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STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022)
SENATE BILL 1857 By: David
AS INTRODUCED
An Act relating to income tax credit; amending 68
O.S. 2021, Section 2357.22, which rel ates to tax
credits for investment in certain qual ified clean-
burning motor vehicles and related asse ts; modifying
tax years for which credit may be claimed; providing
tax credit for hydrogen fuel cells and related
assets; and providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE ST ATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 2357.22, is
amended to read as follows:
Section 2357.22. A. For tax years beginning before December
31, 2027 2028 and before, there shall be allowed a one -time credit
against the income tax imposed by Section 2355 of this title for
investments in qualified clean -burning motor vehicle fuel property
placed in service after December 31, 1990 on or after January 1,
1991.
B. As used in this section, "qualified clean-burning motor
vehicle fuel property " means:
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1. Equipment installed to modify a motor vehicle which is
propelled by gasoline or diesel fuel so that the vehicle may be
propelled by compressed natural gas, liquefied n atural gas, or
liquefied petroleum gas. The equip ment covered by this paragraph
must:
a. be new, not previously used to modify or retrofit any
vehicle propelled by gasoline or diesel fuel and be
installed by an alternative fuels equipment technician
who is certified in accordance with the Alternative
Fuels Technician Certification Act,
b. meet all Federal Motor Vehicle Safety Standards set
forth in 49 CFR 571, or
c. for any commercial motor vehicle (CMV), follow the
Federal Motor Carrier Safety Regulations or Oklahoma
Intrastate Motor Carrier Regulations;
2. A motor vehicle originally equippe d so that the vehicle may
be propelled by compressed natural gas, or liquefied natural gas or
liquefied petroleum gas but only to the extent of the portion of the
basis of such motor vehicle which is attributable to t he storage of
such fuel, the delivery to the e ngine of such motor vehicle of such
fuel, and the exhaust of gases from combustion of such fuel;
3. Property, not including a building and its structural
components, which is:
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a. directly related to the delive ry of compressed natural
gas, liquefied natura l gas or liquefied petroleum gas ,
or hydrogen for commercial purposes or for a fee or
charge, into the fuel tank o f a motor vehicle
propelled by such fuel inclu ding compression equipment
and storage tanks for s uch fuel at the point where
such fuel is so delivered but only if such property is
not used to deliver such fuel into any other type of
storage tank or receptac le and such fuel is not used
for any purpose other than to propel a motor vehicle ,
or
b. a metered-for-fee, public access recharging system for
motor vehicles propelled in whole or in part by
electricity. The property covered by this paragraph
must be new, and must not have been previously
installed or used to refuel vehicles powered by
compressed natural gas, liquefied natural gas or
liquefied petroleum gas, hydrogen, or electricity.
Any property covered by this paragraph which is related to the
delivery of hydrogen into the fuel tank of a motor vehi cle shall
only be eligible for tax year 2010 tax years 2010 and 2023 through
2028; or
4. Property which is directly related to the compression and
delivery of natural gas from a private home or residence, for
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noncommercial purposes, into the fuel tank of a motor vehicle
propelled by compressed natural ga s. The property covered by this
paragraph must be new and must not have been previously installed or
used to refuel vehicles powered by natural gas ; or
5. For tax years 2010 and 2023 through 202 8, a motor vehicle
originally equipped so that the vehicle may be propelled by a
hydrogen fuel cell electric fueling system .
C. As used in this section, "motor vehicle" means a motor
vehicle originally designed by the manufacturer to operate lawfully
and principally on streets and highways.
D. The credit provided for in subsection A of th is section
shall be as follows:
1. For the qualified clean -burning motor vehicle fuel property
defined in paragraph 1 or 2 of subsection B of this section, the
amount of the credit shall be as follows based upon gross vehicle
weight of the qualified vehic le:
a. for vehicles up to or below six thousand (6,000)
pounds, the credit shall be a maximum of Five Tho usand
Five Hundred Dollars ($5,500.00),
b. for vehicles between six thousan d one (6,001) pounds
to ten thousand (10,000) poun ds, the credit shall be a
maximum amount of Nine Thousand Dollars ($9,000.00),
c. for vehicles of ten thousand one (10,001) pounds, but
not in excess of twenty -six thousand five hundred
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(26,500) pounds, the credit shall be a maximum amount
of Twenty-six Thousand Dollars ($26,000.00 ), and
d. for vehicles in excess of twenty -six thousand five
hundred one (26,501) pounds, the credit shal l be a
maximum amount of Fifty Thousand Dollars ($50,000.00)
One Hundred Thousand Dollars ($100,000.00);
2. For qualified cl ean-burning motor vehicle fuel property
defined in paragraph 3 of sub section B of this section, a per -
location credit of forty -five percent (45%) of the cost of the
qualified clean-burning motor vehicle fue l property; and
3. For qualified clean -burning motor vehicle fuel property
defined in paragraph 4 of subsection B of t his section, a per-
location credit of the lesser of fifty percent (50%) of the cost of
the qualified clean-burning motor vehicle fuel pro perty or Two
Thousand Five Hundred Dollars ($2,500 .00).
E. In cases where no credit has been claimed pursuant to
paragraph 1 of subsection D of this section by any prior owner and
in which a motor vehicle is purchased by a taxpayer with qualified
clean-burning motor vehicle fuel property installed by the
manufacturer of such motor vehicle and the taxpayer is unable or
elects not to determine the exact basis which is attributable to
such property, the taxpayer may claim a cre dit in an amount not
exceeding the lesser of ten percent (10%) of the cost of the motor
vehicle or One Thousand Five Hundred Dollars ($1,500.00).
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F. If the tax credit allowed pursuant to subsection A of this
section exceeds the amount of income taxes due or if there are no
state income taxes due on the income of the taxpayer, the amoun t of
the credit not used as an offset against the income taxes of a
taxable year may be carried forward, in order, as a credit against
subsequent income tax liability for a p eriod not to exceed five (5)
years. The tax credit authorized pursuant to the pro visions of this
section shall not be used to reduce the tax liability of the
taxpayer to less than zero (0).
G. A husband and wife who file separate returns for a taxable
year in which they could have file d a joint return may each claim
only one-half (1/2) of the tax credit that would have been allowed
for a joint return.
H. The Oklahoma Tax Commission is herein empowered to
promulgate rules by which the purpose of this sect ion shall be
administered, including the power to establish and enforce penalties
for violations thereof.
I. Notwithstanding the provisions of Section 2352 of this
title, for the fiscal year beginning on July 1, 2014, and each
fiscal year thereafter, the Tax Commission shall calculate a n amount
that equals five percent (5%) of the cost of qualified clean-burning
motor vehicle fuel property as provided f or in paragraph 1 of
subsection D of this section for tax year 2012. For each subsequent
fiscal year thereafter, the Tax Commission shal l perform the same
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computation with respect to the second tax year preceding the
beginning of each subsequent fiscal ye ar. The Tax Commission shall
then transfer an amount equal to the amount calculated in this
subsection from the revenue derived pursuant to the provisions of
subsections A, B and E of Se ction 2355 of this title to the
Compressed Natural Gas Conversion Saf ety and Regulation Fund created
in Section 130.25 of Title 74 of the Oklahoma Statutes.
J. For the taxable year beginning January 1, 202 0, and each
taxable year thereafter, the total amo unt of credits authorized by
this section used to offset tax shall be adjusted annually to limit
the annual amount of credits to Twenty Million Dollars
($20,000,000.00) Thirty Million Dollars ( $30,000,000.00). The Tax
Commission shall annually calculate a nd publish by the first day of
the affected taxable y ear a percentage by which the credits
authorized by this section shall be reduced so the total amount of
credits used to offset tax does not exceed Twenty Million Dollars
($20,000,000.00) Thirty Million Dollars ($30,000,000.00) per year.
The formula to be used for the percentage adjustment shal l be Twenty
Million Dollars ($20,000,000.00) Thirty Million Dollars
($30,000,000.00) divided by the credits claimed in the second
preceding year, with respect to a ny changes to the future of the
credit.
K. Pursuant to subsection J of this section, in the event the
total tax credits authorized b y this section exceed Twenty Million
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Dollars ($20,000,000.00) Thirty Million Dollars ($30,000,000.00) in
any calendar year, the Tax Commission shall permit any excess over
Twenty Million Dollars ($20,0 00,000.00) Thirty Million Dollars
($30,000,000.00) but shall factor such excess into the percentage
adjustment formula for subse quent years with respect to any changes
to the future of the credit.
L. The Tax Commission shall notify the Office of the State
Secretary of Energy and Environment at any time when the amount of
claims for credits allowed pursuant to this section reaches eighty
percent (80%) of the total annual limit pro vided in subsection J of
this section. Upon such notification, the Secretary shall provide
notice to the Governor, Pr esident Pro Tempore of the Senate and
Speaker of the House of Representatives.
SECTION 2. This act shall become effective January 1, 2023.
58-2-2325 QD 1/20/2022 10:31:30 PM