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STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022)
COMMITTEE SUBSTITUTE
FOR
SENATE BILL 1857 By: David
COMMITTEE SUBSTITUTE
An Act relating to income tax credit; amending 68
O.S. 2021, Section 2357.22, which relates to tax
credits for investment in certain qualified clean -
burning motor vehicles and related assets; modifying
tax years for which credit may be claimed; providing
tax credit for hydrogen fuel cells and related
assets; modifying credit limit for certain years;
providing duty of Oklahoma Tax Commission; providing
certain formula; and providing an effective date .
BE IT ENACTED BY THE PEOPLE OF T HE STATE 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.
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B. As used in this section, “qualified clean-burning motor
vehicle fuel property ” means:
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 moto r 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 g ases from combustion of such f uel;
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3. Property, not including a building and its structural
components, which is:
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 re lated 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
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4. Property which is directly related to the compression and
delivery of natural gas from a private h ome or residence, for
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 n atural 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 paragraphs 1, 2, or 5 of subsection B of
this section, the amount of the credi t shall be as follows based
upon gross vehicle wei ght of the qualified vehic le:
a. for vehicles up to or below six thousand (6,000)
pounds, the credit shall be a maxi mum of Five Thousand
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),
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c. for vehicles of ten thousand one ( 10,001) pounds, but
not in excess of twenty -six thousand five hundred
(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 shall 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 lesse r 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 cl aimed pursuant to
paragraph 1 of subsection D of this section by any p rior 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 ta xpayer is unable or
elects not to determine the exact basis which is a ttributable to
such property, the taxpayer may claim a cre dit in an amount not
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exceeding the lesser of ten percent (10%) of the cost of the motor
vehicle or One Thousand Five Hundred Dol lars ($1,500.00).
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, a s 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 r educe 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 allow ed
for a joint return.
H. The Oklahoma Tax Commission is herein empow ered 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 th e provisions of Section 2352 of this
title, for the fiscal year beginn ing 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
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subsection D of this secti on for tax year 2012. For each subsequent
fiscal year thereafter, the Tax Commission shal l perform the same
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 tax years 2020 through 2022 , the total
amount of credits authorized by this section used to offset t ax
shall be adjusted annually to limit the annual amount of credits to
Twenty Million Dollars ($20,000,000.00) . The Tax Commission shall
annually calculate a nd publish by the first day of the affected
taxable year a percentage by which the credits authori zed 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)
per year. The formula to be used for the percentage adjustment
shall be Twenty Million Dollars ($20,000,000.00) 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) in any calendar year, the Tax Commission
shall permit any excess over Twenty Million Dollars ($20,0 00,000.00)
but shall factor such excess into the percentage adjustment formula
for subsequent years with respect to any changes to the fut ure of
the credit.
L. For the tax years 2023 through 2028, the total amount of
credits authorized by this section used to offset tax shall be
adjusted annually to limit the annual amount of credits to :
1. Ten Million Dollars ($10,000,000.00) for qualified clean
burning fuel property propelled by compressed natural gas, liquefied
natural gas, or liquefied petroleum gas , property related to the
delivery of compressed natural gas, liquefied natural gas or
liquefied petroleum gas, and property directly related to the
compression and deliver y of natural gas;
2. Ten Million Dollars ($10,000,000.00) for property originally
equipped so that the vehicle may be propelled by a hydrogen fuel
cell electric fueling system and property directly related to the
delivery of hydrogen; and
3. Ten Million Dollars ($10,000,000.00) for property which is a
metered-for-fee, public access recharging system for motor vehicles
propelled in whole or in part by electricity .
The Tax Commission shal l annually calculate and publish by the
first day of the affected taxa ble year a percentage by which the
credits authorized by this section shall be redu ced so the total
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amount of credits used to offset tax does not exceed each of the
limits provided in paragraphs 1 through 3 of this subsection . The
formula to be used for t he percentage adjustment shall be Ten
Million Dollars ($10,000,000.00) divided by the credits claimed in
the second preceding year, with respect to any changes to the future
of the credit.
M. Pursuant to subsection L of this section, in the event the
tax credits authorized by this section exceed any of the limits
provided in paragraphs 1 through 3 of subsection L of this section
in any year, the Tax Commission shal l permit any excess ove r Ten
Million Dollars ($10,000,000.00) but shall factor such excess in to
the percentage adjustment formula for subsequent years with respect
to any changes to the future of the credit.
N. 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 provid e
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.
58-2-3551 QD 2/15/2022 4:29:13 PM