Oklahoma 2023 Regular Session

Oklahoma House Bill HB1953 Compare Versions

Version 1 (Old)

Version 2 (New)

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3		-	ENGR. H. B. NO. 1953 Page 1 1
	3	+	HB1953 HFLR Page 1
	4	+	BOLD FACE denotes Committee Amendments. 1
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28		-	ENGROSSED HOUSE
29		-	BILL NO. 1953 By: McCall, O'Donnell, and
30		-	Lepak of the House
	29	+	HOUSE OF REPRESENTATIVES - FLOOR VERSION
31	30
32		-	~~and~~
	31	+	STATE OF OKLAHOMA
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34		-	Bullard of the Senate
	33	+	1st Session of the 59th Legislature (2023)
	34	+
	35	+	HOUSE BILL 1953 By: McCall and O'Donnell
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	41	+	AS INTRODUCED
	42	+
40	43		An Act relating to revenue and taxation; amending 68
41		-	O.S. 2021, Sections 2355, as amended by Section 45,
42		-	Chapter 228, O.S.L. 2022, and 2358, as last amended
43		-	by Section 2, Chapter 341, O.S.L. 2022 (68 O.S. Supp.
44		-	2022, Sections 2355 and 2358), which relate to income
45		-	taxation; modifying rates of individual income tax;
46		-	providing for certain rate of individual income tax
47		-	for specified periods; providing for income tax rat es
48		-	based upon certain contingency; providing for
49		-	modified rate of individual income tax for certain
50		-	period; modifying provisions related to standard
51		-	deduction amounts; amending 68 O.S. 2021, Section
52		-	2355.1P-4, which relates to the Pass-Through Entity
53		-	Tax Act; modifying reference to income tax rate for
54		-	certain natural persons; and providing an effective
55		-	date.
56		-
	44	+	O.S. 2021, Section 2355, as amended by Section 45,
	45	+	Chapter 228, O.S.L. 2022 (68 O.S. Supp. 2022, Section
	46	+	2355), which relates to income tax rates; modifying
	47	+	income tax rates; and providing an effective date.
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62	53		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
63	54		SECTION 1. AMENDATORY 68 O.S. 2021, Section 2355, as
64	55		amended by Section 45, Chapter 228, O.S.L. 2022 (68 O.S. Supp. 2022,
65	56		Section 2355), is amended to read as follows:
66	57		Section 2355. A. Individuals. For all taxable years beginning
67	58		after December 31, 1998, and before January 1, 2006, a tax is hereby
68	59		imposed upon the Oklahoma taxable in come of every resident or
	60	+	nonresident individual, which tax shall be computed at the option of
	61	+	the taxpayer under one of the two following methods:
	62	+	1. METHOD 1.
	63	+	a. Single individuals and married individuals filin g
	64	+	separately not deducting federal income t ax:
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70		-	ENGR. H. B. NO. 1953 Page 2 1
	66	+	HB1953 HFLR Page 2
	67	+	BOLD FACE denotes Committee Amendments. 1
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95		-	nonresident individual, which tax shall be computed at the option of
96		-	the taxpayer under one of the two follow ing methods:
97		-	1. METHOD 1.
98		-	a. Single individuals and married individuals filing
99		-	separately not deducting federal income tax:
100	92		(1) 1/2% tax on first $1,000.00 or part t hereof,
101	93		(2) 1% tax on next $1,500.00 or part thereof,
102	94		(3) 2% tax on next $1,250.00 or part thereof,
103	95		(4) 3% tax on next $1,150.00 or part thereof,
104	96		(5) 4% tax on next $1,300.00 or part thereof,
105	97		(6) 5% tax on next $1,500.00 or part thereof,
106	98		(7) 6% tax on next $2,300.00 or part thereof, and
107	99		(8) (a) for taxable years beginning after December
108	100		31, 1998, and before January 1, 2002, 6.75%
109	101		tax on the remainder,
110	102		(b) for taxable years beginning on or after
111	103		January 1, 2002, and before January 1, 2004,
112	104		7% tax on the remainder, and
113	105		(c) for taxable years beginning on or after
114	106		January 1, 2004, 6.65% tax on the remainde r.
115	107		b. Married individuals filing jointly and surviving
116	108		spouse to the extent and in the manner that a
117	109		surviving spouse is permitted to file a joint return
118	110		under the provisions of the Internal Revenue Code and
	111	+	heads of households as defined in the Internal Revenue
	112	+	Code not deducting federal income tax:
	113	+	(1) 1/2% tax on first $2, 000.00 or part thereof,
	114	+	(2) 1% tax on next $3,000.00 or part thereof,
	115	+	(3) 2% tax on next $2,500.00 or part thereof,
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120		-	ENGR. H. B. NO. 1953 Page 3 1
	117	+	HB1953 HFLR Page 3
	118	+	BOLD FACE denotes Committee Amendments. 1
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145		-	heads of households as defined in the Internal Revenue
146		-	Code not deducting federal income tax:
147		-	(1) 1/2% tax on first $2,000.00 or part thereof,
148		-	(2) 1% tax on next $3,000.00 or part th ereof,
149		-	(3) 2% tax on next $2,500.00 or part thereof,
150	143		(4) 3% tax on next $2,300.00 or part thereof,
151	144		(5) 4% tax on next $2,400.00 or part t hereof,
152	145		(6) 5% tax on next $2,800.00 or part thereof,
153	146		(7) 6% tax on next $6,000.00 or part thereof, and
154	147		(8) (a) for taxable years beginning afte r December
155	148		31, 1998, and before January 1, 2002 , 6.75%
156	149		tax on the remainder,
157	150		(b) for taxable years beginning on or after
158	151		January 1, 2002, and before January 1, 2004,
159	152		7% tax on the remainder, and
160	153		(c) for taxable years beginning on or after
161	154		January 1, 2004, 6.65% tax on the remainder.
162	155		2. METHOD 2.
163	156		a. Single individuals and married individu als filing
164	157		separately deducting federal income tax:
165	158		(1) 1/2% tax on first $1,000.00 or part thereof,
166	159		(2) 1% tax on next $1,500. 00 or part thereof,
167	160		(3) 2% tax on next $1,250 .00 or part thereof,
168	161		(4) 3% tax on next $1,150.00 or part thereof,
	162	+	(5) 4% tax on next $1,200.00 or part thereof,
	163	+	(6) 5% tax on next $1,400.00 or part thereof,
	164	+	(7) 6% tax on next $1,500.00 or part thereof,
	165	+	(8) 7% tax on next $1,500.00 or part thereof,
	166	+	(9) 8% tax on next $2,000.00 or part thereof,
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170		-	ENGR. H. B. NO. 1953 Page 4 1
	168	+	HB1953 HFLR Page 4
	169	+	BOLD FACE denotes Committee Amendments. 1
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195		-	(5) 4% tax on next $1,200.00 or part thereof,
196		-	(6) 5% tax on next $1,400.00 or part thereof,
197		-	(7) 6% tax on next $1,500.00 or part thereof,
198		-	(8) 7% tax on next $1,500.00 or part thereof,
199		-	(9) 8% tax on next $2,000.00 or part thereof,
200	194		(10) 9% tax on next $3,500.00 or part thereof, and
201	195		(11) 10% tax on the remainder.
202	196		b. Married individuals filing jointly and sur viving
203	197		spouse to the extent and in the mann er that a
204	198		surviving spouse is permitted to fi le a joint return
205	199		under the provisions of the Internal Revenue Code and
206	200		heads of households as defined in the In ternal Revenue
207	201		Code deducting federal income tax:
208	202		(1) 1/2% tax on the first $2,000.00 or part there of,
209	203		(2) 1% tax on the next $3,000.00 or part thereof,
210	204		(3) 2% tax on the next $2,500.00 or part thereof,
211	205		(4) 3% tax on the next $1,400.00 or part thereof,
212	206		(5) 4% tax on the next $1,500.00 or part thereof,
213	207		(6) 5% tax on the next $1,600.00 or part thereof,
214	208		(7) 6% tax on the next $1,250.00 or part thereo f,
215	209		(8) 7% tax on the next $1,750.00 or part thereof,
216	210		(9) 8% tax on the next $3,000.00 or part thereof,
217	211		(10) 9% tax on the next $6,000.00 or part thereof, and
218	212		(11) 10% tax on the remainder.
	213	+	B. Individuals. For all taxable years beginning on or after
	214	+	January 1, 2008, and ending any tax year which begins after Decem ber
	215	+	31, 2015, for which the determination required p ursuant to Sections
	216	+	4 and 5 of this act is made by the S tate Board of Equalization, a
	217	+	tax is hereby imposed upon the Oklahoma taxable income of every
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220		-	ENGR. H. B. NO. 1953 Page 5 1
	219	+	HB1953 HFLR Page 5
	220	+	BOLD FACE denotes Committee Amendments. 1
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245		-	B. Individuals. For all t axable years beginning on or after
246		-	January 1, 2008, and ending any tax year which begins after December
247		-	31, 2015, for which the determination required pursuant to Sections
248		-	4 2355.1F and 5 2355.1G of this act title is made by the State Board
249		-	of Equalization, a tax is hereby imposed upon the Oklahoma taxable
250		-	income of every resident or nonresident individual, which tax shall
251		-	be computed as follows:
	245	+	resident or nonresident individual, which tax shall be computed as
	246	+	follows:
252	247		1. Single individuals and mar ried individuals filing
253	248		separately:
254	249		(a) 1/2% tax on first $1,000.00 or part thereof,
255	250		(b) 1% tax on next $1,500.00 or part thereof,
256	251		(c) 2% tax on next $1,250.00 or part thereof,
257	252		(d) 3% tax on next $1,150.00 or part thereof,
258	253		(e) 4% tax on next $2,300.00 or p art thereof,
259	254		(f) 5% tax on next $1,500.00 or part thereo f,
260	255		(g) 5.50% tax on the remainder for the 2 008 tax year and
261	256		any subsequent tax year unle ss the rate prescribed by
262	257		subparagraph (h) of this p aragraph is in effect, and
263	258		(h) 5.25% tax on the remainder fo r the 2009 and subsequent
264	259		tax years. The decrease in the top marginal
265	260		individual income tax rate o therwise authorized by
266	261		this subparagraph shal l be contingent upon the
267	262		determination required to be made by the State Board
	263	+	of Equalization pursuant to Sectio n 2355.1A of this
	264	+	title.
	265	+	2. Married individuals filing jointly and surviving spouse to
	266	+	the extent and in the manner that a surviving spouse is permitted to
	267	+	file a joint return under the provisi ons of the Internal Revenue
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269		-	ENGR. H. B. NO. 1953 Page 6 1
	269	+	HB1953 HFLR Page 6
	270	+	BOLD FACE denotes Committee Amendments. 1
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294		-	of Equalization pursuant to Section 23 55.1A of this
295		-	title.
296		-	2. Married individuals filing jointly and surviving spou se to
297		-	the extent and in the manner that a surviving spouse is permitted to
298		-	file a joint return under the provisions of the Internal Revenue
299	295		Code and heads of households as de fined in the Internal Revenue
300	296		Code:
301	297		(a) 1/2% tax on first $2,000.00 or part thereof,
302	298		(b) 1% tax on next $3,000.00 or part thereof,
303	299		(c) 2% tax on next $2,500.00 or part thereof,
304	300		(d) 3% tax on next $2,300.00 or part thereof,
305	301		(e) 4% tax on next $2,400.00 or p art thereof,
306	302		(f) 5% tax on next $2,800.00 or part thereo f,
307	303		(g) 5.50% tax on the remainder for the 2 008 tax year and
308	304		any subsequent tax year unle ss the rate prescribed by
309	305		subparagraph (h) of this paragraph is in effect, and
310	306		(h) 5.25% tax on the remainder fo r the 2009 and subsequent
311	307		tax years. The decrease in the top marginal
312	308		individual income tax rate o therwise authorized by
313	309		this subparagraph shal l be contingent upon the
314	310		determination required to be made by the State Board
315	311		of Equalization pursuant to Sectio n 2355.1A of this
316	312		title.
	313	+	C. Individuals. For all taxable years beginning on or after
	314	+	January 1, 2022 2024, a tax is hereby imposed upon the Oklahoma
	315	+	taxable income of every resident or non resident individual, which
	316	+	tax shall be computed as follows:
	317	+	1. Single individuals and married individuals filing
	318	+	separately:
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318		-	ENGR. H. B. NO. 1953 Page 7 1
	320	+	HB1953 HFLR Page 7
	321	+	BOLD FACE denotes Committee Amendments. 1
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343		-	C. Individuals. For Except as provided by subsection D of this
344		-	section, for all taxable years beginning on or after January 1, 2022
345		-	2024, and ending not later than December 31, 2025, a tax is hereby
346		-	imposed upon the Oklahoma taxable income of every resident or
347		-	nonresident individual, which tax shall be computed as follows:
348		-	1. Single individuals and married individuals filing
349		-	separately:
350		-	(a) 0.25% tax on first $1,000.00 or part thereof,
351		-	(b) 0.75% tax on next $1,500.00 or part thereof,
352		-	(c) 1.75% tax on next $1,250.00 or part thereof,
353		-	(d) 2.75% tax on next $1,150 .00 or part thereof,
354		-	(e) 3.75% tax on next $2,300.00 or part thereof,
355		-	(f) 4.75% tax on the remainder.
	346	+	(a) 0.25% 0.00% tax on first $1,000.00 or part thereof,
	347	+	(b) 0.75% 0.50% tax on next $1,500.00 or part thereof,
	348	+	(c) 1.75% 1.50% tax on next $1,250.00 or part thereof,
	349	+	(d) 2.75% 2.50% tax on next $1,150.00 or part thereof,
	350	+	(e) 3.75% 3.50% tax on next $2,300.00 or part thereof,
	351	+	(f) 4.75% 4.50% tax on the remainder.
356	352		2. Married individuals filing jointly and surviving spouse to
357	353		the extent and in the manner that a surviving spouse is permitted to
358	354		file a joint return under the provisions of the Internal Revenue
359	355		Code and heads of households as defined in the Internal Revenue
360	356		Code:
361		-	(a) 0.25% tax on first $2,000.00 or part thereof,
362		-	(b) 0.75% tax on next $3,000.00 or part thereof,
363		-	(c) 1.75% tax on next $2,500.00 or part ther eof,
364		-	(d) 2.75% tax on next $2,300.00 or part thereof,
365		-	(e) 3.75% tax on next $2,400.0 0 or part thereof,
	357	+	(a) 0.25% 0.00% tax on first $2,000.00 or part thereof,
	358	+	(b) 0.75% 0.50% tax on next $3,000.00 or part thereof,
	359	+	(c) 1.75% 1.50% tax on next $2,500.00 or part thereof,
	360	+	(d) 2.75% 2.50% tax on next $2,300.00 or part thereof,
	361	+	(e) 3.75% 3.50% tax on next $2,400.00 or part thereof,
	362	+	(f) 4.75% 4.50% tax on the remainder.
	363	+	No deduction for federal income taxes paid shall be allowed to
	364	+	any taxpayer to arrive at taxable income.
	365	+	D. Nonresident aliens. In lieu of the rates set forth in
	366	+	subsection A above this section, there shall be imposed on
	367	+	nonresident aliens, as defi ned in the Internal Revenue Code, a tax
	368	+	of eight percent (8%) instead of thirty percent (30%) as used in the
	369	+	Internal Revenue Cod e, with respect to the Oklahoma taxable income
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367		-	ENGR. H. B. NO. 1953 Page 8 1
	371	+	HB1953 HFLR Page 8
	372	+	BOLD FACE denotes Committee Amendments. 1
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392		-	(f) 4.75% tax on the remainder levied at the rate of four
393		-	and twenty-five hundredths percent (4.25%).
394		-	No deduction for federal income taxes paid shall be allowed to
395		-	any taxpayer to arrive at taxable income. The tax levied pursuant
396		-	to this subsection shall be levied only upon the amounts of Oklahoma
397		-	taxable income in excess of:
398		-	1. Nine Thousand Seven Hundred Fifty Dollars ($9,750.00) for
399		-	taxpayers having a single or married filing separate status; or
400		-	2. Sixteen Thousand Two Hundred Fifty Dollars ( $16,250.00) for
401		-	head of household filing status; or
402		-	3. Nineteen Thousand Four Hundred Fifty Dollars ($19,450.00)
403		-	for taxpayers having a joint return filing stat us.
404		-	D. The rate of tax prescribed pur suant to subsection C of this
405		-	section may be extended for subsequent taxable years by law. If the
406		-	rate of taxation otherwise prescribed pursuant t o subsection C of
407		-	this section is not extended for tax years beginning on or after
408		-	January 1, 2026, the rate of taxation for the two (2) tax years
409		-	beginning January 1, 2026, and ending December 31, 2027, and for
410		-	each subsequent two (2) taxable years therea fter, shall be four and
411		-	seventy-five one hundredths percent (4.75%) upo n the amounts of
412		-	Oklahoma taxable inco me only in excess of:
413		-	1. Nine Thousand Seven Hundred Fifty Dollars ($9,750.00) for
414		-	taxpayers having a single or married filing separate status; or
	397	+	of such nonresident aliens as determined under the provision of the
	398	+	Oklahoma Income Tax Act.
	399	+	Every payer of amounts covered by this subsection shall deduct
	400	+	and withhold from such amounts paid each payee an amo unt equal to
	401	+	eight percent (8%) thereof . Every payer required to deduct and
	402	+	withhold taxes under this subsection shall for eac h quarterly period
	403	+	on or before the last day of the month following the close of each
	404	+	such quarterly period, pay over the amount so withheld as taxes to
	405	+	the Tax Commission, and shall file a return with each such payme nt.
	406	+	Such return shall be in such form as the Tax Commission shall
	407	+	prescribe. Every payer required under this subsection to deduct and
	408	+	withhold a tax from a payee shal l, as to the total amounts paid to
	409	+	each payee during the calendar year, furnish to such payee, on or
	410	+	before January 31, of the succeeding year, a written statement
	411	+	showing the name of the payer, the name of the payee and the payee 's
	412	+	Social Security account number, if any, the total amount paid
	413	+	subject to taxation, and the total amount deducte d and withheld as
	414	+	tax and such other in formation as the Tax Commission may require.
	415	+	Any payer who fails to withhold or pay to the Tax Commission any
	416	+	sums herein required to be withheld or paid shall be perso nally and
	417	+	individually liable therefor to the St ate of Oklahoma.
	418	+	E. Corporations. For all taxable years beginning after
	419	+	December 31, 2021, a tax is hereby imposed upon the Oklahoma taxable
	420	+	income of every corporati on doing business within this state or
415	421
416		-	ENGR. H. B. NO. 1953 Page 9 1
	422	+	HB1953 HFLR Page 9
	423	+	BOLD FACE denotes Committee Amendments. 1
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441		-	2. Sixteen Thousand Two Hundred Fifty Dollars ( $16,250.00) for
442		-	head of household filing status; or
443		-	3. Nineteen Thousand Four Hundred Fifty Dollars ($19,450.00)
444		-	for taxpayer having a joint return filing status.
445		-	E. Nonresident aliens. In lieu of the rates set forth in
446		-	subsection A above this section, there shall be imposed on
447		-	nonresident aliens, as defined in the Internal Revenue Code, a tax
448		-	of eight percent (8%) instead of thirty percent (30%) as used in the
449		-	Internal Revenue Code, with respect to the Oklahoma taxable income
450		-	of such nonresident aliens as determined under th e provision of the
451		-	Oklahoma Income Tax Act.
	448	+	deriving income from sources within this state in an amount equal to
	449	+	four percent (4%) thereof.
	450	+	There shall be no additional Oklahoma income tax imposed on
	451	+	accumulated taxable income or on undistributed personal holdi ng
	452	+	company income as those terms are defined in the Internal Revenue
	453	+	Code.
	454	+	F. Certain foreign corporations. In lieu of the tax imposed in
	455	+	the first paragraph of subsection D of this section, for all taxable
	456	+	years beginning after December 31, 2021, there shall be imposed on
	457	+	foreign corporations, as defined in the Internal Revenue Code, a tax
	458	+	of four percent (4%) instead of thirty percent (30%) as used in the
	459	+	Internal Revenue Code, where such income is received from sources
	460	+	within Oklahoma, in accordanc e with the provisions of the Internal
	461	+	Revenue Code and the Oklahoma Income Tax Act.
452	462		Every payer of amounts covered by this subsection shall deduct
453	463		and withhold from such amounts paid each payee an amount equal to
454		-	~~eight~~ percent (8%) thereof. Every payer required to deduct and
	464	+	four percent (4%) thereof. Every payer required to deduct and
455	465		withhold taxes under this subsection shall for eac h quarterly period
456	466		on or before the last day of the month fo llowing the close of ea ch
457	467		such quarterly period, pay over the amount so withheld as taxes to
458	468		the Tax Commission, and shall file a return with each such payment .
459	469		Such return shall be in such form as the Tax Commission shall
460	470		prescribe. Every payer required under this subsection to deduct and
461	471		withhold a tax from a payee shall, as to the total amounts paid to
462		-	each payee during the calendar year, furnish to such payee, o n or
463		-	before January 31, of the succeeding year, a written statement
464		-	showing the name of the payer, the name of the payee and the payee's
465	472
466		-	ENGR. H. B. NO. 1953 Page 10 1
	473	+	HB1953 HFLR Page 10
	474	+	BOLD FACE denotes Committee Amendments. 1
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490	498
491		-	Social Security account number, if any, the total amount paid
492		-	subject to taxation, and the total amount deducted and wi thheld as
493		-	tax and such other information as the Tax Commission may require.
494		-	Any payer who fails to withhold or pay to the Tax Commission any
495		-	sums herein required to be withheld or paid shall be personally and
	499	+	each payee during the calendar year, furnish to such payee, o n or
	500	+	before January 31, of the succeeding year, a written statement
	501	+	showing the name of the payer, the name of the payee and the payee's
	502	+	Social Security account number, if any, the total amounts paid
	503	+	subject to taxation, the total amount deducted and withh eld as tax
	504	+	and such other infor mation as the Tax Commission may require. Any
	505	+	payer who fails to withhold or pay t o the Tax Commission any sums
	506	+	herein required to be withheld or paid shall be personal ly and
496	507		individually liable therefor to the State of Okla homa.
497		-	E. F. Corporations. For all taxable years beginning after
498		-	December 31, 2021, a tax is hereby imposed upon the Oklahoma taxable
499		-	income of every corporation doing business within this state or
500		-	deriving income from sources within this state in an a mount equal to
501		-	four percent (4%) thereof.
502		-	There shall be no additional Oklahoma income tax imposed on
503		-	accumulated taxable income or on undistributed personal holding
504		-	company income as those terms are defined in the Internal Revenue
505		-	Code.
506		-	F. G. Certain foreign corporations. In lieu of the tax imposed
507		-	in the first paragraph of subsection D F of this section, for all
508		-	taxable years beginning after December 31, 2021 , there shall be
509		-	imposed on foreign corporations, as defined in the Internal Revenue
510		-	Code, a tax of four percent (4%) instead of thirty percent (30%) as
511		-	used in the Internal Revenue Code, where such income is received
512		-	from sources within Oklahoma, in accor dance with the provisions of
513		-	the Internal Revenue Code and the Oklahoma Income Tax Act.
	508	+	G. Fiduciaries. A tax is hereby imposed upon the Oklahoma
	509	+	taxable income of every trust and estate at the same rates as are
	510	+	provided in subsection B, or C or D of this section for single
	511	+	individuals. Fiduciaries are not allowed a deduction for any
	512	+	federal income tax paid.
	513	+	H. Tax rate tables. For all taxable years beginning after
	514	+	December 31, 1991, in lieu of th e tax imposed by subsection A, B, or
	515	+	C or D of this section, as applicable there is hereby imp osed for
	516	+	each taxable year on the taxable income of every individual, whose
	517	+	taxable income for such taxable year does not exceed the ceiling
	518	+	amount, a tax determined un der tables, applicable to such taxable
	519	+	year which shall be prescribed by the Tax Commiss ion and which shall
	520	+	be in such form as it determines appropriate. In the table so
	521	+	prescribed, the amounts of the tax shall be computed on the ba sis of
	522	+	the rates prescribed by subsection A, B or C of this section. For
514	523
515		-	ENGR. H. B. NO. 1953 Page 11 1
	524	+	HB1953 HFLR Page 11
	525	+	BOLD FACE denotes Committee Amendments. 1
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539	549
540		-	Every payer of amounts covered by this subsection shall deduct
541		-	and withhold from such amounts paid each payee an amount equal to
542		-	four percent (4%) thereof. Every payer required to deduct and
543		-	withhold taxes under this subsection shall for each quarterly period
544		-	on or before the last day of the month following the close of each
545		-	such quarterly period, pay over the amount so withheld as taxes to
546		-	the Tax Commission, and shall file a return with each such payment.
547		-	Such return shall be in such form as the Tax Commission shall
548		-	prescribe. Every payer required under this subsection to deduct and
549		-	withhold a tax from a payee shall, as to the total amounts paid to
550		-	each payee during the calendar year, furnish to such payee, on or
551		-	before January 31, of the succeeding year, a wri tten statement
552		-	showing the name of the payer, the name of the payee and the payee's
553		-	Social Security account number, if any, the total amounts paid
554		-	subject to taxation, the total amount deducted and withheld as tax
555		-	and such other information as the Tax Comm ission may require. Any
556		-	payer who fails to withhold or pay to the Tax Commission any sums
557		-	herein required to be withheld or paid shall be personally and
558		-	individually liable therefor to the State of Oklahoma.
559		-	G. H. Fiduciaries. A tax is hereby imposed up on the Oklahoma
560		-	taxable income of every trust and estate at the same rates as are
561		-	provided in subsection A, B, or C, or D of this section for single
562		-	individuals. Fiduciaries are not allowed a deduction for any
563		-	federal income tax paid.
	550	+	purposes of this subsection, the term "ceiling amount" means, with
	551	+	respect to any taxpaye r, the amount determined by the Tax Commission
	552	+	for the tax rate category in which such taxpay er falls.
	553	+	SECTION 2. This act shall become effective January 1, 2024.
564	554
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588		-	24
589		-
590		-	H. I. Tax rate tables. For all taxable years beginning after
591		-	December 31, 1991, in lieu of the tax imposed by subsection A, B , or
592		-	C, or D of this section, as applicable there is he reby imposed for
593		-	each taxable year on the taxable income of every individual, whose
594		-	taxable income for such taxable year does not exceed the ceiling
595		-	amount, a tax determined under tables, applicable to such taxable
596		-	year which shall be prescribed by the Tax Commission and which shall
597		-	be in such form as it determines appropriate. In the table so
598		-	prescribed, the amounts of the tax shall be computed on the basis of
599		-	the rates prescribed by subsection A, B , or C, or D of this section.
600		-	For purposes of this sub section, the term "ceiling amount" means,
601		-	with respect to any taxpayer, the amount determined by th e Tax
602		-	Commission for the tax rate category in which such taxpayer falls.
603		-	SECTION 2. AMENDATORY 68 O.S. 2021, Section 2358, as
604		-	amended by Section 2, Chapter 341, O.S.L. 2022 (68 O.S. Supp. 2022,
605		-	Section 2358), is amended to read as follows:
606		-	Section 2358. For all tax years beginning after December 31,
607		-	1981, taxable income and adjusted gross income shall be adjusted to
608		-	arrive at Oklahoma taxable income and Oklahoma adjusted gross income
609		-	as required by this section.
610		-	A. The taxable income of any taxpayer shall be adjusted to
611		-	arrive at Oklahoma taxable income for corporations and Oklahoma
612		-	adjusted gross income for individuals, as follows:
613		-
614		-	ENGR. H. B. NO. 1953 Page 13 1
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636		-	23
637		-	24
638		-
639		-	1. There shall be added interest income on obligations of any
640		-	state or political subdivision there to which is not otherwise
641		-	exempted pursuant to other laws of this state, to the extent that
642		-	such interest is not included in taxable income and adjusted gros s
643		-	income.
644		-	2. There shall be deducted amounts included in such income that
645		-	the state is prohibited from taxing because of the provisions of the
646		-	Federal Constitution, the State Constitution, federal laws or laws
647		-	of Oklahoma.
648		-	3. The amount of any federal ne t operating loss deduction shall
649		-	be adjusted as follows:
650		-	a. For carryovers and carrybacks to taxabl e years
651		-	beginning before January 1, 1981, the amount of any
652		-	net operating loss deduction allowed to a taxpayer for
653		-	federal income tax purposes shall be reduc ed to an
654		-	amount which is the same portion thereof as the loss
655		-	from sources within this state, as de termined pursuant
656		-	to this section and Section 2362 of this title, for
657		-	the taxable year in which such loss is sustained is of
658		-	the total loss for such year;
659		-	b. For carryovers and carrybacks to taxable years
660		-	beginning after December 31, 1980, the amount of an y
661		-	net operating loss deduction allowed for the taxable
662		-	year shall be an amount equal to the aggregate of the
663		-
664		-	ENGR. H. B. NO. 1953 Page 14 1
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668		-	5
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671		-	8
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674		-	11
675		-	12
676		-	13
677		-	14
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679		-	16
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684		-	21
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686		-	23
687		-	24
688		-
689		-	Oklahoma net operating loss carryovers and carry backs
690		-	to such year. Oklahoma net operating losses shall be
691		-	separately determined by reference to S ection 172 of
692		-	the Internal Revenue Code, 26 U.S.C., Section 172, as
693		-	modified by the Oklahoma Income Tax Act, Section 2351
694		-	et seq. of this title, and shall be allowed without
695		-	regard to the existence of a federal net operating
696		-	loss. For tax years beginning after December 31,
697		-	2000, and ending before January 1, 2008, the years to
698		-	which such losses may be carried shall be determined
699		-	solely by reference to Section 172 of the Internal
700		-	Revenue Code, 26 U.S.C., Section 172, with the
701		-	exception that the terms "net op erating loss" and
702		-	"taxable income" shall be replaced with "Oklahoma net
703		-	operating loss" and "Oklahoma taxable income". For
704		-	tax years beginning after Decembe r 31, 2007, and
705		-	ending before January 1, 2009, years to which such
706		-	losses may be carried back shall be limited to two (2)
707		-	years. For tax years beginning after December 31,
708		-	2008, the years to which such losses may be carried
709		-	back shall be determined solely by reference to
710		-	Section 172 of the Internal Revenue Code, 26 U.S.C.,
711		-	Section 172, with the excepti on that the terms "net
712		-	operating loss" and "taxable income" shall be replaced
713		-
714		-	ENGR. H. B. NO. 1953 Page 15 1
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737		-	24
738		-
739		-	with "Oklahoma net operating loss" and "Oklahoma
740		-	taxable income".
741		-	4. Items of the following nature shall be allocated as
742		-	indicated. Allowable deductions attributable to items s eparately
743		-	allocable in subparagraphs a, b and c of this paragraph, whether or
744		-	not such items of income were actually received, shall be allocated
745		-	on the same basis as those items:
746		-	a. Income from real and tangible personal property, such
747		-	as rents, oil and mining production or royalties, and
748		-	gains or losses from sales of such property, shall be
749		-	allocated in accordance with the situs of such
750		-	property;
751		-	b. Income from intangible personal property, such as
752		-	interest, dividends, patent or copyright royalties,
753		-	and gains or losses from sales of such property, shall
754		-	be allocated in accordance with the domiciliary situs
755		-	of the taxpayer, except that:
756		-	(1) where such property has acquired a nonunitary
757		-	business or commercial situs apart from the
758		-	domicile of the taxpayer suc h income shall be
759		-	allocated in accordance with such business or
760		-	commercial situs; interest income from
761		-	investments held to generate working capital for
762		-	a unitary business enterprise shall be included
763		-
764		-	ENGR. H. B. NO. 1953 Page 16 1
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788		-
789		-	in apportionable income; a resident trust or
790		-	resident estate shall be treated as having a
791		-	separate commercial or business situs insofar as
792		-	undistributed income is concerned, but shall not
793		-	be treated as having a se parate commercial or
794		-	business situs insofar as distributed income is
795		-	concerned,
796		-	(2) for taxable years beginning after December 31,
797		-	2003, capital or ordinary gains or losses from
798		-	the sale of an ownership interest in a publicly
799		-	traded partnership, as defined by Section 7704(b)
800		-	of the Internal Revenue Code, shall be allocated
801		-	to this state in the ratio of the original cost
802		-	of such partnership's tangible property in this
803		-	state to the original cost of such partnership's
804		-	tangible property everywhere, as determine d at
805		-	the time of the sale; if more than fifty percent
806		-	(50%) of the value of the partnership's asset s
807		-	consists of intangible assets, capital or
808		-	ordinary gains or losses from the sale of an
809		-	ownership interest in the partnership shall be
810		-	allocated to this sta te in accordance with the
811		-	sales factor of the partnership for its first
812		-	full tax period immediately preceding its tax
813		-
814		-	ENGR. H. B. NO. 1953 Page 17 1
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837		-	24
838		-
839		-	period during which the ownership interest in the
840		-	partnership was sold; the provisions of this
841		-	division shall only apply if the capital or
842		-	ordinary gains or losses from the sale of an
843		-	ownership interest in a partnership do not
844		-	constitute qualifying gain receiving capital
845		-	treatment as defined in subparagraph a of
846		-	paragraph 2 of subsection F of this section,
847		-	(3) income from such property which is required to be
848		-	allocated pursuant to the provisions of paragraph
849		-	5 of this subsection shall be allocated as herein
850		-	provided;
851		-	c. Net income or loss from a business activity which is
852		-	not a part of business carried on within or without
853		-	the state of a unitary character shall be separately
854		-	allocated to the state in which such activity is
855		-	conducted;
856		-	d. In the case of a manufacturing or processing
857		-	enterprise the business of which in Oklahoma consists
858		-	solely of marketing its products by:
859		-	(1) sales having a situs without this state, shipped
860		-	directly to a point from without the state to a
861		-	purchaser within the state, commonly known as
862		-	interstate sales,
863		-
864		-	ENGR. H. B. NO. 1953 Page 18 1
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888		-
889		-	(2) sales of the product stored in public warehouses
890		-	within the state pursuant to "in transit"
891		-	tariffs, as prescribed and allowed by the
892		-	Interstate Commerce Commission, to a purchaser
893		-	within the state,
894		-	(3) sales of the product stored in public warehouses
895		-	within the state where the shipment to such
896		-	warehouses is not covered by "in transit"
897		-	tariffs, as prescribed and al lowed by the
898		-	Interstate Commerce Commission, to a purchaser
899		-	within or without the state,
900		-	the Oklahoma net income shall, at the option of the
901		-	taxpayer, be that portion of the total net income of
902		-	the taxpayer for federal income tax purposes derived
903		-	from the manufacture and/or processing and sales
904		-	everywhere as determined by the ratio of the sales
905		-	defined in this section made to the purchaser within
906		-	the state to the total sales everywhere. The term
907		-	"public warehouse" as used in this subparagraph means
908		-	a licensed public warehouse, the principal business of
909		-	which is warehousing merchandise for the public;
910		-	e. In the case of insurance companies, Oklahoma taxable
911		-	income shall be taxable income of the taxpayer for
912		-	federal tax purposes, as adjusted for the adjustment s
913		-
914		-	ENGR. H. B. NO. 1953 Page 19 1
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938		-
939		-	provided pursuant to the provisions of paragraphs 1
940		-	and 2 of this subsection, apportioned as foll ows:
941		-	(1) except as otherwise provided by division (2) of
942		-	this subparagraph, taxable income of an insurance
943		-	company for a taxable year shall be apportioned
944		-	to this state by multiplying such income by a
945		-	fraction, the numerator of which is the direct
946		-	premiums written for insurance on property or
947		-	risks in this state, and the denominator of which
948		-	is the direct premiums written for insurance on
949		-	property or risks eve rywhere. For purposes of
950		-	this subsection, the term "direct premiums
951		-	written" means the total amoun t of direct
952		-	premiums written, assessments and annuity
953		-	considerations as reported for the taxable year
954		-	on the annual statement filed by the company with
955		-	the Insurance Commissioner in the form approved
956		-	by the National Association of Insurance
957		-	Commissioners, or such other form as may be
958		-	prescribed in lieu thereof,
959		-	(2) if the principal source of premiums written by an
960		-	insurance company consists of premiums for
961		-	reinsurance accepted by it, the taxable income of
962		-	such company shall be apportioned to this state
963		-
964		-	ENGR. H. B. NO. 1953 Page 20 1
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988		-
989		-	by multiplying such income by a fraction, the
990		-	numerator of which is the sum of (a) direct
991		-	premiums written for insurance on property or
992		-	risks in this state, plus (b) premiums written
993		-	for reinsurance accepted in respect of property
994		-	or risks in this state, and t he denominator of
995		-	which is the sum of (c) direct premiums written
996		-	for insurance on property or risks everywhere,
997		-	plus (d) premiums written for reinsurance
998		-	accepted in respect of property or risks
999		-	everywhere. For purposes of this paragraph,
1000		-	premiums written for reinsurance accepted in
1001		-	respect of property or risks in this state,
1002		-	whether or not otherwise determinable, may at the
1003		-	election of the company be determ ined on the
1004		-	basis of the proportion which premiums written
1005		-	for insurance accepted from companies
1006		-	commercially domiciled in Oklahoma bears to
1007		-	premiums written for reinsurance accepted from
1008		-	all sources, or alternatively in the proportion
1009		-	which the sum of the direct premiums written for
1010		-	insurance on property or risks in this state by
1011		-	each ceding company fr om which reinsurance is
1012		-	accepted bears to the sum of the total direct
1013		-
1014		-	ENGR. H. B. NO. 1953 Page 21 1
1015		-	2
1016		-	3
1017		-	4
1018		-	5
1019		-	6
1020		-	7
1021		-	8
1022		-	9
1023		-	10
1024		-	11
1025		-	12
1026		-	13
1027		-	14
1028		-	15
1029		-	16
1030		-	17
1031		-	18
1032		-	19
1033		-	20
1034		-	21
1035		-	22
1036		-	23
1037		-	24
1038		-
1039		-	premiums written by each such ceding company for
1040		-	the taxable year.
1041		-	5. The net income o r loss remaining after the separate
1042		-	allocation in paragraph 4 of this subsection, being that which is
1043		-	derived from a unitary business enterprise, shall be apportioned to
1044		-	this state on the basis of the arithmetical average of three factors
1045		-	consisting of property, payroll and sales or gross revenue
1046		-	enumerated as subparagraphs a, b and c of this paragraph. Net
1047		-	income or loss as used in this paragraph includes that derived from
1048		-	patent or copyright royalties, purchase discounts, and interest on
1049		-	accounts receivable relating to or arising from a business activity,
1050		-	the income from which is apportioned pursuant to this subsection,
1051		-	including the sale or other disposition of such property and any
1052		-	other property used in the unitary enterprise. Deductions used in
1053		-	computing such net income or loss shall not include taxes based on
1054		-	or measured by income. Provided, for corporations whose property
1055		-	for purposes of the tax imposed by Section 2355 of this title has an
1056		-	initial investment cost equaling or exceeding Two Hundred M illion
1057		-	Dollars ($200,000,000.00) and such investment is made on or after
1058		-	July 1, 1997, or for corpo rations which expand their property or
1059		-	facilities in this state and such expansion has an investment cost
1060		-	equaling or exceeding Two Hundred Million Dollars ( $200,000,000.00)
1061		-	over a period not to exceed three (3) years, and such expansion is
1062		-	commenced on or after January 1, 2000, the three factors shall be
1063		-
1064		-	ENGR. H. B. NO. 1953 Page 22 1
1065		-	2
1066		-	3
1067		-	4
1068		-	5
1069		-	6
1070		-	7
1071		-	8
1072		-	9
1073		-	10
1074		-	11
1075		-	12
1076		-	13
1077		-	14
1078		-	15
1079		-	16
1080		-	17
1081		-	18
1082		-	19
1083		-	20
1084		-	21
1085		-	22
1086		-	23
1087		-	24
1088		-
1089		-	apportioned with property and payroll, each comprising twenty -five
1090		-	percent (25%) of the apportionment fact or and sales comprising fifty
1091		-	percent (50%) of the apportionment factor. The apportionment
1092		-	factors shall be computed as follows:
1093		-	a. The property factor is a fraction, the numerator of
1094		-	which is the average value of the taxpayer's real and
1095		-	tangible personal property owned or rented and used in
1096		-	this state during the tax period and the denominator
1097		-	of which is the average value of all the taxpayer's
1098		-	real and tangible personal property everywhere owned
1099		-	or rented and used during the tax period.
1100		-	(1) Property, the income from which is separately
1101		-	allocated in paragraph 4 of this subsection,
1102		-	shall not be included in determining this
1103		-	fraction. The numerator of the fraction shall
1104		-	include a portion of the investment in
1105		-	transportation and other equipment having no
1106		-	fixed situs, such as rolling stock, buses, trucks
1107		-	and trailers, including machinery and equipment
1108		-	carried thereon, airplanes, salespersons'
1109		-	automobiles and other similar equipment, in the
1110		-	proportion that miles traveled in Oklahoma by
1111		-	such equipment bears to tota l miles traveled,
1112		-
1113		-	ENGR. H. B. NO. 1953 Page 23 1
1114		-	2
1115		-	3
1116		-	4
1117		-	5
1118		-	6
1119		-	7
1120		-	8
1121		-	9
1122		-	10
1123		-	11
1124		-	12
1125		-	13
1126		-	14
1127		-	15
1128		-	16
1129		-	17
1130		-	18
1131		-	19
1132		-	20
1133		-	21
1134		-	22
1135		-	23
1136		-	24
1137		-
1138		-	(2) Property owned by the taxpayer is valued at its
1139		-	original cost. Property rent ed by the taxpayer
1140		-	is valued at eight times the net annual rental
1141		-	rate. Net annual rental rate is the annual
1142		-	rental rate paid by the taxpayer, less any annu al
1143		-	rental rate received by the taxpayer from
1144		-	subrentals,
1145		-	(3) The average value of property shall be determined
1146		-	by averaging the values at the beginning and
1147		-	ending of the tax period but the Oklahoma Tax
1148		-	Commission may require the averaging of monthly
1149		-	values during the tax period if reasonably
1150		-	required to reflect properly the average value of
1151		-	the taxpayer's property;
1152		-	b. The payroll factor is a fraction, the numerator of
1153		-	which is the total compensation for services rendered
1154		-	in the state during the tax period, and the
1155		-	denominator of which is the total compensation for
1156		-	services rendered everywhere during the tax period.
1157		-	"Compensation", as used in this subsection means those
1158		-	paid-for services to the extent related to the unitary
1159		-	business but does not include offi cers' salaries,
1160		-	wages and other compensation.
1161		-
1162		-	ENGR. H. B. NO. 1953 Page 24 1
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1164		-	3
1165		-	4
1166		-	5
1167		-	6
1168		-	7
1169		-	8
1170		-	9
1171		-	10
1172		-	11
1173		-	12
1174		-	13
1175		-	14
1176		-	15
1177		-	16
1178		-	17
1179		-	18
1180		-	19
1181		-	20
1182		-	21
1183		-	22
1184		-	23
1185		-	24
1186		-
1187		-	(1) In the case of a transportation enterprise, the
1188		-	numerator of the fraction shall include a portion
1189		-	of such expenditure in connection with employees
1190		-	operating equipment over a fixed route, such as
1191		-	railroad employees, airline pilots, or bus
1192		-	drivers, in this state only a part of the time,
1193		-	in the proportion that mileage traveled in
1194		-	Oklahoma bears to total mileage traveled by such
1195		-	employees,
1196		-	(2) In any case the numerator of the fraction shall
1197		-	include a portion of such expenditures in
1198		-	connection with itinerant employees, such as
1199		-	traveling salespersons, in this s tate only a part
1200		-	of the time, in the proportion that time spent in
1201		-	Oklahoma bears to total time spent in furtherance
1202		-	of the enterprise by such employees;
1203		-	c. The sales factor is a fraction, the numerator of which
1204		-	is the total sales or gross revenue of the t axpayer in
1205		-	this state during the tax period, and the denominator
1206		-	of which is the total sales or gross revenue of the
1207		-	taxpayer everywhere during the tax perio d. "Sales",
1208		-	as used in this subsection does not include sales or
1209		-	gross revenue which are separatel y allocated in
1210		-	paragraph 4 of this subsection.
1211		-
1212		-	ENGR. H. B. NO. 1953 Page 25 1
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1214		-	3
1215		-	4
1216		-	5
1217		-	6
1218		-	7
1219		-	8
1220		-	9
1221		-	10
1222		-	11
1223		-	12
1224		-	13
1225		-	14
1226		-	15
1227		-	16
1228		-	17
1229		-	18
1230		-	19
1231		-	20
1232		-	21
1233		-	22
1234		-	23
1235		-	24
1236		-
1237		-	(1) Sales of tangible personal property have a situs
1238		-	in this state if the property is delivered or
1239		-	shipped to a purchaser other than the United
1240		-	States government, within this state regardless
1241		-	of the FOB point or other conditions of the sale;
1242		-	or the property is shipped from an office, store,
1243		-	warehouse, factory or other place of storage in
1244		-	this state and (a) the pur chaser is the United
1245		-	States government or (b) the taxpayer is not
1246		-	doing business in the state of th e destination of
1247		-	the shipment.
1248		-	(2) In the case of a railroad or interurban railway
1249		-	enterprise, the numerator of the fraction shall
1250		-	not be less than the alloc ation of revenues to
1251		-	this state as shown in its annual report to the
1252		-	Corporation Commission.
1253		-	(3) In the case of an airline, truck or bus
1254		-	enterprise or freight car, tank car, refrigerator
1255		-	car or other railroad equipment enterprise, the
1256		-	numerator of the frac tion shall include a portion
1257		-	of revenue from interstate transportation in the
1258		-	proportion that inter state mileage traveled in
1259		-	Oklahoma bears to total interstate mileage
1260		-	traveled.
1261		-
1262		-	ENGR. H. B. NO. 1953 Page 26 1
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1264		-	3
1265		-	4
1266		-	5
1267		-	6
1268		-	7
1269		-	8
1270		-	9
1271		-	10
1272		-	11
1273		-	12
1274		-	13
1275		-	14
1276		-	15
1277		-	16
1278		-	17
1279		-	18
1280		-	19
1281		-	20
1282		-	21
1283		-	22
1284		-	23
1285		-	24
1286		-
1287		-	(4) In the case of an oil, gasoline or gas pipeline
1288		-	enterprise, the numerator of the fraction shall
1289		-	be either the total of traffic units of the
1290		-	enterprise within Oklahoma or the revenue
1291		-	allocated to Oklahoma based upon miles moved, at
1292		-	the option of the taxpayer, and the denominator
1293		-	of which shall be the total of traffic units of
1294		-	the enterprise or the revenue of the enterprise
1295		-	everywhere as appropriate to the numerator. A
1296		-	"traffic unit" is hereby defined as the
1297		-	transportation for a distance of one (1) mile of
1298		-	one (1) barrel of oil, one (1) gallon of gasoline
1299		-	or one thousand (1,000) c ubic feet of natural or
1300		-	casinghead gas, as the case may be.
1301		-	(5) In the case of a telephone or teleg raph or other
1302		-	communication enterprise, the numerator of the
1303		-	fraction shall include that portion of the
1304		-	interstate revenue as is allocated pursuant to
1305		-	the accounting procedures prescribed by the
1306		-	Federal Communications Commission; provided that
1307		-	in respect to each corporation or business entity
1308		-	required by the Federal Communications Commission
1309		-	to keep its books and records in accordance with
1310		-	a uniform system of accounts prescribed by such
1311		-
1312		-	ENGR. H. B. NO. 1953 Page 27 1
1313		-	2
1314		-	3
1315		-	4
1316		-	5
1317		-	6
1318		-	7
1319		-	8
1320		-	9
1321		-	10
1322		-	11
1323		-	12
1324		-	13
1325		-	14
1326		-	15
1327		-	16
1328		-	17
1329		-	18
1330		-	19
1331		-	20
1332		-	21
1333		-	22
1334		-	23
1335		-	24
1336		-
1337		-	Commission, the intrastate net income shall be
1338		-	determined separately in the manner provided by
1339		-	such uniform system of accounts and only the
1340		-	interstate income shall be subject to allocation
1341		-	pursuant to the provisions of this subs ection.
1342		-	Provided further, that the gross revenue factors
1343		-	shall be those as are determined pursuant to the
1344		-	accounting procedures prescribed by the Federal
1345		-	Communications Commission.
1346		-	In any case where the apportionment of the three factors
1347		-	prescribed in this paragraph attributes to Oklahoma a portion of net
1348		-	income of the enterprise out of all appropriate proportion to the
1349		-	property owned and/or business transacted within this state, because
1350		-	of the fact that one or more of the factors so prescribed are not
1351		-	employed to any appreciable extent in furtherance of the enterprise;
1352		-	or because one or more factors no t so prescribed are employed to a
1353		-	considerable extent in furtherance of the enterprise; or because of
1354		-	other reasons, the Tax Commission is empowered to permi t, after a
1355		-	showing by taxpayer that an excessive portion of net income has been
1356		-	attributed to Oklahoma, or require, when in its judgment an
1357		-	insufficient portion of net income has been attributed to Oklahoma,
1358		-	the elimination, substitution, or use of additio nal factors, or
1359		-	reduction or increase in the weight of such prescribed factors.
1360		-	Provided, however, that any such variance from such prescribed
1361		-
1362		-	ENGR. H. B. NO. 1953 Page 28 1
1363		-	2
1364		-	3
1365		-	4
1366		-	5
1367		-	6
1368		-	7
1369		-	8
1370		-	9
1371		-	10
1372		-	11
1373		-	12
1374		-	13
1375		-	14
1376		-	15
1377		-	16
1378		-	17
1379		-	18
1380		-	19
1381		-	20
1382		-	21
1383		-	22
1384		-	23
1385		-	24
1386		-
1387		-	factors which has the effect of increasing the portion of net income
1388		-	attributable to Oklahoma must not be inhere ntly arbitrary, and
1389		-	application of the recomputed final apportionment to the net income
1390		-	of the enterprise must attribute to Oklahoma only a reasonable
1391		-	portion thereof.
1392		-	6. For calendar years 1997 and 1998, the owner of a new or
1393		-	expanded agricultural commod ity processing facility in this state
1394		-	may exclude from Oklahoma taxable income, or in the case of a n
1395		-	individual, the Oklahoma adjusted gross income, fifteen percent
1396		-	(15%) of the investment by the owner in the new or expanded
1397		-	agricultural commodity processi ng facility. For calendar year 1999,
1398		-	and all subsequent years, the percentage, not to exceed fifte en
1399		-	percent (15%), available to the owner of a new or expanded
1400		-	agricultural commodity processing facility in this state claiming
1401		-	the exemption shall be adjust ed annually so that the total estimated
1402		-	reduction in tax liability does not exceed One Million Doll ars
1403		-	($1,000,000.00) annually. The Tax Commission shall promulgate rules
1404		-	for determining the percentage of the investment which each eligible
1405		-	taxpayer may exclude. The exclusion provided by this paragraph
1406		-	shall be taken in the taxable year when the invest ment is made. In
1407		-	the event the total reduction in tax liability authorized by this
1408		-	paragraph exceeds One Million Dollars ($1,000,000.00) in any
1409		-	calendar year, the Tax Commission shall permit any excess over One
1410		-	Million Dollars ($1,000,000.00) and shall fa ctor such excess into
1411		-
1412		-	ENGR. H. B. NO. 1953 Page 29 1
1413		-	2
1414		-	3
1415		-	4
1416		-	5
1417		-	6
1418		-	7
1419		-	8
1420		-	9
1421		-	10
1422		-	11
1423		-	12
1424		-	13
1425		-	14
1426		-	15
1427		-	16
1428		-	17
1429		-	18
1430		-	19
1431		-	20
1432		-	21
1433		-	22
1434		-	23
1435		-	24
1436		-
1437		-	the percentage for subsequent years. Any amount of the exemption
1438		-	permitted to be excluded pursuant to the provisions of this
1439		-	paragraph but not used in any year may be carried forward as an
1440		-	exemption from income pursuant to the provis ions of this paragraph
1441		-	for a period not exceeding six (6) years following the year in which
1442		-	the investment was originally made.
1443		-	For purposes of this paragrap h:
1444		-	a. "Agricultural commodity processing facility" means
1445		-	building, structures, fixtures and improve ments used
1446		-	or operated primarily for the processing or production
1447		-	of marketable products from agricultural commodities.
1448		-	The term shall also mean a dairy ope ration that
1449		-	requires a depreciable investment of at least Two
1450		-	Hundred Fifty Thousand Dollars ($250, 000.00) and which
1451		-	produces milk from dairy cows. The term does not
1452		-	include a facility that provides only, and nothing
1453		-	more than, storage, cleaning, drying o r transportation
1454		-	of agricultural commodities, and
1455		-	b. "Facility" means each part of the facility whi ch is
1456		-	used in a process primarily for:
1457		-	(1) the processing of agricultural commodities,
1458		-	including receiving or storing agricultur al
1459		-	commodities, or the produc tion of milk at a dairy
1460		-	operation,
1461		-
1462		-	ENGR. H. B. NO. 1953 Page 30 1
1463		-	2
1464		-	3
1465		-	4
1466		-	5
1467		-	6
1468		-	7
1469		-	8
1470		-	9
1471		-	10
1472		-	11
1473		-	12
1474		-	13
1475		-	14
1476		-	15
1477		-	16
1478		-	17
1479		-	18
1480		-	19
1481		-	20
1482		-	21
1483		-	22
1484		-	23
1485		-	24
1486		-
1487		-	(2) transporting the agricultural commodities or
1488		-	product before, during or after the processing,
1489		-	or
1490		-	(3) packaging or otherwise preparing the product for
1491		-	sale or shipment.
1492		-	7. Despite any provi sion to the contrary in parag raph 3 of this
1493		-	subsection, for taxable years beginning after December 31, 1999, in
1494		-	the case of a taxpayer which has a farming loss, such farming loss
1495		-	shall be considered a net operating loss carryback in accordance
1496		-	with and to the extent of the Internal Re venue Code, 26 U.S.C.,
1497		-	Section 172(b)(G). However, the amount of the net operating loss
1498		-	carryback shall not exceed the lesser of:
1499		-	a. Sixty Thousand Dollars ($60,000.00), or
1500		-	b. the loss properly shown on Schedule F of the Inter nal
1501		-	Revenue Service Form 1040 reduced by one-half (1/2) of
1502		-	the income from all other sources other than reflected
1503		-	on Schedule F.
1504		-	8. In taxable years beginning after December 31, 1995, all
1505		-	qualified wages equal to the federal income tax credit set forth in
1506		-	26 U.S.C.A., Section 45A, sh all be deducted from taxable income.
1507		-	The deduction allowed pursuant to this paragraph shall only b e
1508		-	permitted for the tax years in which the federal tax credit pursuant
1509		-	to 26 U.S.C.A., Section 45A, is allowed. For purposes of this
1510		-
1511		-	ENGR. H. B. NO. 1953 Page 31 1
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1513		-	3
1514		-	4
1515		-	5
1516		-	6
1517		-	7
1518		-	8
1519		-	9
1520		-	10
1521		-	11
1522		-	12
1523		-	13
1524		-	14
1525		-	15
1526		-	16
1527		-	17
1528		-	18
1529		-	19
1530		-	20
1531		-	21
1532		-	22
1533		-	23
1534		-	24
1535		-
1536		-	paragraph, "qualified w ages" means those wages used to calculate the
1537		-	federal credit pursuant to 26 U.S.C.A., Section 45A.
1538		-	9. In taxable years beginning after December 31, 2005, an
1539		-	employer that is eligible for and utilizes the Safety Pays OSHA
1540		-	Consultation Service provided by t he Oklahoma Department of Labor
1541		-	shall receive an exemption from taxable income in the amount of One
1542		-	Thousand Dollars ($1,000.00) for the tax year that the service is
1543		-	utilized.
1544		-	10. For taxable years beginning on or after Januar y 1, 2010,
1545		-	there shall be added to Oklahoma taxable income an amount equal to
1546		-	the amount of deferred income not included in such taxable income
1547		-	pursuant to Section 108(i)(1) of the Internal Revenue Code of 1986
1548		-	as amended by Section 1231 of the American Re covery and Reinvestment
1549		-	Act of 2009 (P.L. No. 111-5). There shall be subtracted from
1550		-	Oklahoma taxable income an amount equal to the amount of deferred
1551		-	income included in such taxable income pursuant to Section 108(i)(1)
1552		-	of the Internal Revenue Code by Sec tion 1231 of the American
1553		-	Recovery and Reinvestment Act of 2009 (P.L. No. 111-5).
1554		-	11. For taxable years beginning on or after J anuary 1, 2019,
1555		-	there shall be subtracted from Oklahoma taxable income or adjusted
1556		-	gross income any item of income or gain, and there shall be added to
1557		-	Oklahoma taxable income or adjusted gross income any item of loss or
1558		-	deduction that in the absence of an election pursuant to the
1559		-	provisions of the Pass -Through Entity Tax Equity Act of 2019 would
1560		-
1561		-	ENGR. H. B. NO. 1953 Page 32 1
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1570		-	10
1571		-	11
1572		-	12
1573		-	13
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1575		-	15
1576		-	16
1577		-	17
1578		-	18
1579		-	19
1580		-	20
1581		-	21
1582		-	22
1583		-	23
1584		-	24
1585		-
1586		-	be allocated to a member or to an i ndirect member of an electing
1587		-	pass-through entity pursuant to Section 2351 et seq. of this title,
1588		-	if (i) the electing pass -through entity has accounted for such item
1589		-	in computing its Oklahoma net entity income or loss pursuant to the
1590		-	provisions of the Pass -Through Entity Tax Equity Ac t of 2019, and
1591		-	(ii) the total amount of tax attributable to any resulting Oklahoma
1592		-	net entity income has been paid. The Oklahoma Tax Commission shall
1593		-	promulgate rules for the reporting of such exclusion to direct and
1594		-	indirect members of the electing pass -through entity. As used in
1595		-	this paragraph, "electing pass-through entity", "indirect member",
1596		-	and "member" shall be defined in the same manner as prescribed by
1597		-	Section 2355.1P-2 of this title. Notwithstanding the application of
1598		-	this paragraph, the adjust ed tax basis of any ownership interest in
1599		-	a pass-through entity for purposes of Section 2351 et seq . of this
1600		-	title shall be equal to its adjusted tax basis for federal income
1601		-	tax purposes.
1602		-	B. 1. The taxable income of any corp oration shall be further
1603		-	adjusted to arrive at Oklahoma taxable income, except those
1604		-	corporations electing treatment as provided in subchapter S of the
1605		-	Internal Revenue Code, 26 U.S.C., Section 1361 et seq., and Section
1606		-	2365 of this title, deductions pursu ant to the provisions of the
1607		-	Accelerated Cost Recovery System as defined and allowed in the
1608		-	Economic Recovery Tax Act of 1981, P ublic Law 97-34, 26 U.S.C.,
1609		-	Section 168, for depreciation of assets placed into service after
1610		-
1611		-	ENGR. H. B. NO. 1953 Page 33 1
1612		-	2
1613		-	3
1614		-	4
1615		-	5
1616		-	6
1617		-	7
1618		-	8
1619		-	9
1620		-	10
1621		-	11
1622		-	12
1623		-	13
1624		-	14
1625		-	15
1626		-	16
1627		-	17
1628		-	18
1629		-	19
1630		-	20
1631		-	21
1632		-	22
1633		-	23
1634		-	24
1635		-
1636		-	December 31, 1981, shall not be al lowed in calculating Oklahoma
1637		-	taxable income. Such corporations shall be allowed a deduction for
1638		-	depreciation of assets placed into service after December 31, 1981,
1639		-	in accordance with provisions of the Internal Revenue Code, 26
1640		-	U.S.C., Section 1 et seq., in effect immediately prior t o the
1641		-	enactment of the Accelerated Cost Recovery System. The Oklahoma tax
1642		-	basis for all such asset s placed into service after December 31,
1643		-	1981, calculated in this section shall be retained and utilized for
1644		-	all Oklahoma income tax purposes through the fin al disposition of
1645		-	such assets.
1646		-	Notwithstanding any other provisions of the Oklahoma Income Tax
1647		-	Act, Section 2351 et seq. of this title, or of the Internal Revenue
1648		-	Code to the contrary, this subsection shall control calculation of
1649		-	depreciation of assets pla ced into service after December 31, 1981,
1650		-	and before January 1, 1983.
1651		-	For assets placed in service and held by a corporation in which
1652		-	accelerated cost recovery system was previously disallowed, an
1653		-	adjustment to taxable income i s required in the first taxab le year
1654		-	beginning after December 31, 1982, to reconcile the basis of such
1655		-	assets to the basis allow ed in the Internal Revenue Code. The
1656		-	purpose of this adjustment is to equalize the basis and allowance
1657		-	for depreciation account s between that reported to th e Internal
1658		-	Revenue Service and that reported to Oklahoma.
1659		-
1660		-	ENGR. H. B. NO. 1953 Page 34 1
1661		-	2
1662		-	3
1663		-	4
1664		-	5
1665		-	6
1666		-	7
1667		-	8
1668		-	9
1669		-	10
1670		-	11
1671		-	12
1672		-	13
1673		-	14
1674		-	15
1675		-	16
1676		-	17
1677		-	18
1678		-	19
1679		-	20
1680		-	21
1681		-	22
1682		-	23
1683		-	24
1684		-
1685		-	2. For tax years beginning on or after J anuary 1, 2009, and
1686		-	ending on or before December 31, 2009, there shall be added to
1687		-	Oklahoma taxable income any amount in excess of One Hundred Seventy -
1688		-	five Thousand Dollars ($175,000.00) which has been deducted as a
1689		-	small business expense under Internal Re venue Code, Section 179 as
1690		-	provided in the American Recovery and Reinvestment Act of 2009.
1691		-	C. 1. For taxable years beginning a fter December 31, 1987, the
1692		-	taxable income of any corporation shall be further adjusted to
1693		-	arrive at Oklahoma taxable income for transfers of technology to
1694		-	qualified small businesses located in Oklahoma. Such transferor
1695		-	corporation shall be allowed an exe mption from taxable income of an
1696		-	amount equal to the amount of royalty payment received as a result
1697		-	of such transfer; provided, however, such amount shall not exceed
1698		-	ten percent (10%) of the amount of gross proceeds received by such
1699		-	transferor corporation as a result of the technology transfer. Such
1700		-	exemption shall be allowed for a period not to exceed ten (10) years
1701		-	from the date of receipt of the first royalty payment accruing from
1702		-	such transfer. No exemption may be claimed for transfers of
1703		-	technology to qualified small businesses made prior to January 1,
1704		-	1988.
1705		-	2. For purposes of this subsection:
1706		-	a. "Qualified small business" m eans an entity, whether
1707		-	organized as a corporation, partnership, or
1708		-	proprietorship, organized for profit with its
1709		-
1710		-	ENGR. H. B. NO. 1953 Page 35 1
1711		-	2
1712		-	3
1713		-	4
1714		-	5
1715		-	6
1716		-	7
1717		-	8
1718		-	9
1719		-	10
1720		-	11
1721		-	12
1722		-	13
1723		-	14
1724		-	15
1725		-	16
1726		-	17
1727		-	18
1728		-	19
1729		-	20
1730		-	21
1731		-	22
1732		-	23
1733		-	24
1734		-
1735		-	principal place of business located within this state
1736		-	and which meets the following criteria:
1737		-	(1) Capitalization of not more than Two Hundred Fifty
1738		-	Thousand Dollars ($250,000.00),
1739		-	(2) Having at least fifty percent (50%) of its
1740		-	employees and assets located in Oklahoma at the
1741		-	time of the transfer, an d
1742		-	(3) Not a subsidiary or affiliate of the transferor
1743		-	corporation;
1744		-	b. "Technology" means a propriet ary process, formula,
1745		-	pattern, device or compilation of scientific or
1746		-	technical information which is not in the public
1747		-	domain;
1748		-	c. "Transferor corporation" me ans a corporation which is
1749		-	the exclusive and undisputed owner of the technology
1750		-	at the time the transfer is made; and
1751		-	d. "Gross proceeds" means the tot al amount of
1752		-	consideration for the transfer of technology, whether
1753		-	the consideration is in money or other wise.
1754		-	D. 1. For taxable years beginning after December 31, 2005, the
1755		-	taxable income of any corpor ation, estate or trust, shall be further
1756		-	adjusted for qualifying gains receiving capital treatment. Such
1757		-	corporations, estates or trusts shall be allowed a deduction from
1758		-	Oklahoma taxable income for the amount of qualifying gains receiving
1759		-
1760		-	ENGR. H. B. NO. 1953 Page 36 1
1761		-	2
1762		-	3
1763		-	4
1764		-	5
1765		-	6
1766		-	7
1767		-	8
1768		-	9
1769		-	10
1770		-	11
1771		-	12
1772		-	13
1773		-	14
1774		-	15
1775		-	16
1776		-	17
1777		-	18
1778		-	19
1779		-	20
1780		-	21
1781		-	22
1782		-	23
1783		-	24
1784		-
1785		-	capital treatment earned by the corporation, estate or trust during
1786		-	the taxable year and included in the federal taxable income of such
1787		-	corporation, estate or trust.
1788		-	2. As used in this subsection:
1789		-	a. "qualifying gains receiving capital treatment" means
1790		-	the amount of net capital gains, as defined in Section
1791		-	1222(11) of the Internal Revenue Code, included in the
1792		-	federal income tax return of the corporation, estate
1793		-	or trust that result from:
1794		-	(1) the sale of real property or tangible personal
1795		-	property located within Oklahoma that has been
1796		-	directly or indirectly owned by the c orporation,
1797		-	estate or trust for a holding period of at least
1798		-	five (5) years prior to the date of the
1799		-	transaction from which such net capital gains
1800		-	arise,
1801		-	(2) the sale of stock or on the sale of an ownersh ip
1802		-	interest in an Oklahoma company, limited
1803		-	liability company, or partnership where such
1804		-	stock or ownership interest has been directly or
1805		-	indirectly owned by the corporation, estate or
1806		-	trust for a holding period of at least three (3)
1807		-	years prior to the dat e of the transaction from
1808		-	which the net capital gain s arise, or
1809		-
1810		-	ENGR. H. B. NO. 1953 Page 37 1
1811		-	2
1812		-	3
1813		-	4
1814		-	5
1815		-	6
1816		-	7
1817		-	8
1818		-	9
1819		-	10
1820		-	11
1821		-	12
1822		-	13
1823		-	14
1824		-	15
1825		-	16
1826		-	17
1827		-	18
1828		-	19
1829		-	20
1830		-	21
1831		-	22
1832		-	23
1833		-	24
1834		-
1835		-	(3) the sale of real property, tangible personal
1836		-	property or intangible personal property loc ated
1837		-	within Oklahoma as part of the sale of all or
1838		-	substantially all of the assets of an Oklahoma
1839		-	company, limited liability company, or
1840		-	partnership where such property has been directly
1841		-	or indirectly owned by such entity owned by the
1842		-	owners of such entity , and used in or derived
1843		-	from such entity for a period of at least three
1844		-	(3) years prior to the dat e of the transaction
1845		-	from which the net capital gain s arise,
1846		-	b. "holding period" means an uninterrupted period of
1847		-	time. The holding period shall include any additional
1848		-	period when the property was held by another
1849		-	individual or entity, if such additional p eriod is
1850		-	included in the taxpayer's holding period f or the
1851		-	asset pursuant to the Internal Revenue Code,
1852		-	c. "Oklahoma company", "limited liability company", o r
1853		-	"partnership" means an entity whose primary
1854		-	headquarters have been located in Oklahoma for at
1855		-	least three (3) uninterrupted years prior to the date
1856		-	of the transaction from which the net capital gains
1857		-	arise,
1858		-
1859		-	ENGR. H. B. NO. 1953 Page 38 1
1860		-	2
1861		-	3
1862		-	4
1863		-	5
1864		-	6
1865		-	7
1866		-	8
1867		-	9
1868		-	10
1869		-	11
1870		-	12
1871		-	13
1872		-	14
1873		-	15
1874		-	16
1875		-	17
1876		-	18
1877		-	19
1878		-	20
1879		-	21
1880		-	22
1881		-	23
1882		-	24
1883		-
1884		-	d. "direct" means the taxpayer directly owns th e asset,
1885		-	and
1886		-	e. "indirect" means the taxpayer owns an interest in a
1887		-	pass-through entity (or chain o f pass-through
1888		-	entities) that sells the asset that g ives rise to the
1889		-	qualifying gains receiving capital treatment.
1890		-	(1) With respect to sales of real property or
1891		-	tangible personal property located within
1892		-	Oklahoma, the deduction described in this
1893		-	subsection shall not apply unless the pass -
1894		-	through entity that makes the sale has held the
1895		-	property for not less than five (5) uninterrupted
1896		-	years prior to the date of the transaction that
1897		-	created the capital gain, and each pass-through
1898		-	entity included in the chain o f ownership has
1899		-	been a member, partner, or sharehold er of the
1900		-	pass-through entity in the tier immediately below
1901		-	it for an uninterrupted period of not less th an
1902		-	five (5) years.
1903		-	(2) With respect to sales of stock or ownership
1904		-	interest in or sales of all or s ubstantially all
1905		-	of the assets of an Oklahoma company, limited
1906		-	liability company, or partnership, the deduction
1907		-	described in this subsection shall not apply
1908		-
1909		-	ENGR. H. B. NO. 1953 Page 39 1
1910		-	2
1911		-	3
1912		-	4
1913		-	5
1914		-	6
1915		-	7
1916		-	8
1917		-	9
1918		-	10
1919		-	11
1920		-	12
1921		-	13
1922		-	14
1923		-	15
1924		-	16
1925		-	17
1926		-	18
1927		-	19
1928		-	20
1929		-	21
1930		-	22
1931		-	23
1932		-	24
1933		-
1934		-	unless the pass-through entity that makes the
1935		-	sale has held the stock or ownership interest or
1936		-	the assets for not less than three (3)
1937		-	uninterrupted years prior to the date of the
1938		-	transaction that created the capital gain, and
1939		-	each pass-through entity inclu ded in the chain of
1940		-	ownership has been a member, partner or
1941		-	shareholder of the pass -through entity in the
1942		-	tier immediately below it for an uninterrupted
1943		-	period of not less than three (3) years.
1944		-	E. The Oklahoma adjusted gross income of any individual
1945		-	taxpayer shall be further adjusted as follows to arrive at Oklahoma
1946		-	taxable income:
1947		-	1. a. In the case of individuals, there shall be added or
1948		-	deducted, as the case may be, the difference necessary
1949		-	to allow personal exemptions of One Thousand Dollars
1950		-	($1,000.00) in lieu of the personal exemptions allowed
1951		-	by the Internal Revenue Code.
1952		-	b. There shall be allowed an additional exemption of One
1953		-	Thousand Dollars ($1,000.00) for each taxpayer or
1954		-	spouse who is blind at the close of the tax year. For
1955		-	purposes of this sub paragraph, an individual is blind
1956		-	only if the central visual acuity of the individual
1957		-	does not exceed 20/200 in the better eye with
1958		-
1959		-	ENGR. H. B. NO. 1953 Page 40 1
1960		-	2
1961		-	3
1962		-	4
1963		-	5
1964		-	6
1965		-	7
1966		-	8
1967		-	9
1968		-	10
1969		-	11
1970		-	12
1971		-	13
1972		-	14
1973		-	15
1974		-	16
1975		-	17
1976		-	18
1977		-	19
1978		-	20
1979		-	21
1980		-	22
1981		-	23
1982		-	24
1983		-
1984		-	correcting lenses, or if the visual acuity of the
1985		-	individual is greater than 20/200, but is accompanied
1986		-	by a limitation in t he fields of vision such that the
1987		-	widest diameter of the visual field subtends an angle
1988		-	no greater than twenty (20) degrees.
1989		-	c. There shall be allowed an additional exemption of One
1990		-	Thousand Dollars ($1,000.00) for each taxpayer or
1991		-	spouse who is sixty-five (65) years of age or older at
1992		-	the close of the tax year based upon the filing status
1993		-	and federal adjusted gross income of the taxpayer.
1994		-	Taxpayers with the following filing status may claim
1995		-	this exemption if the federal adjusted gross income
1996		-	does not exceed:
1997		-	(1) Twenty-five Thousand Dollars ($25,000.00) if
1998		-	married and filing jointly;
1999		-	(2) Twelve Thousand Five Hundred Dollars ($12,500.00)
2000		-	if married and filing separately;
2001		-	(3) Fifteen Thousand Dollars ($15,000.00) if single;
2002		-	and
2003		-	(4) Nineteen Thousand Dollars ($19,000.00) if a
2004		-	qualifying head of household.
2005		-	Provided, for taxable years beginning after Decembe r
2006		-	31, 1999, amounts included in the calculation of
2007		-	federal adjusted gross income pursuant to the
2008		-
2009		-	ENGR. H. B. NO. 1953 Page 41 1
2010		-	2
2011		-	3
2012		-	4
2013		-	5
2014		-	6
2015		-	7
2016		-	8
2017		-	9
2018		-	10
2019		-	11
2020		-	12
2021		-	13
2022		-	14
2023		-	15
2024		-	16
2025		-	17
2026		-	18
2027		-	19
2028		-	20
2029		-	21
2030		-	22
2031		-	23
2032		-	24
2033		-
2034		-	conversion of a traditional individual retirement
2035		-	account to a Roth individual retirement account shall
2036		-	be excluded from federal adjusted gross income for
2037		-	purposes of the income thresholds provided in this
2038		-	subparagraph.
2039		-	2. a. For taxable years beginning on or before December 31,
2040		-	2005, in the case of individuals who use the standard
2041		-	deduction in determining taxable income, there shall
2042		-	be added or deducted, as the case may be, the
2043		-	difference necessary to allow a standard deduction in
2044		-	lieu of the standard deduction allowed by the Internal
2045		-	Revenue Code, in an amount equ al to the larger of
2046		-	fifteen percent (15%) of the Oklahoma adjusted gross
2047		-	income or One Thousand Dol lars ($1,000.00), but not to
2048		-	exceed Two Thousand Dollars ($2,000.00), except that
2049		-	in the case of a married individual filing a separate
2050		-	return such deduction shall be the larger of fifteen
2051		-	percent (15%) of such Oklahoma adjusted gross income
2052		-	or Five Hundred Dollars ($500.00), but not to exceed
2053		-	the maximum amount of One Thousand Dollars
2054		-	($1,000.00).
2055		-	b. For taxable years beginning on or after January 1,
2056		-	2006, and before January 1, 2007, in the case of
2057		-	individuals who use the standard deduction in
2058		-
2059		-	ENGR. H. B. NO. 1953 Page 42 1
2060		-	2
2061		-	3
2062		-	4
2063		-	5
2064		-	6
2065		-	7
2066		-	8
2067		-	9
2068		-	10
2069		-	11
2070		-	12
2071		-	13
2072		-	14
2073		-	15
2074		-	16
2075		-	17
2076		-	18
2077		-	19
2078		-	20
2079		-	21
2080		-	22
2081		-	23
2082		-	24
2083		-
2084		-	determining taxable income, there shall be added or
2085		-	deducted, as the case may be, the difference necessary
2086		-	to allow a standard deduction in lieu of the standard
2087		-	deduction allowed by the Internal Revenue Code, in an
2088		-	amount equal to:
2089		-	(1) Three Thousand Dollars ($3,000.0 0), if the filing
2090		-	status is married filing joint, head of household
2091		-	or qualifying widow; or
2092		-	(2) Two Thousand Dollars ($2,000.00), if the filing
2093		-	status is single or married filing separate.
2094		-	c. For the taxable year beginning on January 1, 2007, and
2095		-	ending December 31, 2007, in the case of individuals
2096		-	who use the standard deduction in determining taxabl e
2097		-	income, there shall be added or deducted, as the case
2098		-	may be, the difference necessary to allow a standard
2099		-	deduction in lieu of the standard deduction allowed by
2100		-	the Internal Revenue Code, in an amount equal to:
2101		-	(1) Five Thousand Five Hundred Dollars ($5 ,500.00),
2102		-	if the filing status is married filing joint or
2103		-	qualifying widow; or
2104		-	(2) Four Thousand One Hundred Twenty-five Dollars
2105		-	($4,125.00) for a head of house hold; or
2106		-
2107		-	ENGR. H. B. NO. 1953 Page 43 1
2108		-	2
2109		-	3
2110		-	4
2111		-	5
2112		-	6
2113		-	7
2114		-	8
2115		-	9
2116		-	10
2117		-	11
2118		-	12
2119		-	13
2120		-	14
2121		-	15
2122		-	16
2123		-	17
2124		-	18
2125		-	19
2126		-	20
2127		-	21
2128		-	22
2129		-	23
2130		-	24
2131		-
2132		-	(3) Two Thousand Seven Hundred Fifty Dollars
2133		-	($2,750.00), if the filing status is singl e or
2134		-	married filing separate.
2135		-	d. For the taxable year beginni ng on January 1, 2008, and
2136		-	ending December 31, 2008, in the case of individuals
2137		-	who use the standard deduction in determining taxable
2138		-	income, there shall be added or deducted, as the case
2139		-	may be, the difference necessary to allow a standard
2140		-	deduction in lieu of the standard deduction allowed by
2141		-	the Internal Revenue Code, in an amount equal to:
2142		-	(1) Six Thousand Five Hundred Dollars ($6,500.00), if
2143		-	the filing status is married filing joint or
2144		-	qualifying widow, or
2145		-	(2) Four Thousand Eight Hundred Seventy -five Dollars
2146		-	($4,875.00) for a head of household, or
2147		-	(3) Three Thousand Two Hundred Fifty Dollars
2148		-	($3,250.00), if the filing status is single or
2149		-	married filing separate.
2150		-	e. For the taxable year beginni ng on January 1, 2009, and
2151		-	ending December 31, 2009, in the c ase of individuals
2152		-	who use the standard deduction in determining taxable
2153		-	income, there shall be add ed or deducted, as the case
2154		-	may be, the difference necessary to allow a standard
2155		-
2156		-	ENGR. H. B. NO. 1953 Page 44 1
2157		-	2
2158		-	3
2159		-	4
2160		-	5
2161		-	6
2162		-	7
2163		-	8
2164		-	9
2165		-	10
2166		-	11
2167		-	12
2168		-	13
2169		-	14
2170		-	15
2171		-	16
2172		-	17
2173		-	18
2174		-	19
2175		-	20
2176		-	21
2177		-	22
2178		-	23
2179		-	24
2180		-
2181		-	deduction in lieu of the standard deduction allowed by
2182		-	the Internal Revenue Code, in an amount equal to:
2183		-	(1) Eight Thousand Five Hundred Dollars ($8,500.00),
2184		-	if the filing status is married filing joint or
2185		-	qualifying widow, or
2186		-	(2) Six Thousand Three Hundred Seventy -five Dollars
2187		-	($6,375.00) for a head of household, or
2188		-	(3) Four Thousand Two Hundred Fifty Dollars
2189		-	($4,250.00), if the filing status is single or
2190		-	married filing separa te.
2191		-	Oklahoma adjusted gross income shall be increased by
2192		-	any amounts paid for motor vehicle exci se taxes which
2193		-	were deducted as allowed by the Internal Reven ue Code.
2194		-	f. For taxable years beginning on or after January 1,
2195		-	2010, and ending on December 31, 201 6, in the case of
2196		-	individuals who use the standard deduction in
2197		-	determining taxable income, ther e shall be added or
2198		-	deducted, as the case may be, the differe nce necessary
2199		-	to allow a standard deduction equal to the standard
2200		-	deduction allowed by the Internal Revenue Code, based
2201		-	upon the amount and filing status prescribed by such
2202		-	Code for purposes of f iling federal individual income
2203		-	tax returns.
2204		-
2205		-	ENGR. H. B. NO. 1953 Page 45 1
2206		-	2
2207		-	3
2208		-	4
2209		-	5
2210		-	6
2211		-	7
2212		-	8
2213		-	9
2214		-	10
2215		-	11
2216		-	12
2217		-	13
2218		-	14
2219		-	15
2220		-	16
2221		-	17
2222		-	18
2223		-	19
2224		-	20
2225		-	21
2226		-	22
2227		-	23
2228		-	24
2229		-
2230		-	g. For taxable years beginning on or after January 1,
2231		-	2017, in the case of individuals who use the standard
2232		-	deduction in determining taxable income, there shall
2233		-	be added or deducted, as the case may be, the
2234		-	difference necessary to allow a standard deduction in
2235		-	lieu of the standard deduction allowed by the Internal
2236		-	Revenue Code, as follows:
2237		-	(1) Six Thousand Three Hundre d Fifty Dollars
2238		-	($6,350.00) for single or married filing
2239		-	separately,
2240		-	(2) Twelve Thousand Seven H undred Dollars
2241		-	($12,700.00) for married filing jointly or
2242		-	qualifying widower with dependent child, and
2243		-	(3) Nine Thousand Three Hundred Fifty Dollars
2244		-	($9,350.00) for head of household.
2245		-	3. a. In the case of resident and part -year resident
2246		-	individuals having adjusted gross income from sources
2247		-	both within and without th e state, the itemized or
2248		-	standard deductions and personal exemptions shall be
2249		-	reduced to an amount which is the same portion of the
2250		-	total thereof as Oklahoma adjusted gross income is of
2251		-	adjusted gross income. To the extent itemized
2252		-	deductions include allo wable moving expense, proration
2253		-	of moving expense shall not be required or permitted
2254		-
2255		-	ENGR. H. B. NO. 1953 Page 46 1
2256		-	2
2257		-	3
2258		-	4
2259		-	5
2260		-	6
2261		-	7
2262		-	8
2263		-	9
2264		-	10
2265		-	11
2266		-	12
2267		-	13
2268		-	14
2269		-	15
2270		-	16
2271		-	17
2272		-	18
2273		-	19
2274		-	20
2275		-	21
2276		-	22
2277		-	23
2278		-	24
2279		-
2280		-	but allowable moving expense shall be fully deductible
2281		-	for those taxpayers moving within or into Oklahoma and
2282		-	no part of moving expense shall be deductible for
2283		-	those taxpayers moving without or out of Oklahoma.
2284		-	All other itemized or standard deductions and personal
2285		-	exemptions shall be subject to proration as provided
2286		-	by law.
2287		-	b. For taxable years beginning on or after January 1,
2288		-	2018, the net amount of itemized deductions a llowable
2289		-	on an Oklahoma income tax return, subject to the
2290		-	provisions of paragraph 24 of this subsec tion, shall
2291		-	not exceed Seventeen Thousand Dollars ($17,000.00).
2292		-	For purposes of this subparagraph, charitable
2293		-	contributions and medical expenses deductible for
2294		-	federal income tax purposes shall be excluded from the
2295		-	amount of Seventeen Thousand Dollars ($1 7,000.00) as
2296		-	specified by this subparagraph.
2297		-	4. A resident indiv idual with a physical disability
2298		-	constituting a substantial handicap to employment may deduc t from
2299		-	Oklahoma adjusted gross income such expenditures to modify a motor
2300		-	vehicle, home or workplac e as are necessary to compensate for his or
2301		-	her handicap. A vete ran certified by the Department of Veterans
2302		-	Affairs of the federal government as having a se rvice-connected
2303		-	disability shall be conclusively presumed to be an individual with a
2304		-
2305		-	ENGR. H. B. NO. 1953 Page 47 1
2306		-	2
2307		-	3
2308		-	4
2309		-	5
2310		-	6
2311		-	7
2312		-	8
2313		-	9
2314		-	10
2315		-	11
2316		-	12
2317		-	13
2318		-	14
2319		-	15
2320		-	16
2321		-	17
2322		-	18
2323		-	19
2324		-	20
2325		-	21
2326		-	22
2327		-	23
2328		-	24
2329		-
2330		-	physical disability constituting a substantial handicap to
2331		-	employment. The Tax Commission shall promulgate rules containing a
2332		-	list of combinations of common disabilities and modifications which
2333		-	may be presumed to qualify for this deduction. The Tax Commission
2334		-	shall prescribe necessary requirements for verification.
2335		-	5. a. Before July 1, 2010, the first One Thousand Five
2336		-	Hundred Dollars ($1,500.00) received by any person
2337		-	from the United States as salary or compensation in
2338		-	any form, other than retirement benefits, as a me mber
2339		-	of any component of the Armed Forces of the United
2340		-	States shall be deducted from taxable income.
2341		-	b. On or after July 1, 2010, one hundred percent (100%)
2342		-	of the income received by any person from the United
2343		-	States as salary or compensation in any form, other
2344		-	than retirement benefits, as a member of any component
2345		-	of the Armed Forces of the United States shall be
2346		-	deducted from taxable income.
2347		-	c. Whenever the filing of a timely income tax return by a
2348		-	member of the Armed Forces of the United States is
2349		-	made impracticable or impossible of accomplishment by
2350		-	reason of:
2351		-	(1) absence from the United States, which term
2352		-	includes only the states and the District of
2353		-	Columbia;
2354		-
2355		-	ENGR. H. B. NO. 1953 Page 48 1
2356		-	2
2357		-	3
2358		-	4
2359		-	5
2360		-	6
2361		-	7
2362		-	8
2363		-	9
2364		-	10
2365		-	11
2366		-	12
2367		-	13
2368		-	14
2369		-	15
2370		-	16
2371		-	17
2372		-	18
2373		-	19
2374		-	20
2375		-	21
2376		-	22
2377		-	23
2378		-	24
2379		-
2380		-	(2) absence from the State of Oklahoma while on
2381		-	active duty; or
2382		-	(3) confinement in a hospital within the United
2383		-	States for treatment of wounds, injuries or
2384		-	disease,
2385		-	the time for filing a return and paying an income tax
2386		-	shall be and is hereby extended without incurring
2387		-	liability for interest or penalties, to the fifteenth
2388		-	day of the third month foll owing the month in which:
2389		-	(a) Such individual shall return to the United
2390		-	States if the extension is granted pursuant
2391		-	to subparagraph a of this paragraph, ret urn
2392		-	to the State of Oklahoma if the extension is
2393		-	granted pursuant to subparagraph b of this
2394		-	paragraph or be discharged from such
2395		-	hospital if the extension is grante d
2396		-	pursuant to subparagraph c of this
2397		-	paragraph; or
2398		-	(b) An executor, administrator, or conser vator
2399		-	of the estate of the taxpayer is appointed,
2400		-	whichever event occurs the earliest.
2401		-	Provided, that the Tax Commission may, in its discretion, grant
2402		-	any member of the Armed Forces of the United States an extension of
2403		-	time for filing of income tax returns and payment of income tax
2404		-
2405		-	ENGR. H. B. NO. 1953 Page 49 1
2406		-	2
2407		-	3
2408		-	4
2409		-	5
2410		-	6
2411		-	7
2412		-	8
2413		-	9
2414		-	10
2415		-	11
2416		-	12
2417		-	13
2418		-	14
2419		-	15
2420		-	16
2421		-	17
2422		-	18
2423		-	19
2424		-	20
2425		-	21
2426		-	22
2427		-	23
2428		-	24
2429		-
2430		-	without incurring liabilities for interest or penalties. Such
2431		-	extension may be granted only when in the judgment of the Tax
2432		-	Commission a good cause exists therefor and may be for a period in
2433		-	excess of six (6) months. A record o f every such extension granted,
2434		-	and the reason therefor, shall be kept.
2435		-	6. Before July 1, 2010, th e salary or any other form of
2436		-	compensation, received from the United States by a member of any
2437		-	component of the Armed Forces of the United States, shall be
2438		-	deducted from taxable income during the time in which the person is
2439		-	detained by the enemy in a confl ict, is a prisoner of war or is
2440		-	missing in action and not deceased; provided, after July 1, 2010,
2441		-	all such salary or compensation shall be subject to the ded uction as
2442		-	provided pursuant to paragraph 5 of this subsection.
2443		-	7. a. An individual taxpayer, whethe r resident or
2444		-	nonresident, may deduct an amount equal to the federal
2445		-	income taxes paid by the taxpayer during the taxable
2446		-	year.
2447		-	b. Federal taxes as described in subparagraph a of this
2448		-	paragraph shall be deductible by any individual
2449		-	taxpayer, whether reside nt or nonresident, only to the
2450		-	extent they relate to income subject to taxation
2451		-	pursuant to the provisions of the Oklahoma Income Tax
2452		-	Act. The maximum amoun t allowable in the preceding
2453		-	paragraph shall be prorated on the ratio of the
2454		-
2455		-	ENGR. H. B. NO. 1953 Page 50 1
2456		-	2
2457		-	3
2458		-	4
2459		-	5
2460		-	6
2461		-	7
2462		-	8
2463		-	9
2464		-	10
2465		-	11
2466		-	12
2467		-	13
2468		-	14
2469		-	15
2470		-	16
2471		-	17
2472		-	18
2473		-	19
2474		-	20
2475		-	21
2476		-	22
2477		-	23
2478		-	24
2479		-
2480		-	Oklahoma adjusted gros s income to federal adjusted
2481		-	gross income.
2482		-	c. For the purpose of this paragraph, "federal income
2483		-	taxes paid" shall mean federal income taxes, surtaxes
2484		-	imposed on incomes or excess profits taxes, as though
2485		-	the taxpayer was on the accrual basis. In determin ing
2486		-	the amount of deduction for federal income taxes for
2487		-	tax year 2001, the amount of the deduction shall not
2488		-	be adjusted by the amount of any accelerated te n
2489		-	percent (10%) tax rate bracket credit or advanced
2490		-	refund of the credit received during the tax ye ar
2491		-	provided pursuant to the federal Economic Growth and
2492		-	Tax Relief Reconciliation Act of 2001, P.L. No. 107 -
2493		-	16, and the advanced refund of such credit shall not
2494		-	be subject to taxation.
2495		-	d. The provisions of this paragraph shall apply to all
2496		-	taxable years ending after December 31, 1978, and
2497		-	beginning before January 1, 2006.
2498		-	8. Retirement benefits not to exceed Five Thousand Five Hundred
2499		-	Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five
2500		-	Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Th ousand
2501		-	Dollars ($10,000.00) for the 2006 tax year and all subsequent tax
2502		-	years, which are received by an individual from the civil service of
2503		-	the United States, the Oklahoma Public Employees Retirement System,
2504		-
2505		-	ENGR. H. B. NO. 1953 Page 51 1
2506		-	2
2507		-	3
2508		-	4
2509		-	5
2510		-	6
2511		-	7
2512		-	8
2513		-	9
2514		-	10
2515		-	11
2516		-	12
2517		-	13
2518		-	14
2519		-	15
2520		-	16
2521		-	17
2522		-	18
2523		-	19
2524		-	20
2525		-	21
2526		-	22
2527		-	23
2528		-	24
2529		-
2530		-	the Teachers' Retirement System of Oklahoma, t he Oklahoma Law
2531		-	Enforcement Retirement System, the Oklahoma Firefighters Pension and
2532		-	Retirement System, the Oklahoma Police Pension and Retirement
2533		-	System, the employee retirement systems created by counties pursuant
2534		-	to Section 951 et seq. of Title 19 of th e Oklahoma Statutes, the
2535		-	Uniform Retirement System for Justices and Judges, the Oklahoma
2536		-	Wildlife Conservation Department Retirement Fund, the Oklahoma
2537		-	Employment Security Commission Retirement Plan, or the employee
2538		-	retirement systems created by municipali ties pursuant to Section 48-
2539		-	101 et seq. of Title 11 of the Oklahoma Statutes shall be exempt
2540		-	from taxable income.
2541		-	9. In taxable years beginning after Decemb er 3l, 1984, Social
2542		-	Security benefits received by an individual shall be exempt from
2543		-	taxable income, to the extent such benefits are included in the
2544		-	federal adjusted gross income pursuant to the provisions of Section
2545		-	86 of the Internal Revenue Code, 26 U.S .C., Section 86.
2546		-	10. For taxable years beginning after December 31, 1994, lump -
2547		-	sum distributions from employer plans of deferred compensation,
2548		-	which are not qualified plans within the meaning of Section 401(a)
2549		-	of the Internal Revenue Code, 26 U.S.C., Sect ion 401(a), and which
2550		-	are deposited in and accounted for within a separate bank account or
2551		-	brokerage account in a financial institution within this state,
2552		-	shall be excluded from taxable income in the same manner as a
2553		-	qualifying rollover contribution to an individual retirement account
2554		-
2555		-	ENGR. H. B. NO. 1953 Page 52 1
2556		-	2
2557		-	3
2558		-	4
2559		-	5
2560		-	6
2561		-	7
2562		-	8
2563		-	9
2564		-	10
2565		-	11
2566		-	12
2567		-	13
2568		-	14
2569		-	15
2570		-	16
2571		-	17
2572		-	18
2573		-	19
2574		-	20
2575		-	21
2576		-	22
2577		-	23
2578		-	24
2579		-
2580		-	within the meaning of Section 408 of the Internal Revenue Code, 26
2581		-	U.S.C., Section 408. Amounts withdrawn from such bank or brokerage
2582		-	account, including any earnings thereon, shall be included in
2583		-	taxable income when withdrawn in the same manner as withdrawals from
2584		-	individual retirement accounts within the meaning of Sectio n 408 of
2585		-	the Internal Revenue Code.
2586		-	11. In taxable years beginning after December 31, 1995,
2587		-	contributions made to and interest received from a medical savin gs
2588		-	account established pursuant to Sections 2621 through 2623 of Title
2589		-	63 of the Oklahoma Statutes shall be exempt from taxable income.
2590		-	12. For taxable years beginning after December 31, 1996, the
2591		-	Oklahoma adjusted gross income of any individual taxpayer who is a
2592		-	swine or poultry producer may be further adjusted for the deduction
2593		-	for depreciation allow ed for new construction or expansion costs
2594		-	which may be computed using the same depreciation method elected for
2595		-	federal income tax purposes except that the u seful life shall be
2596		-	seven (7) years for purposes of this paragraph. If depreciation is
2597		-	allowed as a deduction in determining the adjusted gross income of
2598		-	an individual, any depreciation calculated and claimed pursuant to
2599		-	this section shall in no event be a duplication of any depreciation
2600		-	allowed or permitted on the federal income tax return of the
2601		-	individual.
2602		-	13. a. In taxable years beginning before January 1, 2005,
2603		-	retirement benefits not to exceed the amounts
2604		-
2605		-	ENGR. H. B. NO. 1953 Page 53 1
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2607		-	3
2608		-	4
2609		-	5
2610		-	6
2611		-	7
2612		-	8
2613		-	9
2614		-	10
2615		-	11
2616		-	12
2617		-	13
2618		-	14
2619		-	15
2620		-	16
2621		-	17
2622		-	18
2623		-	19
2624		-	20
2625		-	21
2626		-	22
2627		-	23
2628		-	24
2629		-
2630		-	specified in this paragraph, which are receiv ed by an
2631		-	individual sixty-five (65) years of age or older and
2632		-	whose Oklahoma adjusted gross income is Twenty-five
2633		-	Thousand Dollars ($25,000.00) or less if the filing
2634		-	status is single, head of household, or married filing
2635		-	separate, or Fifty Thousand Dollars ($50,000.00) or
2636		-	less if the filing status is married filing joint or
2637		-	qualifying widow, shall be ex empt from taxable income.
2638		-	In taxable years beginning after December 31, 2004,
2639		-	retirement benefits not to exceed the amounts
2640		-	specified in this paragraph, whi ch are received by an
2641		-	individual whose Oklahoma adjusted gross income is
2642		-	less than the qualifying a mount specified in this
2643		-	paragraph, shall be exempt from taxable income.
2644		-	b. For purposes of this paragraph, the qualifying amount
2645		-	shall be as follows:
2646		-	(1) in taxable years beginning after December 31,
2647		-	2004, and prior to January 1, 2007, the
2648		-	qualifying amount shall be Thirty-seven Thousand
2649		-	Five Hundred Dollars ($37,500.00) or less if the
2650		-	filing status is single, head of household, or
2651		-	married filing separate, or Seventy-five Thousand
2652		-	Dollars ($75,000.00) or less if the filing status
2653		-	is married filing jointly o r qualifying widow,
2654		-
2655		-	ENGR. H. B. NO. 1953 Page 54 1
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2657		-	3
2658		-	4
2659		-	5
2660		-	6
2661		-	7
2662		-	8
2663		-	9
2664		-	10
2665		-	11
2666		-	12
2667		-	13
2668		-	14
2669		-	15
2670		-	16
2671		-	17
2672		-	18
2673		-	19
2674		-	20
2675		-	21
2676		-	22
2677		-	23
2678		-	24
2679		-
2680		-	(2) in the taxable year beginning January 1, 2007,
2681		-	the qualifying amount shall be Fifty Thousand
2682		-	Dollars ($50,000.00) or less if the fili ng status
2683		-	is single, head of household, or married filing
2684		-	separate, or One Hundred Thousand Dollars
2685		-	($100,000.00) or less if the filing status is
2686		-	married filing jointly or qualifying widow,
2687		-	(3) in the taxable year beginning January 1, 2008,
2688		-	the qualifying amount shall be Sixty-two Thousand
2689		-	Five Hundred Dollars ($62,500.00) or less if the
2690		-	filing status is single, head of household, or
2691		-	married filing separate, or One Hundred Twenty -
2692		-	five Thousand Dollars ($125,000.00) or less if
2693		-	the filing status is married fi ling jointly or
2694		-	qualifying widow,
2695		-	(4) in the taxable year beginning January 1, 2009,
2696		-	the qualifying amount shall be One Hundred
2697		-	Thousand Dollars ($100,000.00) or less if the
2698		-	filing status is single, head of household, or
2699		-	married filing separate, or Two Hun dred Thousand
2700		-	Dollars ($200,000.00) or less if the filing
2701		-	status is married filing jointly or quali fying
2702		-	widow, and
2703		-
2704		-	ENGR. H. B. NO. 1953 Page 55 1
2705		-	2
2706		-	3
2707		-	4
2708		-	5
2709		-	6
2710		-	7
2711		-	8
2712		-	9
2713		-	10
2714		-	11
2715		-	12
2716		-	13
2717		-	14
2718		-	15
2719		-	16
2720		-	17
2721		-	18
2722		-	19
2723		-	20
2724		-	21
2725		-	22
2726		-	23
2727		-	24
2728		-
2729		-	(5) in the taxable year beginning January 1, 2010,
2730		-	and subsequent taxable years, there shall be no
2731		-	limitation upon the qualifying amount.
2732		-	c. For purposes of this paragraph, "retirement benefits"
2733		-	means the total distributions or withdrawals from the
2734		-	following:
2735		-	(1) an employee pension benefit plan which satisfies
2736		-	the requirements of Section 401 of the Internal
2737		-	Revenue Code, 26 U.S.C., Section 40 1,
2738		-	(2) an eligible deferred compensation plan that
2739		-	satisfies the requirements of Section 457 of the
2740		-	Internal Revenue Code, 26 U.S.C., Section 457,
2741		-	(3) an individual retirement account, annuity or
2742		-	trust or simplified employee pension that
2743		-	satisfies the requirements of Section 408 of the
2744		-	Internal Revenue Code, 26 U.S.C., Section 408,
2745		-	(4) an employee annuity subject to the provisions of
2746		-	Section 403(a) or (b) of the Internal Revenue
2747		-	Code, 26 U.S.C., Section 403(a) or (b),
2748		-	(5) United States Retirement Bonds whic h satisfy the
2749		-	requirements of Section 86 of the Internal
2750		-	Revenue Code, 26 U.S.C., Section 86, or
2751		-	(6) lump-sum distributions from a retirement plan
2752		-	which satisfies the requirements of Section
2753		-
2754		-	ENGR. H. B. NO. 1953 Page 56 1
2755		-	2
2756		-	3
2757		-	4
2758		-	5
2759		-	6
2760		-	7
2761		-	8
2762		-	9
2763		-	10
2764		-	11
2765		-	12
2766		-	13
2767		-	14
2768		-	15
2769		-	16
2770		-	17
2771		-	18
2772		-	19
2773		-	20
2774		-	21
2775		-	22
2776		-	23
2777		-	24
2778		-
2779		-	402(e) of the Internal Revenue Code, 26 U.S.C.,
2780		-	Section 402(e).
2781		-	d. The amount of the exemption provided by this paragraph
2782		-	shall be limited to Five Thousand Five Hun dred Dollars
2783		-	($5,500.00) for the 2004 tax year, Seven Thousand Five
2784		-	Hundred Dollars ($7,500.00) for the 2005 tax year and
2785		-	Ten Thousand Dollars ($10,000.00) f or the tax year
2786		-	2006 and for all subsequent tax years. Any individual
2787		-	who claims the exemption pro vided for in paragraph 8
2788		-	of this subsection shall not be permitted to claim a
2789		-	combined total exemption pursuant to this paragraph
2790		-	and paragraph 8 of this sub section in an amount
2791		-	exceeding Five Thousand Five Hundred Dollars
2792		-	($5,500.00) for the 2004 tax year , Seven Thousand Five
2793		-	Hundred Dollars ($7,500.00) for the 2005 tax year and
2794		-	Ten Thousand Dollars ($10,000.00) for the 2006 tax
2795		-	year and all subsequent tax ye ars.
2796		-	14. In taxable years beginning after December 31, 1999, for an
2797		-	individual engaged in producti on agriculture who has filed a
2798		-	Schedule F form with the taxpayer's federal income tax return for
2799		-	such taxable year, there shall be excluded from taxable inco me any
2800		-	amount which was included as federal taxable income or federal
2801		-	adjusted gross income and whi ch consists of the discharge of an
2802		-
2803		-	ENGR. H. B. NO. 1953 Page 57 1
2804		-	2
2805		-	3
2806		-	4
2807		-	5
2808		-	6
2809		-	7
2810		-	8
2811		-	9
2812		-	10
2813		-	11
2814		-	12
2815		-	13
2816		-	14
2817		-	15
2818		-	16
2819		-	17
2820		-	18
2821		-	19
2822		-	20
2823		-	21
2824		-	22
2825		-	23
2826		-	24
2827		-
2828		-	obligation by a creditor of the taxpayer incurred to finance the
2829		-	production of agricultural products.
2830		-	15. In taxable year s beginning December 31, 2000, an amount
2831		-	equal to one hundred percent (100%) of the amount of any s cholarship
2832		-	or stipend received from participation in the Oklahoma Police Corps
2833		-	Program, as established in Section 2 -140.3 of Title 47 of the
2834		-	Oklahoma Statutes shall be exempt from taxable income.
2835		-	16. a. In taxable years beginning after December 31, 2001,
2836		-	and before January 1, 2005, there shall be allowed a
2837		-	deduction in the amount of contributions to accounts
2838		-	established pursuant to the Oklahoma College Savings
2839		-	Plan Act. The deduction shall equal the amount of
2840		-	contributions to accounts, but in no event shal l the
2841		-	deduction for each contributor exceed Two Thousand
2842		-	Five Hundred Dollars ($2,500.00) each taxable year for
2843		-	each account.
2844		-	b. In taxable years beginning a fter December 31, 2004,
2845		-	each taxpayer shall be allowed a deduction for
2846		-	contributions to accounts es tablished pursuant to the
2847		-	Oklahoma College Savings Plan Act. The maximum annual
2848		-	deduction shall equal the amount of contributions to
2849		-	all such accounts plus any contributions to such
2850		-	accounts by the taxpayer for prior taxable years after
2851		-	December 31, 2004, which were not deducted, but in no
2852		-
2853		-	ENGR. H. B. NO. 1953 Page 58 1
2854		-	2
2855		-	3
2856		-	4
2857		-	5
2858		-	6
2859		-	7
2860		-	8
2861		-	9
2862		-	10
2863		-	11
2864		-	12
2865		-	13
2866		-	14
2867		-	15
2868		-	16
2869		-	17
2870		-	18
2871		-	19
2872		-	20
2873		-	21
2874		-	22
2875		-	23
2876		-	24
2877		-
2878		-	event shall the deduction for each tax year exceed Ten
2879		-	Thousand Dollars ($10,000.00) for each individual
2880		-	taxpayer or Twenty Thousand Dollars ($20,000.00) for
2881		-	taxpayers filing a joint return. Any amount of a
2882		-	contribution that is not deducted by the taxpayer in
2883		-	the year for which the contribution is made may be
2884		-	carried forward as a deduction from income for the
2885		-	succeeding five (5) years. For taxable years
2886		-	beginning after December 31, 2005, deductions may be
2887		-	taken for contributions and rollovers made during a
2888		-	taxable year and up to April 15 of the succeeding
2889		-	year, or the due date of a taxpayer's state income tax
2890		-	return, excluding extensions, whichever is later.
2891		-	Provided, a deduction for the same contribution may
2892		-	not be taken for two (2) different taxable years.
2893		-	c. In taxable years beginning after December 31, 2006,
2894		-	deductions for contributions made pursuant to
2895		-	subparagraph b of this paragraph shall be limited as
2896		-	follows:
2897		-	(1) for a taxpayer who qualified for the five -year
2898		-	carryforward election and who takes a rollover or
2899		-	nonqualified withdrawal during that period, the
2900		-	tax deduction otherwise available pursuant to
2901		-	subparagraph b of this paragraph shall be reduced
2902		-
2903		-	ENGR. H. B. NO. 1953 Page 59 1
2904		-	2
2905		-	3
2906		-	4
2907		-	5
2908		-	6
2909		-	7
2910		-	8
2911		-	9
2912		-	10
2913		-	11
2914		-	12
2915		-	13
2916		-	14
2917		-	15
2918		-	16
2919		-	17
2920		-	18
2921		-	19
2922		-	20
2923		-	21
2924		-	22
2925		-	23
2926		-	24
2927		-
2928		-	by the amount which is equal to the rollover or
2929		-	nonqualified withdrawal, and
2930		-	(2) for a taxpayer who elects to take a rollover or
2931		-	nonqualified withdrawal within the same tax year
2932		-	in which a contribution was made to the
2933		-	taxpayer's account, the tax deduction otherwise
2934		-	available pursuant to subparagraph b of this
2935		-	paragraph shall be reduced by the amount of the
2936		-	contribution which is equal to the rollover or
2937		-	nonqualified withdrawal.
2938		-	d. If a taxpayer elects to take a rollover on a
2939		-	contribution for which a deduction has been taken
2940		-	pursuant to subparagraph b of this paragraph wi thin
2941		-	one (1) year of the date of contribution, the amount
2942		-	of such rollover shall be included in the adjusted
2943		-	gross income of the taxpayer in the taxable year of
2944		-	the rollover.
2945		-	e. If a taxpayer makes a nonqualified withdrawal of
2946		-	contributions for which a ded uction was taken pursuant
2947		-	to subparagraph b of this paragraph, such nonqualified
2948		-	withdrawal and any earnings thereon shall be included
2949		-	in the adjusted gross income of the taxpayer in the
2950		-	taxable year of the nonqualified withdrawal.
2951		-	f. As used in this parag raph:
2952		-
2953		-	ENGR. H. B. NO. 1953 Page 60 1
2954		-	2
2955		-	3
2956		-	4
2957		-	5
2958		-	6
2959		-	7
2960		-	8
2961		-	9
2962		-	10
2963		-	11
2964		-	12
2965		-	13
2966		-	14
2967		-	15
2968		-	16
2969		-	17
2970		-	18
2971		-	19
2972		-	20
2973		-	21
2974		-	22
2975		-	23
2976		-	24
2977		-
2978		-	(1) "non-qualified withdrawal" means a withdrawal
2979		-	from an Oklahoma College Savings Plan account
2980		-	other than one of the following:
2981		-	(a) a qualified withdrawal,
2982		-	(b) a withdrawal made as a result of the death
2983		-	or disability of the designated beneficiary
2984		-	of an account,
2985		-	(c) a withdrawal that is made on the account of
2986		-	a scholarship or the allowance or payment
2987		-	described in Section 135(d)(1)(B) or (C) or
2988		-	by the Internal Revenue Code, received by
2989		-	the designated beneficiary to the extent the
2990		-	amount of the refund d oes not exceed the
2991		-	amount of the scholarship, allowance, or
2992		-	payment, or
2993		-	(d) a rollover or change of designated
2994		-	beneficiary as permitted by subsection F of
2995		-	Section 3970.7 of Title 70 of Oklahoma
2996		-	Statutes, and
2997		-	(2) "rollover" means the transfer of funds from the
2998		-	Oklahoma College Savings Plan to any other plan
2999		-	under Section 529 of the Internal Revenue Code.
3000		-	17. For taxable years beginning after December 31, 2005,
3001		-	retirement benefits received by an individual from any component of
3002		-
3003		-	ENGR. H. B. NO. 1953 Page 61 1
3004		-	2
3005		-	3
3006		-	4
3007		-	5
3008		-	6
3009		-	7
3010		-	8
3011		-	9
3012		-	10
3013		-	11
3014		-	12
3015		-	13
3016		-	14
3017		-	15
3018		-	16
3019		-	17
3020		-	18
3021		-	19
3022		-	20
3023		-	21
3024		-	22
3025		-	23
3026		-	24
3027		-
3028		-	the Armed Forces of the United States in an amount not to exceed the
3029		-	greater of seventy-five percent (75%) of such benefits or Ten
3030		-	Thousand Dollars ($10,000.00) shall be exempt from taxab le income
3031		-	but in no case less than the amount of the exemption provided by
3032		-	paragraph 13 of this sub section.
3033		-	18. For taxable years beginning after December 31, 2006,
3034		-	retirement benefits received by federal civil service retirees,
3035		-	including survivor annuiti es, paid in lieu of Social Security
3036		-	benefits shall be exempt from taxable income to the extent such
3037		-	benefits are included in the federal adjusted gross income pursuant
3038		-	to the provisions of Section 86 of the Internal Revenue Code, 26
3039		-	U.S.C., Section 86, acc ording to the following schedule:
3040		-	a. in the taxable year beginning January 1, 2007, twenty
3041		-	percent (20%) of such benefits shall be exempt,
3042		-	b. in the taxable year beginning January 1, 2008, forty
3043		-	percent (40%) of such benefits shall be exempt,
3044		-	c. in the taxable year beginning January 1, 2009, sixty
3045		-	percent (60%) of such benefits shall be exempt,
3046		-	d. in the taxable year beginning January 1, 2010, eighty
3047		-	percent (80%) of such benefits shall be exempt, and
3048		-	e. in the taxable year beginning January 1, 2011, and
3049		-	subsequent taxable years, one hundred percent (100%)
3050		-	of such benefits shall be exempt.
3051		-
3052		-	ENGR. H. B. NO. 1953 Page 62 1
3053		-	2
3054		-	3
3055		-	4
3056		-	5
3057		-	6
3058		-	7
3059		-	8
3060		-	9
3061		-	10
3062		-	11
3063		-	12
3064		-	13
3065		-	14
3066		-	15
3067		-	16
3068		-	17
3069		-	18
3070		-	19
3071		-	20
3072		-	21
3073		-	22
3074		-	23
3075		-	24
3076		-
3077		-	19. a. For taxable years beginning after December 31, 2007, a
3078		-	resident individual may deduct up to Ten Thousand
3079		-	Dollars ($10,000.00) from Oklahoma adjusted gross
3080		-	income if the individual, or the dependent of the
3081		-	individual, while living, donates one or more human
3082		-	organs of the individual to another human being for
3083		-	human organ transplantation. As used in this
3084		-	paragraph, "human organ" means all or part of a liver,
3085		-	pancreas, kidney, intestine, lung, or bone marrow. A
3086		-	deduction that is claimed under this paragraph may be
3087		-	claimed in the taxable year in which the human organ
3088		-	transplantation occurs.
3089		-	b. An individual may claim this deduction only once, and
3090		-	the deduction may be cla imed only for unreimbursed
3091		-	expenses that are incurred by the individual and
3092		-	related to the organ do nation of the individual.
3093		-	c. The Oklahoma Tax Commission shall promulgate rules to
3094		-	implement the provisions of this paragraph which shall
3095		-	contain a specific list of expenses which may be
3096		-	presumed to qualify for the deduction. The Tax
3097		-	Commission shall pres cribe necessary requirements for
3098		-	verification.
3099		-	20. For taxable years beginning after December 31, 2009, there
3100		-	shall be exempt from taxable income any amount received by the
3101		-
3102		-	ENGR. H. B. NO. 1953 Page 63 1
3103		-	2
3104		-	3
3105		-	4
3106		-	5
3107		-	6
3108		-	7
3109		-	8
3110		-	9
3111		-	10
3112		-	11
3113		-	12
3114		-	13
3115		-	14
3116		-	15
3117		-	16
3118		-	17
3119		-	18
3120		-	19
3121		-	20
3122		-	21
3123		-	22
3124		-	23
3125		-	24
3126		-
3127		-	beneficiary of the death benefit for an emergency medical technician
3128		-	or a registered emergency medical responder provided by Section 1 -
3129		-	2505.1 of Title 63 of the Oklahoma Statutes.
3130		-	21. For taxable years beginning after December 31, 2008,
3131		-	taxable income shall be increased by any unemployment compensation
3132		-	exempted under Section 85(c) of t he Internal Revenue Code, 26
3133		-	U.S.C., Section 85(c)(2009).
3134		-	22. For taxable years beginning after December 31, 2008, there
3135		-	shall be exempt from taxable income any payment in an amount less
3136		-	than Six Hundred Dollars ($600.00) received by a person as an award
3137		-	for participation in a competitive livestock show event. For
3138		-	purposes of this paragraph, the payment shall be treated as a
3139		-	scholarship amount paid by the en tity sponsoring the event and the
3140		-	sponsoring entity shall cause the payment to be categorized as a
3141		-	scholarship in its books and records.
3142		-	23. For taxable years beginning on or after January 1, 2016,
3143		-	taxable income shall be increased by any amount of state and local
3144		-	sales or income taxes deducted under 26 U.S.C., Section 164 of the
3145		-	Internal Revenue Code. If the amount of state and local taxes
3146		-	deducted on the federal return is limited, taxable income on the
3147		-	state return shall be increased only by the amount actually deducted
3148		-	after any such limitations are applied.
3149		-	24. For taxable years beginning after De cember 31, 2020, each
3150		-	taxpayer shall be allowed a deducti on for contributions to accounts
3151		-
3152		-	ENGR. H. B. NO. 1953 Page 64 1
3153		-	2
3154		-	3
3155		-	4
3156		-	5
3157		-	6
3158		-	7
3159		-	8
3160		-	9
3161		-	10
3162		-	11
3163		-	12
3164		-	13
3165		-	14
3166		-	15
3167		-	16
3168		-	17
3169		-	18
3170		-	19
3171		-	20
3172		-	21
3173		-	22
3174		-	23
3175		-	24
3176		-
3177		-	established pursuant to the Achieving a Better Life Experience
3178		-	(ABLE) Program as established in Section 4001.1 et seq. of Title 56
3179		-	of the Oklahoma Statutes. For any tax year, the deduction provided
3180		-	for in this paragraph sh all not exceed Ten Thousand Dollars
3181		-	($10,000.00) for an individual taxpayer or Twenty Thousand Dolla rs
3182		-	($20,000.00) for taxpayers filing a joint return. Any amount of
3183		-	contribution not deducted by th e taxpayer in the tax year for which
3184		-	the contribution is made may be carried forward as a deduction from
3185		-	income for up to five (5) tax years. Deductions may be taken for
3186		-	contributions made during the tax year and through April 15 of the
3187		-	succeeding tax year, or through the due date of a taxpayer's state
3188		-	income tax return excluding extensions, whichever is later.
3189		-	Provided, a deduction for the same contribution may not be taken in
3190		-	more than one (1) tax year.
3191		-	F. 1. For taxable years beginning after December 31, 2004, a
3192		-	deduction from the Oklahoma adjusted gross i ncome of any individual
3193		-	taxpayer shall be allowed for qualifying gains receiving capital
3194		-	treatment that are included in the federal adjusted gross income of
3195		-	such individual taxpayer during the taxabl e year.
3196		-	2. As used in this subsection:
3197		-	a. "qualifying gains receiving capital treatment" means
3198		-	the amount of net capital gains, as defined in Section
3199		-	1222(11) of the Internal Revenue Code, included in an
3200		-
3201		-	ENGR. H. B. NO. 1953 Page 65 1
3202		-	2
3203		-	3
3204		-	4
3205		-	5
3206		-	6
3207		-	7
3208		-	8
3209		-	9
3210		-	10
3211		-	11
3212		-	12
3213		-	13
3214		-	14
3215		-	15
3216		-	16
3217		-	17
3218		-	18
3219		-	19
3220		-	20
3221		-	21
3222		-	22
3223		-	23
3224		-	24
3225		-
3226		-	individual taxpayer's federal income tax return tha t
3227		-	result from:
3228		-	(1) the sale of real property or tangible personal
3229		-	property located within Oklahoma that has been
3230		-	directly or indirectly owned by the individu al
3231		-	taxpayer for a holding period of at least five
3232		-	(5) years prior to the date of the transaction
3233		-	from which such net capital gains arise,
3234		-	(2) the sale of stock or the sale of a direct or
3235		-	indirect ownership interest in an Oklahoma
3236		-	company, limited liability company, or
3237		-	partnership where such stock or ownership
3238		-	interest has been directly or indirectly own ed by
3239		-	the individual taxpayer for a holding period of
3240		-	at least two (2) years prior to the date of the
3241		-	transaction from which the net capital gains
3242		-	arise, or
3243		-	(3) the sale of real property, tangible personal
3244		-	property or intangible personal property located
3245		-	within Oklahoma as part of the sale of all or
3246		-	substantially all of the assets of an Oklahoma
3247		-	company, limited liability company, or
3248		-	partnership or an Oklahoma proprietorship
3249		-	business enterprise where such property has been
3250		-
3251		-	ENGR. H. B. NO. 1953 Page 66 1
3252		-	2
3253		-	3
3254		-	4
3255		-	5
3256		-	6
3257		-	7
3258		-	8
3259		-	9
3260		-	10
3261		-	11
3262		-	12
3263		-	13
3264		-	14
3265		-	15
3266		-	16
3267		-	17
3268		-	18
3269		-	19
3270		-	20
3271		-	21
3272		-	22
3273		-	23
3274		-	24
3275		-
3276		-	directly or indirectly owned by su ch entity or
3277		-	business enterprise or owned by the owners o f
3278		-	such entity or business enterprise for a period
3279		-	of at least two (2) years prior to the date of
3280		-	the transaction from which the net capital gains
3281		-	arise,
3282		-	b. "holding period" means an uninterrupted per iod of
3283		-	time. The holding period shall include any additi onal
3284		-	period when the property was held by another
3285		-	individual or entity, if such additional period is
3286		-	included in the taxpayer's holding period for the
3287		-	asset pursuant to the Internal Revenue Code,
3288		-	c. "Oklahoma company," "limited liability company," or
3289		-	"partnership" means an entity whose primary
3290		-	headquarters have been located in Oklahoma for at
3291		-	least three (3) uninterrupted years prior to the date
3292		-	of the transaction from which the net capital gains
3293		-	arise,
3294		-	d. "direct" means the individual taxpayer directly own s
3295		-	the asset,
3296		-	e. "indirect" means the individual taxpayer owns an
3297		-	interest in a pass-through entity (or chain of pass-
3298		-	through entities) that sells the asset that gives rise
3299		-	to the qualifying gains rec eiving capital treatment.
3300		-
3301		-	ENGR. H. B. NO. 1953 Page 67 1
3302		-	2
3303		-	3
3304		-	4
3305		-	5
3306		-	6
3307		-	7
3308		-	8
3309		-	9
3310		-	10
3311		-	11
3312		-	12
3313		-	13
3314		-	14
3315		-	15
3316		-	16
3317		-	17
3318		-	18
3319		-	19
3320		-	20
3321		-	21
3322		-	22
3323		-	23
3324		-	24
3325		-
3326		-	(1) With respect to sales of re al property or
3327		-	tangible personal property located within
3328		-	Oklahoma, the deduction described in this
3329		-	subsection shall not apply unless the pass-
3330		-	through entity that makes the sale has held the
3331		-	property for not less than five (5) uninterrupted
3332		-	years prior to the date of the transaction that
3333		-	created the capital gain, and each pass -through
3334		-	entity included in t he chain of ownership has
3335		-	been a member, partner, or shareholder of the
3336		-	pass-through entity in the tier immediately below
3337		-	it for an uninterrupted period of not less than
3338		-	five (5) years.
3339		-	(2) With respect to sales of stock or ownership
3340		-	interest in or sales o f all or substantially all
3341		-	of the assets of an Oklahoma company, limited
3342		-	liability company, partner ship or Oklahoma
3343		-	proprietorship business enterprise, the deduction
3344		-	described in this subsection shall not apply
3345		-	unless the pass-through entity that makes the
3346		-	sale has held the stock or ownership interest for
3347		-	not less than two (2) uninterrupted years prior
3348		-	to the date of the transaction that created the
3349		-	capital gain, and each pass-through entity
3350		-
3351		-	ENGR. H. B. NO. 1953 Page 68 1
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3353		-	3
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3355		-	5
3356		-	6
3357		-	7
3358		-	8
3359		-	9
3360		-	10
3361		-	11
3362		-	12
3363		-	13
3364		-	14
3365		-	15
3366		-	16
3367		-	17
3368		-	18
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3370		-	20
3371		-	21
3372		-	22
3373		-	23
3374		-	24
3375		-
3376		-	included in the chain of ownership has been a
3377		-	member, partner or s hareholder of the pass-
3378		-	through entity in the tier immediately below it
3379		-	for an uninterrupted period of not less than two
3380		-	(2) years. For purposes of this div ision,
3381		-	uninterrupted ownership prior to July 1, 2007,
3382		-	shall be included in the determination of the
3383		-	required holding period prescribed by this
3384		-	division, and
3385		-	f. "Oklahoma proprietorship business enter prise" means a
3386		-	business enterprise whose income and expen ses have
3387		-	been reported on Schedule C or F of an individual
3388		-	taxpayer's federal income tax return, or any similar
3389		-	successor schedule published by the Internal Revenue
3390		-	Service and whose primary headquar ters have been
3391		-	located in Oklahoma for at least three (3)
3392		-	uninterrupted years prior to the date of the
3393		-	transaction from which the net capital gains arise.
3394		-	G. 1. For purposes of computing its Oklahoma taxable income
3395		-	under this section, the dividends -paid deduction otherwise allowed
3396		-	by federal law in computing n et income of a real estate investment
3397		-	trust that is subject to federal income tax shall be added bac k in
3398		-	computing the tax imposed by this state under this title if the real
3399		-	estate investment trust i s a captive real estate investment trust.
3400		-
3401		-	ENGR. H. B. NO. 1953 Page 69 1
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3405		-	5
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3407		-	7
3408		-	8
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3410		-	10
3411		-	11
3412		-	12
3413		-	13
3414		-	14
3415		-	15
3416		-	16
3417		-	17
3418		-	18
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3420		-	20
3421		-	21
3422		-	22
3423		-	23
3424		-	24
3425		-
3426		-	2. For purposes of computing its Oklahoma taxable income under
3427		-	this section, a taxpayer shall add back otherwise d eductible rents
3428		-	and interest expenses paid to a captive real estate investment trust
3429		-	that is not subject to the provisions of paragraph 1 of this
3430		-	subsection. As used in this subsection:
3431		-	a. the term "real estate investment trust" or "REIT"
3432		-	means the meaning ascribed to such term in Section 856
3433		-	of the Internal Revenue Code,
3434		-	b. the term "captive real esta te investment trust" means
3435		-	a real estate investment trust, the shares or
3436		-	beneficial interests of which are not regularly traded
3437		-	on an established securities market and more than
3438		-	fifty percent (50%) of the voting power or value of
3439		-	the beneficial interests o r shares of which are owned
3440		-	or controlled, directly or indirectly, or
3441		-	constructively, by a single entity that is:
3442		-	(1) treated as an association taxable as a
3443		-	corporation under the Internal Revenue Code, and
3444		-	(2) not exempt from federal income tax pursuant to
3445		-	the provisions of Section 501(a) of the Inter nal
3446		-	Revenue Code.
3447		-	The term shall not include a real estate investment
3448		-	trust that is intended to be regularly tr aded on an
3449		-	established securities market, and that satisfies the
3450		-
3451		-	ENGR. H. B. NO. 1953 Page 70 1
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3453		-	3
3454		-	4
3455		-	5
3456		-	6
3457		-	7
3458		-	8
3459		-	9
3460		-	10
3461		-	11
3462		-	12
3463		-	13
3464		-	14
3465		-	15
3466		-	16
3467		-	17
3468		-	18
3469		-	19
3470		-	20
3471		-	21
3472		-	22
3473		-	23
3474		-	24
3475		-
3476		-	requirements of Section 856(a)(5) and (6) of the U.S.
3477		-	Internal Revenue Code by r eason of Section 856(h)(2)
3478		-	of the Internal Revenue Code,
3479		-	c. the term "association taxable as a corporation" sha ll
3480		-	not include the following entities:
3481		-	(1) any real estate investment trust as defined in
3482		-	paragraph a of this subsection other than a
3483		-	"captive real estate investment trust", or
3484		-	(2) any qualified real estate investment trust
3485		-	subsidiary under Section 856(i) of the Internal
3486		-	Revenue Code, other than a qualified REIT
3487		-	subsidiary of a "captive real estate inve stment
3488		-	trust", or
3489		-	(3) any Listed Australian Pr operty Trust (meaning an
3490		-	Australian unit trust registered as a "Managed
3491		-	Investment Scheme" under the Australian
3492		-	Corporations Act in which the principal class of
3493		-	units is listed on a recognized stock exchange in
3494		-	Australia and is regularly traded on an
3495		-	established securities market), or an entity
3496		-	organized as a trust, provided that a Listed
3497		-	Australian Property Trust owns or controls,
3498		-	directly or indirectly, seventy-five percent
3499		-
3500		-	ENGR. H. B. NO. 1953 Page 71 1
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3504		-	5
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3507		-	8
3508		-	9
3509		-	10
3510		-	11
3511		-	12
3512		-	13
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3514		-	15
3515		-	16
3516		-	17
3517		-	18
3518		-	19
3519		-	20
3520		-	21
3521		-	22
3522		-	23
3523		-	24
3524		-
3525		-	(75%) or more of the voting power or value of the
3526		-	beneficial interests or shares o f such trust, or
3527		-	(4) any Qualified Foreign Entity, meaning a
3528		-	corporation, trust, association or partnership
3529		-	organized outside the laws of the United States
3530		-	and which satisfies the following criteria:
3531		-	(a) at least seventy-five percent (75%) of the
3532		-	entity's total asset value at the close of
3533		-	its taxable year is represented by real
3534		-	estate assets, as defined in Section
3535		-	856(c)(5)(B) of the Internal Revenue Code,
3536		-	thereby including shares or certificates of
3537		-	beneficial interest in any real estate
3538		-	investment trust, cash and cash equivalents,
3539		-	and U.S. Government securities,
3540		-	(b) the entity receives a dividend -paid
3541		-	deduction comparable to Section 561 of the
3542		-	Internal Revenue Code, or is exempt from
3543		-	entity level tax,
3544		-	(c) the entity is required to distribute at
3545		-	least eighty-five percent (85%) of its
3546		-	taxable income, as computed in the
3547		-	jurisdiction in which it is organized, to
3548		-
3549		-	ENGR. H. B. NO. 1953 Page 72 1
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3551		-	3
3552		-	4
3553		-	5
3554		-	6
3555		-	7
3556		-	8
3557		-	9
3558		-	10
3559		-	11
3560		-	12
3561		-	13
3562		-	14
3563		-	15
3564		-	16
3565		-	17
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3567		-	19
3568		-	20
3569		-	21
3570		-	22
3571		-	23
3572		-	24
3573		-
3574		-	the holders of its shares or certificates of
3575		-	beneficial interest on an annual basis,
3576		-	(d) not more than ten percent (10%) of the
3577		-	voting power or value in such entity is held
3578		-	directly or indirectly or constructively by
3579		-	a single entity or individual, or the shares
3580		-	or beneficial interests of such entity are
3581		-	regularly traded on an established
3582		-	securities market, and
3583		-	(e) the entity is organized in a country whic h
3584		-	has a tax treaty with the United States.
3585		-	3. For purposes of this subsection, the constructive ownership
3586		-	rules of Section 318(a) of the Internal Revenue Code, as modified by
3587		-	Section 856(d)(5) of the Internal Revenue Code, shall apply in
3588		-	determining the ownership of stock, assets, or net profits of any
3589		-	person.
3590		-	4. A real estate investment trust that does not becom e
3591		-	regularly traded on an established securities market within one (1)
3592		-	year of the date on which it first becomes a real estate investment
3593		-	trust shall be deemed not to have been regularly traded on an
3594		-	established securities market, retroactive to the date i t first
3595		-	became a real estate investment trust, and shall file an amended
3596		-	return reflecting such ret roactive designation for any tax year or
3597		-	part year occurring during its initial year of status as a real
3598		-
3599		-	ENGR. H. B. NO. 1953 Page 73 1
3600		-	2
3601		-	3
3602		-	4
3603		-	5
3604		-	6
3605		-	7
3606		-	8
3607		-	9
3608		-	10
3609		-	11
3610		-	12
3611		-	13
3612		-	14
3613		-	15
3614		-	16
3615		-	17
3616		-	18
3617		-	19
3618		-	20
3619		-	21
3620		-	22
3621		-	23
3622		-	24
3623		-
3624		-	estate investment trust. For purposes of this subse ction, a real
3625		-	estate investment trust becomes a real estate investment trust on
3626		-	the first day it has both met the requirements of Section 856 of the
3627		-	Internal Revenue Code and has elected to be treated as a real estate
3628		-	investment trust pursuant to Section 8 56(c)(1) of the Internal
3629		-	Revenue Code.
3630		-	SECTION 3. AMENDATORY 68 O.S. 2021 , Section 2355.1P-4,
3631		-	is amended to read as follows:
3632		-	Section 2355.1P-4 A. For tax years beginning on or after
3633		-	January 1, 2022, there is hereby levied on eac h electing pass-
3634		-	through entity the pass-through entity tax which shall be calculated
3635		-	as follows:
3636		-	1. With regard to each member of an electing pass -through
3637		-	entity, the electing pass -through entity shall multiply such
3638		-	member's Oklahoma distributive share of the electing pass-through
3639		-	entity's Oklahoma net entity income for the tax year by:
3640		-	a. the highest Oklahoma marginal income tax rate levied
3641		-	on the taxable income of natural persons pursuant to
3642		-	Section 2355 of this title if the member is an
3643		-	individual, trust, or estate,
3644		-	b. four percent (4%) if the member is classified as a
3645		-	corporation pursuant to the Int ernal Revenue Code, and
3646		-	is not classified as an S corporation,
3647		-
3648		-	ENGR. H. B. NO. 1953 Page 74 1
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3650		-	3
3651		-	4
3652		-	5
3653		-	6
3654		-	7
3655		-	8
3656		-	9
3657		-	10
3658		-	11
3659		-	12
3660		-	13
3661		-	14
3662		-	15
3663		-	16
3664		-	17
3665		-	18
3666		-	19
3667		-	20
3668		-	21
3669		-	22
3670		-	23
3671		-	24
3672		-
3673		-	c. four percent (4%) if the member is a pass -through
3674		-	entity,
3675		-	d. four percent (4%) if the membe r is a financial
3676		-	institution subject to tax imposed pursuant to the
3677		-	provisions of Section 2370 of t his title, and
3678		-	e. the highest Oklahoma marginal income tax rate that
3679		-	would be applicable to any item of the electing pass -
3680		-	through entity's income or gain wit hout the election
3681		-	made pursuant to subsection F of this section, if the
3682		-	member is an organization d escribed in Section 2359 of
3683		-	this title; and
3684		-	2. The electing pass -through entity shall aggregate the amounts
3685		-	determined with respect to all members pursuant to paragraph 1 of
3686		-	this subsection and the pass-through entity tax for the applicable
3687		-	tax year shall be equal to such aggregated tax amount for the tax
3688		-	year with respect to which the election has been made.
3689		-	B. Sections 2385.29, 2385.30 and 2385.31 of this title shall
3690		-	not be applicable to an electing pass-through entity.
3691		-	C. The pass-through entity tax s hall be due and payable on the
3692		-	same date as provided for the filing of the electing pass -through
3693		-	entity's Oklahoma income tax return, and for tax years begin ning on
3694		-	or after January 1, 2020, estimated tax payments shall be required
3695		-	as provided in Section 2 385.9 of this title.
3696		-
3697		-	ENGR. H. B. NO. 1953 Page 75 1
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3699		-	3
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3701		-	5
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3704		-	8
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3706		-	10
3707		-	11
3708		-	12
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3717		-	21
3718		-	22
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3720		-	24
3721		-
3722		-	D. If the pass-through entity election results in a net entity
3723		-	loss for Oklahoma income tax purposes in any tax year, the net
3724		-	entity loss may be carried back and carried forward by the electing
3725		-	pass-through entity for Oklahoma income tax purposes as set forth in
3726		-	subparagraph b of paragraph 3 of subsection A of Section 2358 of
3727		-	this title.
3728		-	E. Notwithstanding paragraph 2 of subsection C of Section 2368
3729		-	of this title, a nonresident individual who is a member of an
3730		-	electing pass-through entity is not required to file an Oklahoma
3731		-	income tax return, if, for the taxable year, the only source of
3732		-	income allocable or apportionable to this state for the member, or,
3733		-	if a joint income tax return is filed, the member and his or her
3734		-	spouse, is from one or more electing pass -through entities, and each
3735		-	electing pass-through entity files and pays the taxes due under this
3736		-	section.
3737		-	F. Any entity required to f ile an Oklahoma partnership income
3738		-	tax return or an Oklahoma S corporation income tax return may el ect
3739		-	to become an electing pass -through entity. The election shall be
3740		-	made on such form and in such manner as the Oklahoma Tax Commission
3741		-	may prescribe, and any election under this subsection shall have
3742		-	priority over and revoke any election to file a compo site Oklahoma
3743		-	partnership return or requirement of a Subchapter S corporation to
3744		-	report and pay tax on behalf of a nonresident shareholder for the
3745		-	same tax year.
3746		-
3747		-	ENGR. H. B. NO. 1953 Page 76 1
3748		-	2
3749		-	3
3750		-	4
3751		-	5
3752		-	6
3753		-	7
3754		-	8
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3756		-	10
3757		-	11
3758		-	12
3759		-	13
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3761		-	15
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3767		-	21
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3769		-	23
3770		-	24
3771		-
3772		-	G. Pursuant to procedures prescribed by the Tax Commission, if
3773		-	the amount of tax required to be paid by a pass-through entity
3774		-	pursuant to the provisions of this section is not paid when due, the
3775		-	Oklahoma Tax Commission may revoke the pass -through entity's
3776		-	election under subsection F of this section effective for the first
3777		-	year for which the tax is not paid.
3778		-	H. The election authorized by the provisions of this section
3779		-	shall be made pursuant to procedures prescribed by the Tax
3780		-	Commission and shall be filed (i) within sixty (60) days of
3781		-	enactment and pursuant to procedures prescribed by the Oklahoma Tax
3782		-	Commission for any income tax year beginning on or after January 1,
3783		-	2019, and prior to January 1, 2020, or (ii) for any income tax year
3784		-	beginning on or after January 1, 2020, at any time during the
3785		-	preceding tax year or two (2) months and fifteen (15) days after the
3786		-	beginning of the tax year. Any such election shall be binding until
3787		-	revoked pursuant to procedures prescribed by the Tax Commission.
3788		-	The effective date of a revocation (i) made within two (2) months
3789		-	and fifteen (15) days of the electing p ass-through entity's taxable
3790		-	year shall be the first day of such taxable year and (ii) made
3791		-	during the electing pass -through entity's taxable year but after
3792		-	such fifteenth day shall be effective on the first day of the
3793		-	following taxable year. No election made by a pass-through entity
3794		-	with respect to income tax to be paid by such entity using the
3795		-	calculations prescribed by this section shall be binding on any
3796		-
3797		-	ENGR. H. B. NO. 1953 Page 77 1
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3799		-	3
3800		-	4
3801		-	5
3802		-	6
3803		-	7
3804		-	8
3805		-	9
3806		-	10
3807		-	11
3808		-	12
3809		-	13
3810		-	14
3811		-	15
3812		-	16
3813		-	17
3814		-	18
3815		-	19
3816		-	20
3817		-	21
3818		-	22
3819		-	23
3820		-	24
3821		-
3822		-	other pass-through entity, and each pass-through entity shall be
3823		-	able to make an election under the provisions of this act
3824		-	independently.
3825		-	SECTION 4. This act shall become effective January 1, 2024.
3826		-	Passed the House of Representatives the 23rd day of March, 2023.
3827		-
3828		-
3829		-
3830		-
3831		-	Presiding Officer of the House
3832		-	of Representatives
3833		-
3834		-
3835		-	Passed the Senate the ___ day of __________, 2023.
3836		-
3837		-
3838		-
3839		-
3840		-	Presiding Officer of the Senate
3841		-
3842		-
	555	+	COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS AND BUDGET, dated
	556	+	03/02/2023 - DO PASS, As Coauthored.