Oklahoma Senate Bill SB1702

Oklahoma 2022 Regular Session

• Introduced: 2/7/22
• Refer: 2/8/22

Caption

Income tax; modifying the sales apportionment factor to determine certain corporate income to exclude certain out of state shipments. Effective date.

Impact

The adjustments proposed by SB1702 could significantly impact how corporations report their income for tax purposes in Oklahoma. By excluding certain out-of-state shipments from taxable income, it attempts to encourage local business investments and may lead to an increase in job creation within the state. However, the bill's effects will depend on how businesses adapt their operations and financial strategies to take advantage of these changes in tax liability. The modifications could also shift the burden of taxation, with implications for budget planning at the state level.

Summary

Senate Bill 1702 aims to modify the existing state income tax laws in Oklahoma by changing the sales apportionment factor for certain corporate income determination. Specifically, it focuses on excluding certain out-of-state shipments from the income calculations that contribute to Oklahoma's taxable income. The intent of the bill is to create a clearer and more manageable tax structure for corporations that operate across state lines, potentially providing incentives for businesses to maintain or expand their operations within Oklahoma.

Contention

Notably, the modification of income tax regulations can lead to varying opinions among stakeholders. While proponents argue that it simplifies the tax process and promotes economic development, opponents may express concerns about the potential loss of tax revenue for the state if businesses exploit loopholes or inconsistently declare their apportionments. Additionally, there could be apprehensions regarding how these changes might affect local competitors who may not benefit from the same exemptions on out-of-state shipments.