 2006,
2481	2430		deductions for contributions made pursuant to
2482	2431		subparagraph b of this paragraph shall be limited as
2483	2432		follows:
2484	2433		(1) for a taxpayer who qualified for the five -year
2485	2434		carryforward election and who takes a rollover or
2486	2435		nonqualified withdrawal during that period, the
2487	2436		tax deduction otherwise available pursuan t to
2488	2437		subparagraph b of this paragraph shall be reduced
2489	2438		by the amount which is equal to the rollover or
2490	2439		nonqualified withdrawal, and
2491	2440		(2) for a taxpayer who elects to ta ke a rollover or
2492	2441		nonqualified withdrawal within the sam e tax year
2493	2442		in which a contribution was made to the
2494	2443		taxpayer's account, the tax deduction otherwis e
2495	2444		available pursuant to subparagraph b of this
2496	2445		paragraph shall be reduced by the amount of the
2497	2446		contribution which is equal to the rollover or
2498	2447		nonqualified withdrawal.
2499	2448		d. If a taxpayer elects to take a rollover on a
2500	2449		contribution for which a deduction has be en taken
2501	2450		pursuant to subparagraph b of this paragraph within
2502	2451
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2528	2476
2529	2477		one (1) year of the date of contribution, t he amount
2530	2478		of such rollover shall be included in the adj usted
2531	2479		gross income of the taxpayer in the taxable year of
2532	2480		the rollover.
2533	2481		e. If a taxpayer makes a nonqualified withdrawal of
2534	2482		contributions for which a deduction was taken pursuant
2535	2483		to subparagraph b of t his paragraph, such nonqualified
2536	2484		withdrawal and any ear nings thereon shall be included
2537	2485		in the adjusted gross income of the taxpayer in the
2538	2486		taxable year of the nonqualified withdrawal.
2539	2487		f. As used in this paragraph:
2540	2488		(1) "non-qualified withdrawal " means a withdrawal
2541	2489		from an Oklahoma College Savings Plan account
2542	2490		other than one of the following:
2543	2491		(a) a qualified withdrawal,
2544	2492		(b) a withdrawal made as a result of the death
2545	2493		or disability of the designated beneficiary
2546	2494		of an account,
2547	2495		(c) a withdrawal that is made on th e account of
2548	2496		a scholarship or the allowance or payment
2549	2497		described in Section 135(d)(1)(B) or (C) or
2550	2498		by the Internal Revenue Code, received by
2551	2499		the designated beneficiary to the extent the
2552	2500		amount of the refund does not exceed the
2553	2501
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2579	2526
2580	2527		amount of the scholarship, al lowance, or
2581	2528		payment, or
2582	2529		(d) a rollover or change of des ignated
2583	2530		beneficiary as permitted b y subsection F of
2584	2531		Section 3970.7 of Title 70 of Oklahoma
2585	2532		Statutes, and
2586	2533		(2) "rollover" means the transfer of funds from the
2587	2534		Oklahoma College Savings Plan to any other p lan
2588	2535		under Section 529 of the Internal Revenue Code.
2589	2536		18. For taxable years beginning afte r December 31, 2005,
2590	2537		retirement benefits received by an individ ual from any component of
2591	2538		the Armed Forces of the United States in an amount not to exceed the
2592	2539		greater of seventy-five percent (75%) of such benefits or Ten
2593	2540		Thousand Dollars ($10,000.00) shall be exempt from taxable income
2594	2541		but in no case less than the amou nt of the exemption provided by
2595	2542		paragraph 14 of this subsection.
2596	2543		19. For taxable years beginning after December 31, 2006,
2597	2544		retirement benefits received by fede ral civil service retirees,
2598	2545		including survivor annuities, paid in lieu of Social Security
2599	2546		benefits shall be exempt from taxable income to the extent such
2600	2547		benefits are included in the federal adjusted g ross income pursuant
2601	2548		to the provisions of Section 86 of the Internal Revenue Code, 26
2602	2549		U.S.C., Section 86, according to the following schedule:
2603	2550
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2627	2573		23
2628	2574		24
2629	2575
2630	2576		a. in the taxable year beginning January 1, 2007, twenty
2631	2577		percent (20%) of such benefits shall be exempt,
2632	2578		b. in the taxable year beginning January 1, 2008, forty
2633	2579		percent (40%) of such benefits shall be e xempt,
2634	2580		c. in the taxable year beginning January 1, 2009, sixty
2635	2581		percent (60%) of such benefits shall be exempt,
2636	2582		d. in the taxable year beginning January 1, 2010, eight y
2637	2583		percent (80%) of such benefits shall be exempt, and
2638	2584		e. in the taxable year beginning Jan uary 1, 2011, and
2639	2585		subsequent taxable years, one hundred percent (100%)
2640	2586		of such benefits shall be exempt.
2641	2587		20. a. For taxable years beginning after December 31, 2007, a
2642	2588		resident individual may deduct up to Ten Thousand
2643	2589		Dollars ($10,000.00) from Oklahoma adju sted gross
2644	2590		income if the individual, or the dependent of the
2645	2591		individual, while living, donates one or more human
2646	2592		organs of the individual to another human being for
2647	2593		human organ transplantation. As used in this
2648	2594		paragraph, "human organ" means all or part of a liver,
2649	2595		pancreas, kidney, intestine, lung, or bone marrow . A
2650	2596		deduction that is claimed under this paragraph may be
2651	2597		claimed in the taxable year in which the human organ
2652	2598		transplantation occurs.
2653	2599
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2667	2612		13
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2669	2614		15
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2671	2616		17
2672	2617		18
2673	2618		19
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2676	2621		22
2677	2622		23
2678	2623		24
2679	2624
2680	2625		b. An individual may claim this deduction only once, and
2681	2626		the deduction may be claimed only for unreimbursed
2682	2627		expenses that are incurred by the individual and
2683	2628		related to the organ donation of the individual.
2684	2629		c. The Oklahoma Tax Commission shall promulgate rules to
2685	2630		implement the provis ions of this paragraph which shall
2686	2631		contain a specific list of expenses which may be
2687	2632		presumed to qualify for the deduction . The Tax
2688	2633		Commission shall prescribe necessary requirements for
2689	2634		verification.
2690	2635		21. For taxable years beginning after December 31, 2009 , there
2691	2636		shall be exempt from taxab le income any amount received by the
2692	2637		beneficiary of the death b enefit for an emergency medical technician
2693	2638		or a registered emergency medical responder provided by Section 1-
2694	2639		2505.1 of Title 63 of the Oklahoma Statutes.
2695	2640		22. For taxable years beginning after December 31, 2008,
2696	2641		taxable income shall be increased by any une mployment compensation
2697	2642		exempted under Section 85(c) of the Internal Revenue Code, 26
2698	2643		U.S.C., Section 85(c)(2009).
2699	2644		23. For taxable years beginning after Decemb er 31, 2008, there
2700	2645		shall be exempt from taxable income any payment in an amount less
2701	2646		than Six Hundred Dollars ($600.00) received by a person as an award
2702	2647		for participation in a competitive lives tock show event. For
2703	2648		purposes of this paragraph, the payment s hall be treated as a
2704	2649
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2724	2668		19
2725	2669		20
2726	2670		21
2727	2671		22
2728	2672		23
2729	2673		24
2730	2674
2731	2675		scholarship amount paid by the entity sponsoring the event and the
2732	2676		sponsoring entity shall cause the payment to be categorized as a
2733	2677		scholarship in its books and records.
2734	2678		24. For taxable years beginning on or after January 1, 2016,
2735	2679		taxable income shall be increased by any amount of state and local
2736	2680		sales or income taxes deducted un der 26 U.S.C., Section 164 of the
2737	2681		Internal Revenue Code . If the amount of state and local taxe s
2738	2682		deducted on the federal return is limited, taxable income on t he
2739	2683		state return shall be increased only by the amount actually deducted
2740	2684		after any such limitation s are applied.
2741	2685		25. For taxable years beginning after December 31, 2020, each
2742	2686		taxpayer shall be allowed a deduction for contributions to accounts
2743	2687		established pursuant to the Achieving a Better Life Experience
2744	2688		(ABLE) Program as established in Section 4001.1 et seq. of Title 56
2745	2689		of the Oklahoma Statutes . For any tax year, the deduction provided
2746	2690		for in this paragraph shall not exceed Ten Thousand Dollars
2747	2691		($10,000.00) for an individual taxpayer or T wenty Thousand Dollars
2748	2692		($20,000.00) for taxpayers filing a join t return. Any amount of
2749	2693		contribution not deducted by the taxpayer in the tax year for which
2750	2694		the contribution is made may be carried forward as a deduction fro m
2751	2695		income for up to five (5) tax ye ars. Deductions may be taken for
2752	2696		contributions made during the tax year and through April 15 of the
2753	2697		succeeding tax year, or through the due date of a taxpay er's state
2754	2698		income tax return excluding extensions, whichever is l ater.
2755	2699
2756		-	SENATE FLOOR VERSION - HB3347 SFLR Page 55
2757		-	(Bold face denotes Committee Amendments) 1
	2700	+	ENGR. H. B. NO. 3347 Page 55 1
2758	2701		2
2759	2702		3
2760	2703		4
2761	2704		5
2762	2705		6
2763	2706		7
2764	2707		8
2765	2708		9
2766	2709		10
2767	2710		11
2768	2711		12
2769	2712		13
2770	2713		14
2771	2714		15
2772	2715		16
2773	2716		17
2774	2717		18
2775	2718		19
2776	2719		20
2777	2720		21
2778	2721		22
2779	2722		23
2780	2723		24
2781	2724
2782	2725		Provided, a deduction for th e same contribution may not be taken in
2783	2726		more than one (1) tax y ear.
2784	2727		F. 1. For taxable years beginning after December 31, 2004, a
2785	2728		deduction from the Oklahoma adjusted gross inco me of any individual
2786	2729		taxpayer shall be allow ed for qualifying gains receiving capital
2787	2730		treatment that are inclu ded in the federal ad justed gross income of
2788	2731		such individual taxpayer during the taxable year.
2789	2732		2. As used in this subsection:
2790	2733		a. "qualifying gains receiving capital treatment" means
2791	2734		the amount of net capital gains, as defined in Sec tion
2792	2735		1222(11) of the Internal Revenue Code, i ncluded in an
2793	2736		individual taxpayer's federal income tax return that
2794	2737		result from:
2795	2738		(1) the sale of real property or tangible per sonal
2796	2739		property located within Oklahoma that has been
2797	2740		directly or indirectly owned by t he individual
2798	2741		taxpayer for a holding period o f at least five
2799	2742		(5) years prior to the date of the transaction
2800	2743		from which such net capital gains arise,
2801	2744		(2) the sale of stock or the sale of a direct or
2802	2745		indirect ownership interest in an Oklahoma
2803	2746		company, limited liability company, or
2804	2747		partnership where suc h stock or ownership
2805	2748		interest has been directly or indirectly owned by
2806	2749
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2808		-	(Bold face denotes Committee Amendments) 1
	2750	+	ENGR. H. B. NO. 3347 Page 56 1
2809	2751		2
2810	2752		3
2811	2753		4
2812	2754		5
2813	2755		6
2814	2756		7
2815	2757		8
2816	2758		9
2817	2759		10
2818	2760		11
2819	2761		12
2820	2762		13
2821	2763		14
2822	2764		15
2823	2765		16
2824	2766		17
2825	2767		18
2826	2768		19
2827	2769		20
2828	2770		21
2829	2771		22
2830	2772		23
2831	2773		24
2832	2774
2833	2775		the individual taxpa yer for a holding period of
2834	2776		at least two (2) years prior to the date of the
2835	2777		transaction from which the net capital gains
2836	2778		arise, or
2837	2779		(3) the sale of real property, tan gible personal
2838	2780		property or intangible personal property located
2839	2781		within Oklahoma as part of the sale of all or
2840	2782		substantially all of the assets of an Oklahoma
2841	2783		company, limited liability company, or
2842	2784		partnership or an Oklahoma proprietorsh ip
2843	2785		business enterprise where such property has been
2844	2786		directly or indirectly owned by such entity or
2845	2787		business enterprise or owned by the owners of
2846	2788		such entity or business enterprise for a peri od
2847	2789		of at least two (2) years prior to the date of
2848	2790		the transaction from which the net ca pital gains
2849	2791		arise,
2850	2792		b. "holding period" means an uninterrupted period of
2851	2793		time. The holding period shall include any additiona l
2852	2794		period when the property was held by anoth er
2853	2795		individual or entity, if such additiona l period is
2854	2796		included in the taxpayer's holding period for the
2855	2797		asset pursuant to the Internal Revenue Code,
2856	2798
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	2799	+	ENGR. H. B. NO. 3347 Page 57 1
2859	2800		2
2860	2801		3
2861	2802		4
2862	2803		5
2863	2804		6
2864	2805		7
2865	2806		8
2866	2807		9
2867	2808		10
2868	2809		11
2869	2810		12
2870	2811		13
2871	2812		14
2872	2813		15
2873	2814		16
2874	2815		17
2875	2816		18
2876	2817		19
2877	2818		20
2878	2819		21
2879	2820		22
2880	2821		23
2881	2822		24
2882	2823
2883	2824		c. "Oklahoma company," "limited liability company," or
2884	2825		"partnership" means an entity whose primary
2885	2826		headquarters have been located in Oklahoma for at
2886	2827		least three (3) uninterr upted years prior to the date
2887	2828		of the transaction from which the net capital gains
2888	2829		arise,
2889	2830		d. "direct" means the individual taxpayer directly owns
2890	2831		the asset,
2891	2832		e. "indirect" means the individual taxpayer owns an
2892	2833		interest in a pass-through entity (or chain of p ass-
2893	2834		through entities) that sells the asset that gives rise
2894	2835		to the qualifying gains receiving capital treatment.
2895	2836		(1) With respect to sales of real property or
2896	2837		tangible personal property locat ed within
2897	2838		Oklahoma, the deduction describe d in this
2898	2839		subsection shall not apply unless t he pass-
2899	2840		through entity that makes the sale has held the
2900	2841		property for not less than five (5) uninterrupted
2901	2842		years prior to the date of the transaction that
2902	2843		created the capital gain, and each pass-through
2903	2844		entity included in the chain of o wnership has
2904	2845		been a member, partner, or shareholder of the
2905	2846		pass-through entity in the tier immediately below
2906	2847
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2908		-	(Bold face denotes Committee Amendments) 1
	2848	+	ENGR. H. B. NO. 3347 Page 58 1
2909	2849		2
2910	2850		3
2911	2851		4
2912	2852		5
2913	2853		6
2914	2854		7
2915	2855		8
2916	2856		9
2917	2857		10
2918	2858		11
2919	2859		12
2920	2860		13
2921	2861		14
2922	2862		15
2923	2863		16
2924	2864		17
2925	2865		18
2926	2866		19
2927	2867		20
2928	2868		21
2929	2869		22
2930	2870		23
2931	2871		24
2932	2872
2933	2873		it for an uninterrupted period of not less than
2934	2874		five (5) years.
2935	2875		(2) With respect to sales of stock or ownership
2936	2876		interest in or sales of all or subs tantially all
2937	2877		of the assets of an Oklahoma company, limited
2938	2878		liability company, partnership or Oklahoma
2939	2879		proprietorship business enterprise, the ded uction
2940	2880		described in this subsection shall no t apply
2941	2881		unless the pass-through entity that makes the
2942	2882		sale has held the stock or owners hip interest for
2943	2883		not less than two (2) uninterrupted years prior
2944	2884		to the date of the transac tion that created the
2945	2885		capital gain, and each pass-through entity
2946	2886		included in the chain of ownership has been a
2947	2887		member, partner or shareholder of the pass-
2948	2888		through entity in the tier immediately below it
2949	2889		for an uninterrupted period of not less than two
2950	2890		(2) years. For purposes of this divisi on,
2951	2891		uninterrupted ownership prior to July 1, 2007,
2952	2892		shall be included in the determinat ion of the
2953	2893		required holding period prescribed by this
2954	2894		division, and
2955	2895		f. "Oklahoma proprietorship business enterprise " means a
2956	2896		business enterprise whose income and expenses have
2957	2897
2958		-	SENATE FLOOR VERSION - HB3347 SFLR Page 59
2959		-	(Bold face denotes Committee Amendments) 1
	2898	+	ENGR. H. B. NO. 3347 Page 59 1
2960	2899		2
2961	2900		3
2962	2901		4
2963	2902		5
2964	2903		6
2965	2904		7
2966	2905		8
2967	2906		9
2968	2907		10
2969	2908		11
2970	2909		12
2971	2910		13
2972	2911		14
2973	2912		15
2974	2913		16
2975	2914		17
2976	2915		18
2977	2916		19
2978	2917		20
2979	2918		21
2980	2919		22
2981	2920		23
2982	2921		24
2983	2922
2984	2923		been reported on Schedule C or F of an individual
2985	2924		taxpayer's federal income tax return, or any similar
2986	2925		successor schedule pub lished by the Internal Revenue
2987	2926		Service and whose primary headquarters have been
2988	2927		located in Oklahoma for at least three (3)
2989	2928		uninterrupted years prior to the date of the
2990	2929		transaction from which the net capital gain s arise.
2991	2930		G. 1. For purposes of computing it s Oklahoma taxable income
2992	2931		under this section, the dividends -paid deduction otherwise allow ed
2993	2932		by federal law in computing net income of a real estate investment
2994	2933		trust that is subject to federal income tax shall b e added back in
2995	2934		computing the tax imposed by this state under this title if the real
2996	2935		estate investment trust is a captive real estate i nvestment trust.
2997	2936		2. For purposes of computing its Oklahoma taxable income unde r
2998	2937		this section, a taxpayer shall add back otherwise deductible ren ts
2999	2938		and interest expenses paid to a captive real estate investment trust
3000	2939		that is not subject to the provisions of paragraph 1 of this
3001	2940		subsection. As used in this subsection:
3002	2941		a. the term "real estate investment trust" or "REIT"
3003	2942		means the meaning ascribed to such term in Section 856
3004	2943		of the Internal Revenue Code,
3005	2944		b. the term "captive real estate investment trust " means
3006	2945		a real estate investment trust, t he shares or
3007	2946		beneficial interests of which a re not regularly traded
3008	2947
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3010		-	(Bold face denotes Committee Amendments) 1
	2948	+	ENGR. H. B. NO. 3347 Page 60 1
3011	2949		2
3012	2950		3
3013	2951		4
3014	2952		5
3015	2953		6
3016	2954		7
3017	2955		8
3018	2956		9
3019	2957		10
3020	2958		11
3021	2959		12
3022	2960		13
3023	2961		14
3024	2962		15
3025	2963		16
3026	2964		17
3027	2965		18
3028	2966		19
3029	2967		20
3030	2968		21
3031	2969		22
3032	2970		23
3033	2971		24
3034	2972
3035	2973		on an established securities market and mo re than
3036	2974		fifty percent (50%) of the voting power or value of
3037	2975		the beneficial interests or shares of which are owned
3038	2976		or controlled, directly or indir ectly, or
3039	2977		constructively, by a single entity that is:
3040	2978		(1) treated as an association ta xable as a
3041	2979		corporation under the Internal Rev enue Code, and
3042	2980		(2) not exempt from federal income tax pursuant to
3043	2981		the provisions of Section 501(a) of the Internal
3044	2982		Revenue Code.
3045	2983		The term shall not include a real estate investment
3046	2984		trust that is intended to be r egularly traded on an
3047	2985		established securities market, and that satisfies the
3048	2986		requirements of Section 856(a)(5) and (6) of the U.S.
3049	2987		Internal Revenue Code by reason of Secti on 856(h)(2)
3050	2988		of the Internal Revenue Code,
3051	2989		c. the term "association taxable as a corpo ration" shall
3052	2990		not include the following entit ies:
3053	2991		(1) any real estate investment trust as defined in
3054	2992		paragraph a of this subsec tion other than a
3055	2993		"captive real estate inve stment trust", or
3056	2994		(2) any qualified real est ate investment trust
3057	2995		subsidiary under Sect ion 856(i) of the Intern al
3058	2996		Revenue Code, other than a qualified REIT
3059	2997
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3061		-	(Bold face denotes Committee Amendments) 1
	2998	+	ENGR. H. B. NO. 3347 Page 61 1
3062	2999		2
3063	3000		3
3064	3001		4
3065	3002		5
3066	3003		6
3067	3004		7
3068	3005		8
3069	3006		9
3070	3007		10
3071	3008		11
3072	3009		12
3073	3010		13
3074	3011		14
3075	3012		15
3076	3013		16
3077	3014		17
3078	3015		18
3079	3016		19
3080	3017		20
3081	3018		21
3082	3019		22
3083	3020		23
3084	3021		24
3085	3022
3086	3023		subsidiary of a "captive real estate investment
3087	3024		trust", or
3088	3025		(3) any Listed Australian Property Trust ( meaning an
3089	3026		Australian unit trust registered as a "Managed
3090	3027		Investment Scheme" under the Australian
3091	3028		Corporations Act in which the pri ncipal class of
3092	3029		units is listed on a recognized stock exchange in
3093	3030		Australia and is regularly traded on an
3094	3031		established securities market), or an entity
3095	3032		organized as a trust, provided that a Listed
3096	3033		Australian Property Trust owns or contr ols,
3097	3034		directly or indirectly, seventy-five percent
3098	3035		(75%) or more of the voting power or value of the
3099	3036		beneficial interests or shares of such trust, or
3100	3037		(4) any Qualified Foreign Entity, meaning a
3101	3038		corporation, trust, association or part nership
3102	3039		organized outside the laws of the Uni ted States
3103	3040		and which satisfies the following criteria:
3104	3041		(a) at least seventy-five percent (75%) of the
3105	3042		entity's total asset value at the close of
3106	3043		its taxable year is repr esented by real
3107	3044		estate assets, as defined in Section
3108	3045		856(c)(5)(B) of the Internal Reven ue Code,
3109	3046		thereby including shares or certificates of
3110	3047
3111		-	SENATE FLOOR VERSION - HB3347 SFLR Page 62
3112		-	(Bold face denotes Committee Amendments) 1
	3048	+	ENGR. H. B. NO. 3347 Page 62 1
3113	3049		2
3114	3050		3
3115	3051		4
3116	3052		5
3117	3053		6
3118	3054		7
3119	3055		8
3120	3056		9
3121	3057		10
3122	3058		11
3123	3059		12
3124	3060		13
3125	3061		14
3126	3062		15
3127	3063		16
3128	3064		17
3129	3065		18
3130	3066		19
3131	3067		20
3132	3068		21
3133	3069		22
3134	3070		23
3135	3071		24
3136	3072
3137	3073		beneficial interest in an y real estate
3138	3074		investment trust, cash and cash e quivalents,
3139	3075		and U.S. Government securities,
3140	3076		(b) the entity receives a dividend -paid
3141	3077		deduction comparable to Se ction 561 of the
3142	3078		Internal Revenue Code, or is exempt from
3143	3079		entity level tax,
3144	3080		(c) the entity is required to distribute at
3145	3081		least eighty-five percent (85%) of its
3146	3082		taxable income, as computed in the
3147	3083		jurisdiction in which it is organized, to
3148	3084		the holders of its s hares or certificates of
3149	3085		beneficial interest on an annual basis,
3150	3086		(d) not more than ten percent ( 10%) of the
3151	3087		voting power or value in such entity i s held
3152	3088		directly or indirectly or constructiv ely by
3153	3089		a single entity or individual, or t he shares
3154	3090		or beneficial interests of such ent ity are
3155	3091		regularly traded on an established
3156	3092		securities market, and
3157	3093		(e) the entity is organized in a country which
3158	3094		has a tax treaty with the United States.
3159	3095		3. For purposes of this subsection, the constructive own ership
3160	3096		rules of Section 318(a) of the Interna l Revenue Code, as modified by
3161	3097
3162		-	SENATE FLOOR VERSION - HB3347 SFLR Page 63
3163		-	(Bold face denotes Committee Amendments) 1
	3098	+	ENGR. H. B. NO. 3347 Page 63 1
3164	3099		2
3165	3100		3
3166	3101		4
3167	3102		5
3168	3103		6
3169	3104		7
3170	3105		8
3171	3106		9
3172	3107		10
3173	3108		11
3174	3109		12
3175	3110		13
3176	3111		14
3177	3112		15
3178	3113		16
3179	3114		17
3180	3115		18
3181	3116		19
3182	3117		20
3183	3118		21
3184	3119		22
3185	3120		23
3186	3121		24
3187	3122
3188	3123		Section 856(d)(5) of the Internal Revenue Code, shall apply in
3189	3124		determining the ownership of st ock, assets, or net profits of any
3190	3125		person.
3191	3126		4. A real estate investment trust that doe s not become
3192	3127		regularly traded on an establish ed securities market within one (1)
3193	3128		year of the date on which it first b ecomes a real estate investment
3194	3129		trust shall be deemed not to have been regularly traded on an
3195	3130		established securities market, retroactive to the date it first
3196	3131		became a real estate inves tment trust, and shall file an amended
3197	3132		return reflecting such retroactiv e designation for any tax year or
3198	3133		part year occurring during its initial year of status as a real
3199	3134		estate investment trust. For purposes of this subsection, a real
3200	3135		estate investment tr ust becomes a real estate investment trust on
3201	3136		the first day it has both met the requirements of Section 856 of the
3202	3137		Internal Revenue Code and has elected to be treated as a real estate
3203	3138		investment trust pursuant t o Section 856(c)(1) of t he Internal
3204	3139		Revenue Code.
3205	3140		SECTION 2. This act shall become effective January 1, 2023.
3206		-	COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS
3207		-	April 13, 2022 - DO PASS
	3141	+
	3142	+
	3143	+	ENGR. H. B. NO. 3347 Page 64 1
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	3145	+	3
	3146	+	4
	3147	+	5
	3148	+	6
	3149	+	7
	3150	+	8
	3151	+	9
	3152	+	10
	3153	+	11
	3154	+	12
	3155	+	13
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	3157	+	15
	3158	+	16
	3159	+	17
	3160	+	18
	3161	+	19
	3162	+	20
	3163	+	21
	3164	+	22
	3165	+	23
	3166	+	24
	3167	+
	3168	+	Passed the House of Representatives the 22nd day of March, 2022.
	3169	+
	3170	+
	3171	+
	3172	+
	3173	+	Presiding Officer of the House
	3174	+	of Representatives
	3175	+
	3176	+
	3177	+	Passed the Senate the ___ day of __________, 2022.
	3178	+
	3179	+
	3180	+
	3181	+
	3182	+	Presiding Officer of the Senate
	3183	+
	3184	+