OK
Oklahoma House Bill HB2020

Oklahoma 2023 Regular Session

Oklahoma House Bill HB2020 Compare Versions

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28-STATE OF OKLAHOMA
29-
30-1st Session of the 59th Legislature (2023)
31-
32-COMMITTEE SUBSTITUTE
33-FOR ENGROSSED
34-HOUSE BILL 2020 By: Wolfley and Roberts of the
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28+ENGROSSED HOUSE
29+BILL NO. 2020 By: Wolfley and Roberts of the
3530 House
3631
3732 and
3833
39- Montgomery and Pemberton of
40-the Senate
41-
42-
43-
44-
45-
46-COMMITTEE SUBSTITUTE
47-
48-[ income tax - retirement exemption adjustment -
49-effective date ]
34+ Montgomery of the Senate
35+
36+
37+
38+
39+
40+[ revenue and taxation - retirement benefits
41+adjustment - effective date ]
5042
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5446 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
5547 SECTION 1. AMENDATORY 68 O.S. 2021, Section 2358, as
56-last amended by Section 1, Chapter 377, O.S.L. 2022 (68 O.S. Supp.
57-2022, Section 2358), is amended to read as follows:
48+amended by Section 2, Ch apter 341, O.S.L. 2022 (68 O.S. Supp. 2022,
49+Section 2358), is amended to read as follows:
5850 Section 2358. For all tax years beginning after December 31,
5951 1981, taxable income and adjusted gross income shall be adjusted to
6052 arrive at Oklahoma taxable income an d Oklahoma adjusted gross income
6153 as required by this section.
6254 A. The taxable income of any taxpa yer shall be adjusted to
6355 arrive at Oklahoma taxable inco me for corporations and Oklahoma
6456 adjusted gross income for individuals, as foll ows:
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9157 1. There shall be added interest income on obligations of any
9258 state or political subdivision thereto which is not o therwise
9359 exempted pursuant to other laws of this state, to the extent that
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9486 such interest is not included in taxable income and adjusted gross
9587 income.
9688 2. There shall be deducted amounts included in suc h income that
9789 the state is prohibited from taxing becau se of the provisions of the
98-Federal Constitution, the State Constitution, federal laws , or laws
90+Federal Constitution, the St ate Constitution, federal laws or laws
9991 of Oklahoma.
10092 3. The amount of any feder al net operating loss de duction shall
10193 be adjusted as follows:
10294 a. For carryovers and carrybacks to taxable years
10395 beginning before January 1, 1981, the amount of any
10496 net operating loss deduction allowed to a taxpayer for
10597 federal income tax purposes shall be reduced to an
10698 amount which is the same portion thereof as the loss
10799 from sources within this state, as determined pursuant
108100 to this section and Section 2362 of this title, for
109101 the taxable year in which such loss is sustained is of
110-the total loss for such ye ar; and
102+the total loss for such yea r;
111103 b. For carryovers and carrybacks to taxable years
112104 beginning after December 31, 1980, the amount of any
113105 net operating loss deduction allowed for the taxable
114106 year shall be an amount equal to the aggregate of the
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141107 Oklahoma net operating loss carryovers and carrybacks
142108 to such year. Oklahoma net operating losses shall be
143109 separately determined by reference to Section 172 of
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144136 the Internal Revenue Code, 26 U.S.C., Section 172, as
145137 modified by the Oklahoma Income Tax Act, Section 2351
146138 et seq. of this title, and sha ll be allowed without
147139 regard to the existence of a federal net operating
148140 loss. For tax years beginning after December 31 ,
149141 2000, and ending before January 1, 2008, the years to
150142 which such losses may be carried shall be determined
151143 solely by reference to Sec tion 172 of the Internal
152144 Revenue Code, 26 U.S.C., Section 172, with the
153-exception that the terms “net operating loss” and
154-“taxable income” shall be replaced with “Oklahoma net
155-operating loss” and “Oklahoma taxable income ”. For
145+exception that the terms "net operating loss" and
146+"taxable income" shall be replaced with "Oklahoma net
147+operating loss" and "Oklahoma taxable income". For
156148 tax years beginning after De cember 31, 2007, and
157149 ending before January 1, 2009, years to which such
158150 losses may be carried back shall be limited to tw o (2)
159151 years. For tax years beginning after December 31,
160152 2008, the years to which such losses may be carried
161153 back shall be determined s olely by reference to
162154 Section 172 of the Internal Revenue Code, 26 U.S.C.,
163-Section 172, with the exception that the term s “net
164-operating loss” and “taxable income” shall be replaced
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191-with “Oklahoma net operating loss ” and “Oklahoma
192-taxable income”.
155+Section 172, with the exception that the terms "net
156+operating loss" and "taxable income" shall be replaced
157+with "Oklahoma net operating loss" and "Oklahoma
158+taxable income".
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193185 4. Items of the following natur e shall be allocated as
194186 indicated. Allowable deductions attributable to items separately
195-allocable in subparagraphs a, b, and c of this paragraph, whether or
187+allocable in subparagraphs a, b and c of this paragraph, whethe r or
196188 not such items of income were actually received, shall be allocated
197189 on the same basis as those ite ms:
198190 a. Income from real and tangible personal property, such
199191 as rents, oil and mining production or royalties, and
200192 gains or losses from sales of such pro perty, shall be
201193 allocated in accordance with the situs of such
202194 property;
203195 b. Income from intangible pers onal property, such as
204196 interest, dividends, patent or copyright royalties,
205197 and gains or losses fr om sales of such property, shall
206198 be allocated in accorda nce with the domiciliary situs
207199 of the taxpayer, except that:
208200 (1) where such property has acquired a non unitary
209201 business or commercial situs apart from the
210202 domicile of the taxpayer such income shall be
211203 allocated in accordance with such business or
212204 commercial situs; interest income from
213205 investments held to generate working capital for
214206 a unitary business enter prise shall be included
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241207 in apportionable income; a resident trust or
242208 resident estate shall be tre ated as having a
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243235 separate commercial or business situs i nsofar as
244236 undistributed income is concerned, but shall not
245237 be treated as having a separate commercial o r
246238 business situs insofar as distributed income is
247239 concerned,
248240 (2) for taxable years beginning afte r December 31,
249241 2003, capital or ordinary gains or losses from
250242 the sale of an ownership interest in a publicly
251243 traded partnership, as de fined by Section 7704(b)
252244 of the Internal Revenue Code, shall be allocated
253245 to this state in the ratio of the original cost
254-of such partnership’s tangible property in this
255-state to the original cost of such partnership ’s
246+of such partnership's tangible property in this
247+state to the original cost of such partnership's
256248 tangible property everywhere, as dete rmined at
257249 the time of the sale; if more than fifty percent
258-(50%) of the value of the partnership’s assets
250+(50%) of the value of the partnership's assets
259251 consists of intangible assets, capital or
260252 ordinary gains or losses from the sale of an
261253 ownership interest in the partnership shall be
262254 allocated to this state in accordance wi th the
263255 sales factor of the partnership for its first
264256 full tax period immediately preceding its ta x
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291257 period during which the ownership interest in the
292258 partnership was sold; the provisions of this
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293285 division shall only apply if the capit al or
294286 ordinary gains or losses from the sale of an
295287 ownership interest in a partnership do not
296288 constitute qualifying gain receiving capital
297289 treatment as defined in subparagraph a of
298-paragraph 2 of subsection F of this sect ion, and
290+paragraph 2 of subsection F of this section,
299291 (3) income from such property which is required to be
300292 allocated pursuant to the provisions of paragraph
301293 5 of this subsection shall be allocated as here in
302294 provided;
303295 c. Net income or loss from a business activ ity which is
304296 not a part of business carried on within or without
305297 the state of a unitary character shall be separately
306298 allocated to the state in which such activity is
307299 conducted;
308300 d. In the case of a manufacturing or processing
309301 enterprise the business of whi ch in Oklahoma consists
310302 solely of marketing its products by:
311303 (1) sales having a situs without this stat e, shipped
312304 directly to a point from without the state to a
313305 purchaser within the state, commonly known as
314306 interstate sales,
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341307 (2) sales of the product store d in public warehouses
342-within the state purs uant to “in transit”
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343335 tariffs, as prescribed and allowed by the
344336 Interstate Commerce Commission, to a purchaser
345-within the state, or
337+within the state,
346338 (3) sales of the product stored in public warehouses
347339 within the state where the ship ment to such
348-warehouses is not covered by “in transit”
340+warehouses is not covered by "in transit"
349341 tariffs, as prescribed a nd allowed by the
350342 Interstate Commerce Commission, to a purchaser
351343 within or without the state,
352344 the Oklahoma net incom e shall, at the option of the
353345 taxpayer, be that portion of th e total net income of
354346 the taxpayer for federal income tax purposes derived
355347 from the manufacture and/or processing and sales
356348 everywhere as determined by the ratio of the sales
357349 defined in this sect ion made to the purchaser within
358350 the state to the total sales everywhere. The term
359-“public warehouse” as used in this subpara graph means
351+"public warehouse" as used in this subparagraph means
360352 a licensed public warehous e, the principal business of
361353 which is warehousing merchandise for the public;
362354 e. In the case of insurance companies, Oklahoma taxable
363355 income shall be taxable income of the taxpayer for
364356 federal tax purposes, as adjusted for the adjus tments
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391357 provided pursuant to the provisions of paragraphs 1
392358 and 2 of this subsection, apportioned as follows:
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393385 (1) except as otherwise provided by division (2) of
394386 this subparagraph, taxable income of an insurance
395387 company for a taxable year shall be apportion ed
396388 to this state by mult iplying such income by a
397389 fraction, the numerator of which is the direct
398390 premiums written for insurance on property or
399391 risks in this state, and the denomi nator of which
400392 is the direct premiums written for insurance on
401393 property or risks everywhere. For purposes of
402-this subsection, the term “direct premiums
403-written” means the total amount of dir ect
404-premiums written, assessments, and annuity
394+this subsection, the term "direct premiums
395+written" means the total amount of direc t
396+premiums written, assessments and annuity
405397 considerations as reported for the taxable year
406398 on the annual statement filed by the company with
407399 the Insurance Commission er in the form approved
408400 by the National Association of Insurance
409401 Commissioners, or such ot her form as may be
410-prescribed in lieu thereof, and
402+prescribed in lieu thereof,
411403 (2) if the principal source of premiums written by an
412404 insurance company consists of premiums fo r
413405 reinsurance accepted b y it, the taxable income of
414406 such company shall be apportioned to this state
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441407 by multiplying such income by a fraction, the
442408 numerator of which is the sum o f (a) direct
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443435 premiums written for insurance on property or
444436 risks in this state, plus (b) premiums writt en
445437 for reinsurance accepted in respect of property
446438 or risks in this state, and the denomi nator of
447439 which is the sum of (c) direct premiums written
448440 for insurance on property or risks everywhere,
449441 plus (d) premiums written for reinsuran ce
450442 accepted in respect o f property or risks
451443 everywhere. For purposes of this paragraph,
452444 premiums written for rei nsurance accepted in
453445 respect of property or risks in this state,
454446 whether or not otherwise determinable, may at the
455447 election of the company be d etermined on the
456448 basis of the proportion which premiums written
457449 for insurance accepted from companies
458450 commercially domiciled in Oklahoma bears to
459451 premiums written for reinsuranc e accepted from
460452 all sources, or alternatively in the proportion
461453 which the sum of the direct premiums wr itten for
462454 insurance on property or risks in this state by
463455 each ceding company from which reinsurance is
464456 accepted bears to the sum of the total direct
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491457 premiums written by each such ceding company for
492458 the taxable year.
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493485 5. The net income or loss remaining af ter the separate
494486 allocation in paragraph 4 of this subsection, being that which is
495487 derived from a unitary business enterprise, shall be apportioned to
496488 this state on the basis of the arithmetical average of three factors
497-consisting of property, payroll, and sales or gross revenue
498-enumerated as subparagraphs a, b, and c of this paragraph. Net
489+consisting of property, payroll and sales or gross revenue
490+enumerated as subparagraphs a, b and c of this paragraph. Net
499491 income or loss as used in this paragraph includes that derived from
500492 patent or copyright royalties, purchase discounts, and interest on
501493 accounts receivable relating to or arising from a business activity,
502494 the income from which is apportioned pursuant to this subsection,
503495 including the sale or other disposition of such prope rty and any
504496 other property used in the unitary enterprise . Deductions used in
505497 computing such net incom e or loss shall not include taxes based on
506498 or measured by income. Provided, for corpora tions whose property
507499 for purposes of the tax imposed by Section 2 355 of this title has an
508500 initial investment cost equaling or exceeding Two Hund red Million
509501 Dollars ($200,000,000.00) and such investment is made on or after
510502 July 1, 1997, or for corporations which expand their property or
511503 facilities in this state and such expansion has an investment cost
512504 equaling or exceeding Two Hundred Million Doll ars ($200,000,000.00)
513505 over a period not to exceed three (3) years, and such expansion is
514506 commenced on or after J anuary 1, 2000, the three factors shall be
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541507 apportioned with prope rty and payroll, each comprising twenty-five
542508 percent (25%) of the apportionment factor and sales compri sing fifty
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543535 percent (50%) of the apportionment factor. The apportionment
544536 factors shall be computed as follows:
545537 a. The property factor is a fraction, the numerator of
546-which is the average value of t he taxpayer’s real and
538+which is the average value of the taxpayer 's real and
547539 tangible personal property owned or rented and used in
548540 this state during the tax period and the denominator
549-of which is the average value o f all the taxpayer’s
541+of which is the average value of all the taxpayer 's
550542 real and tangible personal pr operty everywhere owned
551543 or rented and used during the tax period.
552544 (1) Property, the income from which i s separately
553545 allocated in paragraph 4 of this subsection,
554546 shall not be included in determining this
555547 fraction. The numerator of the fraction shall
556548 include a portion of the investment in
557549 transportation and other equipment having no
558550 fixed situs, such as roll ing stock, buses, trucks
559551 and trailers, including machinery and equipment
560-carried thereon, airplanes, sa lespersons’
561-automobiles, and other similar equipment, in the
552+carried thereon, airplanes, salespersons'
553+automobiles and other similar equipmen t, in the
562554 proportion that miles traveled in Oklahoma by
563555 such equipment bears to total miles traveled,
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590556 (2) Property owned by the taxpayer is valued at its
591557 original cost. Property rented by the taxpayer
592558 is valued at eight times the net annual rental
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593585 rate. Net annual rental rate is the annual
594586 rental rate paid by the taxpayer, less any annual
595587 rental rate received by the taxpayer from
596588 subrentals,
597589 (3) The average value of property shall be determined
598590 by averaging the values at the beginning and
599-ending of the tax period , but the Oklahoma Tax
591+ending of the tax period but the Oklahoma Tax
600592 Commission may require the averaging of monthly
601593 values during the tax per iod if reasonably
602594 required to reflect properly the average value of
603-the taxpayer’s property;
595+the taxpayer's property;
604596 b. The payroll factor is a fraction, the numerator of
605597 which is the total compensation for services rendered
606598 in the state during the tax per iod, and the
607599 denominator of which is the total compensation for
608600 services rendered everywhere during the tax period.
609-“Compensation”, as used in this subsection means those
601+"Compensation", as used in this subsection means those
610602 paid-for services to the extent related to the unitary
611-business but does not include officers’ salaries,
612-wages, and other compensation.
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634-21
635-22
636-23
637-24
638-
603+business but does not include officers' salaries,
604+wages and other compensation.
639605 (1) In the case of a transportation enterprise, the
640606 numerator of the fraction shall include a portion
641607 of such expenditure in c onnection with employees
642608 operating equipment over a fixed route, such as
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643635 railroad employees, airline pi lots, or bus
644636 drivers, in this state only a part of the time,
645637 in the proportion that mileage traveled in
646638 Oklahoma bears to total mileage traveled by such
647639 employees,
648640 (2) In any case the numerator of the fraction shall
649641 include a portion of such expenditures i n
650642 connection with itinerant employees, such as
651643 traveling salespersons, in this state only a part
652644 of the time, in the proportion that time spent in
653645 Oklahoma bears to total time spent in furtherance
654646 of the enterprise by such employees ;
655647 c. The sales factor is a fraction, the numerator of which
656648 is the total sales or gross revenue of the taxpayer in
657649 this state during the tax period, and the denominator
658650 of which is the total sales or gross revenue of the
659-taxpayer everywhere during the tax period. “Sales”,
651+taxpayer everywhere during the tax period. "Sales",
660652 as used in this subsection does not include sales or
661653 gross revenue which are separately allocated in
662654 paragraph 4 of this subsection.
663-
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666-3
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669-6
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671-8
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687-24
688-
689655 (1) Sales of tangible pers onal property have a situs
690656 in this state if the property is delivered or
691657 shipped to a purchaser other t han the United
692658 States government, within this state regardless
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684+
693685 of the FOB point or other conditions of the sale;
694686 or the property is shipped from an offic e, store,
695-warehouse, factory, or other place of storage in
687+warehouse, factory or other place of storage in
696688 this state and (a) th e purchaser is the Unite d
697689 States government or (b) the taxpayer is not
698690 doing business in the state of the destination of
699691 the shipment.
700692 (2) In the case of a railroad or interurba n railway
701693 enterprise, the numerator of the fraction shall
702694 not be less than the allocation of revenues t o
703695 this state as shown in its annual report to the
704696 Corporation Commission.
705-(3) In the case of an airline , truck, or bus
697+(3) In the case of an airline, truck or bus
706698 enterprise or freight car, tank car , refrigerator
707-car, or other railroad equipme nt enterprise, the
699+car or other railroad equipment enterprise, the
708700 numerator of the fraction shall include a portion
709701 of revenue from interstate transporta tion in the
710702 proportion that interstate mileage traveled in
711703 Oklahoma bears to total interstate mileage
712704 traveled.
713-
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716-3
717-4
718-5
719-6
720-7
721-8
722-9
723-10
724-11
725-12
726-13
727-14
728-15
729-16
730-17
731-18
732-19
733-20
734-21
735-22
736-23
737-24
738-
739705 (4) In the case of an oil, gasoline or gas pipeline
740706 enterprise, the numer ator of the fraction sha ll
741707 be either the total of traffic units of the
742708 enterprise within Oklahoma or the revenue
709+
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743735 allocated to Oklahoma based upon miles moved, at
744736 the option of the taxpayer, and the denominator
745737 of which shall be the total of traffic units o f
746738 the enterprise or the revenue of the enterprise
747739 everywhere as appropr iate to the numerator. A
748-“traffic unit” is hereby defined as the
740+"traffic unit" is hereby defined as the
749741 transportation for a distance of one (1) mile of
750-one (1) barrel of oil, one (1) gall on of
751-gasoline, or one thousand (1,000) cubic feet of
752-natural or casinghead gas, as the case may be.
742+one (1) barrel of oil, one (1) gallon of gasoline
743+or one thousand (1,0 00) cubic feet of natura l or
744+casinghead gas, as the case may be.
753745 (5) In the case of a telephone or telegraph or other
754746 communication enterprise, the numerator of the
755747 fraction shall include that portion of the
756748 interstate revenue as is allocated pursuant to
757749 the accounting procedures prescribed by the
758750 Federal Communications Commi ssion; provided that
759751 in respect to each corporation or business entity
760752 required by the Federal Communicati ons Commission
761753 to keep its books and records in accordance with
762754 a uniform system of accounts prescribed by such
763-
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765-2
766-3
767-4
768-5
769-6
770-7
771-8
772-9
773-10
774-11
775-12
776-13
777-14
778-15
779-16
780-17
781-18
782-19
783-20
784-21
785-22
786-23
787-24
788-
789755 Commission, the intrastate net income shall be
790756 determined separately in the manner provided by
791757 such uniform system of accounts and only the
792758 interstate income shall be subject to allocation
759+
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793785 pursuant to the provisions of this subsection.
794786 Provided further, that the gross revenue factors
795787 shall be those as are determined pursuant to the
796788 accounting procedures prescribed by the Federal
797789 Communications Commission.
798790 In any case where the apportionment of the three factors
799791 prescribed in this paragraph attribu tes to Oklahoma a portion of net
800792 income of the enterprise out of all appropriate proportion to the
801793 property owned and/or business transacted within this state, because
802794 of the fact that one or more of the factors so prescribed are no t
803795 employed to any apprec iable extent in furtherance of the enterprise;
804796 or because one or more factors not so prescribed are employed to a
805797 considerable extent in furtherance of t he enterprise; or because of
806798 other reasons, the Tax Commission is empowered to permit, after a
807-showing by a taxpayer that an excessive portion of net income has
808-been attributed to Oklahoma, or require, when i n its judgment an
799+showing by taxpayer that an excessive portion of net in come has been
800+attributed to Oklahoma, or require, when in its judgment an
809801 insufficient portion of net inco me has been attributed to Oklahoma,
810802 the elimination, substitution, or use of ad ditional factors, or
811803 reduction or increase in the weight of such prescr ibed factors.
812804 Provided, however, that any such variance from such prescribed
813-
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832-19
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838-
839805 factors which has the effect of increasing the portion of net income
840806 attributable to Oklahoma must not be i nherently arbitrary, and
841807 application of the recomputed final apportionm ent to the net income
808+
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842834 of the enterprise must attribute to Oklahoma only a reasonable
843835 portion thereof.
844836 6. For calendar years 1997 and 1998, the owner of a new or
845837 expanded agricultural c ommodity processing faci lity in this state
846838 may exclude from Oklahoma ta xable income, or in the case of an
847839 individual, the Oklahoma adjusted gross income, fifteen percent
848840 (15%) of the investment by the owner in the new or expanded
849841 agricultural commodity pro cessing facility. For calendar year 1999,
850842 and all subsequent years, th e percentage, not to exceed fifteen
851843 percent (15%), available to the owner of a new or expanded
852844 agricultural commodity processing facility in this state claiming
853845 the exemption shall be a djusted annually so that the total estimated
854846 reduction in tax liability does not exceed One Million Dollars
855847 ($1,000,000.00) annually. The Tax Commission shall promulgate rules
856848 for determining the percentage of the investment which each eligible
857849 taxpayer may exclude. The exclusion provided by this paragraph
858850 shall be taken in the taxable year when the investment is made. In
859851 the event the total reduction in tax liability authoriz ed by this
860852 paragraph exceeds One Million Dollars ($1,000,000.00) in any
861853 calendar year, the Tax Commissi on shall permit any excess over One
862854 Million Dollars ($1,000,000.00) and shall factor such excess into
863-
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865-2
866-3
867-4
868-5
869-6
870-7
871-8
872-9
873-10
874-11
875-12
876-13
877-14
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879-16
880-17
881-18
882-19
883-20
884-21
885-22
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887-24
888-
889855 the percentage for subsequent years . Any amount of the exemption
890856 permitted to be excluded pursuant to the provisions of this
891857 paragraph but not used in an y year may be carried forward as an
858+
859+ENGR. H. B. NO. 2020 Page 18 1
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861+3
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883+
892884 exemption from income pursuant to the provisions of this paragraph
893885 for a period not exceeding six (6) years following the year in which
894886 the investment was originally made.
895887 For purposes of this par agraph:
896-a. “Agricultural commodity processing facility” means
897-building buildings, structures, fixtures, and
898-improvements used or operated primarily for the
899-processing or production of marketable products from
900-agricultural commoditie s. The term shall also mean a
901-dairy operation that requires a depreciable investment
902-of at least Two Hundred Fifty Thousand Dollars
903-($250,000.00) and which produ ces milk from dairy cows.
904-The term does not include a facility that provides
905-only, and nothing more than, storage, cleaning,
906-drying, or transportation of agricultural commodities,
907-and
908-b. “Facility” means each part of the facility which is
888+a. "Agricultural commodity processing facility" means
889+building, structures, fixtures and improvements used
890+or operated primarily for the processing or production
891+of marketable products from agricultural commodities.
892+The term shall also mean a dair y operation that
893+requires a depreciable investment of at least Two
894+Hundred Fifty Thousand Dollars ($250,000.00) and which
895+produces milk from dairy cows . The term does not
896+include a facility that provides only, and nothing
897+more than, storage, cleaning, dry ing or transportation
898+of agricultural commodities, and
899+b. "Facility" means each part of the facility which is
909900 used in a process primarily for:
910901 (1) the processing of agricultural commodities,
911902 including receiving or storing agricultural
912-
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937-
938903 commodities, or the p roduction of milk at a d airy
939904 operation,
940905 (2) transporting the agricultur al commodities or
941-product before, during , or after the processing,
906+product before, during or after the processing,
942907 or
908+
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943934 (3) packaging or otherwise preparing the product for
944935 sale or shipment.
945936 7. Despite any provision to the contrary in paragraph 3 of this
946937 subsection, for taxable years beginning after Decem ber 31, 1999, in
947938 the case of a taxpayer which has a farming loss, such farming loss
948939 shall be considered a net operating loss carryback in accordance
949940 with and to the extent of the Intern al Revenue Code, 26 U.S. C.,
950941 Section 172(b)(G). However, the amount of the net operating loss
951942 carryback shall not exceed the lesser of:
952943 a. Sixty Thousand Dollars ($60,000.00), o r
953944 b. the loss properly shown on Schedule F of the Internal
954945 Revenue Service Form 1040 reduced by one-half (1/2) of
955946 the income from all other sources ot her than reflected
956947 on Schedule F.
957948 8. In taxable years beginning after December 31, 1995, all
958949 qualified wages equal to the federal income tax credit set forth in
959950 26 U.S.C.A., Section 45 A, shall be deducted f rom taxable income.
960951 The deduction allowed pursua nt to this paragraph shall only be
961952 permitted for the tax years in which the federal tax credit pursuant
962-
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968-6
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971-9
972-10
973-11
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978-16
979-17
980-18
981-19
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984-22
985-23
986-24
987-
988953 to 26 U.S.C.A., Section 45A, is allowed. For purposes of this
989-paragraph, “qualified wages” means those wages used to calculate the
954+paragraph, "qualified wages" means those wages used to calculate the
990955 federal credit pursu ant to 26 U.S.C.A., Section 45A.
991956 9. In taxable years beginning after December 31, 2005, an
992957 employer that is eligible for and utilizes the Safety Pays OSHA
958+
959+ENGR. H. B. NO. 2020 Page 20 1
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961+3
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983+
993984 Consultation Service provided by the Oklahoma Depa rtment of Labor
994985 shall receive an exemption from ta xable income in the amount of One
995986 Thousand Dollars ($1,000.00) for the tax year that the service is
996987 utilized.
997988 10. For taxable years beginning on or after January 1, 2010,
998989 there shall be added to Oklahoma taxable income an amount equal to
999990 the amount of deferred income not included in such taxable income
1000991 pursuant to Section 108(i)(1) of the Internal Revenue Cod e of 1986
1001992 as amended by Section 1231 of the American Recovery and Reinvestment
1002993 Act of 2009 (P.L. No . 111-5). There shall be subtracted from
1003994 Oklahoma taxable income an amount equal to the amount of de ferred
1004995 income included in such taxable income pursuant t o Section 108(i)(1)
1005996 of the Internal Revenue Code by Section 1231 of the America n
1006997 Recovery and Reinvestment Act of 2009 (P.L. No. 111-5).
1007998 11. For taxable years beginning on or after January 1, 2019,
1008999 there shall be subtracted from Oklahoma taxable income or adjusted
10091000 gross income any item of income or gain, and there shall be added to
10101001 Oklahoma taxable income or adjusted gross income any item of loss or
10111002 deduction that in the absence of an election pursuan t to the
1012-
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1037-
10381003 provisions of the Pass -Through Entity Tax Equit y Act of 2019 would
10391004 be allocated to a member or to an indirect member of an ele cting
10401005 pass-through entity pursuant to Section 2351 et seq. of this titl e,
10411006 if (i) the electing pass-through entity has acc ounted for such item
10421007 in computing its Oklahoma net entit y income or loss pursuant to the
1008+
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10431034 provisions of the Pass -Through Entity Tax Equi ty Act of 2019, and
10441035 (ii) the total amount of tax attributable to any re sulting Oklahoma
10451036 net entity income has been paid . The Oklahoma Tax Commission shall
10461037 promulgate rules for the reporting of such exclusion to direct and
10471038 indirect members of the electing pass-through entity. As used in
1048-this paragraph, “electing pass-through entity”, “indirect member”,
1049-and “member” shall be defined in the same manner as prescribed by
1039+this paragraph, "electing pass-through entity", "indirect member",
1040+and "member" shall be defined in the same manner as prescribed by
10501041 Section 2355.1P-2 of this title. Notwithstanding the application of
10511042 this paragraph, the a djusted tax basis of any ownership interest in
10521043 a pass-through entity for purposes of Section 2351 et seq. of this
10531044 title shall be equal to its adjusted tax basis for federal inco me
10541045 tax purposes.
10551046 B. 1. The taxable income of any corporation shall be further
10561047 adjusted to arrive at Oklahoma taxable income, except those
10571048 corporations electing treatment as provided in subchapter S of the
10581049 Internal Revenue Code, 26 U.S.C., Section 1361 et seq., and Section
10591050 2365 of this title, deductions pursuant to the provisions of the
10601051 Accelerated Cost Recovery System as defined and allowed in the
10611052 Economic Recovery Tax Act of 1981, Public Law 97 -34, 26 U.S.C.,
1062-
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1087-
10881053 Section 168, for depreciation of assets place d into service after
10891054 December 31, 1981, shall not be allowed in calculating Okl ahoma
10901055 taxable income. Such corporations shall be allowed a deduction f or
10911056 depreciation of assets placed into service afte r December 31, 1981,
10921057 in accordance with provisions of th e Internal Revenue Code, 26
1058+
1059+ENGR. H. B. NO. 2020 Page 22 1
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1083+
10931084 U.S.C., Section 1 et seq., in effect immediately pr ior to the
10941085 enactment of the Accelerated Cost Recovery System. The Oklahoma tax
10951086 basis for all such assets placed into ser vice after December 31,
10961087 1981, calculated in this section shall be retained and utilized for
10971088 all Oklahoma income tax purposes through th e final disposition of
10981089 such assets.
10991090 Notwithstanding any other provision s of the Oklahoma Income Tax
11001091 Act, Section 2351 et seq. of this title, or of the Internal Revenue
11011092 Code to the contrary, this subsection shall control calculation of
11021093 depreciation of asset s placed into service after December 31, 1981,
11031094 and before January 1, 19 83.
11041095 For assets placed in service and held by a cor poration in which
11051096 accelerated cost recovery system was p reviously disallowed, an
11061097 adjustment to taxable income is required in the first taxable year
11071098 beginning after December 31, 1982, to reconcile the basis of such
11081099 assets to the basis allowed in the Interna l Revenue Code. The
11091100 purpose of this adjustment is to eq ualize the basis and allowance
11101101 for depreciation accounts between that reported to the Internal
11111102 Revenue Service and that reported to Oklahoma.
1112-
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11381103 2. For tax years beginning on or after January 1, 2009, a nd
11391104 ending on or before December 31, 2009, there shall be added to
11401105 Oklahoma taxable income any amount in excess of One Hundred Seventy -
11411106 five Thousand Dollars ($175,000.00) which has been deducted as a
1107+
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11421133 small business expense under Internal Revenue Code, Secti on 179 as
11431134 provided in the American Recovery and Reinvest ment Act of 2009.
11441135 C. 1. For taxable years beginning after December 31, 1987, the
11451136 taxable income of any corporation shall be further adjusted to
11461137 arrive at Oklahoma taxable income for transfers of tec hnology to
11471138 qualified small businesses located in Oklahom a. Such transferor
11481139 corporation shall be allowed an exemption from taxable inco me of an
11491140 amount equal to the amount of royalty payment received as a re sult
11501141 of such transfer; provided, however, such amo unt shall not exceed
11511142 ten percent (10%) of the amount of gross proceeds received by such
11521143 transferor corporation as a result of the techn ology transfer. Such
11531144 exemption shall be allowed for a period not to ex ceed ten (10) years
11541145 from the date of receipt of th e first royalty payment accruing from
11551146 such transfer. No exemption may be claimed for transfers of
11561147 technology to qualified small busine sses made prior to January 1,
11571148 1988.
11581149 2. For purposes of this subsection :
1159-a. “Qualified small business” means an entity, whether
1150+a. "Qualified small business" means an entity, whether
11601151 organized as a corporation, partnership, or
11611152 proprietorship, organized for profit with its
1162-
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1187-
11881153 principal place of business located wi thin this state
11891154 and which meets the following criteria:
1190-(1) Capitalization capitalization of not more than
1191-Two Hundred Fifty Thousand Dollars ($250,000.00),
1192-(2) Having having at least fifty percent (50%) of its
1155+(1) Capitalization of not more than Two Hundred Fifty
1156+Thousand Dollars ($250,000.00),
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1183+(2) Having at least fifty percent ( 50%) of its
11931184 employees and assets located in Oklahoma at the
11941185 time of the transfer, and
1195-(3) Not not a subsidiary or affiliate of the
1196-transferor corporation;
1197-b. “Technology” means a proprietary process, formula,
1198-pattern, device, or compilation of scientific or
1186+(3) Not a subsidiary or affiliate of the transferor
1187+corporation;
1188+b. "Technology" means a proprietary process, form ula,
1189+pattern, device or compilation of scientific or
11991190 technical information which is not in the public
12001191 domain;
1201-c. “Transferor corporation” means a corporation which is
1192+c. "Transferor corporatio n" means a corporation which is
12021193 the exclusive and undisputed owner of t he technology
12031194 at the time the transfer is made; an d
1204-d. “Gross proceeds” means the total amount of
1195+d. "Gross proceeds" means the total amount of
12051196 consideration for the transfer of technology, whether
12061197 the consideration is in money or otherwise.
12071198 D. 1. For taxable years beginning after December 31, 2005 , the
1208-taxable income of any corporation, estate , or trust, shall be
1209-further adjusted for qualifying gains receiving capital treatm ent.
1210-Such corporations, estates , or trusts shall be allowed a deduction
1211-from Oklahoma taxable income for the amount of qualifying gains
1212-
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1237-
1238-receiving capital treatment earned by the corpor ation, estate, or
1239-trust during the taxable year and included in the fed eral taxable
1240-income of such corporat ion, estate, or trust.
1199+taxable income of any corporation, estate or trust, shall be further
1200+adjusted for qualifying gains re ceiving capital treatment. Such
1201+corporations, estates or trusts shall be allow ed a deduction from
1202+Oklahoma taxable income for the amount of qualifyi ng gains receiving
1203+capital treatment earned by the corporation, estate or trust during
1204+the taxable year and included in the federal taxable income of such
1205+corporation, estate or trust.
12411206 2. As used in this subsection:
1242-a. “qualifying gains receiving capital treatment ” means
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1233+a. "qualifying gains receiving capita l treatment" means
12431234 the amount of net capital gains, a s defined in Section
12441235 1222(11) of the Internal Revenue Co de, included in the
1245-federal income tax return of the co rporation, estate,
1236+federal income tax return of the corporation, estate
12461237 or trust that result from:
12471238 (1) the sale of real property or tangible pers onal
12481239 property located within Oklahoma that has been
12491240 directly or indirectly owned by the corporation,
1250-estate, or trust for a holding period of at least
1241+estate or trust for a holding period of at least
12511242 five (5) years prior to the date of the
12521243 transaction from which such net capital gains
12531244 arise,
12541245 (2) the sale of stock or on the sale of an ownership
12551246 interest in an Oklahoma company, limited
12561247 liability company, or partner ship where such
12571248 stock or ownership interest has been directly or
1258-indirectly owned by the corporation, estate, or
1249+indirectly owned by the corporation, estate or
12591250 trust for a holding period of at least three (3)
12601251 years prior to the date of the transact ion from
12611252 which the net capital gains arise, or
1262-
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1265-3
1266-4
1267-5
1268-6
1269-7
1270-8
1271-9
1272-10
1273-11
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1275-13
1276-14
1277-15
1278-16
1279-17
1280-18
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1282-20
1283-21
1284-22
1285-23
1286-24
1287-
12881253 (3) the sale of real property, tangible personal
1289-property, or intangible personal property located
1254+property or intangible personal propert y located
12901255 within Oklahoma as part of the sale of all or
12911256 substantially all of the assets of an Oklahoma
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12921283 company, limited liability company, or
12931284 partnership where such property has been directly
12941285 or indirectly owned by such entity owned by the
12951286 owners of such entity, and used in or derived
12961287 from such entity for a period of at least three
12971288 (3) years prior to the date of the transact ion
12981289 from which the net capital gains arise,
1299-b. “holding period” means an uninterrupted period of
1290+b. "holding period" means an uninterrupted period of
13001291 time. The holding period shall inclu de any additional
13011292 period when the property was held by another
13021293 individual or entity, if such additional period is
1303-included in the taxpayer’s holding period for the
1294+included in the taxpayer's holding period for the
13041295 asset pursuant to the Internal Revenue Code,
1305-c. “Oklahoma company”, “limited liability company”, or
1306-“partnership” means an entity whose primary
1296+c. "Oklahoma company", "limited liability comp any", or
1297+"partnership" means an entity whose primary
13071298 headquarters have been located in Oklahoma for at
13081299 least three (3) unin terrupted years prior to the date
13091300 of the transaction fro m which the net capital gains
13101301 arise,
1311-
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1336-
1337-d. “direct” means the taxpayer directly owns the asset,
1302+d. "direct" means the taxpayer directly owns the asset,
13381303 and
1339-e. “indirect” means the taxpayer owns an interest in a
1304+e. "indirect" means the taxpayer owns an interest in a
13401305 pass-through entity (or chain of pass-through
1306+
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13411332 entities) that sells the asset that gives rise to the
13421333 qualifying gains receiving capital treatment.
13431334 (1) With respect to sales of rea l property or
13441335 tangible personal property located within
13451336 Oklahoma, the deduction described in this
13461337 subsection shall not apply u nless the pass-
13471338 through entity that makes the sale has he ld the
13481339 property for not less than five (5) uninterrupted
13491340 years prior to the date of the transaction that
13501341 created the capital gain, and each pass-through
13511342 entity included in the chain of ownership has
13521343 been a member, partner, or shareholder of the
13531344 pass-through entity in the tier immediately below
13541345 it for an uninterrupted period of n ot less than
13551346 five (5) years.
13561347 (2) With respect to sales of stock or ownership
13571348 interest in or sales of all or substantially all
13581349 of the assets of an Oklahoma company, limited
13591350 liability company, or partnership, the deduction
13601351 described in this subsection shall not apply
1361-
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1381-20
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1386-
13871352 unless the pass-through entity that makes the
13881353 sale has held the stock or ownership interest or
13891354 the assets for not le ss than three (3)
13901355 uninterrupted years prior to the date of the
1356+
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13911382 transaction that created the capital gain, and
13921383 each pass-through entity included in the chain of
13931384 ownership has been a member, partner or
13941385 shareholder of the pass-through entity in the
13951386 tier immediately below it for an uninterrupted
13961387 period of not less than three (3) years.
13971388 E. The Oklahoma adjusted gross income of any indi vidual
13981389 taxpayer shall be further adjusted as follows to arrive at Oklahoma
13991390 taxable income:
14001391 1. a. In the case of individuals, the re shall be added or
14011392 deducted, as the case may be, the d ifference necessary
14021393 to allow personal exemptions of One Thousand Dollar s
14031394 ($1,000.00) in lieu of the personal exemptions allowed
14041395 by the Internal Revenue Code.
14051396 b. There shall be allowed an additional ex emption of One
14061397 Thousand Dollars ($1,000.00) for each tax payer or
14071398 spouse who is blind at the close of the tax year . For
14081399 purposes of this subparagraph, an individual is blind
14091400 only if the central visual acuity of the individual
14101401 does not exceed 20/200 in the better eye with
1411-
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1436-
14371402 correcting lenses, or if the visual acui ty of the
14381403 individual is greater than 20/200, but is accompanied
14391404 by a limitation in the fields of vision such that the
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14401431 widest diameter of the visual field subtends an angle
14411432 no greater than twenty (20) degrees.
14421433 c. There shall be allowed an additional exempti on of One
14431434 Thousand Dollars ($1,000.00) for each taxpayer or
14441435 spouse who is sixty-five (65) years of age or older at
14451436 the close of the tax year based upon the filing status
14461437 and federal adjusted gross inc ome of the taxpayer.
14471438 Taxpayers with the following filin g status may claim
14481439 this exemption if the federal adjusted gross incom e
14491440 does not exceed:
14501441 (1) Twenty-five Thousand Dollars ($25,000.00) if
1451-married and filing jointly ;,
1442+married and filing jointly;
14521443 (2) Twelve Thousand Five Hundred Do llars ($12,500.00)
1453-if married and filing separately;,
1454-(3) Fifteen Thousand Dollars ($15,000.00) if single;,
1444+if married and filing separately;
1445+(3) Fifteen Thousand Dollars ($15,000.00) if single;
14551446 and
14561447 (4) Nineteen Thousand Dollars ($19,000.00) if a
14571448 qualifying head of household.
14581449 Provided, for taxable years beginning after December
14591450 31, 1999, amounts included in the calculation of
14601451 federal adjusted gross income pursuant to the
1461-
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1464-3
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1481-20
1482-21
1483-22
1484-23
1485-24
1486-
14871452 conversion of a traditional individual r etirement
14881453 account to a Roth individual retirement account shall
14891454 be excluded from federal adjusted gross income for
1455+
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14901481 purposes of the incom e thresholds provided in this
14911482 subparagraph.
14921483 2. a. For taxable years beginning on or before December 31,
14931484 2005, in the case of individuals who use the standard
14941485 deduction in determining taxable income, there shall
14951486 be added or deducted, as the case may be, the
14961487 difference necessary to allow a standard deduction in
14971488 lieu of the standard deduction allowed by the Internal
14981489 Revenue Code, in an amount equal to the larger of
14991490 fifteen percent (15%) of the Oklahoma adjusted gross
15001491 income or One Thousand Dollars ($1,000.00), but not to
15011492 exceed Two Thousand Dollars ($2,000.00), exc ept that
15021493 in the case of a married individual filing a separate
15031494 return such deduction shall be the large r of fifteen
15041495 percent (15%) of such Oklahoma adjusted gross income
15051496 or Five Hundred Dollars ($500.0 0), but not to exceed
15061497 the maximum amount of One Thousand Dollars
15071498 ($1,000.00).
15081499 b. For taxable years beginning on or aft er January 1,
15091500 2006, and before January 1, 2007, in the case of
15101501 individuals who use the standard deduction in
1511-
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1514-3
1515-4
1516-5
1517-6
1518-7
1519-8
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1521-10
1522-11
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1526-15
1527-16
1528-17
1529-18
1530-19
1531-20
1532-21
1533-22
1534-23
1535-24
1536-
15371502 determining taxable income, t here shall be added or
15381503 deducted, as the case may be, the difference necessary
15391504 to allow a standard deduction in lieu of the standard
1505+
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15401531 deduction allowed by the In ternal Revenue Code, in an
15411532 amount equal to:
15421533 (1) Three Thousand Dollars ($3,000.00), if the filing
1543-status is married filing joint, head of
1544-household, or qualifying widow;, or
1534+status is married filing joint, head of household
1535+or qualifying widow; or
15451536 (2) Two Thousand Dollars ($2,000.00), if the filing
15461537 status is single or married fili ng separate.
15471538 c. For the taxable year beginning on January 1, 2007, and
15481539 ending December 31, 2007, in the case of individuals
15491540 who use the standard deductio n in determining taxable
15501541 income, there shall be added or de ducted, as the case
15511542 may be, the difference n ecessary to allow a standard
15521543 deduction in lieu of the standard deduction allowed by
15531544 the Internal Revenue Code, in an amount equal to:
15541545 (1) Five Thousand Five Hundred Dollars ($5,500.00),
15551546 if the filing status is m arried filing joint or
1556-qualifying widow; or,
1547+qualifying widow; or
15571548 (2) Four Thousand One Hundred Twenty-five Dollars
1558-($4,125.00) for a head of household ;, or
1559-
1560-Req. No. 2090 Page 32 1
1561-2
1562-3
1563-4
1564-5
1565-6
1566-7
1567-8
1568-9
1569-10
1570-11
1571-12
1572-13
1573-14
1574-15
1575-16
1576-17
1577-18
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1579-20
1580-21
1581-22
1582-23
1583-24
1584-
1549+($4,125.00) for a head of household; or
15851550 (3) Two Thousand Seven Hundred Fifty Dollars
15861551 ($2,750.00), if the filing status is single or
15871552 married filing separate.
15881553 d. For the taxable year beginning on January 1, 20 08, and
15891554 ending December 31, 2008, in the case o f individuals
1555+
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15901581 who use the standard deduction in de termining taxable
15911582 income, there shall be added or deduct ed, as the case
15921583 may be, the difference necessary to all ow a standard
15931584 deduction in lieu of the standard deduction allowed by
15941585 the Internal Revenue Code, in an amount equal to:
15951586 (1) Six Thousand Five Hund red Dollars ($6,500.00), if
15961587 the filing status is married filing joint or
15971588 qualifying widow, or
15981589 (2) Four Thousand Eight Hundred Seventy-five Dollars
15991590 ($4,875.00) for a head of household, or
16001591 (3) Three Thousand Two Hundred Fifty Dollars
16011592 ($3,250.00), if the fili ng status is single or
16021593 married filing separate.
16031594 e. For the taxable year beginning on January 1, 2009, and
16041595 ending December 31, 2009, in the case of individuals
16051596 who use the standard deduction in determining t axable
16061597 income, there shall be added or deducted, a s the case
16071598 may be, the difference necessary to allow a s tandard
1608-
1609-Req. No. 2090 Page 33 1
1610-2
1611-3
1612-4
1613-5
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1616-8
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1619-11
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1633-
16341599 deduction in lieu of the standard deduction allowed by
16351600 the Internal Revenue Code, in an amount equal to:
16361601 (1) Eight Thousand Five Hundred Dolla rs ($8,500.00),
16371602 if the filing status is married fi ling joint or
16381603 qualifying widow, or
1604+
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1607+3
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1629+
16391630 (2) Six Thousand Three Hundred Seventy-five Dollars
16401631 ($6,375.00) for a head of household, or
16411632 (3) Four Thousand Two Hundred Fi fty Dollars
16421633 ($4,250.00), if the filing status i s single or
16431634 married filing separate.
16441635 Oklahoma adjusted gross income shall be increased by
16451636 any amounts paid for motor vehicle excise taxes which
16461637 were deducted as allowed by the Internal Revenue Code.
16471638 f. For taxable years beginning on or after January 1,
16481639 2010, and ending on December 31, 2016, in the case of
16491640 individuals who use the standard deduction in
16501641 determining taxable income, there shall be added or
16511642 deducted, as the case may be, the difference necessary
16521643 to allow a standard deduction equal to the standard
16531644 deduction allowed by the Internal Revenue Code, ba sed
16541645 upon the amount and filing status prescribed by such
16551646 Code for purposes of filing federal individual income
16561647 tax returns.
1657-
1658-Req. No. 2090 Page 34 1
1659-2
1660-3
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1662-5
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1664-7
1665-8
1666-9
1667-10
1668-11
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1682-
16831648 g. For taxable years beginning on o r after January 1,
16841649 2017, in the case of individ uals who use the standard
16851650 deduction in determining taxable income, there shall
16861651 be added or deducted, as th e case may be, the
16871652 difference necessary to allow a standard deduction in
1653+
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1678+
16881679 lieu of the standard deduction allowed by the Internal
16891680 Revenue Code, as follo ws:
16901681 (1) Six Thousand Three Hundred Fifty Dollars
16911682 ($6,350.00) for single or married filing
16921683 separately,
16931684 (2) Twelve Thousand Seven Hundred Dollars
16941685 ($12,700.00) for married filing jointly o r
16951686 qualifying widower wit h dependent child, and
16961687 (3) Nine Thousand Three Hundred Fifty Dollars
16971688 ($9,350.00) for head of hous ehold.
16981689 3. a. In the case of resident and part -year resident
16991690 individuals having adjusted gross income from sources
17001691 both within and witho ut the state, the itemiz ed or
17011692 standard deductions and personal exemptio ns shall be
17021693 reduced to an amount which is the same portion of the
17031694 total thereof as Oklahoma adjusted gross income is of
17041695 adjusted gross income. To the extent itemized
17051696 deductions include allowable moving expens e, proration
17061697 of moving expense shall not be req uired or permitted
1707-
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1709-2
1710-3
1711-4
1712-5
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17331698 but allowable moving expense sh all be fully deductible
17341699 for those taxpayers moving withi n or into Oklahoma and
17351700 no part of moving expense shall be deductible for
17361701 those taxpayers moving without or out of Oklahoma.
17371702 All other itemized or sta ndard deductions and personal
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17381729 exemptions shall be subject to proration as provided
17391730 by law.
17401731 b. For taxable years beginning on or after January 1,
17411732 2018, the net amount of itemized deducti ons allowable
17421733 on an Oklahoma income tax return, subject to the
17431734 provisions of paragraph 24 of this subsection, shall
17441735 not exceed Seventeen Thousand Dollars ($17,000.00) .
17451736 For purposes of this subparagraph, charitable
17461737 contributions and medical expenses deduct ible for
17471738 federal income tax purposes shall be excluded from the
17481739 amount of Seventeen Thousand Dollars ($17,000.00) as
17491740 specified by this subparagraph.
17501741 4. A resident individual wi th a physical disability
17511742 constituting a substantial handicap to employment may deduct from
17521743 Oklahoma adjusted gross income such expenditures to modify a motor
1753-vehicle, home, or workplace as are necessary to c ompensate for his
1754-or her handicap. A veteran certified by the Department of Veterans
1744+vehicle, home or workplace as are necessar y to compensate for his or
1745+her handicap. A veteran certified by the Department of Veterans
17551746 Affairs of the federal government as having a service-connected
17561747 disability shall be conclusively presumed to be an individual with a
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17831748 physical disability constitutin g a substantial handicap to
17841749 employment. The Tax Commission shall promulgate rules containing a
17851750 list of combinations of common disabili ties and modifications w hich
17861751 may be presumed to qualify for this deduct ion. The Tax Commission
17871752 shall prescribe necessary requirements for verification.
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17881779 5. a. Before July 1, 2010, the first One Thousand Five
17891780 Hundred Dollars ($1,500.00) received by any pers on
17901781 from the United State s as salary or compensation in
17911782 any form, other than retirement benefits, as a member
17921783 of any component of the Armed Forces of the United
17931784 States shall be deducted from taxable income.
17941785 b. On or after July 1, 2010, one hundred percent ( 100%)
17951786 of the income received by any person from the United
17961787 States as salary or compensation in any form, other
17971788 than retirement benefits, as a member of any component
17981789 of the Armed Forces of the United States shall be
17991790 deducted from taxable income.
18001791 c. Whenever the filing of a time ly income tax return by a
18011792 member of the Armed For ces of the United States is
18021793 made impracticable or impossible of accomplishment by
18031794 reason of:
18041795 (1) absence from the United States, which term
18051796 includes only the states and the District of
1806-Columbia;,
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1833-(2) absence from the State of Oklahoma this state
1834-while on active duty ;, or
1797+Columbia;
1798+(2) absence from the State of Oklahoma while on
1799+active duty; or
18351800 (3) confinement in a hospital within the United
1836-States for treatment of wounds, injuries, or
1801+States for treatment of wounds, injuries or
18371802 disease,
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18381829 the time for filing a return and paying an income tax
18391830 shall be and is hereby exte nded without incurring
18401831 liability for interest or penalties, to the fift eenth
18411832 day of the third month following the month i n which:
1842-(a) Such such individual shall return to the
1843-United States if the extension is granted
1844-pursuant to subparagraph a of this
1845-paragraph, return to the State of Oklahoma
1846-this state if the extension is granted
1847-pursuant to subparagraph b of this paragraph
1848-or be discharged from such hospital if the
1849-extension is granted pursuant to
1850-subparagraph c of this paragraph;, or
1851-(b) An an executor, administrator, or
1852-conservator of the estate of t he taxpayer is
1853-appointed, whichever event occurs the
1854-earliest.
1833+(a) Such individual shall return to the United
1834+States if the extension is granted pursuant
1835+to subparagraph a of this paragraph , return
1836+to the State of Oklahoma if the extension is
1837+granted pursuant to subparagraph b of this
1838+paragraph or be discharg ed from such
1839+hospital if the extension is granted
1840+pursuant to subparagraph c of this
1841+paragraph; or
1842+(b) An executor, administrator, or c onservator
1843+of the estate of the taxpayer is appointed,
1844+whichever event occurs the earliest.
18551845 Provided, that the Tax Commis sion may, in its discretion, grant
18561846 any member of the Arm ed Forces of the United States an extension of
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18831847 time for filing of income tax re turns and payment of income tax
18841848 without incurring liabilities for inter est or penalties. Such
18851849 extension may be granted o nly when in the judgment of the Tax
18861850 Commission a good ca use exists therefor and may be for a period in
18871851 excess of six (6) months . A record of every such extension granted,
18881852 and the reason therefor, shall be kept.
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18891879 6. Before July 1, 2010, the salary or any o ther form of
18901880 compensation, received from the United Stat es by a member of any
18911881 component of the Armed Forces of the United States, shall be
18921882 deducted from taxable income during the time in which the person is
18931883 detained by the enemy in a conflict, is a prisone r of war or is
18941884 missing in action and not deceased; provi ded, after July 1, 2010,
18951885 all such salary or compensation shall be subject to th e deduction as
18961886 provided pursuant to paragraph 5 of this subsection.
18971887 7. a. An individual taxpayer, whether resident or
18981888 nonresident, may deduct an amount equal to the federal
18991889 income taxes paid by the taxpayer during the taxable
19001890 year.
19011891 b. Federal taxes as desc ribed in subparagraph a of this
19021892 paragraph shall be deductible by any in dividual
19031893 taxpayer, whether resident or nonresident , only to the
19041894 extent they relate to income subject to ta xation
19051895 pursuant to the provisions of the Oklahoma Income Tax
19061896 Act. The maximum amount allowable in the preceding
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19331897 paragraph shall be prorated on the ra tio of the
19341898 Oklahoma adjusted gross income to feder al adjusted
19351899 gross income.
1936-c. For the purpose of this paragraph, “federal income
1937-taxes paid” shall mean federal i ncome taxes, surtaxes
1900+c. For the purpose of this par agraph, "federal income
1901+taxes paid" shall mean federal income taxes, surtaxes
19381902 imposed on incomes or excess profits taxes, as though
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19391929 the taxpayer was on the accrual basis. In determining
19401930 the amount of deduction for federal income taxes for
19411931 tax year 2001, the amount of the deduction shall not
19421932 be adjusted by the amount of any accelerat ed ten
19431933 percent (10%) tax rate bracket credit or advanced
19441934 refund of the credit received during the tax year
19451935 provided pursuant to the federal Economic Growth and
19461936 Tax Relief Reconciliation Act of 2001, P.L. No. 107-
19471937 16, and the advanced refund of such credit s hall not
19481938 be subject to taxation.
19491939 d. The provisions of this paragraph sh all apply to all
19501940 taxable years ending after Decemb er 31, 1978, and
19511941 beginning before January 1, 2006.
19521942 8. Retirement benefits not to exceed Five Thousand Five Hundred
19531943 Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five
1954-Hundred Dollars ($7,500.00) for the 2005 tax year , and Ten Thousand
1955-Dollars ($10,000.00) for the 2006 tax year, and Twelve Thousand Five
1956-Hundred Dollars ($12,500.00) for the 2024 tax year and all
1957-
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1982-
1983-subsequent tax years, which are received by an individual from the
1984-civil service of the Unite d States, the Oklahoma Public Employees
1985-Retirement System, the Te achers’ Retirement System of Oklahoma, the
1986-Oklahoma Law Enforcement Retirement System, the Oklahoma
1987-Firefighters Pension and Retirement System, the Oklahoma Police
1988-Pension and Retirement Syst em, the employee retirement sy stems
1989-created by counties pursuant to Section 951 et seq. of Title 19 of
1990-the Oklahoma Statutes, the Uniform Retirement System for Justices
1991-and Judges, the Oklahoma Wildlife Conservation Department Retirem ent
1992-Fund, the Oklahoma Employment Security Commissio n Retirement Plan,
1993-or the employee retirement systems created by municipaliti es
1994-pursuant to Section 48-101 et seq. of Title 11 of the Oklahoma
1995-Statutes shall be exempt from taxable income.
1944+Hundred Dollars ($7,500.00) for the 2005 tax year and, Ten Thousand
1945+Dollars ($10,000.00) for the 2006 tax year , and Twenty Thousand
1946+Dollars ($20,000.00) for the 2024 tax year and all subsequent tax
1947+years, which are receiv ed by an individual from the civil se rvice of
1948+the United States, the Oklahoma Public Employees Retirement System,
1949+the Teachers' Retirement System of Oklahoma, the Oklahoma Law
1950+Enforcement Retirement System, the Oklahoma Firefighters Pension and
1951+Retirement System, the Oklahoma Police Pension a nd Retirement
1952+System, the employee retirement systems created by counties pursuant
1953+
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1979+to Section 951 et seq. of Title 19 of the Oklahoma Statut es, the
1980+Uniform Retirement System for Justices and Judge s, the Oklahoma
1981+Wildlife Conservation Department Retirement Fund, the Oklahoma
1982+Employment Security Commission Retirement Plan, or the employee
1983+retirement systems created by municipalities pursuant to Section 48-
1984+101 et seq. of Title 11 of the Oklahoma Statu tes shall be exempt
1985+from taxable income.
19961986 9. In taxable years beginning after December 3l, 1984, Social
19971987 Security benefits received by an individual sh all be exempt from
19981988 taxable income, to the extent s uch benefits are included in the
19991989 federal adjusted gross income pursuant to the provisions of Section
20001990 86 of the Internal Revenue Code, 26 U.S.C., Section 86.
20011991 10. For taxable years beginning after December 3 1, 1994, lump-
20021992 sum distributions from employer plan s of deferred compensation,
20031993 which are not qualified plan s within the meaning of Section 401(a)
20041994 of the Internal Reven ue Code, 26 U.S.C., Section 401(a), and which
20051995 are deposited in and accounted for within a separate bank account or
20061996 brokerage account in a fi nancial institution within this state,
2007-
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20331997 shall be excluded from taxable income in the same manner as a
20341998 qualifying rollover contribution to an individual retirement account
20351999 within the meaning of Section 408 of the Internal Revenue Code, 26
20362000 U.S.C., Section 408. Amounts withdrawn from such bank or brokerage
20372001 account, including any earni ngs thereon, shall be included in
20382002 taxable income when withdrawn in the same manner as withdrawals from
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20392029 individual retirement acco unts within the meaning of Section 408 of
20402030 the Internal Revenue Code.
20412031 11. In taxable years beginning after December 31, 1995,
20422032 contributions made to and interest recei ved from a medical savings
20432033 account established pursuant to Sections 2621 through 2623 of T itle
20442034 63 of the Oklahoma Statutes shall be exempt f rom taxable income.
20452035 12. For taxable years beginning aft er December 31, 1996, the
20462036 Oklahoma adjusted gross income of any individual taxpayer who is a
20472037 swine or poultry producer may be further adjusted for the deduction
20482038 for depreciation allowed for new constr uction or expansion costs
20492039 which may be computed using th e same depreciation method elected for
20502040 federal income tax pu rposes except that the useful life shall be
20512041 seven (7) years for purposes of this paragraph . If depreciation is
20522042 allowed as a deduction in de termining the adjusted gross income of
20532043 an individual, any depreciation calculated and claimed pursuant to
20542044 this section shall in no event be a duplication of any depreciation
20552045 allowed or permitted on the fede ral income tax return of the
20562046 individual.
2057-
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2082-
2083-13. a. In taxable years beginning after December 31, 2002,
2084-nonrecurring adoption expenses paid by a resident
2085-individual taxpayer in connection with:
2086-(1) the adoption of a mi nor, or
2087-(2) a proposed adoption of a minor which did not
2088-result in a decreed adoption,
2089-may be deducted from the Oklahoma adjusted gross
2090-income.
2091-b. The deductions for adoptions and proposed adoptions
2092-authorized by this paragrap h shall not exceed Twenty
2093-Thousand Dollars ($20,000.00) per cale ndar year.
2094-c. The Tax Commission shall pro mulgate rules to implement
2095-the provisions of this paragraph which shall contain a
2096-specific list of nonrecurring adoption expense s which
2097-may be presumed to qualify for the deduction . The Tax
2098-Commission shall prescr ibe necessary requirements for
2099-verification.
2100-d. “Nonrecurring adoption expenses” means adoption fees,
2101-court costs, medical expenses, attorney fees, and
2102-expenses which are directly related to th e legal
2103-process of adoption of a child including, but not
2104-limited to, costs relating to the adoption stud y,
2105-health and psychological examinations, transportation,
2106-and reasonable costs of lodging and food for the child
2107-
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2132-
2133-or adoptive parents which are incurred to complete the
2134-adoption process and are not reimbursed by oth er
2135-sources. The term “nonrecurring adoption expenses”
2136-shall not include attorney fees incurred for the
2137-purpose of litigating a contested adoption, from and
2138-after the point of the initiation of the contest,
2139-costs associated with physical remodeling, renova tion
2140-and alteration of the adoptive parent s’ home or
2141-property, except for a special needs child as
2142-authorized by the court.
2143-14. a. In taxable years beginning before January 1, 2005,
2047+13. a. In taxable years beginning before January 1, 2005,
21442048 retirement benefits not to exceed the amounts
21452049 specified in this par agraph, which are received by an
21462050 individual sixty-five (65) years of age or older and
21472051 whose Oklahoma adjusted gross income is Twenty-five
21482052 Thousand Dollars ($25,000.00) or less if the filing
2053+
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21492079 status is single, head of household, or married filing
21502080 separate, or Fifty Thousand Dollars ($50,000.00) or
21512081 less if the filing status is married filing joint or
21522082 qualifying widow, shall be ex empt from taxable income.
21532083 In taxable years beginning after December 31, 200 4,
21542084 retirement benefits not to exceed the amounts
21552085 specified in this paragraph, which are received by an
21562086 individual whose Oklahoma adjusted gross income is
2157-
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21832087 less than the qualifying a mount specified in this
21842088 paragraph, shall be exempt from taxable income.
21852089 b. For purposes of this paragraph, the qualifying amount
21862090 shall be as follows:
21872091 (1) in taxable years beginning after December 31,
21882092 2004, and prior to January 1, 2007, the
21892093 qualifying amount shall be Thirty-seven Thousand
21902094 Five Hundred Dollars ($37,500.00) or less if the
21912095 filing status is single, head of household, or
21922096 married filing separate, or Seventy-five Thousand
21932097 Dollars ($75,000.00) or less if the filing status
21942098 is married filing jointly o r qualifying widow,
21952099 (2) in the taxable year beginning January 1, 2007,
21962100 the qualifying amount shall be Fifty Thousand
21972101 Dollars ($50,000.00) or less if the filing status
21982102 is single, head of household, or married filing
2103+
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21992129 separate, or One Hundred Thousand Dollars
22002130 ($100,000.00) or less if the filing status is
22012131 married filing jointly or qualifying widow,
22022132 (3) in the taxable year beginning January 1, 2008,
22032133 the qualifying amount shall be Sixty-two Thousand
22042134 Five Hundred Dollars ($62,500.00) or less if the
22052135 filing status is single, head of household, or
22062136 married filing separate, or One Hundred Twenty-
2207-
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2232-
22332137 five Thousand Dollars ($125,000.00) or less if
22342138 the filing status is married filing jointly or
22352139 qualifying widow,
22362140 (4) in the taxable year beginning January 1, 2009,
22372141 the qualifying amount shall be One Hundred
22382142 Thousand Dollars ($100,000.00) or less if the
22392143 filing status is single, head of household, or
22402144 married filing separate, or Two Hundred Thousand
22412145 Dollars ($200,000.00) or less if the filing
22422146 status is married filing jointly or quali fying
22432147 widow, and
22442148 (5) in the taxable year beginning January 1, 2010,
22452149 and subsequent taxable years, there shall be no
22462150 limitation upon the qualifying amount.
2247-c. For purposes of this pa ragraph, “retirement benefits”
2151+
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2177+c. For purposes of this paragraph, "retirement benefits"
22482178 means the total distributions or withdrawals from the
22492179 following:
22502180 (1) an employee pension benefit plan which sati sfies
22512181 the requirements of Section 401 of the Internal
22522182 Revenue Code, 26 U.S.C., Section 401,
22532183 (2) an eligible deferred compensation plan that
22542184 satisfies the requirements of Section 457 of the
22552185 Internal Revenue Code, 26 U.S.C., Section 457,
2256-
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2281-
22822186 (3) an individual retirement account, annuity or
2283-trust, or simplified employee pension that
2187+trust or simplified employee pension that
22842188 satisfies the requirements of Section 408 of the
22852189 Internal Revenue Code, 26 U.S.C., Section 408,
22862190 (4) an employee annuity subject to the provisions of
22872191 Section 403(a) or (b) of the Inte rnal Revenue
22882192 Code, 26 U.S.C., Section 403(a) or (b),
22892193 (5) United States Retirement Bonds which satisfy the
22902194 requirements of Section 86 of the Internal
22912195 Revenue Code, 26 U.S.C., Section 86, or
22922196 (6) lump-sum distributions from a retirement plan
22932197 which satisfies the requirements of Section
22942198 402(e) of the Internal Revenue Code, 26 U .S.C.,
22952199 Section 402(e).
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22962226 d. The amount of the exemption provided by this paragraph
22972227 shall be limited to Five Thousand Five Hundred Dollars
22982228 ($5,500.00) for the 2004 tax year, Seven Thousand Five
2229+Hundred Dollars ($7,500.00) for the 2005 tax year and
2230+Ten Thousand Dollars ($10,000.00) for the tax year
2231+2006 and for all subsequent tax years. Any individual
2232+who claims the exemption provided for in paragraph 8
2233+of this subsection shall not be permi tted to claim a
2234+combined total exemption pursuant to this paragraph
2235+and paragraph 8 of this subsection in an amount
2236+exceeding Five Thousand Five Hundred Dollars
2237+($5,500.00) for the 2004 tax y ear, Seven Thousand Five
22992238 Hundred Dollars ($7,500.00) for the 2005 tax year and,
2300-Ten Thousand Dollars ($10,000.00) for the tax year
2301-2006, and Twelve Thousand Five Hundred Dollars
2302-($12,500.00) for the 2024 tax year and for all
2303-subsequent tax years. Any individual who claims the
2304-exemption provided for in paragraph 8 of this
2305-subsection shall not be permitted to claim a combined
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2331-
2332-total exemption pursu ant to this paragraph and
2333-paragraph 8 of this subse ction in an amount ex ceeding
2334-Five Thousand Five Hundred Dollars ($5,500.00) for the
2335-2004 tax year, Seven Thousand Five Hundred Dollars
2336-($7,500.00) for the 2005 tax year and, Ten Thousand
2337-Dollars ($10,000.00) for the 2006 tax year, and Twelve
2338-Thousand Five Hundred Dollars ( $12,500.00) for the
2239+Ten Thousand Dollars ($10,000.00) for the 2006 tax
2240+year, and Twenty Thousand Dollars ($20,000.0 0) for the
23392241 2024 tax year and all subsequent tax years.
2340-15. In taxable years beginning after December 31, 1999, for an
2242+14. In taxable years beginning after December 31, 1999, for an
23412243 individual engaged in production agriculture who has filed a
2342-Schedule F form with the taxpayer’s federal income tax return for
2244+Schedule F form with the taxpayer's federal income tax return for
23432245 such taxable year, there shall be excluded from t axable income any
23442246 amount which was included as federal taxable income or federal
23452247 adjusted gross income and which consists of the discharge of an
23462248 obligation by a creditor of the taxpayer incurred to finance the
23472249 production of agricultural products.
2348-16. In taxable years beginning December 31 , 2000, an amount
2250+
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2270+20
2271+21
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2274+24
2275+
2276+15. In taxable years beginning December 31, 2000, an amount
23492277 equal to one hundred percent (100%) of the amount of any scholarship
23502278 or stipend received from participa tion in the Oklahoma Police Corps
23512279 Program, as established in Section 2-140.3 of Title 47 of the
23522280 Oklahoma Statutes shall be exempt from ta xable income.
2353-17. a. In taxable years beginning after December 31, 2001,
2281+16. a. In taxable years beginning after December 31, 2001,
23542282 and before January 1, 2005, there shall be all owed a
23552283 deduction in the amount of contributions to accounts
2356-
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2377-21
2378-22
2379-23
2380-24
2381-
23822284 established pursuant to the Oklaho ma College Savings
23832285 Plan Act. The deduction shall equal the amount of
23842286 contributions to accounts, but in no event shall the
23852287 deduction for each contributor exceed T wo Thousand
23862288 Five Hundred Dollars ($2,500.00) each taxable year for
23872289 each account.
23882290 b. In taxable years beginning after December 31, 2004,
23892291 each taxpayer shall be allowed a deduction for
23902292 contributions to accounts established pursuant to the
23912293 Oklahoma College Savings Plan Act. The maximum annual
23922294 deduction shall equal the amount of contributions to
23932295 all such accounts plus any contributions to such
23942296 accounts by the taxpayer for prior taxable years after
23952297 December 31, 2004, which were not deducted, but in no
23962298 event shall the deduction for each tax year exceed Ten
23972299 Thousand Dollars ($10,000.00) for each individua l
2300+
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23982326 taxpayer or Twenty Thousand Dollars ($20, 000.00) for
23992327 taxpayers filing a joint return. Any amount of a
24002328 contribution that is not deducted by the taxpayer in
24012329 the year for which the c ontribution is made may be
24022330 carried forward as a deduction from income for the
24032331 succeeding five (5) years. For taxable years
24042332 beginning after Decembe r 31, 2005, deductions may be
24052333 taken for contributions and rollovers made during a
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2431-
24322334 taxable year and up to April 15 of the succeeding
2433-year, or the due dat e of a taxpayer’s state income tax
2335+year, or the due date of a taxpayer's state income tax
24342336 return, excluding extensions, whichever is later.
24352337 Provided, a deduction for the same contribution may
24362338 not be taken for two (2) different taxable years.
24372339 c. In taxable years beginning after December 31, 2006,
24382340 deductions for contributions made pursuant t o
24392341 subparagraph b of this paragraph shall be limited as
24402342 follows:
24412343 (1) for a taxpayer who qualified for the five-year
24422344 carryforward election and who takes a rollov er or
24432345 nonqualified withdrawal during that period, the
24442346 tax deduction otherwise available pursuant to
24452347 subparagraph b of this paragraph shall b e reduced
24462348 by the amount which is equal to the rollover or
24472349 nonqualified withdrawal, and
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24482376 (2) for a taxpayer who elect s to take a rollover or
24492377 nonqualified withdrawal within the same tax year
24502378 in which a contribution w as made to the
2451-taxpayer’s account, the tax deduction otherwise
2379+taxpayer's account, the tax deduction otherwise
24522380 available pursuant to subparagraph b of this
24532381 paragraph shall be reduced by the amount of the
24542382 contribution which is equal to the rollover or
24552383 nonqualified withdrawal.
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2481-
24822384 d. If a taxpayer elects to t ake a rollover on a
24832385 contribution for which a deduction has been taken
24842386 pursuant to subparagraph b of this paragraph within
24852387 one (1) year of the date of contrib ution, the amount
24862388 of such rollover shall be included in the adjusted
24872389 gross income of the taxpayer i n the taxable year of
24882390 the rollover.
24892391 e. If a taxpayer makes a nonqualified withdrawal of
24902392 contributions for which a deduction was taken pursuant
24912393 to subparagraph b of this paragraph, such nonqualified
24922394 withdrawal and any earnings thereon shall be included
24932395 in the adjusted gross income of the taxpayer in the
24942396 taxable year of the nonqu alified withdrawal.
24952397 f. As used in this paragraph:
2496-(1) “non-qualified withdrawal” means a withdrawal
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2423+
2424+(1) "non-qualified withdrawal " means a withdrawal
24972425 from an Oklahoma College Savings Plan account
24982426 other than one of the following:
24992427 (a) a qualified withdrawal,
25002428 (b) a withdrawal made as a result of the death
25012429 or disability of the designated beneficiary
25022430 of an account,
25032431 (c) a withdrawal that is made on the account of
25042432 a scholarship or the allowance or payment
25052433 described in Section 135(d)(1)(B) or (C) or
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2531-
25322434 by the Internal Revenue Code, recei ved by
25332435 the designated benefici ary to the extent the
25342436 amount of the refund does not exceed the
25352437 amount of the scholarship, allowance, or
25362438 payment, or
25372439 (d) a rollover or change of designated
25382440 beneficiary as permitted by subsection F of
25392441 Section 3970.7 of Title 70 of Oklahoma
25402442 Statutes, and
2541-(2) “rollover” means the transfer of funds from the
2443+(2) "rollover" means the transfer of funds from the
25422444 Oklahoma College Savings Pla n to any other plan
25432445 under Section 529 of the Internal Revenue Cod e.
2544-18. For tax years 2006 through 2021, retirement benefits
2545-received by an individual from any component of the Armed Forces of
2546-the United States in an amount not to exceed the greater of seventy-
2547-five percent (75%) of such benefits or Ten Thousand Dollars
2548-($10,000.00) shall be exempt from taxable income but in no case less
2549-than the amount of the exemption provided by paragraph 14 of this
2550-subsection. For tax year 2022 and subsequent tax years, retirement
2551-benefits received by an individual from any component of the A rmed
2552-Forces of the United States shall be exempt from taxable income.
2553-19. For taxable years beginning after December 31, 2006,
2446+17. For taxable years beginning aft er December 31, 2005,
2447+retirement benefits rece ived by an individual from any component of
2448+
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2473+
2474+the Armed Forces of the United States in an amount not to exceed the
2475+greater of seventy-five percent (75%) of such benefits or Ten
2476+Thousand Dollars ($10,000.00) shall be exempt from taxable income
2477+but in no case less than the amount of the ex emption provided by
2478+paragraph 13 of this subsection.
2479+18. For taxable years beginning aft er December 31, 2006,
25542480 retirement benefits received by federal civil service retirees,
25552481 including survivor annuities, paid in lieu of Social Security
2556-
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2581-
25822482 benefits shall be exempt from taxable income to the extent such
25832483 benefits are included in the federal adjuste d gross income pursuant
25842484 to the provisions of Section 86 of the Internal Revenue Code, 26
25852485 U.S.C., Section 86, according to the follo wing schedule:
25862486 a. in the taxable year beginning January 1, 2007, twenty
25872487 percent (20%) of such bene fits shall be exempt,
25882488 b. in the taxable year beginning January 1, 2008, forty
25892489 percent (40%) of such benefits shall be exempt,
25902490 c. in the taxable year beginning January 1, 2009, sixty
25912491 percent (60%) of such benefits shall be exempt,
25922492 d. in the taxable year beginning January 1, 2010, eig hty
25932493 percent (80%) of such benefits shall be exempt, and
25942494 e. in the taxable year beginning January 1, 2011, and
25952495 subsequent taxable ye ars, one hundred percent (100 %)
25962496 of such benefits shall be exempt.
2597-20. a. For taxable years beginning after December 31, 2007, a
2497+
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2523+19. a. For taxable years beginning after December 31, 2007, a
25982524 resident individual may deduct up to Ten Thousand
25992525 Dollars ($10,000.00) from Oklahoma adjusted gross
26002526 income if the individua l, or the dependent of the
26012527 individual, while living, donates one or more human
26022528 organs of the individual to another human being for
26032529 human organ transplantation. As used in this
2604-paragraph, “human organ” means all or part of a liver,
2530+paragraph, "human organ" means all or part of a liver,
26052531 pancreas, kidney, intest ine, lung, or bone marrow. A
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2631-
26322532 deduction that is claimed under this paragraph may be
26332533 claimed in the taxable year in which the human organ
26342534 transplantation occurs.
26352535 b. An individual may claim this deduction only once, and
26362536 the deduction may be claimed only for unreimbursed
26372537 expenses that are incurred by the individual and
26382538 related to the organ donation of the individual.
26392539 c. The Oklahoma Tax Commission shall promulgate rules to
26402540 implement the provisions of this paragraph which shall
26412541 contain a specific list of expens es which may be
26422542 presumed to qualify for the deduction. The Tax
26432543 Commission shall prescribe necessary requirements for
26442544 verification.
2645-21. For taxable years beginning after December 31, 2009, there
2545+20. For taxable years beginning after December 31, 2009, th ere
26462546 shall be exempt from taxable income any amount received by the
2547+
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2572+
26472573 beneficiary of the death benefit for an emergency medical technician
26482574 or a registered emergency medical responder provided by Section 1-
26492575 2505.1 of Title 63 of the Oklahoma Statutes.
2650-22. For taxable years beginning after December 31, 2008,
2576+21. For taxable years beginning after December 31, 2008,
26512577 taxable income shall be increased by any unemployment compensation
26522578 exempted under Section 85(c) of the Internal Revenue Code, 26
26532579 U.S.C., Section 85(c)(2009).
2654-23. For taxable years beginning after December 31, 2008, there
2580+22. For taxable years beginning after December 3 1, 2008, there
26552581 shall be exempt from taxable income a ny payment in an amoun t less
2656-
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2678-22
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2681-
26822582 than Six Hundred Dollars ($600.00) received by a person as an award
26832583 for participation in a competitive liv estock show event. For
26842584 purposes of this paragraph, the payment shall be treated as a
26852585 scholarship amount paid by the enti ty sponsoring the even t and the
26862586 sponsoring entity sha ll cause the payment to be categorized as a
26872587 scholarship in its books and records.
2688-24. For taxable years beginning on or after January 1, 2016,
2588+23. For taxable years beginning on or after January 1, 2016,
26892589 taxable income shall be increased by any amount of stat e and local
26902590 sales or income taxes deducted under 26 U.S.C ., Section 164 of the
26912591 Internal Revenue Code. If the amount of state and local taxes
26922592 deducted on the federal return is limited, taxable income on the
26932593 state return shall be increased only by the amoun t actually deducted
26942594 after any such limitations are applie d.
2695-25. For taxable years beginning after December 31, 2020, each
2595+24. For taxable years beginning after December 31, 2020, each
26962596 taxpayer shall be allowed a deduction for contributions to accounts
2597+
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2620+23
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2622+
26972623 established pursuant to the Achieving a Better Life Experienc e
26982624 (ABLE) Program as established in Section 4001.1 et seq. of Title 56
26992625 of the Oklahoma Statutes. For any tax year, the deduction provid ed
27002626 for in this paragraph shall not exceed Ten Thousand Dollars
27012627 ($10,000.00) for an individual taxpayer or Twenty Thousand Dollars
27022628 ($20,000.00) for taxpayers filing a joint return . Any amount of
27032629 contribution not deducted by the taxpayer in the tax year for which
27042630 the contribution is made may be carried forward as a deduction from
27052631 income for up to five (5) tax years. Deductions may be taken for
2706-
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27322632 contributions made during the tax year an d through April 15 of the
2733-succeeding tax year, or through the due date of a taxpayer’s state
2633+succeeding tax year, or through the due date of a taxpayer's state
27342634 income tax return excluding extensions, whichever is later .
27352635 Provided, a deduction for the same contri bution may not be taken in
27362636 more than one (1) tax year.
27372637 F. 1. For taxable years beginning after December 31, 2004, a
27382638 deduction from the Oklahoma adjusted gross income of any individual
27392639 taxpayer shall be allowed for qualifying gains receiving capital
27402640 treatment that are included in the federal adjusted gross income o f
27412641 such individual taxpayer during the taxable year.
27422642 2. As used in this subsection:
2743-a. “qualifying gains receiving capital treatment” means
2643+a. "qualifying gains receiving capital treatment " means
27442644 the amount of net capital gains, as defined in Section
27452645 1222(11) of the Internal Revenue Code, included in an
2746-individual taxpayer’s federal income tax return that
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2671+
2672+individual taxpayer's federal income tax return that
27472673 result from:
27482674 (1) the sale of real property or tangible personal
27492675 property located within Oklahoma that has been
27502676 directly or indirectly owned by the in dividual
27512677 taxpayer for a holding period of at least five
27522678 (5) years prior to the date of the transaction
27532679 from which such net capital gains arise,
27542680 (2) the sale of stock or the sale of a direct or
27552681 indirect ownership interest in an Oklahoma
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2781-
27822682 company, limited lia bility company, or
27832683 partnership where such stock or ownership
27842684 interest has been directly or indirectly owned by
27852685 the individual taxpayer f or a holding period of
27862686 at least two (2) years prior to the date of the
27872687 transaction from which the net capital gains
27882688 arise, or
27892689 (3) the sale of real property, tangible personal
2790-property, or intangible personal property located
2690+property or intangible personal property located
27912691 within Oklahoma as part of the s ale of all or
27922692 substantially all of the assets of an Oklahoma
27932693 company, limited liability company, or
2794-partnership, or an Oklahoma proprietorshi p
2694+partnership or an Ok lahoma proprietorship
27952695 business enterprise where such property has been
2696+
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27962722 directly or indirectly owned by such entity or
27972723 business enterprise or owned by the owners of
27982724 such entity or business enterprise for a period
27992725 of at least two (2) years prior to the date of
28002726 the transaction from which the net capital gains
28012727 arise,
2802-b. “holding period” means an uninterrupted period of
2728+b. "holding period" means an uninterrupted period of
28032729 time. The holding period shall include any additional
28042730 period when the property was held by another
28052731 individual or entity, if such additional per iod is
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2832-included in the taxpayer’s holding period for the
2732+included in the taxpayer's holding period for the
28332733 asset pursuant to the Internal Revenue Code,
2834-c. “Oklahoma company,” company”, “limited liability
2835-company,” company”, or “partnership” means an entity
2836-whose primary headquarters have been located in
2837-Oklahoma for at least three ( 3) uninterrupted years
2838-prior to the date of the transaction from wh ich the
2839-net capital gains arise,
2840-d. “direct” means the individual taxpayer directly owns
2734+c. "Oklahoma company," "limited liability company," or
2735+"partnership" means an entity whose primary
2736+headquarters have been located in Oklahoma for at
2737+least three (3) uninterrupted years prior to the date
2738+of the transaction from which the net capital gains
2739+arise,
2740+d. "direct" means the individual taxpayer directly owns
28412741 the asset,
2842-e. “indirect” means the individual taxpayer owns an
2742+e. "indirect" means the individual ta xpayer owns an
28432743 interest in a pass-through entity (or chain of pass-
28442744 through entities) that sells the asset that gives rise
28452745 to the qualifying gains receiving capital treatment.
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28462772 (1) With respect to sales of real property or
28472773 tangible personal property located within
28482774 Oklahoma, the deduction described in this
28492775 subsection shall not apply unless the pass-
28502776 through entity that makes the sale has held the
28512777 property for not less than five (5) u ninterrupted
28522778 years prior to the date of the transaction that
28532779 created the capital gain, and each pass-through
28542780 entity included in the chain of ownership has
28552781 been a member, partner, or sh areholder of the
2856-
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28822782 pass-through entity in the tier immediately below
28832783 it for an uninterrupted period of not less than
28842784 five (5) years.
28852785 (2) With respect to sales of stock or ownership
28862786 interest in or sales of all or substantially all
28872787 of the assets of an Oklahoma company, limited
2888-liability company, partnership, or Oklahoma
2788+liability company, partnership or Oklahoma
28892789 proprietorship business enterprise, the deduction
28902790 described in this subsection shall not a pply
28912791 unless the pass-through entity that mak es the
28922792 sale has held the stock or ownership interest for
28932793 not less than two (2) uninterrupted years prior
28942794 to the date of the transact ion that created the
28952795 capital gain, and each pass-through entity
2796+
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28962822 included in the chain of ownership has been a
2897-member, partner, or shareholder of the pass-
2823+member, partner or shareholder of the pass-
28982824 through entity in the tier immed iately below it
28992825 for an uninterrupted period of not less than two
29002826 (2) years. For purposes of this division,
29012827 uninterrupted ownership prior to July 1, 20 07,
29022828 shall be included in the determination o f the
29032829 required holding period prescribed by this
29042830 division, and
2905-
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2930-
2931-f. “Oklahoma proprietorship business enterprise” means a
2831+f. "Oklahoma proprietorship business enterprise " means a
29322832 business enterprise whose income and expenses have
29332833 been reported on Schedule C or F of an in dividual
2934-taxpayer’s federal income tax return, or any similar
2834+taxpayer's federal income tax retur n, or any similar
29352835 successor schedule published by the Interna l Revenue
29362836 Service and whose primary headquarters have been
29372837 located in Oklahoma for at least three (3)
29382838 uninterrupted years prior to the date of the
29392839 transaction from which the net capital gains ari se.
29402840 G. 1. For purposes of computing its Oklahoma taxable in come
29412841 under this section, the dividends -paid deduction otherwise allow ed
29422842 by federal law in computing net income of a real estate investment
29432843 trust that is subject to federal income tax shall be add ed back in
29442844 computing the tax imposed by this state under this title if the real
29452845 estate investment trust is a captive real estate i nvestment trust.
2846+
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29462872 2. For purposes of computing its Oklahoma taxable income under
29472873 this section, a taxpayer shall add back other wise deductible rents
29482874 and interest expenses paid to a captive real estate investment trust
29492875 that is not subject to the provisions of paragraph 1 of this
29502876 subsection. As used in this subsection:
2951-a. the term “real estate investment trust” or “REIT”
2877+a. the term "real estate investment trust" or "REIT"
29522878 means the meaning ascribed to such term in Section 856
29532879 of the Internal Revenue Code,
2954-
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2979-
2980-b. the term “captive real estate investment trust” means
2880+b. the term "captive real estate investment trust " means
29812881 a real estate investment trust, the shares or
29822882 beneficial interests of which are not regularly traded
29832883 on an established secur ities market and more than
29842884 fifty percent (50%) of the voting power or value of
29852885 the beneficial interests or shares of which are owned
29862886 or controlled, directly or indirectly, or
29872887 constructively, by a single entity th at is:
29882888 (1) treated as an association taxable as a
29892889 corporation under the Int ernal Revenue Code, and
29902890 (2) not exempt from federal income tax pursuant to
29912891 the provisions of Section 501(a) of the Internal
29922892 Revenue Code.
29932893 The term shall not include a real estate in vestment
29942894 trust that is intended to be regula rly traded on an
29952895 established securities market, and that sati sfies the
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29962922 requirements of Section 856(a)(5) and (6) of the U.S.
29972923 Internal Revenue Code by reason of Section 856(h)(2)
29982924 of the Internal Revenue Code,
2999-c. the term “association taxable as a corporation ” shall
2925+c. the term "association taxable as a corporati on" shall
30002926 not include the follow ing entities:
30012927 (1) any real estate investment trust as defined in
30022928 paragraph a of this subsec tion other than a
3003-“captive real estate investment trust”, or
3004-
3005-Req. No. 2090 Page 61 1
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3029-
2929+"captive real estate investment trust", or
30302930 (2) any qualified real estate investment trust
30312931 subsidiary under Section 856(i) of the Internal
30322932 Revenue Code, other than a qualified RE IT
3033-subsidiary of a “captive captive real estate
3034-investment trust”, or trust,
2933+subsidiary of a "captive real estate investment
2934+trust", or
30352935 (3) any Listed Australian Property Trust (meaning an
3036-Australian unit trust registered as a “Managed
3037-Investment Scheme” under the Australian
2936+Australian unit trust registered as a "Managed
2937+Investment Scheme" under the Australian
30382938 Corporations Act in whic h the principal class of
30392939 units is listed on a recognized stock exchange in
30402940 Australia and is regularly traded on an
30412941 established securities market), or an entity
30422942 organized as a trust, provided that a Listed
30432943 Australian Property Trust owns or controls,
30442944 directly or indirectly, seventy -five percent
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30452971 (75%) or more of the voting power or value of the
30462972 beneficial interests or shares of such trust, or
30472973 (4) any Qualified Foreign Entity, meaning a
30482974 corporation, trust, association or partnership
30492975 organized outside the laws o f the United States
30502976 and which satisfies the following criteria:
30512977 (a) at least seventy-five percent (75%) of the
3052-entity’s total asset value at the close of
2978+entity's total asset value at the close of
30532979 its taxable year is represe nted by real
3054-
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30802980 estate assets, as defined in Section
30812981 856(c)(5)(B) of the Inter nal Revenue Code,
30822982 thereby including shares or certificates of
30832983 beneficial interest in an y real estate
30842984 investment trust, cash and cash equivalents,
30852985 and U.S. Government securities,
30862986 (b) the entity receives a dividend-paid
30872987 deduction comparable to Section 561 of the
30882988 Internal Revenue Code, or is exempt from
30892989 entity level tax,
30902990 (c) the entity is required to distribute at
30912991 least eighty-five percent (85%) of its
30922992 taxable income, as computed in the
30932993 jurisdiction in which it is organized, to
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30943020 the holders of its shares or cer tificates of
30953021 beneficial interest on an annual basis,
30963022 (d) not more than ten percent ( 10%) of the
30973023 voting power or value in such entity is held
30983024 directly or indirectly or constructively by
30993025 a single entity or individual, or the shares
31003026 or beneficial interests of such entity are
31013027 regularly traded on an established
31023028 securities market, and
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31293029 (e) the entity is organized in a country which
31303030 has a tax treaty with the United States.
31313031 3. For purposes of this subsection, the constructive ownership
31323032 rules of Section 318(a) of th e Internal Revenue Code , as modified by
31333033 Section 856(d)(5) of the Internal Revenue Code, shall apply in
31343034 determining the ownership of stock, assets, or net profits of any
31353035 person.
31363036 4. A real estate investment trust that does not become
31373037 regularly traded on an established securities market within one (1)
31383038 year of the date on which it first b ecomes a real estate i nvestment
31393039 trust shall be deemed not to have been regularly traded on an
31403040 established securities market, retroactive to the date it first
31413041 became a real estate investment trust, and shall file an amended
31423042 return reflecting such retroactiv e designation for any tax year or
31433043 part year occurring during its initial year of status as a real
3044+
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31443070 estate investment trust. For purposes of this subsection, a real
31453071 estate investment trust becomes a real estate investment trust on
31463072 the first day it has both met the requirements o f Section 856 of the
31473073 Internal Revenue Code and has elected to be treated as a real estate
31483074 investment trust pursuant to Section 856(c)(1) of the Internal
31493075 Revenue Code.
3150-SECTION 2. This act shall become effective November 1, 2023.
3151-
3152-59-1-2090 QD 4/10/2023 5:18:00 PM
3076+SECTION 2. This act shall become effective January 1, 2024.
3077+Passed the House of Representatives the 20th day of March, 2023.
3078+
3079+
3080+
3081+
3082+ Presiding Officer of the House
3083+ of Representatives
3084+
3085+
3086+
3087+Passed the Senate the ___ day of __________, 2023.
3088+
3089+
3090+
3091+
3092+ Presiding Officer of the Senate
3093+
3094+