OK
Oklahoma Senate Bill SB1489

Oklahoma 2022 Regular Session

Oklahoma Senate Bill SB1489 Compare Versions

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5353 STATE OF OKLAHOMA
5454
5555 2nd Session of the 58th Legislature (2022)
5656
5757 SENATE BILL 1489 By: Dahm
5858
5959
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6363 AS INTRODUCED
6464
6565 An Act relating to taxation; amending 68 O.S. 2 021,
6666 Sections 2355, as amended by Section 1, Chapter 493,
6767 O.S.L. 2021 and 2370, which relate to income tax and
6868 privilege tax; eliminating individual and corporate
6969 income tax for certain years; modifying rate of
7070 corporate income tax for certain year; eliminating
7171 privilege tax for certain years; an d providing an
7272 effective date.
7373
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7575
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7777 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
7878 SECTION 1. AMENDATORY 68 O.S. 2021, Section 2355, as
7979 amended by Section 1, Chapter 493, O .S.L. 2021, is amended to read
8080 as follows:
8181 Section 2355. A. Individuals. For all taxable years beginning
8282 after December 31, 1998, and before J anuary 1, 2006, a tax is hereby
8383 imposed upon the Oklahoma taxable income of every resident or
8484 nonresident individual, w hich tax shall be computed at the op tion of
8585 the taxpayer under one of the two followin g methods:
8686 1. METHOD 1.
8787 a. Single individuals and married individuals filing
8888 separately not deducting federal income tax:
8989
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140140 (1) 1/2% tax on first $1,000.00 or part thereof ,
141141 (2) 1% tax on next $1,500.00 or pa rt thereof,
142142 (3) 2% tax on next $1,250.00 or part t hereof,
143143 (4) 3% tax on next $1,150.00 or part thereo f,
144144 (5) 4% tax on next $1,300.00 or part thereof,
145145 (6) 5% tax on next $1,500.00 or part thereof,
146146 (7) 6% tax on next $2,30 0.00 or part thereof, and
147147 (8) (a) for taxable years beginning after December
148148 31, 1998, and before January 1, 2002, 6.75%
149149 tax on the remainder,
150150 (b) for taxable years beginning on or after
151151 January 1, 2002, and before January 1, 2004,
152152 7% tax on the remainder, and
153153 (c) for taxable years beginning on or after
154154 January 1, 2004, 6.65% tax on the rem ainder.
155155 b. Married individuals filing jointly and s urviving
156156 spouse to the extent and in the manner that a
157157 surviving spouse is permitted to file a joint return
158158 under the provisions of the Internal Revenue Co de and
159159 heads of households as defined in the Inter nal Revenue
160160 Code not deducting federal income tax:
161161 (1) 1/2% tax on first $2,000.00 or part thereof,
162162 (2) 1% tax on next $3,000.00 or part thereof,
163163 (3) 2% tax on next $2,50 0.00 or part thereof,
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215215 (4) 3% tax on next $2,300.00 or part thereof,
216216 (5) 4% tax on next $2,400.00 or part thereof,
217217 (6) 5% tax on next $2,800.00 or part thereof,
218218 (7) 6% tax on next $6,000.00 or part thereof, and
219219 (8) (a) for taxable years beginning after Dece mber
220220 31, 1998, and before January 1, 2002, 6.75%
221221 tax on the remainder,
222222 (b) for taxable years beginning on or after
223223 January 1, 2002, and b efore January 1, 2004,
224224 7% tax on the remainder, and
225225 (c) for taxable years beginning on or after
226226 January 1, 2004, 6.65% tax on the remainder.
227227 2. METHOD 2.
228228 a. Single individuals and married individuals fili ng
229229 separately deducting federal income tax:
230230 (1) 1/2% tax on first $1,000.00 or part thereof,
231231 (2) 1% tax on next $1,500.00 or part thereof,
232232 (3) 2% tax on next $1,250.00 or part thereof,
233233 (4) 3% tax on next $1,150.00 or part thereof,
234234 (5) 4% tax on next $1,200 .00 or part thereof,
235235 (6) 5% tax on next $1,400.00 o r part thereof,
236236 (7) 6% tax on next $1,500.00 or part thereof,
237237 (8) 7% tax on next $1,500.00 or part thereof,
238238 (9) 8% tax on next $2,000.00 or part th ereof,
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290290 (10) 9% tax on next $3,500.00 or part thereof, and
291291 (11) 10% tax on the remainder.
292292 b. Married individuals filing jointly and surviving
293293 spouse to the extent and in the manner that a
294294 surviving spouse is permitted to file a j oint return
295295 under the provisions of the Internal Revenue Code and
296296 heads of households as defined in the Internal Revenue
297297 Code deducting federal income tax:
298298 (1) 1/2% tax on the first $2,000.00 or part thereof,
299299 (2) 1% tax on the next $3,000.00 or part thereo f,
300300 (3) 2% tax on the next $2,500.00 or part thereof,
301301 (4) 3% tax on the next $1,400.00 or part thereof,
302302 (5) 4% tax on the next $1,500.00 o r part thereof,
303303 (6) 5% tax on the next $1,600.00 or part thereof,
304304 (7) 6% tax on the next $1,250.00 or part thereof,
305305 (8) 7% tax on the next $1,750.00 or part thereof,
306306 (9) 8% tax on the next $3,000.00 or par t thereof,
307307 (10) 9% tax on the next $6,000.00 or par t thereof, and
308308 (11) 10% tax on the remainder.
309309 B. Individuals. For all taxable years beginning on or after
310310 January 1, 2008, and ending any tax year which begins after December
311311 31, 2015, for which the dete rmination required pursuant to Sections
312312 4 and 5 of this act is made by the State Board of Equalization, a
313313 tax is hereby imposed upon the Oklahoma taxable income of every
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365365 resident or nonresident individual, which tax shall be computed as
366366 follows:
367367 1. Single individuals and married individuals filing
368368 separately:
369369 (a) 1/2% tax on first $1,000.00 or part thereof,
370370 (b) 1% tax on next $1,500.00 or part thereof,
371371 (c) 2% tax on next $1,250.00 or part thereof,
372372 (d) 3% tax on next $1,150.00 or part thereof,
373373 (e) 4% tax on next $2,300.00 or part thereof,
374374 (f) 5% tax on next $1,500.00 or part thereof,
375375 (g) 5.50% tax on the remainder for the 2008 tax year and
376376 any subsequent tax year unless the rate prescribed by
377377 subparagraph (h) of this paragraph is in effect, and
378378 (h) 5.25% tax on the remainder for the 2009 and subsequent
379379 tax years. The decrease in the top marginal
380380 individual income tax rate otherwise authorized by
381381 this subparagraph shall be c ontingent upon the
382382 determination required to be made by the State Board
383383 of Equalization pursuant to Section 2355.1A of this
384384 title.
385385 2. Married individuals filing jointly and surviving spouse to
386386 the extent and in the manner that a surviving spouse is permit ted to
387387 file a joint return under the provisions of the Internal Revenue
388388
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439439 Code and heads of households as defined in the Internal Revenue
440440 Code:
441441 (a) 1/2% tax on first $2,000.00 or part thereof,
442442 (b) 1% tax on next $3,000.00 or part thereof,
443443 (c) 2% tax on next $2,500.00 or part thereof,
444444 (d) 3% tax on next $2,300.00 or part thereof,
445445 (e) 4% tax on next $2,400.00 or part thereof,
446446 (f) 5% tax on next $2,800.00 or part thereof,
447447 (g) 5.50% tax on the remainder for the 2008 tax year and
448448 any subsequent tax year unless the rate prescribed by
449449 subparagraph (h) of this paragraph is in effect, and
450450 (h) 5.25% tax on the remainder for the 2009 and subsequent
451451 tax years. The decrease in the top marginal
452452 individual income tax rate otherwise authorized by
453453 this subparagraph shall be contingent upon the
454454 determination required to be made by the State Board
455455 of Equalization pursuant to Section 2355.1A of this
456456 title.
457457 C. Individuals. For all taxable years beginning on or after
458458 January 1, 2022 taxable year 2022, a tax is hereby imposed upon the
459459 Oklahoma taxable income of every resident or nonresident individual,
460460 which tax shall be computed as follows:
461461 1. Single individuals and married individuals filing
462462 separately:
463463
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514514 (a) 0.25% tax on first $1,000.00 or part thereof,
515515 (b) 0.75% tax on next $1,500.00 o r part thereof,
516516 (c) 1.75% tax on next $1,250.00 or part thereof,
517517 (d) 2.75% tax on next $1,150.00 or part thereof,
518518 (e) 3.75% tax on next $2,300.00 or part thereof,
519519 (f) 4.75% tax on the remainder .
520520 2. Married individuals filing jointly and surviving spouse to
521521 the extent and in the manne r that a surviving spouse is permitted to
522522 file a joint return under the provisions of the Internal Re venue
523523 Code and heads of households as defined in the Internal Revenue
524524 Code:
525525 (a) 0.25% tax on first $2,000.00 or par t thereof,
526526 (b) 0.75% tax on next $3,000.00 or part thereof,
527527 (c) 1.75% tax on next $2,500.0 0 or part thereof,
528528 (d) 2.75% tax on next $2,300.00 or part thereof,
529529 (e) 3.75% tax on next $2,400.00 or part thereof,
530530 (f) 4.75% tax on the remainder .
531531 No deduction for federal in come taxes paid shall be allow ed to
532532 any taxpayer to arrive at taxable income.
533533 D. For taxable year 2023 and subsequent taxa ble years no tax
534534 shall be imposed upon the Oklahoma taxable income of every resident
535535 or nonresident individual .
536536 E. Nonresident aliens. In lieu of the rates set f orth in
537537 subsection A above, for taxable years before 2023, there shall be
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589589 imposed on nonresident alie ns, as defined in the Internal Reve nue
590590 Code, a tax of eight percent (8%) instead of thirty percent (30%) as
591591 used in the Internal Revenue Code, with respect to the Oklahoma
592592 taxable income of such nonresiden t aliens as determined under the
593593 provision of the Oklahoma Income Tax Act.
594594 Every payer of amounts covered by this subsection shall deduct
595595 and withhold from such amounts paid each payee an amount equal to
596596 eight percent (8%) thereof for taxable years before 2023. Every
597597 payer required to deduct and withhold taxes under this subsection
598598 shall for each quarterly period on o r before the last day o f the
599599 month following the close of each such quarterly period, pay o ver
600600 the amount so withheld as taxes to the Tax Com mission, and shall
601601 file a return with each such pay ment. Such return shall be in such
602602 form as the Tax Commission s hall prescribe. Every payer required
603603 under this subsection to deduct and withhold a tax fr om a payee
604604 shall, as to the total amounts paid to each payee during the
605605 calendar year, furnish to suc h payee, on or before January 31, of
606606 the succeeding year, a writ ten statement showing t he name of the
607607 payer, the name of the payee and the payee 's Social Security account
608608 number, if any, the total amount p aid subject to taxation, and the
609609 total amount deducted and withheld as tax and such other information
610610 as the Tax Commission may require . Any payer who fails to withhold
611611 or pay to the Tax Commission any sum s herein required to be withheld
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663663 or paid shall be personally and individually liable therefor to the
664664 State of Oklahoma.
665665 E. F. Corporations.
666666 1. For all taxable years beg inning after December 31 , 1989
667667 taxable years 1990 through 2021 , a tax is hereby impose d upon the
668668 Oklahoma taxable income of every corpor ation doing business within
669669 this state or deriving income from sources within this state in an
670670 amount equal to six percent (6%) thereof ;
671671 2. For taxable year 2022, a tax is hereby imposed upon the
672672 Oklahoma taxable income of every corporation doing business within
673673 this state or deriving income from sources within this state in an
674674 amount equal to four percent (4%) thereof; and
675675 3. For taxable year 2023 and subsequent taxable years no tax
676676 shall be imposed upon the Oklahoma taxable income of every
677677 corporation doing business within t his state or deriving income from
678678 sources within this state .
679679 There shall be no additional Oklahoma i ncome tax imposed on
680680 accumulated taxable income or on undistributed personal holding
681681 company income as those terms are defined in the Internal Revenue
682682 Code.
683683 F. G. Certain foreign corpo rations. In lieu of the tax imposed
684684 in the first paragraph of subsection D E of this section,:
685685 1. for all taxable years beginning after December 31, 1989 For
686686 taxable years 1990 through 2021 , there shall be imposed on foreign
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738738 corporations, as defined in t he Internal Revenue Code, a tax of six
739739 percent (6%) instead of thirty percent (30%) as used in the Internal
740740 Revenue Code, where such income is received fro m sources within
741741 Oklahoma, in accordance with the provisions of the Internal Revenue
742742 Code and the Oklahoma Income Tax Act ;
743743 2. For taxable year 2022, there shall be imposed on foreign
744744 corporations, as defined in the Internal Revenue Code, a tax of four
745745 percent (4%) instead of thirty percent (30%) as used in the Internal
746746 Revenue Code, where such income is received from sources within
747747 Oklahoma, in accordance with the provisions of the Internal Revenue
748748 Code and the Oklahoma Income Tax Act .
749749 3. Every payer of amounts covered by this subsection shall
750750 deduct and withhold from such amounts paid each payee an amount
751751 equal to:
752752 a. six percent (6%) thereof for taxable years 1990
753753 through 2021, and
754754 b. four percent (4%) thereof for taxable year 2022 .
755755 Every payer required to deduct and withhold taxes under this
756756 subsection shall for each quarterly period on or before the l ast day
757757 of the month following the close of ea ch such quarterly period, p ay
758758 over the amount so withheld as taxes to the Tax Commission, and
759759 shall file a return with each such payment . Such return shall be in
760760 such form as the Tax Commission shall prescribe . Every payer
761761 required under this subsection to deduct and withhold a ta x from a
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813813 payee shall, as to the total amounts paid to each payee during the
814814 calendar year, furnish to such payee, on or before Janua ry 31, of
815815 the succeeding year, a written statement showing the name of the
816816 payer, the name of the payee and the payee's Social Security account
817817 number, if any, the total amounts paid subject to taxation, th e
818818 total amount deducted and withheld as tax and su ch other information
819819 as the Tax Commission may requ ire. Any payer who fails to withhold
820820 or pay to the Tax Commission any su ms herein required to be withheld
821821 or paid shall be personally and individually lia ble therefor to the
822822 State of Oklahoma.
823823 G. H. Fiduciaries. A tax is hereby imposed upon the Oklahoma
824824 taxable income of every trust and estate at the same rates as are
825825 provided in subsection B, or C, or D of this section for single
826826 individuals. Fiduciaries are not allowed a deduction for any
827827 federal income tax paid.
828828 H. I. Tax rate tables. For all taxable years beginning after
829829 December 31, 1991, in lieu of th e tax imposed by subsection A , B, or
830830 C, or D of this section, as applicable there is hereby impose d for
831831 each taxable year on the taxable income of e very individual, whose
832832 taxable income for such taxa ble year does not exceed the ceiling
833833 amount, a tax determined un der tables, applicable to suc h taxable
834834 year which shall be prescribed by the Tax Commission and which shall
835835 be in such form as it determines appropriate. In the table so
836836 prescribed, the amoun ts of the tax shall be computed on the basis of
837837
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888888 the rates prescribed by subsection A, B, or C, or D of this section.
889889 For purposes of this subsection, the term "ceiling amount" means,
890890 with respect to any t axpayer, the amount determined by the Tax
891891 Commission for the tax rate category in which such taxpayer falls.
892892 SECTION 2. AMENDATORY 68 O.S. 2021, Section 2370, is
893893 amended to read as follows:
894894 Section 2370. A. For taxable years beginning after December
895895 31, 2021 year 2022, for the privilege of doing business within this
896896 state, every state banking association, national banking associat ion
897897 and credit union organized under the laws of th is state, located or
898898 doing business within the lim its of the State of Oklahoma shall
899899 annually pay to this state a privilege tax at the rate o f four
900900 percent (4%) of the amount of the taxable income as provi ded in this
901901 section. For taxable year 2023 and sub sequent taxable years, no
902902 privilege tax shall be levied.
903903 B. 1. The privilege tax levied by this sec tion shall be in
904904 addition to the Busin ess Activity Tax levied in Section 1218 of this
905905 title and the franchise tax levied in Article 12 of this title and
906906 in lieu of the tax levied by Section 2 355 of this title and in lieu
907907 of all taxes levied by the State of Oklahoma, or any subdivision
908908 thereof, upon the shares of stock or personal property of any
909909 banking association or credit union subject to taxation under t his
910910 section.
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962962 2. Nothing in this section shall be construed to exempt the
963963 real property of any bankin g associations or credit unions from
964964 taxation to the same extent, according to its value, as other real
965965 property is taxed. Nothing herein shall be constru ed to exempt an
966966 association from pay ment of any fee or tax authorized or levied
967967 pursuant to the banki ng laws.
968968 3. Personal property which is subject to a lease agreement
969969 between a bank or credit union, as lessor, and a nonbanking business
970970 entity or individual, as lessee, is not exempt from p ersonal
971971 property ad valorem taxation. Provided further, that it shall be
972972 the duty of the lessee of s uch personal property to return sworn
973973 lists or schedules of their taxable property within each county to
974974 the county assessor of such county as provided in Sections 2433 and
975975 2434 of this title.
976976 C. Any tax levied under th is section shall accrue on the last
977977 day of the taxable year and be payable as provided in Section 2375
978978 of this title. The accrual of such tax for the firs t taxable year
979979 to which this act app lies, shall apply notwithstanding the prior
980980 accrual of a tax in t he same taxable year based upon the net income
981981 of the next preceding taxable year; provided, however, any
982982 additional deduction enuring to the benefit of th e taxpayer shall be
983983 deducted in accordance with the optional transitional deduction
984984 procedures in Section 2354 of this title.
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10361036 D. The basis of the tax shall be United States taxable income
10371037 as defined in paragraph 10 of Section 2353 of this title and any
10381038 adjustments thereto under the provisio ns of Section 2358 of this
10391039 title with the following adjustments:
10401040 1. There shall be deducted all i nterest income on obligations
10411041 of the United States government and agencies thereof not otherwise
10421042 exempted and all interest income on obligations of the State of
10431043 Oklahoma or political subdivisions thereof, including public t rust
10441044 authorities, not otherwise e xempted under the laws of this state;
10451045 and
10461046 2. Expense deductions claimed in arriving at taxable income
10471047 under paragraph 10 of Section 2353 of this title shall be reduced by
10481048 an amount equal to fifty percent (50%) of excluded interest income
10491049 on obligations of the United States government or agencies thereof
10501050 and obligations of the State of Oklahoma or political subdivisions
10511051 thereof.
10521052 E. 1. Except as otherwise prov ided in paragraph 2 of this
10531053 subsection, before January 1, 2017, t here shall be allowed a credit
10541054 against the tax levied in subsection A of this section in an amount
10551055 equal to the amount of taxable income received by a part icipating
10561056 financial institution as d efined in Section 90.2 of Title 62 of the
10571057 Oklahoma Statutes pursu ant to a loan made under the Ru ral Economic
10581058 Development Loan Act . Such credit shall be limited each year to
10591059 five percent (5%) of the amount of annual payr oll certified by the
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11111111 Oklahoma Rural Economic Development Loan Program Review Board
11121112 pursuant to the provisions of paragraph 3 of subs ection B of Section
11131113 90.4 of Title 62 of the Oklahoma Statutes with respect to the loan
11141114 made by the participating financial i nstitution and may be claimed
11151115 for any number of years necessary until the amount of total credits
11161116 claimed is equal to the total amou nt of taxable income received by
11171117 the participating financial institution pursuant to the loan . Any
11181118 credit allowed but not u sed in a taxable year may be carried forward
11191119 for a period not to exceed five (5) taxable years . In no event
11201120 shall a credit allowed pursuant to the provisions of this subsection
11211121 be transferable or refundable.
11221122 2. No credit otherwise authorized by the provi sions of this
11231123 subsection may be clai med for any event, transaction, investment,
11241124 expenditure or other act occurring on or after July 1, 2010, for
11251125 which the credit would otherwise be allowable . The provisions of
11261126 this paragraph shall cease to be operative on July 1, 2012.
11271127 Beginning July 1, 20 12, the credit authorized by this subsection may
11281128 be claimed for any event, transaction, investm ent, expenditure or
11291129 other act occurring on or after July 1, 2012, according to the
11301130 provisions of this subsection.
11311131 SECTION 3. This act shall become effective N ovember 1, 2022.
11321132
11331133 58-2-3140 QD 1/20/2022 8:03:54 AM