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ENGROSSED HOUSE
BILL NO. 4358 By: Boatman, Hill, Frix, Ford
and McCall of the House
and
Quinn of the Senate
An Act relating to revenue and taxation; amending 68
O.S. 2021, Sections 2355, 2355.1P-4, 2370, and 2805,
which relate to modification of the corporate income
tax rate; modifying rate of corporate income tax;
specifying tax rate by tax year; providing for
imposition of income tax rate based upon certain
corporate characteristics; prohibiting acquisition of
tax credits on or after effectiv e date; providing for
inapplicability of certain provisions to public
service corporations; providing for income tax rate
after utilization of tax credits; modifying
provisions related to tax levied upon certain pass-
through entities; providing for termination of tax
levied on certain pass -through entities; providing
for filing of required returns by pass-through
entities and other entities; modifying rate of tax
imposed on certain finan cial institutions in lieu of
income tax; specifying rate of tax by year; providing
for payment of fee in lieu of pe rsonal property tax
beginning on or after specified date; providing for
apportionment of revenue to the State Public Common
School Building Equalization Fund; and providing an
effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLA HOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 2355, is
amended to read as follows:
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Section 2355. A. Individuals. For all taxable years beginning
after December 31, 1998, and b efore January 1, 2006, a tax is hereby
imposed upon the Oklahoma taxable income of every resident or
nonresident individual, which tax shall be computed at the option of
the taxpayer under one of the two following methods:
1. METHOD 1.
a. Single individuals and married individuals filing
separately not deducting federal income tax:
(1) 1/2% tax on first $1,000.00 or part thereof,
(2) 1% tax on next $1,500.00 or part th ereof,
(3) 2% tax on next $1,250.00 or part thereof,
(4) 3% tax on next $1,150.00 or part thereof,
(5) 4% tax on next $1,300.00 or part thereof,
(6) 5% tax on next $1,500.00 or part thereof,
(7) 6% tax on next $2,300.00 or part thereof, and
(8) (a) for taxable years beginning after Decemb er
31, 1998, and before January 1, 2002, 6.75%
tax on the remainder,
(b) for taxable years beginning on or after
January 1, 2002, and before January 1, 2004,
7% tax on the remainder, and
(c) for taxable years beginning on o r after
January 1, 2004, 6.65% ta x on the remainder.
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b. Married individuals filing jointl y and surviving
spouse to the extent and in the manner that a
surviving spouse is permitted to file a joint return
under the provisions of the Internal Revenue Code an d
heads of households as defined in the Internal Revenue
Code not deducting federal incom e tax:
(1) 1/2% tax on first $2,000.00 or part thereof,
(2) 1% tax on next $3,000.00 or part thereof,
(3) 2% tax on next $2,500.00 or part thereof,
(4) 3% tax on next $2,300.00 or part thereof,
(5) 4% tax on next $2,400.00 or part thereof,
(6) 5% tax on next $2,800.00 or part thereof,
(7) 6% tax on next $6,000.00 or part thereof, and
(8) (a) for taxable years beginning after December
31, 1998, and before January 1, 2002 , 6.75%
tax on the remainder,
(b) for taxable years beginning on or after
January 1, 2002, and before January 1, 2004,
7% tax on the remainder, and
(c) for taxable years beginning on or afte r
January 1, 2004, 6.65% tax on the remainder.
2. METHOD 2.
a. Single individuals and married indi viduals filing
separately deducting federal income tax:
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(1) 1/2% tax on first $1,000.00 or part thereof,
(2) 1% tax on next $1,500.00 or part thereof,
(3) 2% tax on next $1,250.00 or part thereof,
(4) 3% tax on next $1,150.00 or part thereof,
(5) 4% tax on next $1,200.00 or part thereof,
(6) 5% tax on next $1,400.00 or part thereof,
(7) 6% tax on next $1,500.00 or part thereof,
(8) 7% tax on next $1,500.00 or part thereof,
(9) 8% tax on next $2,000.00 or part th ereof,
(10) 9% tax on next $3,500.00 or part t hereof, and
(11) 10% tax on the remainder.
b. Married individuals filing jointly and surviving
spouse to the extent and in the manner that a
surviving spouse is permitted to file a joint return
under the provisions of the Internal Revenue Code and
heads of households as defined in the Internal Revenue
Code deducting federal income tax:
(1) 1/2% tax on the first $2,000.00 or part thereof,
(2) 1% tax on the next $3,000.00 or part thereof,
(3) 2% tax on the next $2,500.00 or part thereof,
(4) 3% tax on the next $1,400.00 or part thereof,
(5) 4% tax on the next $1,5 00.00 or part thereof,
(6) 5% tax on the next $1,600.00 or part thereof,
(7) 6% tax on the next $1,25 0.00 or part thereof,
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(8) 7% tax on the next $1,750.00 or part the reof,
(9) 8% tax on the next $3,0 00.00 or part thereof,
(10) 9% tax on the next $6,000.00 or part thereof, and
(11) 10% tax on the remainder.
B. Individuals. For all taxable years beginnin g on or after
January 1, 2008, and ending any tax year which begin s after December
31, 2015, for which the determination required pursuant to Sections
4 and 5 of this act is made by the State Board of Equalization, a
tax is hereby imposed upon the Oklahoma taxable income of every
resident or nonresident individual, which tax shall be computed as
follows:
1. Single individuals and married individuals filing
separately:
(a) 1/2% tax on first $1,000.00 or part thereof,
(b) 1% tax on next $1,500.00 or part the reof,
(c) 2% tax on next $1,250.00 or part thereof,
(d) 3% tax on next $1,150.00 or part thereof,
(e) 4% tax on next $2,300.00 or part thereof,
(f) 5% tax on next $1,500.00 or part thereof,
(g) 5.50% tax on the remainder for the 2008 tax year and
any subsequent tax year unless the rate prescribed by
subparagraph (h) of t his paragraph is in effect, and
(h) 5.25% tax on the remainder for the 2009 and subsequen t
tax years. The decrease in the top marginal
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individual income tax rate otherwise authorized by
this subparagraph shall be contingent upon the
determination required to be made by the State Board
of Equalization pursuant to Section 2355.1A of this
title.
2. Married individuals filing jointly and surviving spouse to
the extent and in the manner that a s urviving spouse is permitted to
file a joint return under the prov isions of the Internal Revenue
Code and heads of households as defined in the Internal Re venue
Code:
(a) 1/2% tax on first $2,000.00 or part thereof,
(b) 1% tax on next $3,000.00 or part the reof,
(c) 2% tax on next $2,500.00 or part thereof,
(d) 3% tax on next $2,300.00 or part thereof,
(e) 4% tax on next $2,400.00 or part thereof,
(f) 5% tax on next $2,800.00 or part thereof,
(g) 5.50% tax on the remainder for the 2008 tax year and
any subsequent tax year unless the rate prescribed by
subparagraph (h) of t his paragraph is in effect, and
(h) 5.25% tax on the remainder for the 2009 and subsequen t
tax years. The decrease in the top marginal
individual income tax rate otherwise authorized by
this subparagraph shall be contingent upon the
determination required to be made by the State Board
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of Equalization pursuant to Section 2355.1A of this
title.
C. Individuals. For all taxable years beginning on or after
January 1, 2016, and for which the det ermination required pursuant
to Sections 4 and 5 of this act is ma de by the State Board of
Equalization, a tax is hereby imposed upon the Oklahoma taxable
income of every resident or nonresident individual, which tax shall
be computed as follows:
1. Single individuals and married individuals filing
separately:
(a) 1/2% tax on first $1,000.00 or part th ereof,
(b) 1% tax on next $1,500.00 or part thereof,
(c) 2% tax on next $1,250.00 or part thereof,
(d) 3% tax on next $1,150.00 or part thereof,
(e) 4% tax on next $2,300.00 or part thereof,
(f) 5% tax on the remainder if t he State Board of
Equalization makes a determination pursuant to Section
4 of this act or four and eighty-five hundredths
(4.85%) tax on the remainder if the State Board of
Equalization makes a determination pursuant to Section
5 of this act.
2. Married individuals filing jointly and sur viving spouse to
the extent and in the manner that a sur viving spouse is permitted to
file a joint return under the provisions of the Internal Revenue
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Code and heads of households as defined in the Internal Revenue
Code:
(a) 1/2% tax on first $2,000.00 or part thereof,
(b) 1% tax on next $3,000.00 or part there of,
(c) 2% tax on next $2,500.00 or part thereof,
(d) 3% tax on next $2,300.00 or part thereof,
(e) 4% tax on next $2,400.00 or part thereof,
(f) 5% tax on the remaind er if the State Board of
Equalization makes a determination pursuant to Section
4 of this act or four and eighty-five hundredths
percent (4.85%) tax on the remainder if the State
Board of Equalization makes a determination pursuant
to Section 5 of this act .
No deduction for federal income taxes paid shall be allowed to
any taxpayer to arrive a t taxable income.
D. Nonresident aliens. In lieu of the rates set forth in
subsection A above, ther e shall be imposed on nonresident aliens, as
defined in the Intern al Revenue Code, a tax of eight p ercent (8%)
instead of thirty percent (30%) as used in t he Internal Revenue
Code, with respect to the Oklahoma taxable income of such
nonresident aliens as d etermined under the provision of the Oklahoma
Income Tax Act.
Every payer of amounts covered by thi s subsection shall deduct
and withhold from such amounts paid each payee an amount equal to
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eight percent (8%) thereof . Every payer required to deduct and
withhold taxes under this subsection shall for each quarterly perio d
on or before the last day of th e month following the close of each
such quarterly perio d, pay over the amount so withheld as taxes to
the Tax Commission, and shall file a return with each such payment.
Such return shall be in such form as the Tax Commis sion shall
prescribe. Every payer required under this subsection to deduct and
withhold a tax from a payee shall, as to the total amounts paid to
each payee during the calendar year, furnis h to such payee, on or
before January 31, of the succeeding year, a written statement
showing the name of the payer, the name of the payee and the payee 's
social security account number, if any, the total amount paid
subject to taxation, and the total amou nt deducted and withheld as
tax and such other information as the Tax Commission may require .
Any payer who fails to withhold or pay to the Tax Commission any
sums herein required to be withheld or paid shall be personally and
individually liable therefor to the State of Oklahoma.
E. Corporations. For 1. Except as otherwise provided by
paragraph 2 of this subsection, for all taxable years beginning
after December 31, 2021, a tax is hereby imposed upon the Oklahoma
taxable income of every corporation doi ng business within this state
or deriving income from sources withi n this state in an amount equal
to four percent (4%) thereof.
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2. Except as provided by paragraph 3 of this subsection, for
all taxable years beginning after December 31, 2022, a tax is hereby
imposed upon the Oklahoma taxable income of every corporation doing
business within this state or deriving income from sources within
this state in an amount as follows:
a. three and five-tenths percent (3.5%) for tax years
beginning not later than December 31, 2023,
b. three percent (3.0%) for tax years beginning not later
than December 31, 2024,
c. two and five-tenths percent (2.5%) for tax years
beginning not later than December 31, 2025,
d. two percent (2.0%) for tax years beginning not later
than December 31, 2026,
e. one and five-tenths percent (1.5% ) for tax years
beginning not later than December 31, 2027,
f. one percent (1.0%) for tax years beginning not later
than December 31, 2028,
g. five-tenths percent (0.5%) for tax years beginning not
later than December 31, 2029, and
h. zero percent (0%) for tax years beginning on or after
January 1, 2030.
There shall be no additional Oklahoma income tax im posed on
accumulated taxable income or on undistributed personal holding
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company income as those term s are defined in the Internal Revenue
Code.
3. Notwithstanding subsection I of this section and except as
provided by paragraph 5 or paragraph 6 of this subsection, unless
state General Revenue Fund revenue collections for the fiscal year
immediately preceding the current tax filing year exceed one hundred
two percent (102%) of General Revenue Fund revenue collections for
the second fiscal year preceding the current t ax filing year, the tax
rate set forth in paragraph 1 of this subsection shall apply for a
corporation that:
a. participates in the filing of a publicly traded
company's financial statements prepared in accordance
with generally accepted accounting princi ples, and
b.
(1) the corporation has Oklahoma tax credit
carryforwards in excess of Fifty Million Dollars
($50,000,000.00) that have an indefinite
carryforward period, as of the effective date of
this act, or
(2) is a component member of an affiliate d group
filing a consolidated Oklahoma income tax return
under the provisions of Section 2367 of this
title, and the component members of such
affiliated group have, i n the aggregate, Oklahoma
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tax credit carryforwards in excess of Fifty
Million Dollars ($50,000,000.00) that have an
indefinite carryforward period, as of the
effective date of this act.
4. No corporation as described by paragraph 3 of this
subsection shall acquire any tax credit authorized pursuant to the
provisions of the Oklahoma Statutes on or after the effective date
of this act.
5. The provisions of paragraph 3 of this subsection shall not
be applicable to any public service corporation the rates of which
are subject to the regulatory jurisdiction of the Oklahoma
Corporation Commission.
6. If a corporation which is subject to the provisions of
paragraph 3 of this subsection or a corporation which makes an
election to be subject to the inco me tax rate prescribed by
paragraph 1 of this subsection has fully utilized all tax credits
available to it pursuant to applicable provisions of law , the income
tax rate for the corporat ion for the first tax year beginning after
the end of the final tax year with respect to which any such credits
have been claimed and used to reduce an income tax liabi lity amount
shall be zero percent ( 0%) and the rate shall be zero percent (0%)
thereafter.
F. Certain foreign corporat ions. In lieu of the tax imposed in
the first paragraph of subsection D of this section, for al l taxable
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years beginning after December 31 , 2021, there shall be imposed on
foreign corporations, as defined in the Internal Revenue Code, a tax
of four percent (4%) imposed at the same rate for the applicable
income tax year as prescribed by subsection E of this section
instead of thirty percent (30%) as used in the Internal Revenue
Code, where such income is received from sources within Oklahoma, in
accordance with the provisions of the Internal Revenue Code and the
Oklahoma Income Tax Act.
Every payer of amounts covered by this subsection shall deduct
and withhold from such amounts paid each payee an amount equal t o
four percent (4%) thereof a rate equal to the rate pre scribed by
subsection E of this section based on the ap plicable tax year.
Every payer required to deduct and withhold taxes unde r this
subsection shall for each quarterl y period on or before the l ast day
of the month following the close of each such quart erly period, pay
over the amount so withheld as taxes to the Tax Commission, and
shall file a return with each such payment . Such return shall be in
such form as the Tax Commission shall prescribe . Every payer
required under this subsection to deduct and withhold a tax from a
payee shall, as to the total amounts paid to each payee during the
calendar year, furnish to such payee, o n or before January 31, of
the succeeding year, a written statement showing the name of the
payer, the name of the payee and th e payee's Social Security account
number, if any, the total amounts paid subject to ta xation, the
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total amount deducted and withh eld as tax and such other information
as the Tax Commission may requ ire. Any payer who fails to withhold
or pay to the Tax Com mission any sums herein required to be withheld
or paid shall be personally and indivi dually liable therefor to the
State of Oklahoma.
G. Fiduciaries. A tax is hereby imposed upon the Oklahoma
taxable income of every trust and estate at the same rates as are
provided in subsection B or C of this section for singl e
individuals. Fiduciaries are not allowed a deduction for any
federal income tax paid.
H. Tax rate tables. For all taxable years begi nning after
December 31, 1991, in lieu of the tax imposed b y subsection A, B or
C of this section, as applicable there is hereby imposed for each
taxable year on the taxable income of ever y individual, whose
taxable income for such taxable year does not ex ceed the ceiling
amount, a tax determined under tables, app licable to such taxable
year which shall be prescribed by th e Tax Commission and which shall
be in such form as it determines app ropriate. In the table so
prescribed, the amounts of the tax shall be computed on the basis of
the rates prescribed by subsect ion A, B or C of this section. For
purposes of this subsect ion, the term "ceiling amount" means, with
respect to any taxpayer, t he amount determined by the Tax Commiss ion
for the tax rate category in which such taxpayer falls.
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I. Not later than June 30, 2023, for entities in existence as
of the effective date of this act, and not later th an sixty (60)
days after the formation of a n entity subject to taxation pursuant
to subsection E of this section which occurs after the effectiv e
date of this act, a taxpayer shall make an election, which shall be
irrevocable, on such form as may be prescribed for such purpose by
the Oklahoma Tax Commission, and except as otherwise provided by
this section, to be subject to the rate of tax at four percent (4%)
imposed pursuant to paragraph 1 of subsection E of this section and
to continue to be subject to s uch rate of income taxation for all
subsequent taxable years or to be subj ect to the rate of tax imposed
pursuant to paragraph 2 of subsection E of this section based upon
the applicable taxable year.
J. The irrevocable election required by subsection I of this
section shall be binding upon any subsidiary entity of the taxpayer
making such election unles s otherwise provided by this section.
K. The irrevocable election ot herwise prescribed by subsection
I of this section shall not be binding with respect t o an entity
which was a subsidiary of an entity making such election during any
period of time the former subs idiary was not acquired by any other
entity.
L. If a former subsidiary of an entity making an ele ction
pursuant to subsection I of this section is acquired by another
entity, the entity having acquired such former subsidi ary shall be
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authorized to make an irrevocable election which is binding u pon the
former subsidiary of the previous entity.
SECTION 2. AMENDATORY 68 O.S. 2021, Section 2355.1P-4,
is amended to read as follows:
Section 2355.1P-4 A. For tax years beginning on or after
January 1, 2022 2023, there is hereby levied on each electing pass-
through entity the pass -through entity tax which shall be calculated
as follows:
1. With regard to each member of an electing pass-through
entity, the electing pass -through entity shall multiply such
member's Oklahoma distributive shar e of the electing pass-through
entity's Oklahoma net entity income f or the tax year by:
a. the highest Oklahoma marginal income tax rate levied
on the taxable income of natural persons pursuant to
Section 2355 of this title if the member is an
individual, trust, or estate,
b. four percent (4%) if the member is classified a s a
corporation pursuant t o the Internal Revenue Code, and
is not classified as an S corporation, a rate as
follows:
(1) three and five-tenths percent (3.5%) for tax
years beginning not later than December 31, 2023,
(2) three percent (3.0%) for tax years b eginning not
later than December 31, 2024,
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(3) two and five-tenths percent (2.5%) for tax years
beginning not later than December 31, 2025,
(4) two percent (2.0%) for tax ye ars beginning not
later than December 31, 2026,
(5) one and five-tenths percent (1.5%) for tax years
beginning not later than December 31, 2027,
(6) one percent (1.0%) for tax years beginning not
later than December 31, 2028,
(7) five-tenths percent (0.5%) for tax years
beginning not later than December 31, 2029, and
(8) zero percent (0%) for tax years beginning on or
after January 1, 2030,
c. four percent (4%) if the member is a pass -through
entity, a rate as follows:
(1) three and five-tenths percent (3.5%) for tax
years beginning not later than December 31, 2023,
(2) three percent (3.0%) for tax years beginning not
later than December 31, 2024,
(3) two and five-tenths percent (2.5%) for tax years
beginning not later than December 31, 2025,
(4) two percent (2.0%) for tax ye ars beginning not
later than December 31, 2026,
(5) one and five-tenths percent (1.5%) for tax years
beginning not later than December 31, 2027,
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(6) one percent (1.0%) for tax years beginning not
later than December 31, 2028,
(7) five-tenths percent (0.5%) for tax years
beginning not later than December 31, 2029, and
(8) zero percent (0%) for tax years beginning on or
after January 1, 2030,
d. four percent (4%) if the member is a financial
institution subject to tax impose d pursuant to the
provisions of Section 2370 of this title, the rate
prescribed by Section 2370 of this title, and
e. the highest Oklahoma marginal income tax rate that
would be applicable to any item of the electi ng pass-
through entity's income or gain wit hout the election
made pursuant to subs ection F of this section, if the
member is an organization d escribed in Section 2359 o f
this title; and
2. The electing pass-through entity shall aggregate the amounts
determined with respect to all members pursuant to paragraph 1 of
this subsection and t he pass-through entity tax for the applicable
tax year shall be equal to such aggregat ed tax amount for the tax
year with respect to which the election has been made.
B. Sections 2385.29, 2385.30 and 2385.31 o f this title shall
not be applicable to an ele cting pass-through entity.
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C. The pass-through entity tax s hall be due and payable on the
same date as provided for the filing of the electing pass-through
entity's Oklahoma income tax return, and for tax years begin ning on
or after January 1, 2020, estim ated tax payments shall be required
as provided in Section 2 385.9 of this title.
D. If the pass-through entity election results in a net entity
loss for Oklahoma income t ax purposes in any tax year, the net
entity loss may be carried back and carried forw ard by the electing
pass-through entity for Oklahoma income tax purposes as set forth in
subparagraph b of paragraph 3 of subsection A of Section 2358 of
this title.
E. Notwithstanding paragraph 2 of subsection C of Section 2368
of this title, a nonresident individual who is a member of an
electing pass-through entity is not required to fi le an Oklahoma
income tax return, if, for the taxable year, the only source of
income allocable or apportionable to this state for the member, or,
if a joint income tax r eturn is filed, the member and his or her
spouse, is from one or more electing pass-through entities, and each
electing pass-through entity files and pays the taxes due u nder this
section.
F. Any entity required to f ile an Oklahoma partnership income
tax return or an Oklahoma S corporation income tax return may el ect
to become an electing pass-through entity. The election shall be
made on such form and in such manner as the Oklahoma Tax Commission
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may prescribe, and any election under this subsection shal l have
priority over and revoke any election to file a compo site Oklahoma
partnership return or requirement of a Subchapter S corporation to
report and pay tax on behalf of a nonresident shareholder for the
same tax year.
G. Pursuant to procedures prescri bed by the Tax Commission, if
the amount of tax required to be paid by a pass-through entity
pursuant to the provisions of this section is not paid when due, the
Oklahoma Tax Commission may revoke the pass -through entity's
election under subsection F of th is section effective for the first
year for which the tax is not paid.
H. The election authorized by the provisions of this section
shall be made pursuant to procedu res prescribed by the Tax
Commission and shall be filed (i) within sixty (60) days of
enactment and pursuant to procedures prescribed by the Oklahoma Tax
Commission for any in come tax year beginning on or after January 1,
2019, and prior to January 1, 2020 , or (ii) for any income tax year
beginning on or after January 1, 2020, at any time duri ng the
preceding tax year or two (2) months and fifteen (15) days after the
beginning of the tax year. Any such election shall be binding until
revoked pursuant to pr ocedures prescribed by the Tax Commission .
The effective date of a revocation (i) made w ithin two (2) months
and fifteen (15) days of the electing p ass-through entity's taxable
year shall be the first day of such taxable year and (ii) made
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during the electing pass-through entity's taxable year but after
such fifteenth day shall be effective o n the first day of the
following taxable year . No election made by a pass-through entity
with respect to income tax to be paid by such entity using the
calculations prescribed by this section shall be binding on any
other pass-through entity, and each pas s-through entity shall be
able to make an election under the provisions of this act
independently.
I. The provisions of this section shall cease to have the for ce
and effect of law after the expiration of the last da te the
applicable tax return is filed, including any extensions, with
respect to the final taxable year for which any entity having made
an election to be subject to the provisions of this section is
required to file a return with the Oklahoma Tax Commis sion,
including the period of time requi red for any person or entity
receiving a distribution of inco me or an allocation of los s from a
pass-through entity is required to file a return with the Oklahoma
Tax Commission, including any extensions.
SECTION 3. AMENDATORY 68 O .S. 2021, Section 2370, is
amended to read as follows:
Section 2370. A. For taxable years beginning after December
31, 2021, for For the privilege of doing business within this state,
every state banking association, national banking associat ion and
credit union organized under the laws of this state, located or
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doing business within the limits of the State of Oklahoma shall
annually pay to this state a privilege tax at the rate of four
percent (4%) of the amount of the upon taxable income as provi ded in
this section subsection as follows:
1. Three and five-tenths percent (3.5%) for tax years beginning
not later than December 31, 2023;
2. Three percent (3.0%) for tax years beginning not later than
December 31, 2024;
3. Two and five-tenths percent (2.5%) for tax years beginning
not later than December 31, 2025;
4. Two percent (2.0%) for tax years beginning not later than
December 31, 2026;
5. One and five-tenths percent (1.5% ) for tax years beginning
not later than December 31, 2027;
6. One percent (1.0%) for tax years beginning not later than
December 31, 2028;
7. Five-tenths percent (0.5%) for tax years beginning not later
than December 31, 2029; and
8. Zero percent (0%) for tax years beginning on or after
January 1, 2030.
B. 1. The privilege tax levied by this section shall be in
addition to the Business Activity Tax levied in Sec tion 1218 of this
title and the franchise tax levied in Article 12 of this title and
in lieu of the tax levied by Section 2 355 of this title and in lieu
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of all taxes levied by the State of Oklahoma, or any subdivision
thereof, upon the shares of stock or p ersonal property of any
banking association or credit union subject to taxation under this
section.
2. Nothing in this section shall be construed to exempt the
real property of any banking associations or credit unions from
taxation to the same extent, according to its value, as other real
property is taxed. Nothing herein shall be construed to exempt an
association from pay ment of any fee or tax authorized or levied
pursuant to the banking laws.
3. Personal property which is subject to a lease agreement
between a bank or credit union, as lessor, and a nonbanking business
entity or individual, as lessee, is not exempt from p ersonal
property ad valorem taxation . Provided further, that it shall be
the duty of the lessee of such personal property to return sworn
lists or schedules of their taxable property within each county to
the county assessor of such county as provided in Sections 2433 and
2434 of this title.
4. For all tax years beginning on or after January 1, 2030, an
entity subject to the tax otherwise levied by the provisions of this
section shall pay an annual fee, in lieu of any other tax on the
personal property of the financial institution, in the amount of One
Hundred Dollars ($100.00). Such fee shall be apport ioned to the
State Public Common School Building Equalization Fund to be
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distributed in the manner prescribed by Section 3-104 of Title 70 of
the Oklahoma Statutes.
C. Any tax levied under this section shall accrue on the last
day of the taxable year and be pay able as provided in Sectio n 2375
of this title. The accrual of such tax for the first taxable year
to which this act app lies, shall apply notwithstanding the prior
accrual of a tax in the same ta xable year based upon the net income
of the next preceding t axable year; provided, however, any
additional deduction enuring to the benefit of the taxpayer shall be
deducted in accordance with the optional transitional deduction
procedures in Section 2354 of this title.
D. The basis of the tax shall be United Stat es taxable income
as defined in paragraph 10 of Section 2353 of this title and any
adjustments thereto under the provisio ns of Section 2358 of this
title with the following adjustments:
1. There shall be deducted all interest income on obligations
of the United States government and agencies thereof not otherwise
exempted and all interest income on obligations of the State of
Oklahoma or political subdivisions thereof, including public trust
authorities, not otherwise exempted under the laws of this state;
and
2. Expense deductions claimed in arriving at taxable income
under paragraph 10 of Section 2353 of this title shall be reduced by
an amount equal to fifty percent (50%) of excluded interest i ncome
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on obligations of the United States government or agen cies thereof
and obligations of the State of Oklahoma or political subdivisions
thereof.
E. 1. Except as otherwise prov ided in paragraph 2 of this
subsection, before January 1, 2017, there shall be allowed a credit
against the tax levied in subsection A of this section in an amou nt
equal to the amount of taxable income received by a participating
financial institution as d efined in Section 90.2 of Title 62 of the
Oklahoma Statutes pursuant to a l oan made under the Rural Economic
Development Loan Act . Such credit shall be limited each year to
five percent (5%) of the amount of annual payroll certified by the
Oklahoma Rural Economic Development Loan Program Review Board
pursuant to the provisions o f paragraph 3 of subsection B of Section
90.4 of Title 62 of the Oklahoma Statutes wit h respect to the loan
made by the participating financial institution and may be claimed
for any number of years necessary until the amount of total credits
claimed is equal to the total amount of taxable income received by
the participating financial inst itution pursuant to the loan. Any
credit allowed but not used in a taxable year may be carried forward
for a period not to exceed five (5) taxable years . In no event
shall a credit allowed pursuant to the provisions of this subs ection
be transferable or refundable.
2. No credit otherwise authorized by the provisions of this
subsection may be clai med for any event, transaction, investment,
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expenditure or other act occurr ing on or after July 1, 2010, for
which the credit would oth erwise be allowable. The provisions of
this paragraph shall cease to be operative on July 1, 2012 .
Beginning July 1, 20 12, the credit authorized by this subsection may
be claimed for any event, transaction, investment, expenditure or
other act occurring on or after July 1, 2012, according to the
provisions of this subsection.
SECTION 4. AMENDATORY 68 O.S. 2021, Section 2805, is
amended to read as follows:
Section 2805. The following fees or taxes levied by the
provisions of the Oklahoma Statutes shall be in lieu of ad valorem
tax, whether in lieu of real property tax, persona l property tax, or
both as provided by law:
1. The registration fees and taxes imposed upon airc raft by
Section 251 et seq. of Title 3 of the Oklahoma Statu tes;
2. Registration fees for motor vehicles as provided in Section
1103 of Title 47 of the Oklaho ma Statutes, except as otherwis e
specifically provided;
3. The fee imposed upon transfers of use d vehicles in lieu of
the ad valorem tax upon inventories of used motor vehicles by
Section 1137.1 of Title 47 of the Oklahoma Statutes;
4. The registration a nd license fees imposed upon ve ssels and
motors pursuant to the Oklahoma Vessel and Motor Registr ation Act,
Section 4001 et seq. of Title 63 of the Oklahoma Statutes;
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5. The taxes levied upon the gross production of substances
pursuant to Section 1001 of this title;
6. The taxes levied upon the gross pro duction of substances
pursuant to Section 1020 of this title;
7. The tax imposed upon gross receipts purs uant to Section 1803
of this title;
8. The tax imposed upon certain textile products pursuant to
Section 2001 of this title;
9. The tax imposed upon certain freight cars pursuant to
Section 2202 of this title;
10. The tax imposed on certain parts of the inventories, both
new and used items, owned and/or possessed for sale by retailers of
farm tractors and other equipment pursuant to Sections 1 5401
through 4 5404 of this act title;
11. The tax imposed upon inventories of new vehicles and
certain vessels pursuant to Section 5301 of this title; and
12. The fee imposed pursuant to Section 2370 of this title for
applicable periods beginning on or after January 1, 2030; and
13. Such other fees or t axes as may be expressly provided by
law to be in lieu of ad valorem taxation.
SECTION 5. This act shall become effective January 1, 2023.
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Passed the House of Representatives the 23rd day of March, 2022.
Presiding Officer of the House
of Representatives
Passed the Senate the ___ day of __________, 2022.
Presiding Officer of the Senate