OK
Oklahoma House Bill HB2101

Oklahoma 2023 Regular Session

Oklahoma House Bill HB2101 Compare Versions

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2828 STATE OF OKLAHOMA
2929
3030 1st Session of the 59th Legislature (2023)
3131
3232 HOUSE BILL 2101 By: Bennett
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3838 AS INTRODUCED
3939
4040 An Act relating to revenue and taxation; amending 68
4141 O.S. 2021, Section 2358, as amended by Section 2,
4242 Chapter 341, O.S.L. 2022 (68 O.S. Supp. 2022, Section
4343 2358), which relates to Oklahoma adjusted gross
4444 income and taxable income; authorizing deductions
4545 related to Section 280E of the Internal Revenue Code
4646 of 1986; and providing an effectiv e date.
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5454 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
5555 SECTION 1. AMENDATORY 68 O.S. 2021, Section 23 58, as
5656 amended by Section 2, Chapter 341, O.S.L. 2022 (68 O.S. Supp. 2022,
5757 Section 2358), is amended to read as follows:
5858 Section 2358. For all tax years beginning after December 31,
5959 1981, taxable income and adjusted gross income shall be adjusted to
6060 arrive at Oklahoma taxable income and Okla homa adjusted gross income
6161 as required by this section.
6262 A. The taxable income of any taxpa yer shall be adjusted to
6363 arrive at Oklahoma taxable inco me for corporations and Oklahoma
6464 adjusted gross income for individuals, as foll ows:
6565
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9191 1. There shall be added interest income on obligations of any
9292 state or political subdivision thereto which is not o therwise
9393 exempted pursuant to other laws of this state, to the extent that
9494 such interest is not included in taxable income and adjusted gross
9595 income.
9696 2. There shall be deducted amounts included in suc h income that
9797 the state is prohibited from taxing becau se of the provisions of the
9898 Federal Constitution, the St ate Constitution, federal laws or laws
9999 of Oklahoma.
100100 3. The amount of any feder al net operating loss deductio n shall
101101 be adjusted as follows:
102102 a. For carryovers and carrybacks to taxable years
103103 beginning before January 1, 1981, the amount of any
104104 net operating loss deduction allowed to a taxpayer for
105105 federal income tax purposes shall be reduced to an
106106 amount which is the same portion thereof as the lo ss
107107 from sources within this state, as determined pursuant
108108 to this section and Section 2362 of this title, for
109109 the taxable year in which such loss is sustained is of
110110 the total loss for such yea r;
111111 b. For carryovers and carry backs to taxable years
112112 beginning after December 31, 1980, the amount of any
113113 net operating loss deduction allowed for the taxable
114114 year shall be an amount equal to the aggregate of the
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141141 Oklahoma net operating loss carryovers and carrybacks
142142 to such year. Oklahoma net operating losses shall b e
143143 separately determined by reference to Section 172 of
144144 the Internal Revenue Code, 26 U.S.C., Section 172, as
145145 modified by the Oklahoma Income Tax Act, Section 2351
146146 et seq. of this title, and sha ll be allowed without
147147 regard to the existence of a federal net operating
148148 loss. For tax years beginning after December 31 ,
149149 2000, and ending before January 1, 2008, the years to
150150 which such losses may be carried shall be determined
151151 solely by reference to Sec tion 172 of the Internal
152152 Revenue Code, 26 U.S.C., Section 172, with the
153153 exception that the terms "net operating loss" and
154154 "taxable income" shall be replaced with "Oklahoma net
155155 operating loss" and "Oklahoma taxable income ". For
156156 tax years beginning after De cember 31, 2007, and
157157 ending before January 1, 2009, years to wh ich such
158158 losses may be carried back shall be limited to tw o (2)
159159 years. For tax years beginning after December 31,
160160 2008, the years to which such losses may be carried
161161 back shall be determined s olely by reference to
162162 Section 172 of the Internal Revenue Code, 26 U.S.C.,
163163 Section 172, with the exception that the terms "net
164164 operating loss" and "taxable income" shall be replaced
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191191 with "Oklahoma net operating loss " and "Oklahoma
192192 taxable income".
193193 4. Items of the following nature shal l be allocated as
194194 indicated. Allowable deductions attributable to items separately
195195 allocable in subparagraphs a, b and c of this paragraph, whethe r or
196196 not such items of income were actually received, shall be allocated
197197 on the same basis as those items:
198198 a. Income from real and tangible personal property, such
199199 as rents, oil and mining production or royalties, and
200200 gains or losses from sales of such pro perty, shall be
201201 allocated in accordance with the situs of such
202202 property;
203203 b. Income from intangible personal p roperty, such as
204204 interest, dividends, patent or copyright royalties,
205205 and gains or losses fr om sales of such property, shall
206206 be allocated in accorda nce with the domiciliary situs
207207 of the taxpayer, except that:
208208 (1) where such property has acquired a nonunitar y
209209 business or commercial situ s apart from the
210210 domicile of the taxpayer such income shall be
211211 allocated in accordance with such business or
212212 commercial situs; interest income from
213213 investments held to generate working capital for
214214 a unitary business enterprise shall be included
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241241 in apportionable income; a resident trust or
242242 resident estate shall be tre ated as having a
243243 separate commercial or business situs i nsofar as
244244 undistributed income is concerned, but shall not
245245 be treated as having a separate commercial or
246246 business situs insofar as distrib uted income is
247247 concerned,
248248 (2) for taxable years beginning afte r December 31,
249249 2003, capital or ordinary gains or losses from
250250 the sale of an ownership interest in a publicly
251251 traded partnership, as de fined by Section 7704(b)
252252 of the Internal Revenue Code, sha ll be allocated
253253 to this state in the ratio of the original cost
254254 of such partnership's tangible property in this
255255 state to the original cost of such partnership 's
256256 tangible property everywhere, as dete rmined at
257257 the time of the sale ; if more than fifty percent
258258 (50%) of the value of the partnership's assets
259259 consists of intangible assets, capital or
260260 ordinary gains or losses from the sale of an
261261 ownership interest in the partnership shall be
262262 allocated to this state in accordance with the
263263 sales factor of the partner ship for its first
264264 full tax period immediately preceding its ta x
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291291 period during which the own ership interest in the
292292 partnership was sold; the provisions of this
293293 division shall only apply if the capit al or
294294 ordinary gains or losses from the sale of an
295295 ownership interest in a partnership do not
296296 constitute qualifying gain receiving capital
297297 treatment as defined in subparagraph a of
298298 paragraph 2 of subsection F of this section,
299299 (3) income from such property which is required to be
300300 allocated pursuant to the provisi ons of paragraph
301301 5 of this subsection shall be allocated as here in
302302 provided;
303303 c. Net income or loss from a business activ ity which is
304304 not a part of business carried on within or without
305305 the state of a unitary character shall be se parately
306306 allocated to the state in which such activity is
307307 conducted;
308308 d. In the case of a manufacturing or processing
309309 enterprise the business of whi ch in Oklahoma consists
310310 solely of marketing its products by:
311311 (1) sales having a situs without this state, shi pped
312312 directly to a point from without the state to a
313313 purchaser within the state, commonly known as
314314 interstate sales,
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341341 (2) sales of the product store d in public warehouses
342342 within the state pursuant to "in transit"
343343 tariffs, as prescribed and allowed by the
344344 Interstate Commerce Commi ssion, to a purchaser
345345 within the state,
346346 (3) sales of the product stored in public warehouses
347347 within the state where the ship ment to such
348348 warehouses is not covered by "in transit"
349349 tariffs, as prescribed a nd allowed by the
350350 Interstate Commerce Commission, to a purchaser
351351 within or without the state,
352352 the Oklahoma net incom e shall, at the option of the
353353 taxpayer, be that portion of th e total net income of
354354 the taxpayer for federal income tax purposes derived
355355 from the manufacture and/or proces sing and sales
356356 everywhere as determined by the ratio of the sales
357357 defined in this sect ion made to the purchaser within
358358 the state to the total sales everywhere. The term
359359 "public warehouse" as used in this subparagraph means
360360 a licensed public warehouse, the principal business of
361361 which is warehousing merchandise for the public;
362362 e. In the case of insurance companies, Oklahoma taxable
363363 income shall be taxable income of the taxpayer for
364364 federal tax purposes, as adjusted for the adjus tments
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391391 provided pursuant to th e provisions of paragraphs 1
392392 and 2 of this subsection, apportioned as follows:
393393 (1) except as otherwise provided by divis ion (2) of
394394 this subparagraph, taxable income of an insurance
395395 company for a taxable year shall be apportion ed
396396 to this state by multiplyin g such income by a
397397 fraction, the numerator of which is the direct
398398 premiums written for insurance on property or
399399 risks in this state, and the denomi nator of which
400400 is the direct premiums written for insurance on
401401 property or risks everywhere. For purposes of
402402 this subsection, the term "direct premiums
403403 written" means the total amount of direc t
404404 premiums written, assessments and annuity
405405 considerations as reported for the taxable year
406406 on the annual statement filed by the company with
407407 the Insurance Commissioner in the form approved
408408 by the National Association of Insurance
409409 Commissioners, or such ot her form as may be
410410 prescribed in lieu thereof,
411411 (2) if the principal source of premiums written by an
412412 insurance company consists of premiums fo r
413413 reinsurance accepted by it, the taxable income of
414414 such company shall be apportioned to this state
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441441 by multiplying such income by a fraction, the
442442 numerator of which is the sum o f (a) direct
443443 premiums written for insurance on property or
444444 risks in this state, plus (b) premiums written
445445 for reinsurance accepted in respect of property
446446 or risks in this state, and the denomi nator of
447447 which is the sum of (c) dire ct premiums written
448448 for insurance on property or risks everywhere,
449449 plus (d) premiums written for reinsuran ce
450450 accepted in respect of prop erty or risks
451451 everywhere. For purposes of this paragraph,
452452 premiums written for rei nsurance accepted in
453453 respect of property or risks in this state,
454454 whether or not otherwise determinable, may at the
455455 election of the company be d etermined on the
456456 basis of the proportion which premiums written
457457 for insurance accepted from companies
458458 commercially domiciled in Oklahoma bears to
459459 premiums written for reinsuranc e accepted from
460460 all sources, or alternatively in the proportion
461461 which the sum of the direct premiums written for
462462 insurance on property or risks in this state by
463463 each ceding company from which reinsurance is
464464 accepted bears to the sum of the total direct
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491491 premiums written by each such ceding company for
492492 the taxable year.
493493 5. The net income or loss remaining after th e separate
494494 allocation in paragraph 4 of this subsection, being that which is
495495 derived from a unitary business enterprise, shall be apportioned to
496496 this state on the basis of the arithmetical average of three factors
497497 consisting of property, payroll and sales or gross revenue
498498 enumerated as subparagraphs a, b and c of this paragraph. Net
499499 income or loss as used in this paragraph includes that derived from
500500 patent or copyright royalties, purchase discounts, and interest on
501501 accounts receivable relating to or arisin g from a business activity,
502502 the income from which is apportioned pursuant to this subsection,
503503 including the sale or othe r disposition of such prope rty and any
504504 other property used in the unitary enterprise . Deductions used in
505505 computing such net income or l oss shall not include taxes based on
506506 or measured by income. Provided, for corpora tions whose property
507507 for purposes of the tax imposed by Section 2 355 of this title has an
508508 initial investment cost equaling or exceeding Two Hund red Million
509509 Dollars ($200,000,000.00) and such investment is made on or after
510510 July 1, 1997, or for corporations which expand their property or
511511 facilities in this state and such expansion has an investment cost
512512 equaling or exceeding Two Hundred Million Doll ars ($200,000,000.00)
513513 over a period not to exceed three (3) years, and such expansion is
514514 commenced on or after J anuary 1, 2000, the three factors shal l be
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541541 apportioned with prope rty and payroll, each comprising twenty -five
542542 percent (25%) of the apportionment factor and sales comprising f ifty
543543 percent (50%) of the apportionment factor. The apportionment
544544 factors shall be computed as follows:
545545 a. The property factor is a fraction, the numerator of
546546 which is the average value of the taxpayer 's real and
547547 tangible personal property owned or rented and used in
548548 this state during the tax period and the denominator
549549 of which is the average value of all the taxpayer 's
550550 real and tangible personal pr operty everywhere owned
551551 or rented and used during the tax period.
552552 (1) Property, the income from which is sepa rately
553553 allocated in paragraph 4 of this subsection,
554554 shall not be included in determining this
555555 fraction. The numerator of the fraction shall
556556 include a portion of the investment in
557557 transportation and other equipment having no
558558 fixed situs, such as rolling st ock, buses, trucks
559559 and trailers, including machinery and equipment
560560 carried thereon, airplanes, salespersons'
561561 automobiles and other similar equipmen t, in the
562562 proportion that miles traveled in Oklahoma by
563563 such equipment bears to total miles traveled,
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590590 (2) Property owned by the taxpayer is valued at its
591591 original cost. Property rented by the taxpayer
592592 is valued at eight times th e net annual rental
593593 rate. Net annual rental rate is the annual
594594 rental rate paid by the taxpayer, less any annual
595595 rental rate received b y the taxpayer from
596596 subrentals,
597597 (3) The average value of property shall be determined
598598 by averaging the values at the beg inning and
599599 ending of the tax period but the Oklahoma Tax
600600 Commission may require the averaging of monthly
601601 values during the tax period if reasonably
602602 required to reflect properly the average value of
603603 the taxpayer's property;
604604 b. The payroll factor is a fracti on, the numerator of
605605 which is the total compensation for services rendered
606606 in the state during the tax per iod, and the
607607 denominator of which is the total compensation for
608608 services rendered everywhere during the tax period.
609609 "Compensation", as used in this subsection means those
610610 paid-for services to the extent related to the unitary
611611 business but does not include officers' salaries,
612612 wages and other compensation.
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639639 (1) In the case of a transportation enterprise, the
640640 numerator of the fraction shall include a porti on
641641 of such expenditure in c onnection with employees
642642 operating equipment over a fixed route, such as
643643 railroad employees, airline pilots, or bus
644644 drivers, in this state only a part of the time,
645645 in the proportion that mileage traveled in
646646 Oklahoma bears to tota l mileage traveled by such
647647 employees,
648648 (2) In any case the numerator of the fraction shall
649649 include a portion of such expenditures in
650650 connection with itinerant employees, such as
651651 traveling salespersons, in this state only a part
652652 of the time, in the proportio n that time spent in
653653 Oklahoma bears to total time spent in furtherance
654654 of the enterprise by such employees ;
655655 c. The sales factor is a fra ction, the numerator of which
656656 is the total sales or gross revenue of the taxpayer in
657657 this state during the tax period, a nd the denominator
658658 of which is the total sales or gross revenue of the
659659 taxpayer everywhere during the tax period. "Sales",
660660 as used in this subsection does not include sales or
661661 gross revenue which are separately allocated in
662662 paragraph 4 of this subsection.
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689689 (1) Sales of tangible pers onal property have a situs
690690 in this state if the property is delivered or
691691 shipped to a purchaser other than th e United
692692 States government, within this state regardless
693693 of the FOB point or other conditions of the sale;
694694 or the property is shipped from an offic e, store,
695695 warehouse, factory or other place of storage in
696696 this state and (a) th e purchaser is the United
697697 States government or (b) the taxpayer is not
698698 doing business in the state of the destination of
699699 the shipment.
700700 (2) In the case of a railroad or interurba n railway
701701 enterprise, the numerator of the fraction shall
702702 not be less than the allocation of revenues to
703703 this state as shown in its annual report to the
704704 Corporation Commission.
705705 (3) In the case of an airline, truck or bus
706706 enterprise or freight car, tank car , refrigerator
707707 car or other railroad equipment enterprise, the
708708 numerator of the fraction shall include a port ion
709709 of revenue from interstate transporta tion in the
710710 proportion that interstate mileage traveled in
711711 Oklahoma bears to to tal interstate mileage
712712 traveled.
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739739 (4) In the case of an oil, gasoline or gas pipeline
740740 enterprise, the numer ator of the fraction shall
741741 be either the total of traffic units of the
742742 enterprise within Oklahoma or the revenue
743743 allocated to Oklahoma based upon mile s moved, at
744744 the option of the taxpayer, and the denominator
745745 of which shall be the total of traffic units o f
746746 the enterprise or the revenu e of the enterprise
747747 everywhere as appropr iate to the numerator. A
748748 "traffic unit" is hereby defined as the
749749 transportation for a distance of one (1) mile of
750750 one (1) barrel of oil, one (1) gallon of gasoline
751751 or one thousand (1,0 00) cubic feet of natural or
752752 casinghead gas, as the case may be.
753753 (5) In the case of a telephone or telegraph or other
754754 communication enterprise, the nu merator of the
755755 fraction shall include that portion of the
756756 interstate revenue as is allocated pursuant to
757757 the accounting procedures presc ribed by the
758758 Federal Communications Commi ssion; provided that
759759 in respect to each corporation or business entity
760760 required by the Federal Communicati ons Commission
761761 to keep its books and records in accordance with
762762 a uniform system of accounts prescribed by su ch
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789789 Commission, the intrastate net income shall be
790790 determined separately in the manner provided by
791791 such uniform system of accounts and only the
792792 interstate income shall be subject to allocation
793793 pursuant to the provisions of this subsection.
794794 Provided further, that the gross revenue factors
795795 shall be those as are determined pursuant to the
796796 accounting procedures prescribed by th e Federal
797797 Communications Commission.
798798 In any case where the apportionment of the three factors
799799 prescribed in this paragraph attributes to Oklahoma a portion of net
800800 income of the enterprise out of all appropriate proportion to the
801801 property owned and/or busin ess transacted within this state, because
802802 of the fact that one or more of the factors so prescribed are no t
803803 employed to any appreciable extent in furtherance of the enterprise;
804804 or because one or more factors not so prescribed are employed to a
805805 considerable extent in furtherance of t he enterprise; or because of
806806 other reasons, the Tax Commission is empowered to permit, after a
807807 showing by taxpayer that an excessive portion of net in come has been
808808 attributed to Oklahoma, or require, when in its judgment an
809809 insufficient portion of net inco me has been attributed to Oklahoma,
810810 the elimination, substitution, or use of ad ditional factors, or
811811 reduction or increase in the weight of such prescr ibed factors.
812812 Provided, however, that any such variance from such prescribed
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839839 factors which has the effect of increasing the portion of net income
840840 attributable to Oklahoma must not be i nherently arbitrary, and
841841 application of the recomputed final apportionm ent to the net income
842842 of the enterprise must attribute to Oklahoma only a reaso nable
843843 portion thereof.
844844 6. For calendar years 1997 and 1998, the owner of a new or
845845 expanded agricultural c ommodity processing facility i n this state
846846 may exclude from Oklahoma ta xable income, or in the case of an
847847 individual, the Oklahoma adjusted gross inco me, fifteen percent
848848 (15%) of the investment by the owner in the new or expanded
849849 agricultural commodity pro cessing facility. For calendar year 1999,
850850 and all subsequent years, th e percentage, not to exceed fifteen
851851 percent (15%), available to the owner of a new or expanded
852852 agricultural commodity processing facility in this state claiming
853853 the exemption shall be a djusted annually so that the t otal estimated
854854 reduction in tax liability does not exceed One Million Dollars
855855 ($1,000,000.00) annually. The Tax Commission shall promulgate rules
856856 for determining the percentage of the investment which each eligible
857857 taxpayer may exclude. The exclusion provided by this paragraph
858858 shall be taken in the taxable year when the investment is made. In
859859 the event the total reductio n in tax liability authoriz ed by this
860860 paragraph exceeds One Million Dollars ($1,000,000.00) in any
861861 calendar year, the Tax Commission sha ll permit any excess over One
862862 Million Dollars ($1,000,000.00) and shall factor such excess into
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889889 the percentage for subse quent years. Any amount of the exemption
890890 permitted to be excluded pursuant to the provisions of this
891891 paragraph but not used in any year may be carried forward as an
892892 exemption from income pursuant to the provisions of this paragraph
893893 for a period not exceed ing six (6) years following the year in which
894894 the investment was originally made.
895895 For purposes of this par agraph:
896896 a. "Agricultural commodity processing facility" means
897897 building, structures, fixtures and improvements used
898898 or operated primarily for the proce ssing or production
899899 of marketable products from agricultural commodities .
900900 The term shall also mean a dair y operation that
901901 requires a depreciable investment of at least Two
902902 Hundred Fifty Thousand Dollars ($250,000.00) and which
903903 produces milk from dairy cow s. The term does not
904904 include a facility that provides only, and nothing
905905 more than, storage, cleaning, dry ing or transportation
906906 of agricultural commodities, and
907907 b. "Facility" means each part of the facility which is
908908 used in a process primarily for:
909909 (1) the processing of agricultural commodities,
910910 including receiving or storing agricultural
911911 commodities, or the p roduction of milk at a dairy
912912 operation,
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939939 (2) transporting the agricultur al commodities or
940940 product before, during or after the processing,
941941 or
942942 (3) packaging or otherwise preparing the product for
943943 sale or shipment.
944944 7. Despite any provision to the contrary in paragraph 3 of this
945945 subsection, for taxable years beginning after Decem ber 31, 1999, in
946946 the case of a taxpayer which has a farming loss, such farming loss
947947 shall be considered a net operating loss carryback in accordance
948948 with and to the extent of the Intern al Revenue Code, 26 U.S.C .,
949949 Section 172(b)(G). However, the amount of the net operating loss
950950 carryback shall not exceed the lesser of:
951951 a. Sixty Thousand Dollars ($60,000.00), o r
952952 b. the loss properly shown on Schedule F of the Internal
953953 Revenue Service Form 1040 reduced by one-half (1/2) of
954954 the income from all other sources ot her than reflected
955955 on Schedule F.
956956 8. In taxable years beginning after December 31, 1995, all
957957 qualified wages equal to the federal income tax credit set forth in
958958 26 U.S.C.A., Section 45 A, shall be deducted f rom taxable income.
959959 The deduction allowed pursua nt to this paragraph shall only be
960960 permitted for the tax years in which the fed eral tax credit pursuant
961961 to 26 U.S.C.A., Section 45A, is allowed . For purposes of this
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988988 paragraph, "qualified wages" means those wages used to calculate the
989989 federal credit pursu ant to 26 U.S.C.A., Section 45A.
990990 9. In taxable years beginning after December 31, 2005, an
991991 employer that is eligible for and utilizes the Safety Pays OSHA
992992 Consultation Service provided by the Oklahoma Depa rtment of Labor
993993 shall receive an exemption from ta xable income in the amount of One
994994 Thousand Dollars ($1,000.00) for the tax year that the service is
995995 utilized.
996996 10. For taxable years beginning on or after January 1, 2010,
997997 there shall be added to Oklahoma taxable income an amount equal to
998998 the amount of deferred income not included in such taxable income
999999 pursuant to Section 108(i)(1) of the Internal Revenue Cod e of 1986
10001000 as amended by Section 1231 of the American Recovery and Reinvestment
10011001 Act of 2009 (P.L. No . 111-5). There shall be subtracted from
10021002 Oklahoma taxable income an amount equal to the amount of de ferred
10031003 income included in suc h taxable income pursuant t o Section 108(i)(1)
10041004 of the Internal Revenue Code by Section 1231 of the America n
10051005 Recovery and Reinvestment Act of 2009 (P.L. No. 111-5).
10061006 11. For taxable years beginning on or after January 1, 2019,
10071007 there shall be subtracted from Oklahoma taxable income or adjusted
10081008 gross income any item of income or gain, and there shall be added to
10091009 Oklahoma taxable income or adjusted gross income any item of loss or
10101010 deduction that in the absence of an election pursuan t to the
10111011 provisions of the Pa ss-Through Entity Tax Equit y Act of 2019 would
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10381038 be allocated to a member or to an indirect member of an ele cting
10391039 pass-through entity pursuant to Section 2351 et seq. of this titl e,
10401040 if (i) the electing pass-through entity has acc ounted for such item
10411041 in computing its Oklahoma net entit y income or loss pursuant to the
10421042 provisions of the Pass -Through Entity Tax Equi ty Act of 2019, and
10431043 (ii) the total amount of tax attributable to any re sulting Oklahoma
10441044 net entity income has been paid . The Oklahoma Tax Commission shall
10451045 promulgate rules for the reporting of such exclusion to direct and
10461046 indirect members of the electing pass-through entity. As used in
10471047 this paragraph, "electing pass-through entity", "indirect member",
10481048 and "member" shall be defined in the same manner a s prescribed by
10491049 Section 2355.1P-2 of this title. Notwithstanding the application of
10501050 this paragraph, the a djusted tax basis of any ownership interest in
10511051 a pass-through entity for purposes of Section 2351 et seq. of this
10521052 title shall be equal to its adjusted tax basis for federal inco me
10531053 tax purposes.
10541054 12. For taxable years beginning on or after January 1, 2024,
10551055 there shall be allowed a deduction from Oklahoma taxable income
10561056 equal to the amount of any deduction for business expense incurred
10571057 in conducting applicable licensed medical marijuana business
10581058 activity within this state which was disallowed for the same tax
10591059 year pursuant to the provisions of Section 280E of the Interna l
10601060 Revenue Code of 1986, as amended.
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10871087 B. 1. The taxable income of any corporation shall be further
10881088 adjusted to arrive at Oklahoma taxable income, except those
10891089 corporations electing treatment as provided in subchapter S of the
10901090 Internal Revenue Code, 26 U.S.C., Section 1361 et seq., and Section
10911091 2365 of this title, deductions pursuant to the pr ovisions of the
10921092 Accelerated Cost Recovery System as defined and allowed in the
10931093 Economic Recovery Tax Act of 1981, Public Law 97 -34, 26 U.S.C.,
10941094 Section 168, for depreciation of assets place d into service after
10951095 December 31, 1981, shall not be allowed in calc ulating Oklahoma
10961096 taxable income. Such corporations shall be allowed a deduction f or
10971097 depreciation of assets placed into service afte r December 31, 1981,
10981098 in accordance with provisions of th e Internal Revenue Code, 26
10991099 U.S.C., Section 1 et seq., in effect imm ediately prior to the
11001100 enactment of the Accelerated Cost Recovery System . The Oklahoma tax
11011101 basis for all such assets placed into ser vice after December 31,
11021102 1981, calculated in this section shall be retained and utilized for
11031103 all Oklahoma income tax purposes through the final disposition of
11041104 such assets.
11051105 Notwithstanding any other provision s of the Oklahoma Income Tax
11061106 Act, Section 2351 et seq. of this title, or of the Internal Revenue
11071107 Code to the contrary, this subsection shall control calculation of
11081108 depreciation of assets placed into service after December 31, 1981,
11091109 and before January 1, 19 83.
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11361136 For assets placed in service and held by a cor poration in which
11371137 accelerated cost recovery system was p reviously disallowed, an
11381138 adjustment to taxable income is required in the first taxable year
11391139 beginning after December 31, 1982, to reconcile the basis of such
11401140 assets to the basis allowed in the Interna l Revenue Code. The
11411141 purpose of this adjustment is to eq ualize the basis and allowance
11421142 for depreciation accounts between tha t reported to the Internal
11431143 Revenue Service and that reported to Oklahoma.
11441144 2. For tax years beginning on or after January 1, 2009, a nd
11451145 ending on or before December 31, 2009, there shall be added to
11461146 Oklahoma taxable income any amount in excess of One Hundre d Seventy-
11471147 five Thousand Dollars ($175,000.00) which has been deducted as a
11481148 small business expense under Internal Revenue Code, Secti on 179 as
11491149 provided in the American Recovery and Reinvest ment Act of 2009.
11501150 C. 1. For taxable years beginning after December 31, 1987, the
11511151 taxable income of any corporation shall be further adjusted to
11521152 arrive at Oklahoma taxable income for transfers of tec hnology to
11531153 qualified small businesses located in Oklahom a. Such transferor
11541154 corporation shall be allowed an exemption from t axable income of an
11551155 amount equal to the amount of royalty payment received as a re sult
11561156 of such transfer; provided, however, such amo unt shall not exceed
11571157 ten percent (10%) of the amount of gross proceeds received by such
11581158 transferor corporation as a result o f the technology transfer. Such
11591159 exemption shall be allowed for a period not to ex ceed ten (10) years
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11861186 from the date of receipt of th e first royalty payment accruing from
11871187 such transfer. No exemption may be claimed for transfers of
11881188 technology to qualified s mall businesses made prior to January 1,
11891189 1988.
11901190 2. For purposes of this subsection :
11911191 a. "Qualified small business" means an entity, whether
11921192 organized as a corporation, partnership, or
11931193 proprietorship, organized for profit with its
11941194 principal place of business located within this state
11951195 and which meets the following criteria:
11961196 (1) Capitalization of not more than Two Hundred Fifty
11971197 Thousand Dollars ($250,000.00),
11981198 (2) Having at least fifty percent ( 50%) of its
11991199 employees and assets located in Oklahoma at the
12001200 time of the transfer, and
12011201 (3) Not a subsidiary or affiliate of the transferor
12021202 corporation;
12031203 b. "Technology" means a proprietary process, form ula,
12041204 pattern, device or compilation of scientific or
12051205 technical information which is not in the public
12061206 domain;
12071207 c. "Transferor corporation" means a corporation which is
12081208 the exclusive and undisputed owner of t he technology
12091209 at the time the transfer is made; an d
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12361236 d. "Gross proceeds" means the total amount of
12371237 consideration for the transfer of technology, whether
12381238 the consideration is i n money or otherwise.
12391239 D. 1. For taxable years beginning after December 31, 2005 , the
12401240 taxable income of any corporation, estate or trust, shall be further
12411241 adjusted for qualifying gains re ceiving capital treatment . Such
12421242 corporations, estates or trusts sha ll be allowed a deduction from
12431243 Oklahoma taxable income for the amount of qualifyi ng gains receiving
12441244 capital treatment earned by the corporation, estate or trust during
12451245 the taxable year and included in the federal taxable income of such
12461246 corporation, estate or trust.
12471247 2. As used in this subsection:
12481248 a. "qualifying gains receiving capita l treatment" means
12491249 the amount of net capital gains, a s defined in Section
12501250 1222(11) of the Internal Revenue Co de, included in the
12511251 federal income tax return of the corporation, es tate
12521252 or trust that result from:
12531253 (1) the sale of real property or tangible pers onal
12541254 property located within Oklahoma that has been
12551255 directly or indirectly owned by the corporation,
12561256 estate or trust for a holding period of at least
12571257 five (5) years prior to the date of the
12581258 transaction from which such net capital gains
12591259 arise,
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12861286 (2) the sale of stock or on the sale of an ownership
12871287 interest in an Oklahoma company, limited
12881288 liability company, or partner ship where such
12891289 stock or ownership interest has been directly or
12901290 indirectly owned by the corporation, estate or
12911291 trust for a holding period of at least three (3)
12921292 years prior to the date of the transact ion from
12931293 which the net capital gains arise, or
12941294 (3) the sale of real property, tangible personal
12951295 property or intangible perso nal property located
12961296 within Oklahoma as part of the sale of all or
12971297 substantially all of the assets of an Oklahoma
12981298 company, limited liability company, or
12991299 partnership where such property has been directly
13001300 or indirectly owned by such entity owned by the
13011301 owners of such entity, and used in or derived
13021302 from such entity for a period of at least three
13031303 (3) years prior to the date of the transact ion
13041304 from which the net capital gains arise,
13051305 b. "holding period" means an uninterrupted period of
13061306 time. The holding period s hall include any additional
13071307 period when the property was held by another
13081308 individual or entity, if such additional period is
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13351335 included in the taxpayer's holding period for the
13361336 asset pursuant to the Internal Revenue Code,
13371337 c. "Oklahoma company", "limited liability company", or
13381338 "partnership" means an entity whose primary
13391339 headquarters have been located in Oklahoma for at
13401340 least three (3) unin terrupted years prior to the date
13411341 of the transaction fro m which the net capital gains
13421342 arise,
13431343 d. "direct" means the taxpayer directly owns the asset,
13441344 and
13451345 e. "indirect" means the taxpayer owns an in terest in a
13461346 pass-through entity (or chain of pass-through
13471347 entities) that sells the asset that gives rise to the
13481348 qualifying gains receiving capital treatment.
13491349 (1) With respect to sales of real property or
13501350 tangible personal property located within
13511351 Oklahoma, the deduction described in this
13521352 subsection shall not apply u nless the pass-
13531353 through entity that makes the sale has he ld the
13541354 property for not less than five (5) uninterrupted
13551355 years prior to the date of the transaction that
13561356 created the capital gain, and each pass-through
13571357 entity included in the chain of ownership has
13581358 been a member, partner, or shareholder of the
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13851385 pass-through entity in the tier immediately below
13861386 it for an uninterrupted perio d of not less than
13871387 five (5) years.
13881388 (2) With respect to sales of stock or ownership
13891389 interest in or sales of all or substantially all
13901390 of the assets of an Oklahoma company, limited
13911391 liability company, or partnership, the deduction
13921392 described in this subsection shall not apply
13931393 unless the pass-through entity that makes the
13941394 sale has held the stock or ownership interest or
13951395 the assets for not le ss than three (3)
13961396 uninterrupted years prior to the date of the
13971397 transaction that created the capital gain, and
13981398 each pass-through entity included in the chain of
13991399 ownership has been a member, partn er or
14001400 shareholder of the pass-through entity in the
14011401 tier immediately below it for an uninterrupted
14021402 period of not less than three (3) years.
14031403 E. The Oklahoma adjusted gross income of any individual
14041404 taxpayer shall be further adjusted as follows to arrive at Oklahoma
14051405 taxable income:
14061406 1. a. In the case of individuals, the re shall be added or
14071407 deducted, as the case may be, the d ifference necessary
14081408 to allow personal exemptions of One Thousand Dol lars
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14351435 ($1,000.00) in lieu of the personal exemptions allowed
14361436 by the Internal Revenue Code.
14371437 b. There shall be allowed an additional ex emption of One
14381438 Thousand Dollars ($1,000.00) for each tax payer or
14391439 spouse who is blind at the close of the tax year . For
14401440 purposes of this subparagraph, an individual is blind
14411441 only if the central visual acuity of the individual
14421442 does not exceed 20/200 in the better eye with
14431443 correcting lenses, or if the visual acui ty of the
14441444 individual is greater than 20/200, but is accompanied
14451445 by a limitation in the fields of vision such that the
14461446 widest diameter of the visual field subtends an angle
14471447 no greater than twenty (20) degrees.
14481448 c. There shall be allowed an additional exempti on of One
14491449 Thousand Dollars ($1,000.00) for each taxpayer or
14501450 spouse who is sixty-five (65) years of age or older at
14511451 the close of the tax year based upon the filing status
14521452 and federal adjusted gross inc ome of the taxpayer.
14531453 Taxpayers with the following filin g status may claim
14541454 this exemption if the federal adjusted gross inco me
14551455 does not exceed:
14561456 (1) Twenty-five Thousand Dollars ($25,000.00) if
14571457 married and filing jointly;
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14841484 (2) Twelve Thousand Five Hundred Do llars ($12,500.00)
14851485 if married and filing separately;
14861486 (3) Fifteen Thousand Dollars ($15,000.00) if single;
14871487 and
14881488 (4) Nineteen Thousand Dollars ($19,000.00) if a
14891489 qualifying head of household.
14901490 Provided, for taxable years beginning after December
14911491 31, 1999, amounts included in the calculation of
14921492 federal adjusted gross income pursuant to the
14931493 conversion of a traditional individual r etirement
14941494 account to a Roth individual retirement account shall
14951495 be excluded from federal adjusted gross income for
14961496 purposes of the incom e thresholds provided in this
14971497 subparagraph.
14981498 2. a. For taxable years beginning on or before December 31,
14991499 2005, in the case of individuals who use the standard
15001500 deduction in determining taxable income, there shall
15011501 be added or deducted, as the case may be, the
15021502 difference necessary to allow a standard deduction in
15031503 lieu of the standard deduction allowed by the Internal
15041504 Revenue Code, in an amount equal to the larger of
15051505 fifteen percent (15%) of the Oklahoma adjusted gross
15061506 income or One Thousand Dollars ($1,000.00), but not to
15071507 exceed Two Thousand Dollars ($2,000.00), exc ept that
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15341534 in the case of a married individual filing a separate
15351535 return such deduction shall be the larger of fifteen
15361536 percent (15%) of such Oklahoma adjusted gross income
15371537 or Five Hundred Dollars ($500.0 0), but not to exceed
15381538 the maximum amount of One Thousand Dollars
15391539 ($1,000.00).
15401540 b. For taxable years beginning on or aft er January 1,
15411541 2006, and before January 1, 2007, in the case of
15421542 individuals who use the standard deduction in
15431543 determining taxable income, t here shall be added or
15441544 deducted, as the case may be, the difference necessary
15451545 to allow a standard deduction in lieu of the standard
15461546 deduction allowed by the Internal Revenue Code, in an
15471547 amount equal to:
15481548 (1) Three Thousand Dollars ($3,000.00), if the filing
15491549 status is married filing joint, head of household
15501550 or qualifying widow; or
15511551 (2) Two Thousand Dollars ($2,000.00), if the filing
15521552 status is single or married filing separate.
15531553 c. For the taxable year beginning on January 1, 2007, and
15541554 ending December 31, 2007, in the case of individuals
15551555 who use the standard deductio n in determining taxable
15561556 income, there shall be added or de ducted, as the case
15571557 may be, the difference necessary to allow a standard
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15841584 deduction in lieu of the standard deduction allowed by
15851585 the Internal Revenue Code, in an amount equal to:
15861586 (1) Five Thousand Five Hundred Dollars ($5,500.00),
15871587 if the filing status is m arried filing joint or
15881588 qualifying widow; or
15891589 (2) Four Thousand One Hundred Twenty-five Dollars
15901590 ($4,125.00) for a head of household; or
15911591 (3) Two Thousand Seven Hundred Fifty Dollars
15921592 ($2,750.00), if the filing status is single or
15931593 married filing separate.
15941594 d. For the taxable year beginning on January 1, 2008, and
15951595 ending December 31, 2008, in the case o f individuals
15961596 who use the standard deduction in de termining taxable
15971597 income, there shall be added or deduct ed, as the case
15981598 may be, the difference necessary to all ow a standard
15991599 deduction in lieu of the standard deduction allowed by
16001600 the Internal Revenue Code, in an amount equal to:
16011601 (1) Six Thousand Five Hund red Dollars ($6,500.00), if
16021602 the filing status is married filing joint or
16031603 qualifying widow, or
16041604 (2) Four Thousand Eight Hundred Seventy-five Dollars
16051605 ($4,875.00) for a head of household, or
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16321632 (3) Three Thousand Two Hundred Fifty Dollars
16331633 ($3,250.00), if the fili ng status is single or
16341634 married filing separate.
16351635 e. For the taxable year beginning on January 1, 2009, and
16361636 ending December 31, 2009, in the case of individuals
16371637 who use the standard deduction in determining t axable
16381638 income, there shall be added or deducted, a s the case
16391639 may be, the difference necessary to allow a s tandard
16401640 deduction in lieu of the standard deduction allowed by
16411641 the Internal Revenue Code, in an amount equal to:
16421642 (1) Eight Thousand Five Hundred Dolla rs ($8,500.00),
16431643 if the filing status is married fi ling joint or
16441644 qualifying widow, or
16451645 (2) Six Thousand Three Hundred Seventy-five Dollars
16461646 ($6,375.00) for a head of household, or
16471647 (3) Four Thousand Two Hundred Fifty Dollars
16481648 ($4,250.00), if the filing status i s single or
16491649 married filing separate.
16501650 Oklahoma adjusted gross income shall be increased by
16511651 any amounts paid for motor vehicle excise taxes which
16521652 were deducted as allowed by the Internal Revenue Code.
16531653 f. For taxable years beginning on or after January 1,
16541654 2010, and ending on December 31, 2016, in the case of
16551655 individuals who use the standard deduction in
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16821682 determining taxable income, there shall be added or
16831683 deducted, as the case may be, the difference necessary
16841684 to allow a standard deduction equal to the standard
16851685 deduction allowed by the Internal Revenue Code, ba sed
16861686 upon the amount and filing status prescribed by such
16871687 Code for purposes of filing federal individua l income
16881688 tax returns.
16891689 g. For taxable years beginning on or after January 1,
16901690 2017, in the case of individ uals who use the standard
16911691 deduction in determining taxable income, there shall
16921692 be added or deducted, as th e case may be, the
16931693 difference necessary to al low a standard deduction in
16941694 lieu of the standard deduction allowed by the Internal
16951695 Revenue Code, as follo ws:
16961696 (1) Six Thousand Three Hundred Fifty Dollars
16971697 ($6,350.00) for single or married filing
16981698 separately,
16991699 (2) Twelve Thousand Seven Hundred Dollars
17001700 ($12,700.00) for married filing jointly or
17011701 qualifying widower with dependent child, and
17021702 (3) Nine Thousand Three Hundred Fifty Dollars
17031703 ($9,350.00) for head of hous ehold.
17041704 3. a. In the case of resident and part -year resident
17051705 individuals having adjusted gross inc ome from sources
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17321732 both within and without the state, the itemized or
17331733 standard deductions and personal exemptio ns shall be
17341734 reduced to an amount which is the same portion of the
17351735 total thereof as Oklahoma adjusted gross income is of
17361736 adjusted gross income . To the extent itemized
17371737 deductions include allowable moving expense, proration
17381738 of moving expense shall not be req uired or permitted
17391739 but allowable moving expense sh all be fully deductible
17401740 for those taxpayers moving withi n or into Oklahoma and
17411741 no part of moving expense shall be deductible for
17421742 those taxpayers moving without or out of Oklahoma.
17431743 All other itemized or sta ndard deductions and personal
17441744 exemptions shall be subject to proration as provided
17451745 by law.
17461746 b. For taxable years beginning on or after January 1,
17471747 2018, the net amount of itemized deductions allowable
17481748 on an Oklahoma income tax return, subject to the
17491749 provisions of paragraph 24 of this subsection, shall
17501750 not exceed Seventeen Thousand Dollars ($17,000.00) .
17511751 For purposes of this subparagraph, charitable
17521752 contributions and medical expenses deductible for
17531753 federal income tax purposes shall be excluded from the
17541754 amount of Seventeen Thousand Dollars ($17,000.00) as
17551755 specified by this subparagraph.
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17821782 4. A resident individual wi th a physical disability
17831783 constituting a substantial handicap to employment may deduct from
17841784 Oklahoma adjusted gross income such expenditures to modify a motor
17851785 vehicle, home or workplace as are necessar y to compensate for his or
17861786 her handicap. A veteran certified by the Department of Veterans
17871787 Affairs of the federal government as having a service-connected
17881788 disability shall be conclusively presumed to be an individual with a
17891789 physical disability constitutin g a substantial handicap to
17901790 employment. The Tax Commission shall promulgate rules containing a
17911791 list of combinations of common disabilities and modifications which
17921792 may be presumed to qualify for this deduct ion. The Tax Commission
17931793 shall prescribe necessary requirements for verification.
17941794 5. a. Before July 1, 2010, the first One Thousand Five
17951795 Hundred Dollars ($1,500.00) received by any person
17961796 from the United States as salary or compensation in
17971797 any form, other than retirement benefits, as a member
17981798 of any component of the Armed Forces of the United
17991799 States shall be deducted from taxable income.
18001800 b. On or after July 1, 2010, one hundred percent (100%)
18011801 of the income received by any person from the United
18021802 States as salary or compensation in any form, other
18031803 than retirement benefits, as a member of any component
18041804 of the Armed Forces of the United States shall b e
18051805 deducted from taxable income.
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18321832 c. Whenever the filing of a timely income tax return by a
18331833 member of the Armed For ces of the United States is
18341834 made impracticable or impossible of accomplishment by
18351835 reason of:
18361836 (1) absence from the United States, which term
18371837 includes only the states and the District of
18381838 Columbia;
18391839 (2) absence from the State of Oklahoma while on
18401840 active duty; or
18411841 (3) confinement in a hospital within the United
18421842 States for treatment of wounds, injuries or
18431843 disease,
18441844 the time for filing a return and p aying an income tax
18451845 shall be and is hereby extended without incurring
18461846 liability for interest or penalties, to the fift eenth
18471847 day of the third month following the month i n which:
18481848 (a) Such individual shall return to the United
18491849 States if the extension is gran ted pursuant
18501850 to subparagraph a of thi s paragraph, return
18511851 to the State of Oklahoma if the extension is
18521852 granted pursuant to subparagraph b of this
18531853 paragraph or be discharg ed from such
18541854 hospital if the extension is granted
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18811881 pursuant to subparagraph c of this
18821882 paragraph; or
18831883 (b) An executor, administ rator, or conservator
18841884 of the estate of the taxpayer is appointed,
18851885 whichever event occurs the earliest.
18861886 Provided, that the Tax Commis sion may, in its discretion, grant
18871887 any member of the Arm ed Forces of the United State s an extension of
18881888 time for filing of in come tax returns and payment of income tax
18891889 without incurring liabilities for inter est or penalties. Such
18901890 extension may be granted o nly when in the judgment of the Tax
18911891 Commission a good ca use exists therefor and may b e for a period in
18921892 excess of six (6) mon ths. A record of every such extension granted,
18931893 and the reason therefor, shall be kept.
18941894 6. Before July 1, 2010, the salary or any o ther form of
18951895 compensation, received from the United Stat es by a member of any
18961896 component of the Armed Forces of the United St ates, shall be
18971897 deducted from taxable income during the time in which the person is
18981898 detained by the enemy in a conflict, is a prisone r of war or is
18991899 missing in action and not deceased; provi ded, after July 1, 2010,
19001900 all such salary or compensation shall be su bject to the deduction as
19011901 provided pursuant to paragraph 5 of this subsection.
19021902 7. a. An individual taxpayer, whether resident or
19031903 nonresident, may deduct an amount equal to the federal
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19301930 income taxes paid by the taxpay er during the taxable
19311931 year.
19321932 b. Federal taxes as described in subparagraph a of this
19331933 paragraph shall be deductible by any in dividual
19341934 taxpayer, whether resident or nonresident , only to the
19351935 extent they relate to income subject to ta xation
19361936 pursuant to the provisions of the Oklahoma Income Tax
19371937 Act. The maximum amount allowable in the preceding
19381938 paragraph shall be prorated on the ra tio of the
19391939 Oklahoma adjusted gross income to feder al adjusted
19401940 gross income.
19411941 c. For the purpose of this par agraph, "federal income
19421942 taxes paid" shall mean federal income taxes, surtaxes
19431943 imposed on incomes or excess profits taxes, as though
19441944 the taxpayer was on the accrual basis. In determining
19451945 the amount of deduction for federal income taxes for
19461946 tax year 2001, the amount of the deductio n shall not
19471947 be adjusted by the amount of an y accelerated ten
19481948 percent (10%) tax rate bracket credit or advanced
19491949 refund of the credit received during the tax year
19501950 provided pursuant to the federal Economic Growth and
19511951 Tax Relief Reconciliation Act of 2001, P.L . No. 107-
19521952 16, and the advanced refund of su ch credit shall not
19531953 be subject to taxation.
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19801980 d. The provisions of this paragraph sh all apply to all
19811981 taxable years ending after Decemb er 31, 1978, and
19821982 beginning before January 1, 2006.
19831983 8. Retirement benefits not to exceed Five Thousand Five Hundred
19841984 Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five
19851985 Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Thousand
19861986 Dollars ($10,000.00) for the 2006 tax year and all subsequent tax
19871987 years, which are receiv ed by an individual from the civil service of
19881988 the United States, the Oklahoma Public Employees Retirement System,
19891989 the Teachers' Retirement System of Oklahoma, the Oklahoma Law
19901990 Enforcement Retirement System, the Oklahoma Firefighters Pension and
19911991 Retirement System, the Oklahoma Police Pension and Retir ement
19921992 System, the employee retirement systems created by counties pursuant
19931993 to Section 951 et seq. of Title 19 of the Oklahoma Statut es, the
19941994 Uniform Retirement System for Justices and Judge s, the Oklahoma
19951995 Wildlife Conservation Department Retirement Fund, th e Oklahoma
19961996 Employment Security Commission Retirement Plan, or the employee
19971997 retirement systems created by municipalities pursuant to Section 48-
19981998 101 et seq. of Title 11 of the Oklahoma Statu tes shall be exempt
19991999 from taxable income.
20002000 9. In taxable years beginn ing after December 3l, 1984, Social
20012001 Security benefits received by an individual sh all be exempt from
20022002 taxable income, to the extent s uch benefits are included in the
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20292029 federal adjusted gross income pursuant to the provisions of Section
20302030 86 of the Internal Reve nue Code, 26 U.S.C., Section 86.
20312031 10. For taxable years beginning after December 3 1, 1994, lump-
20322032 sum distributions from employer plan s of deferred compensation,
20332033 which are not qualified plan s within the meaning of Section 401(a)
20342034 of the Internal Revenue Code, 26 U.S.C., Section 401(a), and which
20352035 are deposited in and accounted for within a separate bank account or
20362036 brokerage account in a fi nancial institution within this state,
20372037 shall be excluded from taxable income in the same manner as a
20382038 qualifying rollover con tribution to an individual retirement account
20392039 within the meaning of Section 408 of the Internal Revenue Code, 26
20402040 U.S.C., Section 408. Amounts withdrawn from such bank or brokerage
20412041 account, including any earni ngs thereon, shall be included in
20422042 taxable income when withdrawn in the same manner as withdrawals from
20432043 individual retirement acco unts within the meaning of Section 408 of
20442044 the Internal Revenue Code.
20452045 11. In taxable years beginning after December 31, 1995,
20462046 contributions made to and interest received from a medical savings
20472047 account established pursuant to Sections 2621 through 2623 of T itle
20482048 63 of the Oklahoma Statutes shall be exempt f rom taxable income.
20492049 12. For taxable years beginning aft er December 31, 1996, the
20502050 Oklahoma adjusted gross income of any indi vidual taxpayer who is a
20512051 swine or poultry producer may be further adjusted for the deduction
20522052 for depreciation allowed for new constr uction or expansion costs
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20792079 which may be computed using th e same depreciation method elected for
20802080 federal income tax purposes e xcept that the useful life shall be
20812081 seven (7) years for purposes of this paragraph . If depreciation is
20822082 allowed as a deduction in de termining the adjusted gross income of
20832083 an individual, any depreciation calculated and claimed pursuant to
20842084 this section shall in no event be a duplication of any depreciation
20852085 allowed or permitted on the fede ral income tax return of the
20862086 individual.
20872087 13. a. In taxable years beginning before January 1, 2005,
20882088 retirement benefits not to exceed the amounts
20892089 specified in this paragraph, which are received by an
20902090 individual sixty-five (65) years of age or older and
20912091 whose Oklahoma adjusted gross income is Twenty-five
20922092 Thousand Dollars ($25,000.00) or less if the filing
20932093 status is single, head of household, or married filing
20942094 separate, or Fifty Thousand Dollars ($50,000.00) or
20952095 less if the filing status is married filing joint or
20962096 qualifying widow, shall be ex empt from taxable income.
20972097 In taxable years beginning after December 31, 200 4,
20982098 retirement benefits not to exceed the amounts
20992099 specified in this paragraph, which are received by an
21002100 individual whose Oklahoma adjusted gross income is
21012101 less than the qualifying a mount specified in this
21022102 paragraph, shall be exempt from taxable income.
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21292129 b. For purposes of this paragraph, the qualifying amount
21302130 shall be as follows:
21312131 (1) in taxable years beginning after December 31,
21322132 2004, and prior to January 1, 2007, the
21332133 qualifying amount shall be Thirty-seven Thousand
21342134 Five Hundred Dollars ($37,500.00) or less if the
21352135 filing status is single, head of household, or
21362136 married filing separate, or Seventy-five Thousand
21372137 Dollars ($75,000.00) or less if the filing status
21382138 is married filing jointly o r qualifying widow,
21392139 (2) in the taxable year beginning January 1, 2007,
21402140 the qualifying amount shall be Fifty Thousand
21412141 Dollars ($50,000.00) or less if the filing status
21422142 is single, head of household, or married filing
21432143 separate, or One Hundred Thousand Dollars
21442144 ($100,000.00) or less if the filing status is
21452145 married filing jointly or qualifying widow,
21462146 (3) in the taxable year beginning January 1, 2008,
21472147 the qualifying amount shall be Sixty-two Thousand
21482148 Five Hundred Dollars ($62,500.00) or less if the
21492149 filing status is single, head of household, or
21502150 married filing separate, or One Hundred Twenty-
21512151 five Thousand Dollars ($125,000.00) or less if
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21782178 the filing status is married filing jointly or
21792179 qualifying widow,
21802180 (4) in the taxable year beginning January 1, 2009,
21812181 the qualifying amount shall be One Hundred
21822182 Thousand Dollars ($100,000.00) or less if the
21832183 filing status is single, head of household, or
21842184 married filing separate, or Two Hundred Thousand
21852185 Dollars ($200,000.00) or less if the filing
21862186 status is married filing jointly or quali fying
21872187 widow, and
21882188 (5) in the taxable year beginning January 1, 2010,
21892189 and subsequent taxable years, there shall be no
21902190 limitation upon the quali fying amount.
21912191 c. For purposes of this paragraph, "retirement benefits"
21922192 means the total distributions or withdrawals from the
21932193 following:
21942194 (1) an employee pension benefit plan which sati sfies
21952195 the requirements of Section 401 of the Internal
21962196 Revenue Code, 26 U.S.C., Section 401,
21972197 (2) an eligible deferred compensation plan that
21982198 satisfies the requirements of Section 457 of the
21992199 Internal Revenue Code, 26 U.S.C., Section 457,
22002200 (3) an individual retirement account, annuity or
22012201 trust or simplified employee pension that
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22282228 satisfies the requirements of Section 408 of the
22292229 Internal Revenue Code, 26 U.S.C., Section 408,
22302230 (4) an employee annuity subject to the provisions of
22312231 Section 403(a) or (b) of the Inte rnal Revenue
22322232 Code, 26 U.S.C., Section 403(a) or (b),
22332233 (5) United States Retirement Bonds which satisfy the
22342234 requirements of Section 86 of the Internal
22352235 Revenue Code, 26 U.S.C., Section 86, or
22362236 (6) lump-sum distributions from a retirement plan
22372237 which satisfies the requirements of Section
22382238 402(e) of the Internal Revenue Code, 26 U.S.C.,
22392239 Section 402(e).
22402240 d. The amount of the exemption provided by this paragraph
22412241 shall be limited to Five Thousand Five Hundred Dollars
22422242 ($5,500.00) for the 2004 tax year, Seven Thousand Five
22432243 Hundred Dollars ($7,500.00) for the 2005 tax year and
22442244 Ten Thousand Dollars ($10,000.00) for the tax year
22452245 2006 and for all subsequent tax years. Any individual
22462246 who claims the exemption provided for in paragraph 8
22472247 of this subsection shall not be permi tted to claim a
22482248 combined total exemption pursuant to this paragraph
22492249 and paragraph 8 of this subsection in an amount
22502250 exceeding Five Thousand Five Hundred Dollars
22512251 ($5,500.00) for the 2004 tax y ear, Seven Thousand Five
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22782278 Hundred Dollars ($7,500.00) for the 2005 tax year and
22792279 Ten Thousand Dollars ($10,000.00) for the 2006 tax
22802280 year and all subsequent tax years.
22812281 14. In taxable years beginning after December 31, 1999, for an
22822282 individual engaged in production agriculture who has filed a
22832283 Schedule F form with the t axpayer's federal income tax return for
22842284 such taxable year, there shall be excluded f rom taxable income any
22852285 amount which was included as federal taxable income or federal
22862286 adjusted gross income and which consists of the discharge of an
22872287 obligation by a credit or of the taxpayer incurred to finance the
22882288 production of agricultural products.
22892289 15. In taxable years beginning December 31, 2000, an amount
22902290 equal to one hundred percent (100%) of the am ount of any scholarship
22912291 or stipend received from participation in the Oklahoma Police Corps
22922292 Program, as established in Section 2-140.3 of Title 47 of the
22932293 Oklahoma Statutes shall be exempt from taxable income.
22942294 16. a. In taxable years beginning after December 31, 2001,
22952295 and before January 1, 2005, there shall be all owed a
22962296 deduction in the amount of contributions to accounts
22972297 established pursuant to the Oklaho ma College Savings
22982298 Plan Act. The deduction shall equal the amount of
22992299 contributions to accounts, but in no event shall the
23002300 deduction for each contributor exceed T wo Thousand
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23272327 Five Hundred Dollars ($2,500.00) each taxable year for
23282328 each account.
23292329 b. In taxable years beginning after December 31, 2004,
23302330 each taxpayer shall be allowed a deduction for
23312331 contributions to accounts established pursuant to the
23322332 Oklahoma College Savings Plan Act. The maximum annual
23332333 deduction shall equal the amount of contributions to
23342334 all such accounts plus any contributions to such
23352335 accounts by the taxpayer for prior taxable years aft er
23362336 December 31, 2004, which were not deducted, but in no
23372337 event shall the deduction for each tax year exceed Ten
23382338 Thousand Dollars ($10,000.00) for each individua l
23392339 taxpayer or Twenty Thousand Dollars ($20,000.00) for
23402340 taxpayers filing a joint return . Any amount of a
23412341 contribution that is not deducted by the taxpayer in
23422342 the year for which the c ontribution is made may be
23432343 carried forward as a deduction from income for the
23442344 succeeding five (5) years. For taxable years
23452345 beginning after December 31, 2005, deductions may be
23462346 taken for contributions and rollovers made during a
23472347 taxable year and up to Apri l 15 of the succeeding
23482348 year, or the due date of a taxpayer's state income tax
23492349 return, excluding extensions, whichever is later.
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23762376 Provided, a deduction for the same contri bution may
23772377 not be taken for two (2) different taxable years.
23782378 c. In taxable years begi nning after December 31, 2006,
23792379 deductions for contributions made pursuant t o
23802380 subparagraph b of this paragraph shall be limited as
23812381 follows:
23822382 (1) for a taxpayer who qualifi ed for the five-year
23832383 carryforward election and who takes a rollov er or
23842384 nonqualified withdrawal during that period, the
23852385 tax deduction otherwise available pursuant to
23862386 subparagraph b of this paragraph shall be reduced
23872387 by the amount which is equal to the rollo ver or
23882388 nonqualified withdrawal, and
23892389 (2) for a taxpayer who elect s to take a rollover or
23902390 nonqualified withdrawal within the same tax year
23912391 in which a contribution w as made to the
23922392 taxpayer's account, the tax deduction otherwise
23932393 available pursuant to subparag raph b of this
23942394 paragraph shall be reduced by the amount of the
23952395 contribution which is e qual to the rollover or
23962396 nonqualified withdrawal.
23972397 d. If a taxpayer elects to t ake a rollover on a
23982398 contribution for which a deduction has been taken
23992399 pursuant to subparagra ph b of this paragraph within
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24262426 one (1) year of the date of contrib ution, the amount
24272427 of such rollover shall be included in the adjusted
24282428 gross income of the taxpayer i n the taxable year of
24292429 the rollover.
24302430 e. If a taxpayer makes a nonqualified withdrawal of
24312431 contributions for which a deduction was taken pursuant
24322432 to subparagraph b of this paragrap h, such nonqualified
24332433 withdrawal and any earnings thereon shall be included
24342434 in the adjusted gross income of the taxpayer in the
24352435 taxable year of the nonqualified withdrawal .
24362436 f. As used in this paragraph:
24372437 (1) "non-qualified withdrawal " means a withdrawal
24382438 from an Oklahoma College Savings Plan account
24392439 other than one of the following:
24402440 (a) a qualified withdrawal,
24412441 (b) a withdrawal made as a result of the death
24422442 or disability of the designated beneficiary
24432443 of an account,
24442444 (c) a withdrawal that is made on the accou nt of
24452445 a scholarship or the allowance or payment
24462446 described in Section 135(d)(1)(B) or (C) or
24472447 by the Internal Revenue Code, received by
24482448 the designated beneficiary to the ex tent the
24492449 amount of the refund does not exceed the
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24762476 amount of the scholarship, allowance , or
24772477 payment, or
24782478 (d) a rollover or change of designated
24792479 beneficiary as permitted by subsection F of
24802480 Section 3970.7 of Title 70 of Oklahoma
24812481 Statutes, and
24822482 (2) "rollover" means the transfer of funds from the
24832483 Oklahoma College Savings Pla n to any other plan
24842484 under Section 529 of the Internal Revenue Cod e.
24852485 17. For taxable years beginning aft er December 31, 2005,
24862486 retirement benefits received by an individual from any compo nent of
24872487 the Armed Forces of the United States in an amount not to exceed the
24882488 greater of seventy-five percent (75%) of such benefits or Ten
24892489 Thousand Dollars ($10,000.00) shall be exempt from taxable income
24902490 but in no case less than the amount of the exemptio n provided by
24912491 paragraph 13 of this subsection.
24922492 18. For taxable years beginning after Dec ember 31, 2006,
24932493 retirement benefits received by federal civi l service retirees,
24942494 including survivor annuities, paid in l ieu of Social Security
24952495 benefits shall be exempt from taxable income t o the extent such
24962496 benefits are included in the federal adjusted gros s income pursuant
24972497 to the provisions of Section 86 of the Int ernal Revenue Code, 26
24982498 U.S.C., Section 86, according to the following schedule:
24992499
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25252525 a. in the taxable year beginning January 1, 2007 , twenty
25262526 percent (20%) of such bene fits shall be exempt,
25272527 b. in the taxable year beginning January 1, 2008, forty
25282528 percent (40%) of such benefits shall be exempt,
25292529 c. in the taxable year beg inning January 1, 2009, sixty
25302530 percent (60%) of such benefits shall be exempt,
25312531 d. in the taxable year beginning January 1, 2010, eight y
25322532 percent (80%) of such benefits shall be exempt, and
25332533 e. in the taxable year beginning January 1, 2011, and
25342534 subsequent taxable years, one hundred percent (100 %)
25352535 of such benefits shall be exemp t.
25362536 19. a. For taxable years beginning after December 31, 2007, a
25372537 resident individual may deduct up to Ten Thousand
25382538 Dollars ($10,000.00) from Oklahoma adjusted gross
25392539 income if the individu al, or the dependent of the
25402540 individual, while living, donates one or more human
25412541 organs of the individual to another human being for
25422542 human organ transplantation. As used in this
25432543 paragraph, "human organ" means all or part of a liver,
25442544 pancreas, kidney, intes tine, lung, or bone marrow. A
25452545 deduction that is claimed under th is paragraph may be
25462546 claimed in the taxable year in which the human organ
25472547 transplantation occurs.
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25742574 b. An individual may claim this ded uction only once, and
25752575 the deduction may be claimed only for unreimbursed
25762576 expenses that are incurred by the individual and
25772577 related to the organ donation of the individual.
25782578 c. The Oklahoma Tax Commission shall promulgate rules to
25792579 implement the provisions of this paragraph which shall
25802580 contain a specific list of expen ses which may be
25812581 presumed to qualify for the deduction. The Tax
25822582 Commission shall prescribe necessary requirements for
25832583 verification.
25842584 20. For taxable years beginning after December 31, 2009, there
25852585 shall be exempt from taxable income any amount received by the
25862586 beneficiary of the death benefit for an emergency medical technician
25872587 or a registered emergency medical responder provided by Section 1-
25882588 2505.1 of Title 63 of the Oklahoma Statutes.
25892589 21. For taxable years beginning after December 31, 2008,
25902590 taxable income shall be increased by any unemployment compensation
25912591 exempted under Section 85(c) of the Internal Revenue Code, 26
25922592 U.S.C., Section 85(c)(2009).
25932593 22. For taxable years beginning after December 31, 2 008, there
25942594 shall be exempt from taxable income any payment in an amount less
25952595 than Six Hundred Dollars ($600.00) rec eived by a person as an award
25962596 for participation in a competitive liv estock show event. For
25972597 purposes of this paragraph, the payment shall be treated as a
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26242624 scholarship amount paid by the entity sponsoring the event and the
26252625 sponsoring entity shall cause the p ayment to be categor ized as a
26262626 scholarship in its books and records.
26272627 23. For taxable years beginning on or after January 1, 2016,
26282628 taxable income shall be increased by any amount of state and local
26292629 sales or income taxes deducted under 26 U.S.C., Section 164 of the
26302630 Internal Revenue Code. If the amount of state and local taxes
26312631 deducted on the feder al return is limited, taxable income on the
26322632 state return shall be increased only by the amount actually deducted
26332633 after any such limitations are applied.
26342634 24. For taxable years beginning after December 31, 2020, each
26352635 taxpayer shall be allowed a deduction f or contributions to accounts
26362636 established pursuant to the Achieving a Better Life Experience
26372637 (ABLE) Program as established in Section 4001.1 et seq. of Title 56
26382638 of the Oklahoma Statutes. For any tax year, the deduction provid ed
26392639 for in this paragraph shall not exceed Ten Thousand Dollars
26402640 ($10,000.00) for an individual taxpayer or Twenty Thousand Dollars
26412641 ($20,000.00) for taxpayers filing a joint return . Any amount of
26422642 contribution not deducted by the taxpayer in the tax year for which
26432643 the contribution is made may be carried forward as a deduction from
26442644 income for up to five (5) tax years. Deductions may be taken for
26452645 contributions made during the tax year and throug h April 15 of the
26462646 succeeding tax year, or through the due date of a taxpayer's state
26472647 income tax return excluding extensions, whichever is later .
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26742674 Provided, a deduction for the same contribution may not be taken in
26752675 more than one (1) tax year.
26762676 F. 1. For taxable years beginning after December 31, 2004, a
26772677 deduction from the Oklahoma adjusted gross inco me of any individual
26782678 taxpayer shall be allowed for qualifying gains receiving capital
26792679 treatment that are included in the federal adjusted gross income of
26802680 such individual taxpayer during the taxable year.
26812681 2. As used in this subsection:
26822682 a. "qualifying gains receiving capital treatment " means
26832683 the amount of net capital gains, as defined in Section
26842684 1222(11) of the Internal Revenue Code, included in an
26852685 individual taxpayer's federal income tax return that
26862686 result from:
26872687 (1) the sale of real property or tangible personal
26882688 property located within Oklahoma that has bee n
26892689 directly or indirectly owned by the individual
26902690 taxpayer for a holding period of at least five
26912691 (5) years prior to the date of the transaction
26922692 from which such net capital gains arise,
26932693 (2) the sale of stock or the sale of a direct or
26942694 indirect ownership inte rest in an Oklahoma
26952695 company, limited liability company, or
26962696 partnership where such stock or ownership
26972697 interest has been directly or indirectly owned by
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27242724 the individual taxpayer f or a holding period of
27252725 at least two (2) years prior to the date of the
27262726 transaction from which the net capital gains
27272727 arise, or
27282728 (3) the sale of real property, tangible personal
27292729 property or intangible personal property located
27302730 within Oklahoma as part of the s ale of all or
27312731 substantially all of the assets of an Oklahoma
27322732 company, limited liability company, or
27332733 partnership or an Oklahoma proprietorship
27342734 business enterprise where such property has been
27352735 directly or indirectly owned by such entity or
27362736 business enterprise or owned by the owners of
27372737 such entity or business enterprise for a period
27382738 of at least two (2) years prior to the date of
27392739 the transaction from which the net capital gains
27402740 arise,
27412741 b. "holding period" means an uninterrupted period of
27422742 time. The holding period shall include any add itional
27432743 period when the property was held by another
27442744 individual or entity, if such additional period is
27452745 included in the taxpayer's holding period for the
27462746 asset pursuant to the Internal Revenue Code,
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27732773 c. "Oklahoma company," "limited liability company," or
27742774 "partnership" means an entity whose primary
27752775 headquarters have been located in Oklahoma for at
27762776 least three (3) uninterrupted years prior to the date
27772777 of the transaction fr om which the net capital gains
27782778 arise,
27792779 d. "direct" means the individual taxpayer directl y owns
27802780 the asset,
27812781 e. "indirect" means the individual taxpay er owns an
27822782 interest in a pass-through entity (or chain of pass-
27832783 through entities) that sells the asset that giv es rise
27842784 to the qualifying gains receiving capital treatment.
27852785 (1) With respect to sales of real property or
27862786 tangible personal property located with in
27872787 Oklahoma, the deduction described in this
27882788 subsection shall not apply unless the pass-
27892789 through entity that ma kes the sale has held the
27902790 property for not less than five (5) u ninterrupted
27912791 years prior to the date of the transaction that
27922792 created the capital ga in, and each pass-through
27932793 entity included in the chain of ownership has
27942794 been a member, partner, or shareholder of the
27952795 pass-through entity in the tier immediately below
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28222822 it for an uninterrupted period of not less than
28232823 five (5) years.
28242824 (2) With respect to sale s of stock or ownership
28252825 interest in or sales of all or substantially all
28262826 of the assets of an Oklahoma company, limited
28272827 liability company, partnership or Oklahoma
28282828 proprietorship business enterprise, the deduction
28292829 described in this subsection shall not apply
28302830 unless the pass-through entity that makes the
28312831 sale has held the stock or ownership interest for
28322832 not less than two (2) uninterrupted years prior
28332833 to the date of the transact ion that created the
28342834 capital gain, and each pass-through entity
28352835 included in the chai n of ownership has been a
28362836 member, partner or shareholder of the pass-
28372837 through entity in the tier immediately be low it
28382838 for an uninterrupted period of not less than two
28392839 (2) years. For purposes of this division,
28402840 uninterrupted ownership prior to July 1, 2007,
28412841 shall be included in the determination of the
28422842 required holding period prescribed by this
28432843 division, and
28442844 f. "Oklahoma proprietorship business enterprise " means a
28452845 business enterprise whose income and expenses have
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28722872 been reported on Schedule C or F of an indivi dual
28732873 taxpayer's federal income tax return, or any similar
28742874 successor schedule published by the Internal Revenue
28752875 Service and whose primary headquarters have been
28762876 located in Oklahoma for at least three (3)
28772877 uninterrupted years prior to the date of the
28782878 transaction from which the net capital gains arise.
28792879 G. 1. For purposes of computing its Oklahoma taxable income
28802880 under this section, the dividends -paid deduction otherwise allow ed
28812881 by federal law in computing net income of a real estate investment
28822882 trust that is subject to federal income tax shall be added back in
28832883 computing the tax imposed by this state under this title if the real
28842884 estate investment trust is a captive real estate i nvestment trust.
28852885 2. For purposes of computing its Oklahoma taxable income under
28862886 this section, a taxpayer shall add back otherwise deductible rents
28872887 and interest expenses paid to a captive real est ate investment trust
28882888 that is not subject to the provisions of paragraph 1 of this
28892889 subsection. As used in this subsection:
28902890 a. the term "real estate investment trust" or "REIT"
28912891 means the meaning ascribed to such term in Section 856
28922892 of the Internal Revenue Code,
28932893 b. the term "captive real estate investment trust " means
28942894 a real estate investment trust, the shares or
28952895 beneficial interests of which are not regularly traded
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29222922 on an established securities market and more than
29232923 fifty percent (50%) of the voting power o r value of
29242924 the beneficial interests or shares of which are owned
29252925 or controlled, directly or indirectly, or
29262926 constructively, by a single entity that i s:
29272927 (1) treated as an association taxable as a
29282928 corporation under the Internal Revenue Code, and
29292929 (2) not exempt from federal income tax pursuant to
29302930 the provisions of Section 501(a) of the Internal
29312931 Revenue Code.
29322932 The term shall not include a real estate invest ment
29332933 trust that is intended to be regularly traded on an
29342934 established securities market, and that satisfie s the
29352935 requirements of Section 856(a)(5) and (6) of the U.S.
29362936 Internal Revenue Code by reason of Section 856(h)(2)
29372937 of the Internal Revenue Code,
29382938 c. the term "association taxable as a corporation" shall
29392939 not include the following entities:
29402940 (1) any real estate investment trust as defined in
29412941 paragraph a of this subsec tion other than a
29422942 "captive real estate invest ment trust", or
29432943 (2) any qualified real estate inv estment trust
29442944 subsidiary under Section 856(i) of the Internal
29452945 Revenue Code, other than a qualified REI T
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29722972 subsidiary of a "captive real estate investment
29732973 trust", or
29742974 (3) any Listed Australian Property Trust (me aning an
29752975 Australian unit trust registered as a "Managed
29762976 Investment Scheme" under the Australian
29772977 Corporations Act in which the principal class of
29782978 units is listed on a recognized stock exchange in
29792979 Australia and is regularly traded on an
29802980 established securitie s market), or an entity
29812981 organized as a trust, pro vided that a Listed
29822982 Australian Property Trust owns or controls,
29832983 directly or indirectly, seventy -five percent
29842984 (75%) or more of the voting power or value of the
29852985 beneficial interests or shares of such trust, or
29862986 (4) any Qualified Foreign Entity, meaning a
29872987 corporation, trust, association or partnership
29882988 organized outside the laws of the United States
29892989 and which satisfies the following criteria:
29902990 (a) at least seventy-five percent (75%) of the
29912991 entity's total asset value at the close of
29922992 its taxable year is represented by real
29932993 estate assets, as defined in Section
29942994 856(c)(5)(B) of the Internal Revenue Code,
29952995 thereby including shares or certificates of
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30223022 beneficial interest in an y real estate
30233023 investment trust, cash and cash equ ivalents,
30243024 and U.S. Government securities,
30253025 (b) the entity receives a dividend-paid
30263026 deduction comparable to Section 561 of the
30273027 Internal Revenue Code, or is exempt from
30283028 entity level tax,
30293029 (c) the entity is required to distribute at
30303030 least eighty-five percent (85%) of its
30313031 taxable income, as computed in the
30323032 jurisdiction in which it is organized, to
30333033 the holders of its shares or certificates of
30343034 beneficial interest on an annual basis,
30353035 (d) not more than ten percent ( 10%) of the
30363036 voting power or value in such entity is held
30373037 directly or indirectly or constructively by
30383038 a single entity or individual, or the shares
30393039 or beneficial interests of such entity are
30403040 regularly traded on an established
30413041 securities market, and
30423042 (e) the entity is organized in a country which
30433043 has a tax treaty with the United States.
30443044 3. For purposes of this subsection, the constructive ownership
30453045 rules of Section 318(a) of the Internal Revenue Code , as modified by
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30723072 Section 856(d)(5) of the Internal Revenue Code, shall apply in
30733073 determining the ownership of stoc k, assets, or net profits of any
30743074 person.
30753075 4. A real estate investment trust that does not become
30763076 regularly traded on an established securities market within one (1)
30773077 year of the date on which it first b ecomes a real estate i nvestment
30783078 trust shall be deemed n ot to have been regularly traded on an
30793079 established securities market, retroactive to the date it first
30803080 became a real estate investment trust, and shall file an amended
30813081 return reflecting such retroactiv e designation for any tax year or
30823082 part year occurring d uring its initial year of status as a real
30833083 estate investment trust. For purposes of this subsection, a real
30843084 estate investment trust becomes a real estate investment trust on
30853085 the first day it has both met the requirements o f Section 856 of the
30863086 Internal Revenue Code and has elected to be treated as a real estate
30873087 investment trust pursuant to Section 856(c)(1) of the Internal
30883088 SECTION 2. This act shall become effective January 1, 2024.
30893089
30903090 59-1-6177 MAH 12/19/22