Oklahoma 2023 1st Special Session

Oklahoma House Bill HB1040 Compare Versions

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Version 2 (New)

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1		-	An Act
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2	28		(1ST EXTRAORDINARY SESSION)
3		-	~~ENROLLED~~ HOUSE
	29	+	ENGROSSED HOUSE
4	30		BILL NO. 1040 By: Wallace, Martinez, Maynard,
5	31		and Hill of the House
6	32
7	33		and
8	34
9	35		Thompson (Roger) and Hall
10	36		of the Senate
11	37
12	38
13	39
14	40		An Act relating to revenue and taxation; amending 68
15	41		O.S. 2021, Section 2355, a s amended by Section 45,
16	42		Chapter 228, O.S.L. 2022 ( 68 O.S. Supp. 2022, Section
17	43		2355), which relates to income tax; modifying certain
18	44		dollar amount for purposes of income tax liab ility
19	45		computation; and providing an effective date .
20	46
21	47
22		-	~~SUBJECT: Revenue and taxation~~
	48	+
23	49
24	50		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
25		-
26	51		SECTION 1. AMENDATORY 68 O.S. 2021, Section 2355, as
27	52		amended by Section 45, Chapte r 228, O.S.L. 2022 (68 O.S. Supp. 2022,
28	53		Section 2355), is amended to read as follows:
29		-
30	54		Section 2355. A. Individuals. For all taxable years beginning
31	55		after December 31, 1998, and before January 1, 2006, a tax is hereby
32	56		imposed upon the Oklahoma taxable in come of every resident or
33	57		nonresident individual, which tax shall be computed at the option of
34	58		the taxpayer under one of the two following methods:
35		-
36	59		1. METHOD 1.
37		-
38	60		a. Single individuals and married individuals filing
39	61		separately not deducting federal income t ax:
40		-
41	62		(1) 1/2% tax on first $1,000.00 or part there of,
42	63
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43	89		(2) 1% tax on next $1,500.00 or part thereof,
44		-
45	90		(3) 2% tax on next $1,250.00 or part thereof,
46		-	ENR. H. B. NO. 1040 (1ST EX. SESS.) Page 2
47	91		(4) 3% tax on next $1,150.00 or part thereof,
48		-
49	92		(5) 4% tax on next $1,300.00 or part thereof,
50		-
51	93		(6) 5% tax on next $1,500.00 or part thereof,
52		-
53	94		(7) 6% tax on next $2,300.00 or part thereof, and
54		-
55	95		(8) (a) for taxable years beginning after December
56	96		31, 1998, and before January 1, 2002, 6 .75%
57	97		tax on the remainder,
58		-
59	98		(b) for taxable years beginning on or after
60	99		January 1, 2002, and before January 1, 2004,
61	100		7% tax on the remainde r, and
62		-
63	101		(c) for taxable years beginning on or after
64	102		January 1, 2004, 6.65% tax on the remainder.
65		-
66	103		b. Married individuals filing jointly and surviving
67	104		spouse to the extent and in the manner that a
68	105		surviving spouse is permitted to file a joint return
69	106		under the provisions of the Internal Revenue Code and
70	107		heads of households as defined in the Internal Revenue
71	108		Code not deducting federal income tax:
72		-
73	109		(1) 1/2% tax on first $2,000.00 or part thereof,
74		-
75	110		(2) 1% tax on next $3,000.00 or part thereof,
76		-
77	111		(3) 2% tax on next $2,500.00 or part thereof,
78		-
79	112		(4) 3% tax on next $2,300.00 or part thereof,
80	113
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81	139		(5) 4% tax on next $2,400.00 or part thereof,
82		-
83	140		(6) 5% tax on next $2,800.00 or part thereof,
84		-
85	141		(7) 6% tax on next $6,000.00 or part thereof, and
86		-
87	142		(8) (a) for taxable years beginning after De cember
88	143		31, 1998, and before January 1, 2002 , 6.75%
89	144		tax on the remainder,
90		-	ENR. H. B. NO. 1040 (1ST EX. SESS.) Page 3
91	145		(b) for taxable years beginning on or after
92	146		January 1, 2002, and before January 1, 2004,
93	147		7% tax on the remainder, and
94		-
95	148		(c) for taxable years beginning on or after
96	149		January 1, 2004, 6.65 % tax on the remainder.
97		-
98	150		2. METHOD 2.
99		-
100	151		a. Single individuals and married individuals filing
101	152		separately deducting federa l income tax:
102		-
103	153		(1) 1/2% tax on first $1,000.00 or part thereof,
104		-
105	154		(2) 1% tax on next $1,500. 00 or part thereof,
106		-
107	155		(3) 2% tax on next $1,250.00 or part thereof,
108		-
109	156		(4) 3% tax on next $1,150.00 or part thereo f,
110		-
111	157		(5) 4% tax on next $1,200.00 or part thereof,
112		-
113	158		(6) 5% tax on next $1,400.00 or part thereof,
114		-
115	159		(7) 6% tax on next $1,500.00 or part thereof,
116		-
117	160		(8) 7% tax on next $1,500.00 or part thereof,
118		-
119	161		(9) 8% tax on next $2,000.00 or part thereof,
120		-
121	162		(10) 9% tax on next $3,500.00 or part thereof, and
122	163
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123	189		(11) 10% tax on the remainder.
124		-
125	190		b. Married individuals filing jointly and surviving
126	191		spouse to the extent and in the mann er that a
127	192		surviving spouse is permitted to file a joint return
128	193		under the provisions of the Internal Revenue C ode and
129	194		heads of households as defined in the Internal Rev enue
130	195		Code deducting federal income tax:
131		-
132	196		(1) 1/2% tax on the first $2,000.00 or part there of,
133		-
134	197		(2) 1% tax on the next $3,000.00 or part ther eof,
135		-	ENR. H. B. NO. 1040 (1ST EX. SESS.) Page 4
136	198		(3) 2% tax on the next $2,500.00 or part thereof,
137		-
138	199		(4) 3% tax on the next $1,400.00 or part thereof,
139		-
140	200		(5) 4% tax on the next $1,500.00 or part thereof,
141		-
142	201		(6) 5% tax on the next $1,600.00 or part thereof,
143		-
144	202		(7) 6% tax on the next $1,250.00 or part thereof,
145		-
146	203		(8) 7% tax on the next $1,750.00 or part thereof,
147		-
148	204		(9) 8% tax on the next $3,000.00 or part thereof,
149		-
150	205		(10) 9% tax on the next $6,000.00 or part thereof, and
151		-
152	206		(11) 10% tax on the remainder.
153		-
154	207		B. Individuals. For all taxable years beginning on or after
155	208		January 1, 2008, and ending any tax year which begins after Decem ber
156	209		31, 2015, for which the determination required pursuant to Sections
157	210		4 and 5 of this act is made by the State Board of Equalization, a
158	211		tax is hereby imposed upon the Oklahoma taxable income of ever y
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159	238		resident or nonresident individual, which tax shall be computed as
160	239		follows:
161		-
162	240		1. Single individuals and married indiv iduals filing
163	241		separately:
164		-
165	242		(a) 1/2% tax on first $1,000.00 or part thereof,
166		-
167	243		(b) 1% tax on next $1,500.00 or part thereof,
168		-
169	244		(c) 2% tax on next $1,250.00 or part thereof,
170		-
171	245		(d) 3% tax on next $1,150.00 or part thereof,
172		-
173	246		(e) 4% tax on next $2,300.00 or part thereo f,
174		-
175	247		(f) 5% tax on next $1,500.00 or part thereof,
176		-
177	248		(g) 5.50% tax on the remainder for the 2 008 tax year and
178	249		any subsequent tax year unless t he rate prescribed by
179	250		subparagraph (h) of this p aragraph is in effect, and
180		-	ENR. H. B. NO. 1040 (1ST EX. SESS.) Page 5
181	251		(h) 5.25% tax on the remainder for the 2009 and subsequent
182	252		tax years. The decrease in the top marginal
183	253		individual income tax rate o therwise authorized by
184	254		this subparagraph shall be contingent upon the
185	255		determination required to be made by the State Board
186	256		of Equalization pursuant to Section 2355.1A of this
187	257		title.
188		-
189	258		2. Married individuals filing jointly and surviving spouse to
190	259		the extent and in the manner that a surviving spouse is perm itted to
191	260		file a joint return under the provisi ons of the Internal Revenue
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192	287		Code and heads of households as defined in t he Internal Revenue
193	288		Code:
194		-
195	289		(a) 1/2% tax on first $2,000.00 or part thereof,
196		-
197	290		(b) 1% tax on next $3,000.00 or part thereof,
198		-
199	291		(c) 2% tax on next $2,500.00 or part thereof,
200		-
201	292		(d) 3% tax on next $2,300.00 or part thereof,
202		-
203	293		(e) 4% tax on next $2,400.00 or part thereo f,
204		-
205	294		(f) 5% tax on next $2,800.00 or part thereof,
206		-
207	295		(g) 5.50% tax on the remainder for the 2 008 tax year and
208	296		any subsequent tax year unless the rate prescribed by
209	297		subparagraph (h) of this paragraph is in effect, and
210		-
211	298		(h) 5.25% tax on the remainder for the 2009 and subsequent
212	299		tax years. The decrease in the top marginal
213	300		individual income tax rate o therwise authorized by
214	301		this subparagraph shall be contingent upon the
215	302		determination required to be made by th e State Board
216	303		of Equalization pursuant to Section 2355.1A of this
217	304		title.
218		-
219	305		C. Individuals. For all taxable years beginning on or after
220	306		January 1, 2022 2024, a tax is hereby imposed upon the Oklaho ma
221	307		taxable income of every resident or non resident individual, which
222	308		tax shall be computed as follows:
	309	+	1. Single individuals and married individuals filing
	310	+	separately:
223	311
224		-	1. Single individuals and married individuals filing
225		-	separately: ENR. H. B. NO. 1040 (1ST EX. SESS.) Page 6
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226	336
227	337		(a) 0.25% tax on first $1,000.00 or part thereof,
228		-
229	338		(b) 0.75% tax on next $1,500.00 or part thereof,
230		-
231	339		(c) 1.75% tax on next $1,250.00 or part thereof,
232		-
233	340		(d) 2.75% tax on next $1,150.00 or part thereof,
234		-
235	341		(e) 3.75% tax on next $2,300.00 or part thereof,
236		-
237	342		(f) 4.75% tax on the remainder.
238		-
239	343		2. Married individuals filing jointly and surviving spouse to
240	344		the extent and in the manner that a surviving spouse is permit ted to
241	345		file a joint return under the provisions of the Int ernal Revenue
242	346		Code and heads of households as defined in the Internal Revenue
243	347		Code:
244		-
245	348		(a) 0.25% tax on first $2,000.00 or part thereof,
246		-
247	349		(b) 0.75% tax on next $3,000.00 or part thereof,
248		-
249	350		(c) 1.75% tax on next $2,500.00 or part thereof,
250		-
251	351		(d) 2.75% tax on next $2,300.00 or part thereof,
252		-
253	352		(e) 3.75% tax on next $2,400.00 $4,600.00 or part thereof,
254		-
255	353		(f) 4.75% tax on the remainder.
256		-
257	354		No deduction for federal income taxes paid shall be allowed to
258	355		any taxpayer to arrive at taxable income.
259		-
260	356		D. Nonresident aliens. In lieu of the rates set forth in
261	357		subsection A above, there shall be imposed on nonresident aliens, as
262	358		defined in the Internal Revenue Code, a tax of eight percent (8%)
263	359		instead of thirty percent (30%) as used in the Internal Revenue
264	360		Code, with respect to the Oklahom a taxable income of such
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265	387		nonresident aliens as determined under the provision of the Oklahoma
266	388		Income Tax Act.
267		-
268	389		Every payer of amounts covered by this subsection shall deduct
269	390		and withhold from such am ounts paid each payee an amount equal to
270		-	eight percent (8%) thereof. Every payer required to deduct and ~~ENR. H. B. NO. 1040 (1ST EX. SESS.) Page 7~~
	391	+	eight percent (8%) thereof. Every payer required to deduct and
271	392		withhold taxes under this subsection shall for each quarterly period
272	393		on or before the last day of the month following the close of each
273	394		such quarterly period, pay over the amount so withheld as taxes to
274	395		the Tax Commission, and shall file a return with each such payment.
275	396		Such return shall be in such form as the Tax Commission shall
276	397		prescribe. Every payer required under this subsection to deduct and
277	398		withhold a tax from a payee shall, as to the total amounts pai d to
278	399		each payee during the calendar year, furnish to such payee, on or
279	400		before January 31, of the succeeding year, a written statement
280	401		showing the name of the payer, the name of the payee and the pay ee's
281	402		Social Security account number, if any, the total amo unt paid
282	403		subject to taxation, and the total amount deducted and withheld as
283	404		tax and such other information as the Tax Commission may require.
284	405		Any payer who fails to withhold or pay to the Tax Commi ssion any
285	406		sums herein required to be withheld or paid shal l be personally and
286	407		individually liable therefor to the State of Oklahoma.
287		-
288	408		E. Corporations. For all taxable years beginning after
289	409		December 31, 2021, a tax is hereby imposed upon the Oklahoma taxab le
290	410		income of every corporation doing business within this state or
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291	437		deriving income from sources within this state in an amount equal to
292	438		four percent (4%) thereof.
293		-
294	439		There shall be no additional Oklahoma income tax imposed on
295	440		accumulated taxable income or on undistributed personal holding
296	441		company income as those terms are defined in the Internal Rev enue
297	442		Code.
298		-
299	443		F. Certain foreign corporatio ns. In lieu of the tax imposed in
300	444		the first paragraph of subsection D of this section, for all taxable
301	445		years beginning after December 31, 2021, there shall be imposed on
302	446		foreign corporations, as defined in the Inte rnal Revenue Code, a tax
303	447		of four percent (4%) instead of thirty percent (30%) as used in the
304	448		Internal Revenue Code, where such income is received from sources
305	449		within Oklahoma, in accordance with the provisions of the Inter nal
306	450		Revenue Code and the Oklahoma Income Tax Act.
307		-
308	451		Every payer of amounts covered by this subsection shall deduct
309	452		and withhold from such amounts paid each payee an amount equal to
310	453		four percent (4%) thereof. Every payer required to deduct and
311	454		withhold taxes under this subsection shall for e ach quarterly period
312	455		on or before the last day of the m onth following the close of each
313	456		such quarterly period, pay over the amount so withheld as taxes to
314	457		the Tax Commission, and shall file a return with each such payment .
315		-	Such return shall be in such for m as the Tax Commission shall ~~ENR. H. B. NO. 1040 (1ST EX. SESS.) Page 8~~
	458	+	Such return shall be in such for m as the Tax Commission shall
316	459		prescribe. Every payer required under this subsection to deduct and
317	460		withhold a tax from a payee shall, as to the total amounts paid t o
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318	487		each payee during the calendar year, furnish to such pay ee, on or
319	488		before January 31, of th e succeeding year, a written statement
320	489		showing the name of the payer, the name of the payee and the payee's
321	490		Social Security account number, if any, the total amount s paid
322	491		subject to taxation, the total amount deducted and withheld as tax
323	492		and such other information as the Tax Commission may require . Any
324	493		payer who fails to withhold or pay to the Tax Commission any sums
325	494		herein required to be withheld or paid shall be p ersonally and
326	495		individually liable therefor to the State of Oklahoma.
327		-
328	496		G. Fiduciaries. A tax is hereby imposed upon the Oklahoma
329	497		taxable income of every trust and estate at the same rates as are
330	498		provided in subsection B or C of this section for single
331	499		individuals. Fiduciaries are not allowed a deduction for any
332	500		federal income tax paid.
333		-
334	501		H. Tax rate tables. For all taxable years beginning after
335	502		December 31, 1991, in lieu of the tax imposed by subsection A, B or
336	503		C of this section, as applicable there is her eby imposed for each
337	504		taxable year on the taxable income of every individual, whose
338	505		taxable income for such taxable year does not exceed the ceiling
339	506		amount, a tax determined under tables, applicable to such taxable
340	507		year which shall be prescribed by the Tax Commission and which shall
341	508		be in such form as it determine s appropriate. In the table so
342	509		prescribed, the amounts of the tax shall be computed on t he basis of
343	510		the rates prescribed by subsection A, B or C of this section. For
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	521	+	10
	522	+	11
	523	+	12
	524	+	13
	525	+	14
	526	+	15
	527	+	16
	528	+	17
	529	+	18
	530	+	19
	531	+	20
	532	+	21
	533	+	22
	534	+	23
	535	+	24
	536	+
344	537		purposes of this subsection, t he term "ceiling amount" means, with
345	538		respect to any taxpay er, the amount determined by the T ax Commission
346	539		for the tax rate category in which such t axpayer falls.
347		-
348	540		SECTION 2. This act shall become effective January 1, 2024.
349		-	ENR. H. B. NO. 1040 (1ST EX. SESS.) Page 9
350	541		Passed the House of Representatives the 24th day of May, 2023.
351	542
352	543
353	544
354	545
355	546		Presiding Officer of the House
356	547		of Representatives
357	548
358	549
359	550
360		-	Passed the Senate the ~~26th~~ day of ~~May~~, 2023.
	551	+	Passed the Senate the ___ day of __________, 2023.
361	552
362	553
363	554
364	555
365	556		Presiding Officer of the Senate
366	557
367	558
368		-	OFFICE OF THE GOVERNOR
369		-	Received by the Office of the Governor this ____________________
370		-	day of ___________________, 20_______, at _______ o'clock _______ M.
371		-	By: _________________________________
372		-	Approved by the Governor of the State of Oklahoma this _____ ____
373		-	day of ___________________, 20_______, at _______ o'clock _______ M.
374		-
375		-
376		-	_________________________________
377		-	Governor of the State of Oklahoma
378		-
379		-	OFFICE OF THE SECRETARY OF STATE
380		-	Received by the Office of the Secretary of State this __________
381		-	day of ___________________, 20_______, at _______ o'clock _______ M.
382		-	By: _________________________________