Oklahoma 2022 Regular Session

Oklahoma Senate Bill SB553

Introduced

2/1/21

Refer

2/2/21

Caption

Income tax; eliminating deduction for certain capital gains. Effective date.

Impact

The potential impact of SB553 on state law is significant, as it alters the treatment of capital gains for tax purposes, which can affect investment behaviors and individual taxpayers. This legislation aims to close loopholes that may have previously allowed for tax deductions on capital gains, potentially leading to an increase in tax liabilities for individuals and possibly corporations holding investments that qualify as capital gains. There is an implication that the state could see an increased revenue flow as a result of these adjustments, which may be necessary for budgetary constraints.

Summary

Senate Bill 553 focuses on the elimination of the deduction for certain capital gains in Oklahoma's income tax code. Specifically, it seeks to amend Section 2358 of the Oklahoma Income Tax Act by modifying the term under which certain income modifications for capital gains can occur. The proposed changes indicate that from a specified date, no adjustments will be allowed to lower the taxable income related to those capital gains. By tightening the regulations around these capital gains, the bill aims to increase state revenue derived from income tax.

Contention

However, the bill faces contention from various stakeholders, including individuals who argue that removing the deduction for capital gains might discourage investment in the local economy. Critics point out that such measures could disproportionately affect middle-class taxpayers who rely on capital gains from the sale of homes and businesses. The debate around SB553 centers on finding a balance between enhancing tax revenue and fostering a healthy economic environment that encourages growth and investment.