| 3 | | - | SENATE FLOOR VERSION - SB405 SFLR Page 1 |
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| 4 | | - | (Bold face denotes Committee Amendments) 1 |
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| 29 | | - | SENATE FLOOR VERSION |
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| 30 | | - | February 8, 2023 |
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| 31 | | - | AS AMENDED |
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| 32 | | - | |
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| 33 | | - | SENATE BILL NO. 405 By: Rader and Bergstrom |
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| 34 | | - | |
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| 35 | | - | |
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| 36 | | - | |
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| 37 | | - | |
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| 38 | | - | |
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| 39 | | - | [ income tax – adjustments - application - |
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| 40 | | - | notification - effective date ] |
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| 3 | + | |
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| 4 | + | Req. No. 156 Page 1 1 |
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| 53 | + | STATE OF OKLAHOMA |
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| 54 | + | |
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| 55 | + | 1st Session of the 59th Legislature (2023) |
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| 56 | + | |
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| 57 | + | SENATE BILL 405 By: Rader |
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| 58 | + | |
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| 59 | + | |
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| 60 | + | |
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| 61 | + | |
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| 62 | + | |
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| 63 | + | AS INTRODUCED |
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| 64 | + | |
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| 65 | + | An Act relating to income tax; amending 68 O.S . 2021, |
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| 66 | + | Section 2358, as last amended by Section 1, Chapter |
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| 67 | + | 377, O.S.L. 2022 (68 O.S. Supp. 2022, Section 2358), |
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| 68 | + | which relates to adjustments to arrive at Oklahoma |
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| 69 | + | taxable income and Oklahoma adjusted gross income; |
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| 70 | + | requiring submission of application to claim |
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| 71 | + | exemption for certain tax years; requ iring the |
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| 72 | + | Oklahoma Department of Commerce to prescr ibe certain |
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| 73 | + | form; providing information requirements; requiring |
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| 74 | + | the Department to make determination of eligibility; |
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| 75 | + | requiring notification upon making determination; |
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| 76 | + | requiring the Department to establish application |
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| 77 | + | deadline; updating statutory language; and providing |
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| 78 | + | an effective date. |
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| 41 | 79 | | |
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| 42 | 80 | | |
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| 43 | 81 | | |
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| 44 | 82 | | |
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| 45 | 83 | | BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA: |
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| 46 | 84 | | SECTION 1. AMENDATORY 68 O.S. 2021, Section 2358, as |
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| 47 | 85 | | last amended by Section 1, Chapter 377, O.S.L. 2022 (68 O.S. Supp. |
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| 48 | 86 | | 2022, Section 2358), is amended to read as follows: |
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| 49 | 87 | | Section 2358. For all tax years beginning after December 31, |
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| 50 | 88 | | 1981, taxable income and adjusted gross incom e shall be adjusted to |
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| 51 | 89 | | arrive at Oklahoma taxable income and Oklahoma adjusted gross income |
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| 52 | 90 | | as required by this section. |
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| 53 | 142 | | A. The taxable income of any taxp ayer shall be adjusted to |
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| 54 | 143 | | arrive at Oklahoma taxable income for corporations and Oklahoma |
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| 55 | 144 | | adjusted gross income for individuals, as fol lows: |
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| 56 | 145 | | 1. There shall be added interest income on obligations of any |
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| 57 | 146 | | state or political subdivision thereto which is not otherwise |
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| 58 | 147 | | exempted pursuant to other laws of this state, to the extent that |
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| 59 | 148 | | such interest is not incl uded in taxable income and adjuste d gross |
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| 60 | 149 | | income. |
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| 88 | 150 | | 2. There shall be deducted amounts included in such income that |
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| 89 | 151 | | the state is prohibited from taxing beca use of the provisions of the |
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| 90 | 152 | | Federal Constitution, the State Constitution, federal laws , or laws |
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| 91 | 153 | | of Oklahoma. |
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| 92 | 154 | | 3. The amount of any fede ral net operating loss deduction shall |
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| 93 | 155 | | be adjusted as follows: |
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| 94 | 156 | | a. For carryovers and carrybacks to taxable years |
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| 95 | 157 | | beginning before January 1, 1981, the amount of any |
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| 96 | 158 | | net operating loss deduction allowed to a taxpayer for |
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| 97 | 159 | | federal income tax purposes shall be reduced to an |
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| 98 | 160 | | amount which is the same portion thereof as the loss |
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| 99 | 161 | | from sources within this state, as determined pursuan t |
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| 100 | 162 | | to this section and Section 2362 of this title, for |
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| 101 | 163 | | the taxable year in which such loss is sustaine d is of |
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| 102 | 164 | | the total loss for such ye ar; and |
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| 103 | 216 | | b. For carryovers and carrybacks to taxable years |
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| 104 | 217 | | beginning after December 31, 1980, the amount of any |
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| 105 | 218 | | net operating loss deduction allowed for the taxable |
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| 106 | 219 | | year shall be an amount equal to the aggregate of the |
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| 107 | 220 | | Oklahoma net operating loss carryovers an d carrybacks |
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| 108 | 221 | | to such year. Oklahoma net operating losses shall b e |
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| 109 | 222 | | separately determined by reference to Section 172 of |
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| 110 | 223 | | the Internal Revenue Code, 26 U.S.C., Section 172, as |
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| 111 | 224 | | modified by the Oklahoma Income Tax Act, Section 2351 |
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| 139 | 225 | | et seq. of this title, and s hall be allowed without |
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| 140 | 226 | | regard to the existence of a federal net operating |
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| 141 | 227 | | loss. For tax years beginning after December 3 1, |
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| 142 | 228 | | 2000, and ending before January 1, 2008, the years to |
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| 143 | 229 | | which such losses may be carried shall be de termined |
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| 144 | 230 | | solely by reference to S ection 172 of the Internal |
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| 145 | 231 | | Revenue Code, 26 U.S.C., Section 172, with the |
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| 146 | 232 | | exception that the terms “net operating loss” and |
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| 147 | 233 | | “taxable income” shall be replaced with “Oklahoma net |
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| 148 | 234 | | operating loss” and “Oklahoma taxable income ”. For |
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| 149 | 235 | | tax years beginning after December 31, 2007, and |
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| 150 | 236 | | ending before January 1, 2009, years to wh ich such |
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| 151 | 237 | | losses may be carried back shall be limited to t wo (2) |
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| 152 | 238 | | years. For tax years beginning after December 31, |
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| 153 | 239 | | 2008, the years to which such losses may be carried |
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| 154 | 291 | | back shall be determined solely by reference to |
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| 155 | 292 | | Section 172 of the Internal Revenue Code, 26 U.S.C., |
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| 156 | 293 | | Section 172, with the exception that the term s “net |
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| 157 | 294 | | operating loss” and “taxable income” shall be replaced |
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| 158 | 295 | | with “Oklahoma net operating loss ” and “Oklahoma |
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| 159 | 296 | | taxable income”. |
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| 160 | 297 | | 4. Items of the following nature shall be allocated as |
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| 161 | 298 | | indicated. Allowable deductions attributable to items separately |
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| 162 | 299 | | allocable in subparagraphs a, b, and c of this paragraph, whether or |
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| 190 | 300 | | not such items of income were actually received, shall be allocated |
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| 191 | 301 | | on the same basis as those items: |
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| 192 | 302 | | a. Income from real and tangible p ersonal property, such |
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| 193 | 303 | | as rents, oil and mining production or royalties, and |
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| 194 | 304 | | gains or losses from sales of such property, shall be |
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| 195 | 305 | | allocated in accordance with the situs of such |
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| 196 | 306 | | property; |
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| 197 | 307 | | b. Income from intangible personal property, such as |
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| 198 | 308 | | interest, dividends, patent or copyright royalties, |
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| 199 | 309 | | and gains or losses f rom sales of such property, shall |
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| 200 | 310 | | be allocated in accordance with the domiciliary situs |
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| 201 | 311 | | of the taxpayer, except that: |
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| 202 | 312 | | (1) where such property has acquired a nonunitary |
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| 203 | 313 | | business or commercial situs a part from the |
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| 204 | 314 | | domicile of the taxpayer such income shall be |
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| 205 | 366 | | allocated in accordance with such business or |
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| 206 | 367 | | commercial situs; interest income from |
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| 207 | 368 | | investments held to generate workin g capital for |
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| 208 | 369 | | a unitary business enterprise shall be included |
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| 209 | 370 | | in apportionable income; a resident trust or |
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| 210 | 371 | | resident estate shall be treated a s having a |
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| 211 | 372 | | separate commercial or business situs insofar as |
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| 212 | 373 | | undistributed income is concerned, but shall not |
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| 213 | 374 | | be treated as having a separate commercial or |
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| 241 | 375 | | business situs insofar as distribute d income is |
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| 242 | 376 | | concerned, |
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| 243 | 377 | | (2) for taxable years beginning after Dece mber 31, |
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| 244 | 378 | | 2003, capital or ordinary gains or losses from |
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| 245 | 379 | | the sale of an ownership interest in a publicly |
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| 246 | 380 | | traded partnership, as defined by Section 7704(b) |
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| 247 | 381 | | of the Internal Revenue Code, shall b e allocated |
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| 248 | 382 | | to this state in the ratio of the original cost |
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| 249 | 383 | | of such partnership’s tangible property in this |
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| 250 | 384 | | state to the original cost of such partnership ’s |
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| 251 | 385 | | tangible property every where, as determined at |
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| 252 | 386 | | the time of the sale; if more than fifty percent |
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| 253 | 387 | | (50%) of the value of the partnership ’s assets |
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| 254 | 388 | | consists of intangibl e assets, capital or |
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| 255 | 389 | | ordinary gains or losses from the sale of an |
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| 256 | 441 | | ownership interest in the pa rtnership shall be |
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| 257 | 442 | | allocated to this state in accordance with the |
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| 258 | 443 | | sales factor of the partnership for its first |
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| 259 | 444 | | full tax period immediately preceding its tax |
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| 260 | 445 | | period during which the ownership interest in the |
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| 261 | 446 | | partnership was sold; the provisions of this |
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| 262 | 447 | | division shall only appl y if the capital or |
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| 263 | 448 | | ordinary gains or losses from the sale of an |
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| 264 | 449 | | ownership interest in a partnership do not |
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| 292 | 450 | | constitute qualifying gain receiv ing capital |
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| 293 | 451 | | treatment as defined in subparagraph a of |
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| 294 | 452 | | paragraph 2 of subsection F of this sect ion, |
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| 295 | 453 | | (3) income from such property which is required to be |
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| 296 | 454 | | allocated pursuant to the provisions o f paragraph |
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| 297 | 455 | | 5 of this subsection shall be allocated as herein |
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| 298 | 456 | | provided; |
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| 299 | 457 | | c. Net income or loss from a business activity which is |
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| 300 | 458 | | not a part of business carried on within or without |
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| 301 | 459 | | the state of a unitary character shall be separately |
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| 302 | 460 | | allocated to the state in which such activity is |
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| 303 | 461 | | conducted; |
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| 304 | 462 | | d. In the case of a manufact uring or processing |
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| 305 | 463 | | enterprise the business of which in Oklahoma consists |
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| 306 | 464 | | solely of marketing its products by: |
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| 307 | 516 | | (1) sales having a situs without this state, shipped |
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| 308 | 517 | | directly to a point from wi thout the state to a |
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| 309 | 518 | | purchaser within the state, commonly known a s |
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| 310 | 519 | | interstate sales, |
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| 311 | 520 | | (2) sales of the product stored in public warehouses |
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| 312 | 521 | | within the state purs uant to “in transit” |
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| 313 | 522 | | tariffs, as prescribed and allowed by the |
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| 314 | 523 | | Interstate Commerce Commission, to a purchaser |
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| 315 | 524 | | within the state, or |
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| 343 | 525 | | (3) sales of the product stored in public warehouses |
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| 344 | 526 | | within the state where the shipment to such |
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| 345 | 527 | | warehouses is not covered by “in transit” |
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| 346 | 528 | | tariffs, as prescribed and allowed by the |
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| 347 | 529 | | Interstate Commerce Commission, to a purc haser |
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| 348 | 530 | | within or without the state, |
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| 349 | 531 | | the Oklahoma net income shall, at the option of the |
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| 350 | 532 | | taxpayer, be that portion of the total net income of |
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| 351 | 533 | | the taxpayer for feder al income tax purpose s derived |
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| 352 | 534 | | from the manufacture and/or processing and sales |
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| 353 | 535 | | everywhere as determined by the ratio of the sales |
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| 354 | 536 | | defined in this section made to the purchaser within |
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| 355 | 537 | | the state to the total sales everywhere. The term |
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| 356 | 538 | | “public warehouse” as used in this subpara graph means |
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| 357 | 590 | | a licensed public warehouse, the principal business of |
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| 358 | 591 | | which is warehousing merchandise for the public; |
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| 359 | 592 | | e. In the case of insuran ce companies, Oklahoma taxable |
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| 360 | 593 | | income shall be taxable income of the taxpayer for |
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| 361 | 594 | | federal tax purposes, as adjusted for the adjustments |
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| 362 | 595 | | provided pursuant to the provisions of paragraphs 1 |
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| 363 | 596 | | and 2 of this subsection, apportioned as follows: |
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| 364 | 597 | | (1) except as otherwise provided by division (2) of |
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| 365 | 598 | | this subparagraph, taxable income of an insurance |
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| 366 | 599 | | company for a taxable year shal l be apportioned |
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| 394 | 600 | | to this state by multiplying such income by a |
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| 395 | 601 | | fraction, the numerator of which is the direct |
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| 396 | 602 | | premiums written for insurance on property or |
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| 397 | 603 | | risks in this state, and the denominator of which |
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| 398 | 604 | | is the direct premiums writte n for insurance on |
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| 399 | 605 | | property or risks everywhere. For purposes of |
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| 400 | 606 | | this subsection, the term “direct premiums |
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| 401 | 607 | | written” means the total amount of direct |
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| 402 | 608 | | premiums written, assessments, and annuity |
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| 403 | 609 | | considerations as reported for the taxable year |
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| 404 | 610 | | on the annual statement filed by the company with |
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| 405 | 611 | | the Insurance Commissioner in the form approved |
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| 406 | 612 | | by the National Association of Insurance |
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| 407 | 664 | | Commissioners, or such other form as m ay be |
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| 408 | 665 | | prescribed in lieu thereof, |
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| 409 | 666 | | (2) if the principal source of premiums written by an |
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| 410 | 667 | | insurance company consists of premiums for |
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| 411 | 668 | | reinsurance accepted by it, the taxable income of |
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| 412 | 669 | | such company shall be apportioned to this state |
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| 413 | 670 | | by multiplying such income by a fraction, the |
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| 414 | 671 | | numerator of which is the sum of (a) direct |
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| 415 | 672 | | premiums written for insurance on property or |
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| 416 | 673 | | risks in this state, plus (b) premiums written |
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| 417 | 674 | | for reinsurance accepted in res pect of property |
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| 445 | 675 | | or risks in this state, and the denominator of |
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| 446 | 676 | | which is the sum of (c) direct premiums written |
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| 447 | 677 | | for insurance on property or risks everywhere, |
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| 448 | 678 | | plus (d) premiums written for reinsurance |
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| 449 | 679 | | accepted in respect of property or risks |
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| 450 | 680 | | everywhere. For purposes of this paragraph, |
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| 451 | 681 | | premiums written for reinsurance accep ted in |
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| 452 | 682 | | respect of property or risks in this state, |
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| 453 | 683 | | whether or not otherwise determinable, may at the |
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| 454 | 684 | | election of the company be determined on the |
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| 455 | 685 | | basis of the proportion which premiums wr itten |
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| 456 | 686 | | for insurance accepted from companies |
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| 457 | 687 | | commercially domiciled in Oklahoma bears to |
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| 458 | 739 | | premiums written for reinsurance accepted from |
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| 459 | 740 | | all sources, or alternativel y in the proportion |
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| 460 | 741 | | which the sum of the direct premiums written for |
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| 461 | 742 | | insurance on property or risks in this state by |
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| 462 | 743 | | each ceding company from which reinsurance is |
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| 463 | 744 | | accepted bears to the sum of the total direct |
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| 464 | 745 | | premiums written by each such ceding company fo r |
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| 465 | 746 | | the taxable year. |
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| 466 | 747 | | 5. The net income or loss remaining after the separate |
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| 467 | 748 | | allocation in paragraph 4 of this subsection, being that which is |
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| 468 | 749 | | derived from a unita ry business enterprise, shall be apportioned to |
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| 496 | 750 | | this state on the basis of the arithmetical av erage of three facto rs |
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| 497 | 751 | | consisting of property, payroll, and sales or gross revenue |
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| 498 | 752 | | enumerated as subparagraphs a, b, and c of this paragraph. Net |
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| 499 | 753 | | income or loss as used in this paragraph includes that derived from |
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| 500 | 754 | | patent or copyright royalties, purchase dis counts, and interest on |
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| 501 | 755 | | accounts receivable relating to or arising from a business activity , |
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| 502 | 756 | | the income from which is apportioned pursuant to this subsection , |
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| 503 | 757 | | including the sale or other disposition of such property and any |
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| 504 | 758 | | other property used in the unita ry enterprise. Dedu ctions used in |
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| 505 | 759 | | computing such net income or loss shall not include taxe s based on |
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| 506 | 760 | | or measured by income. Provided, for corporations whose pro perty |
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| 507 | 761 | | for purposes of the tax imposed by Section 2355 of this title has an |
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| 508 | 762 | | initial investment cost equaling or exc eeding Two Hundred Million |
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| 509 | 814 | | Dollars ($200,000,000.00) and such investmen t is made on or after |
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| 510 | 815 | | July 1, 1997, or for corporations which expand th eir property or |
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| 511 | 816 | | facilities in this state and such expansion has an investment cost |
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| 512 | 817 | | equaling or exceeding Two Hundred Million Dollars ($200,000,000.00) |
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| 513 | 818 | | over a period not to exceed three (3) years, and such expansion is |
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| 514 | 819 | | commenced on or after January 1, 2000, the three factors shall be |
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| 515 | 820 | | apportioned with property and payroll, each comprising twenty -five |
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| 516 | 821 | | percent (25%) of the apportionment factor and sales comprising fifty |
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| 517 | 822 | | percent (50%) of the apportionment factor. The apportionment |
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| 518 | 823 | | factors shall be computed as f ollows: |
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| 546 | 824 | | a. The property factor is a fraction, the numerator of |
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| 547 | 825 | | which is the average value of t he taxpayer’s real and |
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| 548 | 826 | | tangible personal property owned or rented and used in |
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| 549 | 827 | | this state during the tax period and the denominator |
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| 550 | 828 | | of which is the average value o f all the taxpayer’s |
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| 551 | 829 | | real and tangible personal property everywhere owned |
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| 552 | 830 | | or rented and used d uring the tax period. |
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| 553 | 831 | | (1) Property, the income from which is separately |
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| 554 | 832 | | allocated in paragraph 4 of this subsection, |
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| 555 | 833 | | shall not be included in determining this |
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| 556 | 834 | | fraction. The numerator of the fraction shall |
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| 557 | 835 | | include a portion of the investment in |
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| 558 | 836 | | transportation and other equipment having no |
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| 559 | 837 | | fixed situs, such as rolling stock, buses, trucks |
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| 560 | 889 | | and trailers, including machinery and equipment |
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| 561 | 890 | | carried thereon, airplanes, sa lespersons’ |
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| 562 | 891 | | automobiles, and other similar equipment, in the |
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| 563 | 892 | | proportion that miles traveled in Oklahoma by |
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| 564 | 893 | | such equipment bears to total miles traveled, |
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| 565 | 894 | | (2) Property owned by the taxpay er is valued at its |
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| 566 | 895 | | original cost. Property rented by the taxpayer |
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| 567 | 896 | | is valued at eight times the net annual rental |
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| 568 | 897 | | rate. Net annual rental rate is the annual |
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| 569 | 898 | | rental rate paid by the taxpayer, less any annual |
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| 597 | 899 | | rental rate received by the taxpayer from |
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| 598 | 900 | | subrentals, |
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| 599 | 901 | | (3) The average value of property shall be determined |
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| 600 | 902 | | by averaging the values at the beginning and |
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| 601 | 903 | | ending of the tax period , but the Oklahoma Tax |
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| 602 | 904 | | Commission may require the averaging of monthly |
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| 603 | 905 | | values during the tax period if reasonably |
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| 604 | 906 | | required to reflect properly the average value of |
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| 605 | 907 | | the taxpayer’s property; |
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| 606 | 908 | | b. The payroll factor is a fraction, the numerator of |
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| 607 | 909 | | which is the total compensation for services rende red |
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| 608 | 910 | | in the state during the tax period, and the |
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| 609 | 911 | | denominator of which is the total compens ation for |
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| 610 | 912 | | services rendered everywhere during the tax period. |
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| 611 | 964 | | “Compensation”, as used in this subsection means those |
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| 612 | 965 | | paid-for services to the extent related to the un itary |
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| 613 | 966 | | business but does not include officers’ salaries, |
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| 614 | 967 | | wages, and other compensation. |
|---|
| 615 | 968 | | (1) In the case of a transportation enterprise, the |
|---|
| 616 | 969 | | numerator of the fractio n shall include a portion |
|---|
| 617 | 970 | | of such expenditure in connection with employees |
|---|
| 618 | 971 | | operating equipment over a fixed route, such as |
|---|
| 619 | 972 | | railroad employees, airline pilots, or bus |
|---|
| 620 | 973 | | drivers, in this state only a part of the time, |
|---|
| 648 | 974 | | in the proportion that mileage traveled in |
|---|
| 649 | 975 | | Oklahoma bears to total mileage traveled by such |
|---|
| 650 | 976 | | employees, |
|---|
| 651 | 977 | | (2) In any case the numerator of the fraction shall |
|---|
| 652 | 978 | | include a portion of such expenditures in |
|---|
| 653 | 979 | | connection with itinerant e mployees, such as |
|---|
| 654 | 980 | | traveling salespersons, in this state only a part |
|---|
| 655 | 981 | | of the time, in the proportion that time spent in |
|---|
| 656 | 982 | | Oklahoma bears to total time spent in furtherance |
|---|
| 657 | 983 | | of the enterprise by such employees; |
|---|
| 658 | 984 | | c. The sales factor is a fraction, the numerator of which |
|---|
| 659 | 985 | | is the total sales or gross revenue of the taxpayer in |
|---|
| 660 | 986 | | this state during the tax period, and the denominator |
|---|
| 661 | 987 | | of which is the total sales or gross revenue of the |
|---|
| 662 | 1039 | | taxpayer everywhere during the tax period. “Sales”, |
|---|
| 663 | 1040 | | as used in this subsection does not include sales or |
|---|
| 664 | 1041 | | gross revenue which are separately allocated in |
|---|
| 665 | 1042 | | paragraph 4 of this subsection. |
|---|
| 666 | 1043 | | (1) Sales of tangible personal property have a situs |
|---|
| 667 | 1044 | | in this state if the property is delivered or |
|---|
| 668 | 1045 | | shipped to a purchaser other than the United |
|---|
| 669 | 1046 | | States government, within this state regardless |
|---|
| 670 | 1047 | | of the FOB point or other conditions of the sale; |
|---|
| 671 | 1048 | | or the property is shipped from an office, store, |
|---|
| 699 | 1049 | | warehouse, factory, or other place of storage in |
|---|
| 700 | 1050 | | this state and (a) the purchaser is the United |
|---|
| 701 | 1051 | | States government or (b) t he taxpayer is not |
|---|
| 702 | 1052 | | doing business in the state of the destination of |
|---|
| 703 | 1053 | | the shipment. |
|---|
| 704 | 1054 | | (2) In the case of a railroad or interurban railway |
|---|
| 705 | 1055 | | enterprise, the numerator of the f raction shall |
|---|
| 706 | 1056 | | not be less than the allocation of revenues to |
|---|
| 707 | 1057 | | this state as shown in its annual report to the |
|---|
| 708 | 1058 | | Corporation Commission. |
|---|
| 709 | 1059 | | (3) In the case of an airline , truck, or bus |
|---|
| 710 | 1060 | | enterprise or freight car, tank car, refrigerator |
|---|
| 711 | 1061 | | car, or other railroad equipme nt enterprise, the |
|---|
| 712 | 1062 | | numerator of the fraction shall include a portion |
|---|
| 713 | 1114 | | of revenue from interstate transportation in the |
|---|
| 714 | 1115 | | proportion that interstate mileage traveled in |
|---|
| 715 | 1116 | | Oklahoma bears to total interstate mileage |
|---|
| 716 | 1117 | | traveled. |
|---|
| 717 | 1118 | | (4) In the case of an oil, gasoline or gas pipeline |
|---|
| 718 | 1119 | | enterprise, the numerator of the fraction shall |
|---|
| 719 | 1120 | | be either the total of traffic units of the |
|---|
| 720 | 1121 | | enterprise within Oklahoma or the revenue |
|---|
| 721 | 1122 | | allocated to Oklahoma based upon miles moved, at |
|---|
| 722 | 1123 | | the option of the taxpayer, and the denominator |
|---|
| 750 | 1124 | | of which shall be the total of traffic units of |
|---|
| 751 | 1125 | | the enterprise or the revenue of the enterprise |
|---|
| 752 | 1126 | | everywhere as appropriate to the numerator. A |
|---|
| 753 | 1127 | | “traffic unit” is hereby defined as the |
|---|
| 754 | 1128 | | transportation for a distance of one (1) mile of |
|---|
| 755 | 1129 | | one (1) barrel of oil, one (1) gall on of |
|---|
| 756 | 1130 | | gasoline, or one thousand (1,000) cubic feet of |
|---|
| 757 | 1131 | | natural or casinghead gas, as the case may be. |
|---|
| 758 | 1132 | | (5) In the case of a telephone or telegraph or other |
|---|
| 759 | 1133 | | communication enterprise, the numerator of the |
|---|
| 760 | 1134 | | fraction shall include that portion of the |
|---|
| 761 | 1135 | | interstate revenue as is allocated pursuant to |
|---|
| 762 | 1136 | | the accounting procedures prescribed by the |
|---|
| 763 | 1137 | | Federal Communications Commission; provided that |
|---|
| 764 | 1189 | | in respect to each corporation or b usiness entity |
|---|
| 765 | 1190 | | required by the Federal Communications Commission |
|---|
| 766 | 1191 | | to keep its books and records in accordance with |
|---|
| 767 | 1192 | | a uniform system of accounts prescribed by such |
|---|
| 768 | 1193 | | Commission, the intrastate net income shall be |
|---|
| 769 | 1194 | | determined separately in the manner provided by |
|---|
| 770 | 1195 | | such uniform system of accounts and only the |
|---|
| 771 | 1196 | | interstate income shall be subject to allocation |
|---|
| 772 | 1197 | | pursuant to the provisions of this subsection. |
|---|
| 773 | 1198 | | Provided further, that the gross revenue factors |
|---|
| 801 | 1199 | | shall be those as are determined pursuant to the |
|---|
| 802 | 1200 | | accounting procedures prescribed by the Federal |
|---|
| 803 | 1201 | | Communications Commission. |
|---|
| 804 | 1202 | | In any case where the apportionmen t of the three factors |
|---|
| 805 | 1203 | | prescribed in this paragraph attributes to Oklahoma a portion of net |
|---|
| 806 | 1204 | | income of the enterprise out of all appropriate proportion to the |
|---|
| 807 | 1205 | | property owned and/or business transacted within this state, because |
|---|
| 808 | 1206 | | of the fact that one or more of the factors so prescribed are not |
|---|
| 809 | 1207 | | employed to any appreciable extent in furtherance of the enterprise; |
|---|
| 810 | 1208 | | or because one or more factors not so prescribed are emp loyed to a |
|---|
| 811 | 1209 | | considerable extent in furtherance of the enterprise; or because of |
|---|
| 812 | 1210 | | other reasons, the Tax Commission is empowered to permit, after a |
|---|
| 813 | 1211 | | showing by a taxpayer that an excessive portion of net income has |
|---|
| 814 | 1212 | | been attributed to Oklahoma, or require, when i n its judgment an |
|---|
| 815 | 1264 | | insufficient portion of net income has been attributed to Oklahoma, |
|---|
| 816 | 1265 | | the elimination, substitution, or use of additional factors, or |
|---|
| 817 | 1266 | | reduction or increase in the weight of such prescribed factors. |
|---|
| 818 | 1267 | | Provided, however, that any such variance from such prescribed |
|---|
| 819 | 1268 | | factors which has the effect of increasing the portion of net income |
|---|
| 820 | 1269 | | attributable to Oklahoma must not be inherently arbitrary, and |
|---|
| 821 | 1270 | | application of the recomputed final apportionment to the net income |
|---|
| 822 | 1271 | | of the enterprise must attribute t o Oklahoma only a reasonable |
|---|
| 823 | 1272 | | portion thereof. |
|---|
| 851 | 1273 | | 6. For calendar years 1997 and 1998, the owner of a new or |
|---|
| 852 | 1274 | | expanded agricultural commodity processing facility in this state |
|---|
| 853 | 1275 | | may exclude from Oklahoma taxable income, or in the case of an |
|---|
| 854 | 1276 | | individual, the Oklah oma adjusted gross income, fifteen percent |
|---|
| 855 | 1277 | | (15%) of the investment by the owner in the new or expanded |
|---|
| 856 | 1278 | | agricultural commodity processing facility. For calendar year 1999, |
|---|
| 857 | 1279 | | and all subsequent years, the percentage, not to exceed fifteen |
|---|
| 858 | 1280 | | percent (15%), avail able to the owner of a new or expanded |
|---|
| 859 | 1281 | | agricultural commodity processing facility in this stat e claiming |
|---|
| 860 | 1282 | | the exemption shall be adjusted annually so that the total estimated |
|---|
| 861 | 1283 | | reduction in tax liability does not exceed One Million Dollars |
|---|
| 862 | 1284 | | ($1,000,000.00) annually. The Tax Commission shall promulgate rules |
|---|
| 863 | 1285 | | for determining the percentage of the invest ment which each eligible |
|---|
| 864 | 1286 | | taxpayer may exclude. The exclusion provided by this paragraph |
|---|
| 865 | 1287 | | shall be taken in the taxable year when the investment is made. In |
|---|
| 866 | 1339 | | the event the total reduction in tax liability authorized by this |
|---|
| 867 | 1340 | | paragraph exceeds One Million Dol lars ($1,000,000.00) in any |
|---|
| 868 | 1341 | | calendar year, the Tax Commission shall permit any excess over One |
|---|
| 869 | 1342 | | Million Dollars ($1,000,000.00) and shall factor such excess into |
|---|
| 870 | 1343 | | the percentage for subsequent years. Any amount of the exemption |
|---|
| 871 | 1344 | | permitted to be excluded purs uant to the provisions of this |
|---|
| 872 | 1345 | | paragraph but not used in any year may be carried forward as an |
|---|
| 873 | 1346 | | exemption from income pursuant to the provisions of this paragraph |
|---|
| 901 | 1347 | | for a period not exceeding six (6) years following the year in which |
|---|
| 902 | 1348 | | the investment was origin ally made. |
|---|
| 903 | 1349 | | For purposes of this paragraph: |
|---|
| 904 | 1350 | | a. “Agricultural commodity processing facility” means |
|---|
| 905 | 1351 | | building buildings, structures, fixtures , and |
|---|
| 906 | 1352 | | improvements used or operated primarily for the |
|---|
| 907 | 1353 | | processing or production of marketable products from |
|---|
| 908 | 1354 | | agricultural commoditie s. The term shall also mean a |
|---|
| 909 | 1355 | | dairy operation that requires a depreciable investment |
|---|
| 910 | 1356 | | of at least Two Hundred Fifty Thousand Dollars |
|---|
| 911 | 1357 | | ($250,000.00) and which produ ces milk from dairy cows. |
|---|
| 912 | 1358 | | The term does not include a facility that provides |
|---|
| 913 | 1359 | | only, and nothing more than, storage, cleaning, |
|---|
| 914 | 1360 | | drying, or transportation of agricultural commodities, |
|---|
| 915 | 1361 | | and |
|---|
| 916 | 1413 | | b. “Facility” means each part of the facility which is |
|---|
| 917 | 1414 | | used in a process primarily for: |
|---|
| 918 | 1415 | | (1) the processing of agricultural commodities , |
|---|
| 919 | 1416 | | including receiving or storing agricultural |
|---|
| 920 | 1417 | | commodities, or the production of milk at a dairy |
|---|
| 921 | 1418 | | operation, |
|---|
| 922 | 1419 | | (2) transporting the agricultural commodities or |
|---|
| 923 | 1420 | | product before, during , or after the processing, |
|---|
| 924 | 1421 | | or |
|---|
| 952 | 1422 | | (3) packaging or otherwise preparing the product for |
|---|
| 953 | 1423 | | sale or shipment. |
|---|
| 954 | 1424 | | 7. Despite any provision to the contrary in paragraph 3 of this |
|---|
| 955 | 1425 | | subsection, for taxable years beginning after December 31, 1999, in |
|---|
| 956 | 1426 | | the case of a taxpayer which has a farm ing loss, such farming loss |
|---|
| 957 | 1427 | | shall be considered a net operating loss carryback in accordance |
|---|
| 958 | 1428 | | with and to the extent of the Internal Revenue Code, 26 U.S.C., |
|---|
| 959 | 1429 | | Section 172(b)(G). However, the amount of the net operating loss |
|---|
| 960 | 1430 | | carryback shall not exceed the le sser of: |
|---|
| 961 | 1431 | | a. Sixty Thousand Dollars ($60,000.00), or |
|---|
| 962 | 1432 | | b. the loss properly shown on Schedule F of the Internal |
|---|
| 963 | 1433 | | Revenue Service Form 1040 reduced by one-half (1/2) of |
|---|
| 964 | 1434 | | the income from all other sources other than reflected |
|---|
| 965 | 1435 | | on Schedule F. |
|---|
| 966 | 1487 | | 8. In taxable years b eginning after December 31, 1995, all |
|---|
| 967 | 1488 | | qualified wages equal to the federal income tax cre dit set forth in |
|---|
| 968 | 1489 | | 26 U.S.C.A., Section 45A, shall be deducted from taxable income. |
|---|
| 969 | 1490 | | The deduction allowed pursuant to this paragraph shall only be |
|---|
| 970 | 1491 | | permitted for the tax years in which the federal tax credit pursuant |
|---|
| 971 | 1492 | | to 26 U.S.C.A., Section 45A, is allowed. For purposes of this |
|---|
| 972 | 1493 | | paragraph, “qualified wages” means those wages used to calculate the |
|---|
| 973 | 1494 | | federal credit pursuant to 26 U.S.C.A., Section 45A. |
|---|
| 974 | 1495 | | 9. In taxable years be ginning after December 31, 2005, an |
|---|
| 975 | 1496 | | employer that is eligible for and utilizes the Safet y Pays OSHA |
|---|
| 1003 | 1497 | | Consultation Service provided by the Oklahoma Department of Labor |
|---|
| 1004 | 1498 | | shall receive an exemption from taxable income in the amount of One |
|---|
| 1005 | 1499 | | Thousand Dollars ($1,0 00.00) for the tax year that the service is |
|---|
| 1006 | 1500 | | utilized. |
|---|
| 1007 | 1501 | | 10. For taxable years beginning on or after January 1, 2010, |
|---|
| 1008 | 1502 | | there shall be added to Oklahoma taxable income an amount equal to |
|---|
| 1009 | 1503 | | the amount of deferred income not included in such taxable income |
|---|
| 1010 | 1504 | | pursuant to Section 108(i)(1) of the Internal Revenue Code of 1986 |
|---|
| 1011 | 1505 | | as amended by Section 1231 of the American Recovery and Reinvestment |
|---|
| 1012 | 1506 | | Act of 2009 (P.L. No. 111-5). There shall be subtracted from |
|---|
| 1013 | 1507 | | Oklahoma taxable income an amount equal to the amount of deferred |
|---|
| 1014 | 1508 | | income included in such taxable income pursuant to Section 108(i)(1) |
|---|
| 1015 | 1509 | | of the Internal Revenue Code by Section 1231 of the American |
|---|
| 1016 | 1510 | | Recovery and Reinvestment Act of 2009 (P.L. No. 111-5). |
|---|
| 1017 | 1562 | | 11. For taxable years beginning on or after Ja nuary 1, 2019, |
|---|
| 1018 | 1563 | | there shall be subtracted from Oklahoma taxable income or adjusted |
|---|
| 1019 | 1564 | | gross income any item of i ncome or gain, and there shall be added to |
|---|
| 1020 | 1565 | | Oklahoma taxable income or adjusted gross income any item of loss or |
|---|
| 1021 | 1566 | | deduction that in the absence of an election pursuant to t he |
|---|
| 1022 | 1567 | | provisions of the Pass-Through Entity Tax Equity Act of 2019 would |
|---|
| 1023 | 1568 | | be allocated to a member or to an indirect member of an electing |
|---|
| 1024 | 1569 | | pass-through entity pursuant to Section 2351 et seq. of this title, |
|---|
| 1025 | 1570 | | if (i) the electing pass -through entity has accounted for such item |
|---|
| 1026 | 1571 | | in computing its Oklahoma net entity income or loss pursuant to the |
|---|
| 1054 | 1572 | | provisions of the Pass-Through Entity Tax Equity Act of 2019, and |
|---|
| 1055 | 1573 | | (ii) the total amount of tax attributable to any resulting Oklahoma |
|---|
| 1056 | 1574 | | net entity income has been paid. The O klahoma Tax Commission shall |
|---|
| 1057 | 1575 | | promulgate rules for the reporting of such exclusion to d irect and |
|---|
| 1058 | 1576 | | indirect members of the electing pass-through entity. As used in |
|---|
| 1059 | 1577 | | this paragraph, “electing pass-through entity”, “indirect member”, |
|---|
| 1060 | 1578 | | and “member” shall be defined in the same manner as prescribed by |
|---|
| 1061 | 1579 | | Section 2355.1P-2 of this title. Notwithstanding the application of |
|---|
| 1062 | 1580 | | this paragraph, the adjusted tax basis of any ownership interest in |
|---|
| 1063 | 1581 | | a pass-through entity for purposes o f Section 2351 et seq. of this |
|---|
| 1064 | 1582 | | title shall be equal to its adjusted tax basis for federal income |
|---|
| 1065 | 1583 | | tax purposes. |
|---|
| 1066 | 1584 | | B. 1. The taxable income of any corporation shall be further |
|---|
| 1067 | 1585 | | adjusted to arrive at Oklahoma taxable income, except those |
|---|
| 1068 | 1637 | | corporations electing treatment as provided in subchapter S of the |
|---|
| 1069 | 1638 | | Internal Revenue Code, 26 U.S.C., Section 1361 et seq., and Section |
|---|
| 1070 | 1639 | | 2365 of this title, deductions pursuant to the provisions of the |
|---|
| 1071 | 1640 | | Accelerated Cost Recovery System as defined and allowed in the |
|---|
| 1072 | 1641 | | Economic Recovery Tax Act of 1981, Public Law 97 -34, 26 U.S.C., |
|---|
| 1073 | 1642 | | Section 168, for depreciation of assets placed into service after |
|---|
| 1074 | 1643 | | December 31, 1981, shall not be allowed in calculating Oklahoma |
|---|
| 1075 | 1644 | | taxable income. Such corporations shall be allowed a deduction for |
|---|
| 1076 | 1645 | | depreciation of assets placed into service after Dece mber 31, 1981, |
|---|
| 1077 | 1646 | | in accordance with provisions of the Internal Revenue Cod e, 26 |
|---|
| 1105 | 1647 | | U.S.C., Section 1 et seq., in effect immediately prior to the |
|---|
| 1106 | 1648 | | enactment of the Accelerated Cost Recovery System. The Oklahoma tax |
|---|
| 1107 | 1649 | | basis for all such assets placed into service a fter December 31, |
|---|
| 1108 | 1650 | | 1981, calculated in this section shall be retained and utilized for |
|---|
| 1109 | 1651 | | all Oklahoma income tax purposes through the final disposition of |
|---|
| 1110 | 1652 | | such assets. |
|---|
| 1111 | 1653 | | Notwithstanding any other provisions of the Okl ahoma Income Tax |
|---|
| 1112 | 1654 | | Act, Section 2351 et seq. o f this title, or of the Internal Revenue |
|---|
| 1113 | 1655 | | Code to the contrary, this subs ection shall control calculation of |
|---|
| 1114 | 1656 | | depreciation of assets placed into service after December 31, 1981, |
|---|
| 1115 | 1657 | | and before January 1, 1983. |
|---|
| 1116 | 1658 | | For assets placed in service and held by a corporati on in which |
|---|
| 1117 | 1659 | | accelerated cost recovery system was previously disallowed, an |
|---|
| 1118 | 1660 | | adjustment to taxable income is required in the first taxable year |
|---|
| 1119 | 1712 | | beginning after December 31, 1982, to reconcile the basis of such |
|---|
| 1120 | 1713 | | assets to the basis allowed in the Internal Reve nue Code. The |
|---|
| 1121 | 1714 | | purpose of this adjustment is to equalize the basis and a llowance |
|---|
| 1122 | 1715 | | for depreciation accounts between that reported to the Internal |
|---|
| 1123 | 1716 | | Revenue Service and that reported to Oklahoma. |
|---|
| 1124 | 1717 | | 2. For tax years be ginning on or after January 1, 2009, and |
|---|
| 1125 | 1718 | | ending on or before December 31, 2009, there shall be added to |
|---|
| 1126 | 1719 | | Oklahoma taxable income any amount in excess of One Hundred Seventy- |
|---|
| 1127 | 1720 | | five Thousand Dollars ($175,000.00) which has been deducted as a |
|---|
| 1155 | 1721 | | small business expense under Internal Revenue Code, Section 179 as |
|---|
| 1156 | 1722 | | provided in the American Recovery and Reinvestment Act of 2009. |
|---|
| 1157 | 1723 | | C. 1. For taxable years beginning after December 31, 1987, the |
|---|
| 1158 | 1724 | | taxable income of any corporation shall be further adjusted to |
|---|
| 1159 | 1725 | | arrive at Oklahoma taxable income for transfers of technolog y to |
|---|
| 1160 | 1726 | | qualified small businesses located in Oklahoma. Such transferor |
|---|
| 1161 | 1727 | | corporation shall be allowed an exemption from taxable income of an |
|---|
| 1162 | 1728 | | amount equal to the amount of royalty payment received as a result |
|---|
| 1163 | 1729 | | of such the transfer; provided, however, such the amount shall not |
|---|
| 1164 | 1730 | | exceed ten percent (10%) of the amount of gross proceeds receive d by |
|---|
| 1165 | 1731 | | such the transferor corporation as a result of the technology |
|---|
| 1166 | 1732 | | transfer. Such The exemption shall be allowed for a period not to |
|---|
| 1167 | 1733 | | exceed ten (10) years from the date of receipt of the firs t royalty |
|---|
| 1168 | 1734 | | payment accruing from such the transfer. No exemption may be |
|---|
| 1169 | 1786 | | claimed for transfers of technology to qualified small businesses |
|---|
| 1170 | 1787 | | made prior to January 1, 1988. |
|---|
| 1171 | 1788 | | 2. For tax year 2024 and sub sequent tax years, to be eligible |
|---|
| 1172 | 1789 | | for the exemption provide d in this subsection, corporations shall |
|---|
| 1173 | 1790 | | annually apply to the Oklahoma Departmen t of Commerce on a form |
|---|
| 1174 | 1791 | | prescribed by the Department . The form prescribed shall require |
|---|
| 1175 | 1792 | | information from the corporation including: |
|---|
| 1176 | 1793 | | a. gross proceeds generated from assets and employees in |
|---|
| 1177 | 1794 | | this state for the previous tax year, |
|---|
| 1205 | 1795 | | b. employment levels and tot al annual payroll in this |
|---|
| 1206 | 1796 | | state for the previous tax year, |
|---|
| 1207 | 1797 | | c. for corporations applying to rec eive a first tax year |
|---|
| 1208 | 1798 | | exemption pursuant to this sub section, an estimate d |
|---|
| 1209 | 1799 | | amount of exemption th at will be claimed, and |
|---|
| 1210 | 1800 | | d. for corporations applying to receive su bsequent tax |
|---|
| 1211 | 1801 | | year exemptions pursuant to this sub section, the |
|---|
| 1212 | 1802 | | amount of exemption claimed in the previous t ax year. |
|---|
| 1213 | 1803 | | The Department shall determine if the corporation has provided the |
|---|
| 1214 | 1804 | | required information in the application and is therefore eligible to |
|---|
| 1215 | 1805 | | claim the exemption provided in this subsection . The Department |
|---|
| 1216 | 1806 | | shall, upon an affirmative determination, notify the Tax Commission |
|---|
| 1217 | 1807 | | that the corporation has met the application requirements of this |
|---|
| 1218 | 1808 | | paragraph. The Department shall notify the Commission of all |
|---|
| 1219 | 1809 | | eligible applicants by the end of the tax year. The Department |
|---|
| 1220 | 1861 | | shall establish an annual application deadline that provides the |
|---|
| 1221 | 1862 | | Department sufficient time to determine an applicant’s eligibility |
|---|
| 1222 | 1863 | | and provide the required notification. |
|---|
| 1223 | 1864 | | 3. For purposes of this subsection: |
|---|
| 1224 | 1865 | | a. “Qualified small business” means an entity, whethe r |
|---|
| 1225 | 1866 | | organized as a corporation, partnership, or |
|---|
| 1226 | 1867 | | proprietorship, organized f or profit with its |
|---|
| 1227 | 1868 | | principal place of business located within this state |
|---|
| 1228 | 1869 | | and which meets the following criteria: |
|---|
| 1256 | 1870 | | (1) Capitalization capitalization of not more than |
|---|
| 1257 | 1871 | | Two Hundred Fifty Thousand Dollars ($250,000.00), |
|---|
| 1258 | 1872 | | (2) Having having at least fifty percent (50%) of its |
|---|
| 1259 | 1873 | | employees and assets located in Oklahoma this |
|---|
| 1260 | 1874 | | state at the time of the transfer, and |
|---|
| 1261 | 1875 | | (3) Not not a subsidiary or affiliate of the |
|---|
| 1262 | 1876 | | transferor corporation; |
|---|
| 1263 | 1877 | | b. “Technology” means a proprietary process, formula, |
|---|
| 1264 | 1878 | | pattern, device, or compilation of scientific or |
|---|
| 1265 | 1879 | | technical information whi ch is not in the public |
|---|
| 1266 | 1880 | | domain; |
|---|
| 1267 | 1881 | | c. “Transferor corporation” means a corporation which is |
|---|
| 1268 | 1882 | | the exclusive and undisputed owner of the technolog y |
|---|
| 1269 | 1883 | | at the time the transfer is made; and |
|---|
| 1270 | 1935 | | d. “Gross proceeds” means the total amount of |
|---|
| 1271 | 1936 | | consideration for the transfer of technology, whether |
|---|
| 1272 | 1937 | | the consideration is in money or otherwise. |
|---|
| 1273 | 1938 | | D. 1. For taxable years beginning after December 31, 2005, the |
|---|
| 1274 | 1939 | | taxable income of any corporation, estate , or trust, shall be |
|---|
| 1275 | 1940 | | further adjusted for qualifying gains receiving capital treatm ent. |
|---|
| 1276 | 1941 | | Such corporations, estates , or trusts shall be allowed a deduction |
|---|
| 1277 | 1942 | | from Oklahoma taxable income for the amount of qualifying gains |
|---|
| 1278 | 1943 | | receiving capital treatment earned by the corpor ation, estate, or |
|---|
| 1306 | 1944 | | trust during the taxable year and included in the feder al taxable |
|---|
| 1307 | 1945 | | income of such corporat ion, estate, or trust. |
|---|
| 1308 | 1946 | | 2. As used in this subsection: |
|---|
| 1309 | 1947 | | a. “qualifying gains receiving capital treatment ” means |
|---|
| 1310 | 1948 | | the amount of net capital gains, as defi ned in Section |
|---|
| 1311 | 1949 | | 1222(11) of the Internal Revenue Code, included in the |
|---|
| 1312 | 1950 | | federal income tax return of the cor poration, estate, |
|---|
| 1313 | 1951 | | or trust that result from: |
|---|
| 1314 | 1952 | | (1) the sale of real property or tangible personal |
|---|
| 1315 | 1953 | | property located within Oklahoma that has been |
|---|
| 1316 | 1954 | | directly or indirectly owned by the corporation, |
|---|
| 1317 | 1955 | | estate, or trust for a holdin g period of at least |
|---|
| 1318 | 1956 | | five (5) years prior to the date of the |
|---|
| 1319 | 1957 | | transaction from which such net capital gains |
|---|
| 1320 | 1958 | | arise, |
|---|
| 1321 | 2010 | | (2) the sale of stock or on the sale of an ownership |
|---|
| 1322 | 2011 | | interest in an Oklah oma company, limited |
|---|
| 1323 | 2012 | | liability company, or partnership where such |
|---|
| 1324 | 2013 | | stock or ownership interest has been dir ectly or |
|---|
| 1325 | 2014 | | indirectly owned by the corporation, estate, or |
|---|
| 1326 | 2015 | | trust for a holding period of at least three (3) |
|---|
| 1327 | 2016 | | years prior to the date of the transaction fr om |
|---|
| 1328 | 2017 | | which the net capital gains arise, or |
|---|
| 1356 | 2018 | | (3) the sale of real prope rty, tangible personal |
|---|
| 1357 | 2019 | | property, or intangible personal property located |
|---|
| 1358 | 2020 | | within Oklahoma as part of the sale of all or |
|---|
| 1359 | 2021 | | substantially all of the assets of an Oklahoma |
|---|
| 1360 | 2022 | | company, limited liabili ty company, or |
|---|
| 1361 | 2023 | | partnership where such property has been directly |
|---|
| 1362 | 2024 | | or indirectly owned by such entity owned by the |
|---|
| 1363 | 2025 | | owners of such entity, and used in or derived |
|---|
| 1364 | 2026 | | from such entity for a period of at least three |
|---|
| 1365 | 2027 | | (3) years prior to the date of the transaction |
|---|
| 1366 | 2028 | | from which the net capital gains arise, |
|---|
| 1367 | 2029 | | b. “holding period” means an uninterrupted period of |
|---|
| 1368 | 2030 | | time. The holding period shall inclu de any additional |
|---|
| 1369 | 2031 | | period when the property was held by another |
|---|
| 1370 | 2032 | | individual or entity, if such additional period is |
|---|
| 1371 | 2084 | | included in the taxpayer’s holding period for the |
|---|
| 1372 | 2085 | | asset pursuant to the Internal Revenue Code, |
|---|
| 1373 | 2086 | | c. “Oklahoma company”, “limited liability compa ny”, or |
|---|
| 1374 | 2087 | | “partnership” means an entity whose primary |
|---|
| 1375 | 2088 | | headquarters have been locate d in Oklahoma for at |
|---|
| 1376 | 2089 | | least three (3) uninterrup ted years prior to the date |
|---|
| 1377 | 2090 | | of the transaction from which the net capital gains |
|---|
| 1378 | 2091 | | arise, |
|---|
| 1406 | 2092 | | d. “direct” means the taxpayer directly o wns the asset, |
|---|
| 1407 | 2093 | | and |
|---|
| 1408 | 2094 | | e. “indirect” means the taxpayer owns an interest in a |
|---|
| 1409 | 2095 | | pass-through entity (or chain of pass -through |
|---|
| 1410 | 2096 | | entities) that sells the asset that gives rise to the |
|---|
| 1411 | 2097 | | qualifying gains receiving capital treatment. |
|---|
| 1412 | 2098 | | (1) With respect to sales of real pr operty or |
|---|
| 1413 | 2099 | | tangible personal property located within |
|---|
| 1414 | 2100 | | Oklahoma, the deduction descr ibed in this |
|---|
| 1415 | 2101 | | subsection shall not apply unless the pass- |
|---|
| 1416 | 2102 | | through entity that makes the sale has held the |
|---|
| 1417 | 2103 | | property for not less than five (5) uninterrupt ed |
|---|
| 1418 | 2104 | | years prior to the da te of the transaction that |
|---|
| 1419 | 2105 | | created the capital gain, and each pass -through |
|---|
| 1420 | 2106 | | entity included in the chain of ownership has |
|---|
| 1421 | 2107 | | been a member, partner, or shareholder of the |
|---|
| 1422 | 2159 | | pass-through entity in the tier immediately below |
|---|
| 1423 | 2160 | | it for an uninterrupted period of not l ess than |
|---|
| 1424 | 2161 | | five (5) years. |
|---|
| 1425 | 2162 | | (2) With respect to sales of stock or ownership |
|---|
| 1426 | 2163 | | interest in or sales of all or substantially all |
|---|
| 1427 | 2164 | | of the assets of an Oklahoma company, limited |
|---|
| 1428 | 2165 | | liability company, or partnership, the deduction |
|---|
| 1429 | 2166 | | described in this subsection shall not apply |
|---|
| 1457 | 2167 | | unless the pass-through entity that makes the |
|---|
| 1458 | 2168 | | sale has held the stock or ow nership interest or |
|---|
| 1459 | 2169 | | the assets for not less tha n three (3) |
|---|
| 1460 | 2170 | | uninterrupted years prior to the date of the |
|---|
| 1461 | 2171 | | transaction that created the capital gain, and |
|---|
| 1462 | 2172 | | each pass-through entity included in the chain of |
|---|
| 1463 | 2173 | | ownership has been a member, partner or |
|---|
| 1464 | 2174 | | shareholder of the pass-through entity in the |
|---|
| 1465 | 2175 | | tier immediately below it for an uninterrupted |
|---|
| 1466 | 2176 | | period of not less than three (3) years. |
|---|
| 1467 | 2177 | | E. The Oklahoma adjusted gross income of any individual |
|---|
| 1468 | 2178 | | taxpayer shall be further adjusted as follows to arrive at Oklahoma |
|---|
| 1469 | 2179 | | taxable income: |
|---|
| 1470 | 2180 | | 1. a. In the case of individuals, there sha ll be added or |
|---|
| 1471 | 2181 | | deducted, as the case may be, the difference necessary |
|---|
| 1472 | 2182 | | to allow personal exemptions of One Thousand Dollars |
|---|
| 1473 | 2234 | | ($1,000.00) in lieu of the personal exemptions allowed |
|---|
| 1474 | 2235 | | by the Internal Revenue Code. |
|---|
| 1475 | 2236 | | b. There shall be allowed an additional exemptio n of One |
|---|
| 1476 | 2237 | | Thousand Dollars ($1,000.00) for each taxpayer or |
|---|
| 1477 | 2238 | | spouse who is blind at the close of the tax year. For |
|---|
| 1478 | 2239 | | purposes of this subparagraph, an individual is blind |
|---|
| 1479 | 2240 | | only if the central visual acuity of th e individual |
|---|
| 1480 | 2241 | | does not exceed 20/200 in the better eye with |
|---|
| 1508 | 2242 | | correcting lenses, or if the visual acuity of the |
|---|
| 1509 | 2243 | | individual is greater than 20/200, but is accompanied |
|---|
| 1510 | 2244 | | by a limitation in the fields of vision such that the |
|---|
| 1511 | 2245 | | widest diameter of the visual field sub tends an angle |
|---|
| 1512 | 2246 | | no greater than twenty (20) degree s. |
|---|
| 1513 | 2247 | | c. There shall be allowed an additional exemption of One |
|---|
| 1514 | 2248 | | Thousand Dollars ($1,000.00) for each taxpayer or |
|---|
| 1515 | 2249 | | spouse who is sixty-five (65) years of age or older at |
|---|
| 1516 | 2250 | | the close of the tax year based upon the f iling status |
|---|
| 1517 | 2251 | | and federal adjusted gross income of the taxpayer. |
|---|
| 1518 | 2252 | | Taxpayers with the following filing status may claim |
|---|
| 1519 | 2253 | | this exemption if the federal adjusted gross income |
|---|
| 1520 | 2254 | | does not exceed: |
|---|
| 1521 | 2255 | | (1) Twenty-five Thousand Dollars ($25,000.00) if |
|---|
| 1522 | 2256 | | married and filing j ointly;, |
|---|
| 1523 | 2308 | | (2) Twelve Thousand Five Hundred Dollars ($12,500.00) |
|---|
| 1524 | 2309 | | if married and filing separately;, |
|---|
| 1525 | 2310 | | (3) Fifteen Thousand Dollars ($15,000.00) if single;, |
|---|
| 1526 | 2311 | | and |
|---|
| 1527 | 2312 | | (4) Nineteen Thousand Do llars ($19,000.00) if a |
|---|
| 1528 | 2313 | | qualifying head of household. |
|---|
| 1529 | 2314 | | Provided, for taxable years beginning after December |
|---|
| 1530 | 2315 | | 31, 1999, amounts inc luded in the calculation of |
|---|
| 1531 | 2316 | | federal adjusted gross income pursuant to the |
|---|
| 1559 | 2317 | | conversion of a traditional individual retirement |
|---|
| 1560 | 2318 | | account to a Roth individual retirement account shall |
|---|
| 1561 | 2319 | | be excluded from federal a djusted gross income for |
|---|
| 1562 | 2320 | | purposes of the income thre sholds provided in this |
|---|
| 1563 | 2321 | | subparagraph. |
|---|
| 1564 | 2322 | | 2. a. For taxable years beginning on or before December 31, |
|---|
| 1565 | 2323 | | 2005, in the case of individua ls who use the standard |
|---|
| 1566 | 2324 | | deduction in determining taxable income, there sha ll |
|---|
| 1567 | 2325 | | be added or deducted, as the case may be, the |
|---|
| 1568 | 2326 | | difference necessary to allow a standard deduction in |
|---|
| 1569 | 2327 | | lieu of the standard deduction allowed by the Internal |
|---|
| 1570 | 2328 | | Revenue Code, in an amou nt equal to the larger of |
|---|
| 1571 | 2329 | | fifteen percent (15%) of the Oklahoma adjusted g ross |
|---|
| 1572 | 2330 | | income or One Thousand Dollars ($1,000.00), but n ot to |
|---|
| 1573 | 2331 | | exceed Two Thousand Dollars ($2,000.00), except that |
|---|
| 1574 | 2383 | | in the case of a married individual filing a separate |
|---|
| 1575 | 2384 | | return such deduction shall be the larger of fifteen |
|---|
| 1576 | 2385 | | percent (15%) of such Oklahoma adjus ted gross income |
|---|
| 1577 | 2386 | | or Five Hundred Dollars ($500.00), bu t not to exceed |
|---|
| 1578 | 2387 | | the maximum amount of One Thousand Dollars |
|---|
| 1579 | 2388 | | ($1,000.00). |
|---|
| 1580 | 2389 | | b. For taxable years beginning on or after January 1, |
|---|
| 1581 | 2390 | | 2006, and before January 1, 2007, in the case of |
|---|
| 1582 | 2391 | | individuals who use the sta ndard deduction in |
|---|
| 1610 | 2392 | | determining taxable income, there s hall be added or |
|---|
| 1611 | 2393 | | deducted, as the case may be, the difference necessary |
|---|
| 1612 | 2394 | | to allow a standard deduction in lieu of the standard |
|---|
| 1613 | 2395 | | deduction allowed by the Internal Revenue Code, in an |
|---|
| 1614 | 2396 | | amount equal to: |
|---|
| 1615 | 2397 | | (1) Three Thousand Dollars ($3,000.00), if the filing |
|---|
| 1616 | 2398 | | status is married filing joint, head of |
|---|
| 1617 | 2399 | | household, or qualifying widow;, or |
|---|
| 1618 | 2400 | | (2) Two Thousand Dollars ($2,000.00), if the filing |
|---|
| 1619 | 2401 | | status is single or married filing separate. |
|---|
| 1620 | 2402 | | c. For the taxable year beginning on January 1, 2007, and |
|---|
| 1621 | 2403 | | ending December 31, 2007, in the case of individuals |
|---|
| 1622 | 2404 | | who use the standard deduction in determining taxable |
|---|
| 1623 | 2405 | | income, there shall be added or deducted, as the case |
|---|
| 1624 | 2406 | | may be, the difference necessary to allow a standard |
|---|
| 1659 | 2465 | | (3) Two Thousand Seven Hundred Fifty Dollars |
|---|
| 1660 | 2466 | | ($2,750.00), if the filing status is single or |
|---|
| 1661 | 2467 | | married filing separate. |
|---|
| 1662 | 2468 | | d. For the taxable year b eginning on January 1, 2008, and |
|---|
| 1663 | 2469 | | ending December 31, 2008, in the case of individuals |
|---|
| 1664 | 2470 | | who use the standard deduction in determin ing taxable |
|---|
| 1665 | 2471 | | income, there shall be added or deducted, as the case |
|---|
| 1666 | 2472 | | may be, the difference necessary to allo w a standard |
|---|
| 1667 | 2473 | | deduction in lieu of the standard deduction allowed by |
|---|
| 1668 | 2474 | | the Internal Revenue Cod e, in an amount equal to: |
|---|
| 1669 | 2475 | | (1) Six Thousand Five Hundred Do llars ($6,500.00), if |
|---|
| 1670 | 2476 | | the filing status is married filing joint or |
|---|
| 1671 | 2477 | | qualifying widow, or |
|---|
| 1672 | 2478 | | (2) Four Thousand Eight Hundred Seventy -five Dollars |
|---|
| 1673 | 2479 | | ($4,875.00) for a head of household, or |
|---|
| 1674 | 2531 | | (3) Three Thousand Two Hundred Fifty Dollars |
|---|
| 1675 | 2532 | | ($3,250.00), if the filing sta tus is single or |
|---|
| 1676 | 2533 | | married filing separate. |
|---|
| 1677 | 2534 | | e. For the taxable year beginning on January 1, 2009, and |
|---|
| 1678 | 2535 | | ending December 31, 2009, in the case of individuals |
|---|
| 1679 | 2536 | | who use the standard deduction in determining taxable |
|---|
| 1680 | 2537 | | income, there shall be added or deducted, as the case |
|---|
| 1681 | 2538 | | may be, the difference necessary to allow a standard |
|---|
| 1709 | 2539 | | deduction in lieu of the standard deduction allo wed by |
|---|
| 1710 | 2540 | | the Internal Revenue Code, in an amount equal to: |
|---|
| 1711 | 2541 | | (1) Eight Thousand Five Hundred Dol lars ($8,500.00), |
|---|
| 1712 | 2542 | | if the filing status is married filing j oint or |
|---|
| 1713 | 2543 | | qualifying widow, or |
|---|
| 1714 | 2544 | | (2) Six Thousand Three Hundred Seventy-five Dollars |
|---|
| 1715 | 2545 | | ($6,375.00) for a head of household, or |
|---|
| 1716 | 2546 | | (3) Four Thousand Two Hundred Fifty Dollars |
|---|
| 1717 | 2547 | | ($4,250.00), if the filing status is single or |
|---|
| 1718 | 2548 | | married filing separate. |
|---|
| 1719 | 2549 | | Oklahoma adjusted gross income shall be increased by |
|---|
| 1720 | 2550 | | any amounts paid for motor vehicle excise taxes which |
|---|
| 1721 | 2551 | | were deducted as allowed by the Internal Revenue Code. |
|---|
| 1722 | 2552 | | f. For taxable years beginning on or after January 1, |
|---|
| 1723 | 2553 | | 2010, and ending on December 31, 2016, in the case of |
|---|
| 1724 | 2554 | | individuals who use the standard deduction in |
|---|
| 1759 | 2613 | | g. For taxable years beginning on or after January 1, |
|---|
| 1760 | 2614 | | 2017, in the case of indiv iduals who use the standard |
|---|
| 1761 | 2615 | | deduction in determining taxab le income, there shall |
|---|
| 1762 | 2616 | | be added or deducted, as the case may be, the |
|---|
| 1763 | 2617 | | difference necessary to allow a stand ard deduction in |
|---|
| 1764 | 2618 | | lieu of the standard deduction allowed by the Internal |
|---|
| 1765 | 2619 | | Revenue Code, as fol lows: |
|---|
| 1766 | 2620 | | (1) Six Thousand Three Hundred Fifty Dollars |
|---|
| 1767 | 2621 | | ($6,350.00) for single or married filing |
|---|
| 1768 | 2622 | | separately, |
|---|
| 1769 | 2623 | | (2) Twelve Thousand Seven Hundred Dollars |
|---|
| 1770 | 2624 | | ($12,700.00) for married filing jointly or |
|---|
| 1771 | 2625 | | qualifying widower with dependent child, and |
|---|
| 1772 | 2626 | | (3) Nine Thousand Three Hundred Fifty Dollars |
|---|
| 1773 | 2627 | | ($9,350.00) for head of household. |
|---|
| 1774 | 2628 | | 3. a. In the case of resident and part-year resident |
|---|
| 1775 | 2629 | | individuals having adjusted gross income from source s |
|---|
| 1810 | 2688 | | but allowable moving expense shall be fully deductible |
|---|
| 1811 | 2689 | | for those taxpayers moving within or into Oklahoma and |
|---|
| 1812 | 2690 | | no part of moving expense shall b e deductible for |
|---|
| 1813 | 2691 | | those taxpayers moving without or out of Oklahoma. |
|---|
| 1814 | 2692 | | All other itemized or standard deductions and personal |
|---|
| 1815 | 2693 | | exemptions shall be subjec t to proration as provided |
|---|
| 1816 | 2694 | | by law. |
|---|
| 1817 | 2695 | | b. For taxable years beginning on or after January 1, |
|---|
| 1818 | 2696 | | 2018, the net amount of itemized deduct ions allowable |
|---|
| 1819 | 2697 | | on an Oklahoma income tax return, subject to the |
|---|
| 1820 | 2698 | | provisions of paragraph 24 of this subsection, shall |
|---|
| 1821 | 2699 | | not exceed Seventeen Thousand Dollars ($17,000.00). |
|---|
| 1822 | 2700 | | For purposes of this subparagraph, charitable |
|---|
| 1823 | 2701 | | contributions and medical expenses deduc tible for |
|---|
| 1824 | 2702 | | federal income tax purposes shall be excluded from the |
|---|
| 1825 | 2703 | | amount of Seventeen Thousand Dollars ($17,000.00) as |
|---|
| 1826 | 2704 | | specified by this subparagraph. |
|---|
| 1827 | 2756 | | 4. A resident individual with a physical disability |
|---|
| 1828 | 2757 | | constituting a substantial hand icap to employment may deduct from |
|---|
| 1829 | 2758 | | Oklahoma adjusted gross income such expenditures to mod ify a motor |
|---|
| 1830 | 2759 | | vehicle, home, or workplace as are necessary to c ompensate for his |
|---|
| 1831 | 2760 | | or her handicap. A veteran certified by the Department of Veterans |
|---|
| 1832 | 2761 | | Affairs of the feder al government as havin g a service-connected |
|---|
| 1833 | 2762 | | disability shall be conclusively presumed to be an individual with a |
|---|
| 1861 | 2763 | | physical disability constituting a su bstantial handicap to |
|---|
| 1862 | 2764 | | employment. The Tax Commission shall promulgate rules containing a |
|---|
| 1863 | 2765 | | list of combinations of common disabil ities and modifications which |
|---|
| 1864 | 2766 | | may be presumed to qualify for this d eduction. The Tax Commission |
|---|
| 1865 | 2767 | | shall prescribe necessary requi rements for verification. |
|---|
| 1866 | 2768 | | 5. a. Before July 1, 2010, the first One Thousand Five |
|---|
| 1867 | 2769 | | Hundred Dollars ($1,500.0 0) received by any p erson |
|---|
| 1868 | 2770 | | from the United States as salary or compensation in |
|---|
| 1869 | 2771 | | any form, other than retirement benefits, as a member |
|---|
| 1870 | 2772 | | of any component of the Armed Forces of the United |
|---|
| 1871 | 2773 | | States shall be deducted from taxable income. |
|---|
| 1872 | 2774 | | b. On or after July 1, 2010 , one hundred percen t (100%) |
|---|
| 1873 | 2775 | | of the income received by any person from the United |
|---|
| 1874 | 2776 | | States as salary or compensation in any form, other |
|---|
| 1875 | 2777 | | than retirement benefits, as a member of any component |
|---|
| 1876 | 2778 | | of the Armed Forces of the United States shall be |
|---|
| 1877 | 2779 | | deducted from taxable income. |
|---|
| 1912 | 2838 | | (2) absence from the State of Oklahoma this state |
|---|
| 1913 | 2839 | | while on active duty;, or |
|---|
| 1914 | 2840 | | (3) confinement in a hospital within the United |
|---|
| 1915 | 2841 | | States for treatment of wounds, injuries, or |
|---|
| 1916 | 2842 | | disease, |
|---|
| 1917 | 2843 | | the time for filing a return and paying an income tax |
|---|
| 1918 | 2844 | | shall be and is hereby extended without incurring |
|---|
| 1919 | 2845 | | liability for interest or p enalties, to the fifteenth |
|---|
| 1920 | 2846 | | day of the third month following the month in whic h: |
|---|
| 1921 | 2847 | | (a) Such such individual shall return to the |
|---|
| 1922 | 2848 | | United States if the extension is granted |
|---|
| 1923 | 2849 | | pursuant to subparagr aph a of this |
|---|
| 1924 | 2850 | | paragraph, return to the State of Oklahoma |
|---|
| 1925 | 2851 | | this state if the extension is granted |
|---|
| 1926 | 2852 | | pursuant to subparagraph b of this paragraph |
|---|
| 1927 | 2853 | | or be discharged from such hospital if the |
|---|
| 1928 | 2905 | | extension is granted pursuant to |
|---|
| 1929 | 2906 | | subparagraph c of this paragraph;, or |
|---|
| 1930 | 2907 | | (b) An an executor, administrator, or |
|---|
| 1931 | 2908 | | conservator of the estate of t he taxpayer is |
|---|
| 1932 | 2909 | | appointed, whichever event occurs the |
|---|
| 1933 | 2910 | | earliest. |
|---|
| 1934 | 2911 | | Provided, that the Tax Commission may, in its discretion, grant |
|---|
| 1935 | 2912 | | any member of the Armed Forces of the United States an extensio n of |
|---|
| 1963 | 2913 | | time for filing of income tax returns and payment of income t ax |
|---|
| 1964 | 2914 | | without incurring liabilities for interest or penalties. Such |
|---|
| 1965 | 2915 | | extension may be granted only when in the judgment of the Tax |
|---|
| 1966 | 2916 | | Commission a good cause exists therefor and may be for a perio d in |
|---|
| 1967 | 2917 | | excess of six (6) months. A record of every such extension g ranted, |
|---|
| 1968 | 2918 | | and the reason therefor, shall be kept. |
|---|
| 1969 | 2919 | | 6. Before July 1, 2010, the salary o r any other form of |
|---|
| 1970 | 2920 | | compensation, received from the United States by a member of any |
|---|
| 1971 | 2921 | | component of the Arm ed Forces of the United States, shall be |
|---|
| 1972 | 2922 | | deducted from taxable inc ome during the time in which the person is |
|---|
| 1973 | 2923 | | detained by the enemy in a conflict, is a prisoner of war or is |
|---|
| 1974 | 2924 | | missing in action and not deceased; provided, after July 1, 2010, |
|---|
| 1975 | 2925 | | all such salary or compensation shall be subject to the deduction as |
|---|
| 1976 | 2926 | | provided pursuant to paragraph 5 of this subsection. |
|---|
| 1977 | 2927 | | 7. a. An individual taxpayer, whether reside nt or |
|---|
| 1978 | 2928 | | nonresident, may deduct an amount equal to the federal |
|---|
| 2014 | 2988 | | paragraph shall be prorated on the ratio of the |
|---|
| 2015 | 2989 | | Oklahoma adjusted gross income to federal adjusted |
|---|
| 2016 | 2990 | | gross income. |
|---|
| 2017 | 2991 | | c. For the purpose of this paragraph, “federal income |
|---|
| 2018 | 2992 | | taxes paid” shall mean federal income taxes, surtaxes |
|---|
| 2019 | 2993 | | imposed on incomes or excess profits taxes, as though |
|---|
| 2020 | 2994 | | the taxpayer was on the accrual basis. In determining |
|---|
| 2021 | 2995 | | the amount of deduction for federal income taxes for |
|---|
| 2022 | 2996 | | tax year 2001, the amount of the deduction shall not |
|---|
| 2023 | 2997 | | be adjusted by the amount of any accelerated ten |
|---|
| 2024 | 2998 | | percent (10%) tax rat e bracket credit or advanced |
|---|
| 2025 | 2999 | | refund of the credit received during the tax year |
|---|
| 2026 | 3000 | | provided pursuant to the federal Economic Growth and |
|---|
| 2027 | 3001 | | Tax Relief Reconciliation Act of 2001, P.L. No. 107- |
|---|
| 2028 | 3002 | | 16, and the advanced refund of such credit shall not |
|---|
| 2029 | 3003 | | be subject to taxation. |
|---|
| 2030 | 3055 | | d. The provisions of this paragraph shall apply to all |
|---|
| 2031 | 3056 | | taxable years ending aft er December 31, 1978, and |
|---|
| 2032 | 3057 | | beginning before January 1, 2006. |
|---|
| 2033 | 3058 | | 8. Retirement benefits not to exceed Five Thousand Five Hundred |
|---|
| 2034 | 3059 | | Dollars ($5,500.00) for the 2004 tax year, Seve n Thousand Five |
|---|
| 2035 | 3060 | | Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Thousand |
|---|
| 2036 | 3061 | | Dollars ($10,000.00) for the 2006 tax year and all subsequent tax |
|---|
| 2037 | 3062 | | years, which are received by an individual from the civil service of |
|---|
| 2065 | 3063 | | the United States, the Oklahoma Public Employees Retirement System, |
|---|
| 2066 | 3064 | | the Teachers’ Retirement System of Oklahoma, the Oklah oma Law |
|---|
| 2067 | 3065 | | Enforcement Retirement System, the Oklahoma Firefighters Pension and |
|---|
| 2068 | 3066 | | Retirement System, the Oklahoma Police Pension and Retirement |
|---|
| 2069 | 3067 | | System, the employee retirement s ystems created by counties pursuant |
|---|
| 2070 | 3068 | | to Section 951 et seq. of Title 19 of the Oklaho ma Statutes, the |
|---|
| 2071 | 3069 | | Uniform Retirement System for Justices and Judges, the Oklahoma |
|---|
| 2072 | 3070 | | Wildlife Conservation Department Retirement Fund, the Oklahoma |
|---|
| 2073 | 3071 | | Employment Security Commissi on Retirement Plan, or the employee |
|---|
| 2074 | 3072 | | retirement systems created by municipalities pur suant to Section 48- |
|---|
| 2075 | 3073 | | 101 et seq. of Title 11 of the Oklahoma Statutes shall be exempt |
|---|
| 2076 | 3074 | | from taxable income. |
|---|
| 2077 | 3075 | | 9. In taxable years beginning after December 3l, 1984, Social |
|---|
| 2078 | 3076 | | Security benefits received by an individual shall be exempt from |
|---|
| 2079 | 3077 | | taxable income, to the extent such benefits are included in the |
|---|
| 2080 | 3129 | | federal adjusted gross income pursuant to the provisions of Section |
|---|
| 2081 | 3130 | | 86 of the Internal Revenue Code, 26 U.S.C., Section 86. |
|---|
| 2082 | 3131 | | 10. For taxable years beginning after December 31, 1994, lump - |
|---|
| 2083 | 3132 | | sum distributions from empl oyer plans of deferred compensation, |
|---|
| 2084 | 3133 | | which are not qualified plans within the meaning of Section 401(a) |
|---|
| 2085 | 3134 | | of the Internal Revenue Code, 26 U.S.C., Section 401(a), and which |
|---|
| 2086 | 3135 | | are deposited in and accounted for within a separate bank account or |
|---|
| 2087 | 3136 | | brokerage account in a financial institution within this state, |
|---|
| 2088 | 3137 | | shall be excluded from taxable income in the same manner as a |
|---|
| 2116 | 3138 | | qualifying rollover contribution to an individual retirement a ccount |
|---|
| 2117 | 3139 | | within the meaning of Section 408 of the Internal Revenue Code, 26 |
|---|
| 2118 | 3140 | | U.S.C., Section 408. Amounts withdrawn from such bank or brokerage |
|---|
| 2119 | 3141 | | account, including any earnings thereon, shall be included in |
|---|
| 2120 | 3142 | | taxable income when withdrawn in the same manner as withdrawals from |
|---|
| 2121 | 3143 | | individual retirement accounts within the meaning of Section 408 of |
|---|
| 2122 | 3144 | | the Internal Revenue Code. |
|---|
| 2123 | 3145 | | 11. In taxable years beginning after December 31, 1995, |
|---|
| 2124 | 3146 | | contributions made to and interest received from a medical savings |
|---|
| 2125 | 3147 | | account established pursuant to Sections 2621 through 2623 of Title |
|---|
| 2126 | 3148 | | 63 of the Oklahoma Statutes shall be exempt from taxable income. |
|---|
| 2127 | 3149 | | 12. For taxable years beginning after December 31, 1996, the |
|---|
| 2128 | 3150 | | Oklahoma adjusted gross income of any individual taxpayer who is a |
|---|
| 2129 | 3151 | | swine or poultry producer may be further adjusted for the deduction |
|---|
| 2130 | 3152 | | for depreciation allowed for n ew construction or expansion costs |
|---|
| 2166 | 3212 | | 13. a. In taxable years beginning after December 31, 2002, |
|---|
| 2167 | 3213 | | nonrecurring adoption expenses paid by a resident |
|---|
| 2168 | 3214 | | individual taxpayer in connection with: |
|---|
| 2169 | 3215 | | (1) the adoption of a minor, or |
|---|
| 2170 | 3216 | | (2) a proposed adoption of a minor which did not |
|---|
| 2171 | 3217 | | result in a decreed adopti on, |
|---|
| 2172 | 3218 | | may be deducted from the Oklahoma adjusted gross |
|---|
| 2173 | 3219 | | income. |
|---|
| 2174 | 3220 | | b. The deductions for adoptions and proposed adoptions |
|---|
| 2175 | 3221 | | authorized by this paragraph shall not exceed Twenty |
|---|
| 2176 | 3222 | | Thousand Dollars ($20,000.00) per calendar year. |
|---|
| 2177 | 3223 | | c. The Tax Commission shall promulgate rules to implement |
|---|
| 2178 | 3224 | | the provisions of this paragraph which shall contain a |
|---|
| 2179 | 3225 | | specific list of nonrecurring adoption expenses which |
|---|
| 2180 | 3226 | | may be presumed to qualify for the deductio n. The Tax |
|---|
| 2181 | 3278 | | Commission shall prescribe necessary requirements for |
|---|
| 2182 | 3279 | | verification. |
|---|
| 2183 | 3280 | | d. “Nonrecurring adoption expenses” means adoption fees, |
|---|
| 2184 | 3281 | | court costs, medical expenses, attorney fees, and |
|---|
| 2185 | 3282 | | expenses which are directly related to the legal |
|---|
| 2186 | 3283 | | process of adoption of a child including, but not |
|---|
| 2187 | 3284 | | limited to, costs relating to the adoption study, |
|---|
| 2188 | 3285 | | health and psychological examinations, transportation, |
|---|
| 2189 | 3286 | | and reasonable costs of lodging and food for the child |
|---|
| 2217 | 3287 | | or adoptive parents which are incurred to complete the |
|---|
| 2218 | 3288 | | adoption process and are not reimbursed by other |
|---|
| 2219 | 3289 | | sources. The term “nonrecurring adoption expe nses” |
|---|
| 2220 | 3290 | | shall not include attorney fees incurred for the |
|---|
| 2221 | 3291 | | purpose of litigating a contested adoption, from and |
|---|
| 2222 | 3292 | | after the point of the initiation of the contest, |
|---|
| 2223 | 3293 | | costs associated with physical remodeling, renovation |
|---|
| 2224 | 3294 | | and alteration of the adoptive parents ’ home or |
|---|
| 2225 | 3295 | | property, except for a special needs child as |
|---|
| 2226 | 3296 | | authorized by the court. |
|---|
| 2227 | 3297 | | 14. a. In taxable years beginning before January 1, 2005, |
|---|
| 2228 | 3298 | | retirement benefits not to exceed the amounts |
|---|
| 2229 | 3299 | | specified in this paragraph, which are received by an |
|---|
| 2230 | 3300 | | individual sixty-five (65) years of age or older and |
|---|
| 2231 | 3301 | | whose Oklahoma adjusted gross income is Twenty-five |
|---|
| 2232 | 3353 | | Thousand Dollars ($25,000.00) or less if the filing |
|---|
| 2233 | 3354 | | status is single, head of household, or married filing |
|---|
| 2234 | 3355 | | separate, or Fifty Thousand Dollars ($50,000.00) or |
|---|
| 2235 | 3356 | | less if the filing status is married filing joint or |
|---|
| 2236 | 3357 | | qualifying widow, shall be exempt from taxable income. |
|---|
| 2237 | 3358 | | In taxable years beginning after December 31, 2004, |
|---|
| 2238 | 3359 | | retirement benefits not to exceed the amounts |
|---|
| 2239 | 3360 | | specified in this paragraph, which are received by an |
|---|
| 2240 | 3361 | | individual whose Oklahoma adjusted gross income is |
|---|
| 2268 | 3362 | | less than the qualifying amount specified in this |
|---|
| 2269 | 3363 | | paragraph, shall be exempt from taxable income. |
|---|
| 2270 | 3364 | | b. For purposes of this paragraph, the qualifying amount |
|---|
| 2271 | 3365 | | shall be as follows: |
|---|
| 2272 | 3366 | | (1) in taxable years beginning after December 31, |
|---|
| 2273 | 3367 | | 2004, and prior to January 1, 2007, the |
|---|
| 2274 | 3368 | | qualifying amount shall be Thirty-seven Thousand |
|---|
| 2275 | 3369 | | Five Hundred Dollars ($37,500.00) or less if the |
|---|
| 2276 | 3370 | | filing status is single, head of household, or |
|---|
| 2277 | 3371 | | married filing separate, or Seventy -five Thousand |
|---|
| 2278 | 3372 | | Dollars ($75,000.00) or less if the filing status |
|---|
| 2279 | 3373 | | is married filing jointly or qualifying widow, |
|---|
| 2280 | 3374 | | (2) in the taxable year beginning January 1, 2007, |
|---|
| 2281 | 3375 | | the qualifying amount shall be Fifty Thousand |
|---|
| 2282 | 3376 | | Dollars ($50,000.00) or less if the filing status |
|---|
| 2283 | 3428 | | is single, head of h ousehold, or married filing |
|---|
| 2284 | 3429 | | separate, or One Hundred Thousand Dollars |
|---|
| 2285 | 3430 | | ($100,000.00) or less if the filing status is |
|---|
| 2286 | 3431 | | married filing jointly or qualifying widow, |
|---|
| 2287 | 3432 | | (3) in the taxable year beginning January 1, 2008, |
|---|
| 2288 | 3433 | | the qualifying amount shall be Sixty -two Thousand |
|---|
| 2289 | 3434 | | Five Hundred Dollars ($62,500.00) or less if the |
|---|
| 2290 | 3435 | | filing status is single, head of household, or |
|---|
| 2291 | 3436 | | married filing separate, or One Hundred Twenty- |
|---|
| 2319 | 3437 | | five Thousand Dollars ($125,000.00) or less if |
|---|
| 2320 | 3438 | | the filing status is married filing jointly or |
|---|
| 2321 | 3439 | | qualifying widow, |
|---|
| 2322 | 3440 | | (4) in the taxable year beginning January 1, 2009, |
|---|
| 2323 | 3441 | | the qualifying amount shall be One Hundred |
|---|
| 2324 | 3442 | | Thousand Dollars ($100,000.00) or less if the |
|---|
| 2325 | 3443 | | filing status is single, head of household, or |
|---|
| 2326 | 3444 | | married filing separate, or Two Hundred Thousand |
|---|
| 2327 | 3445 | | Dollars ($200,000.00) or less if the filing |
|---|
| 2328 | 3446 | | status is married filing jointly or qualifying |
|---|
| 2329 | 3447 | | widow, and |
|---|
| 2330 | 3448 | | (5) in the taxable year beginning January 1, 2010, |
|---|
| 2331 | 3449 | | and subsequent taxable years, there shall be no |
|---|
| 2332 | 3450 | | limitation upon the qualifying amount. |
|---|
| 2333 | 3502 | | c. For purposes of this paragrap h, “retirement benefits” |
|---|
| 2334 | 3503 | | means the total distributions or withdrawals from the |
|---|
| 2335 | 3504 | | following: |
|---|
| 2336 | 3505 | | (1) an employee pension benefit plan which satisfies |
|---|
| 2337 | 3506 | | the requirements of Section 401 of the Internal |
|---|
| 2338 | 3507 | | Revenue Code, 26 U.S.C., Section 401, |
|---|
| 2339 | 3508 | | (2) an eligible deferred co mpensation plan that |
|---|
| 2340 | 3509 | | satisfies the requirements of Section 457 of the |
|---|
| 2341 | 3510 | | Internal Revenue Code, 26 U.S.C., Section 457, |
|---|
| 2369 | 3511 | | (3) an individual retirement account, annuity or |
|---|
| 2370 | 3512 | | trust, or simplified employee pension that |
|---|
| 2371 | 3513 | | satisfies the requirements of Section 408 of th e |
|---|
| 2372 | 3514 | | Internal Revenue Code, 26 U.S.C., Section 408, |
|---|
| 2373 | 3515 | | (4) an employee annuity subject to the provisions of |
|---|
| 2374 | 3516 | | Section 403(a) or (b) of the Internal Revenue |
|---|
| 2375 | 3517 | | Code, 26 U.S.C., Section 403(a) or (b), |
|---|
| 2376 | 3518 | | (5) United States Retirement Bonds which satisfy the |
|---|
| 2377 | 3519 | | requirements of Section 86 of the Internal |
|---|
| 2378 | 3520 | | Revenue Code, 26 U.S.C., Section 86, or |
|---|
| 2379 | 3521 | | (6) lump-sum distributions from a retirement plan |
|---|
| 2380 | 3522 | | which satisfies the requirements of Section |
|---|
| 2381 | 3523 | | 402(e) of the Internal Revenue Code, 26 U.S.C., |
|---|
| 2382 | 3524 | | Section 402(e). |
|---|
| 2383 | 3576 | | d. The amount of the exemption provided by this paragraph |
|---|
| 2384 | 3577 | | shall be limited to Five Thousand Five Hundre d Dollars |
|---|
| 2385 | 3578 | | ($5,500.00) for the 2004 tax year, Seven Thousand Five |
|---|
| 2386 | 3579 | | Hundred Dollars ($7,500.00) for the 2005 tax year and |
|---|
| 2387 | 3580 | | Ten Thousand Dollars ($10,000.00) for the tax year |
|---|
| 2388 | 3581 | | 2006 and for all subsequent tax years. Any individual |
|---|
| 2389 | 3582 | | who claims the exemption provid ed for in paragraph 8 |
|---|
| 2390 | 3583 | | of this subsection shall not be permitted to claim a |
|---|
| 2391 | 3584 | | combined total exemption pursuant to this paragraph |
|---|
| 2392 | 3585 | | and paragraph 8 of this subse ction in an amount |
|---|
| 2420 | 3586 | | exceeding Five Thousand Five Hundred Dollars |
|---|
| 2421 | 3587 | | ($5,500.00) for the 2004 tax year, S even Thousand Five |
|---|
| 2422 | 3588 | | Hundred Dollars ($7,500.00) for the 2005 tax year and |
|---|
| 2423 | 3589 | | Ten Thousand Dollars ($10,000.00) for the 2006 tax |
|---|
| 2424 | 3590 | | year and all subsequent tax year s. |
|---|
| 2425 | 3591 | | 15. In taxable years be ginning after December 31, 1999, for an |
|---|
| 2426 | 3592 | | individual engaged in production agriculture who has filed a |
|---|
| 2427 | 3593 | | Schedule F form with the taxpayer’s federal income tax return for |
|---|
| 2428 | 3594 | | such taxable year, there shall be excluded from taxable income any |
|---|
| 2429 | 3595 | | amount which was inclu ded as federal taxable income or federal |
|---|
| 2430 | 3596 | | adjusted gross income and which consists of the discharge of an |
|---|
| 2431 | 3597 | | obligation by a creditor of the taxpayer incurred to finance the |
|---|
| 2432 | 3598 | | production of agricultural products. |
|---|
| 2433 | 3650 | | 16. In taxable years beginning December 31, 2000 , an amount |
|---|
| 2434 | 3651 | | equal to one hundred percent (100%) of the amount of any scho larship |
|---|
| 2435 | 3652 | | or stipend received from participation in the Oklahoma Police Corps |
|---|
| 2436 | 3653 | | Program, as established in Section 2-140.3 of Title 47 of the |
|---|
| 2437 | 3654 | | Oklahoma Statutes shall be exempt from taxabl e income. |
|---|
| 2438 | 3655 | | 17. a. In taxable years beginning after December 31, 2001, |
|---|
| 2439 | 3656 | | and before January 1, 2005, there shall be allowed a |
|---|
| 2440 | 3657 | | deduction in the amount of contributions to accounts |
|---|
| 2441 | 3658 | | established pursuant to the Oklahoma College Savings |
|---|
| 2442 | 3659 | | Plan Act. The deduction sha ll equal the amount of |
|---|
| 2443 | 3660 | | contributions to accounts, but in no event shall t he |
|---|
| 2471 | 3661 | | deduction for each contributor exceed Two Thousand |
|---|
| 2472 | 3662 | | Five Hundred Dollars ($2,500.00) each taxable year for |
|---|
| 2473 | 3663 | | each account. |
|---|
| 2474 | 3664 | | b. In taxable years beginning aft er December 31, 2004, |
|---|
| 2475 | 3665 | | each taxpayer shall be allowed a deduction for |
|---|
| 2476 | 3666 | | contributions to accounts estab lished pursuant to the |
|---|
| 2477 | 3667 | | Oklahoma College Savings Plan Act. The maximum annual |
|---|
| 2478 | 3668 | | deduction shall equal the amount of contributions to |
|---|
| 2479 | 3669 | | all such accounts plus an y contributions to such |
|---|
| 2480 | 3670 | | accounts by the taxpayer for prior taxable years after |
|---|
| 2481 | 3671 | | December 31, 2004, wh ich were not deducted, but in no |
|---|
| 2482 | 3672 | | event shall the deduction for each tax year exceed Ten |
|---|
| 2483 | 3673 | | Thousand Dollars ($10,000.00) for each individual |
|---|
| 2484 | 3725 | | taxpayer or Twenty Thousand Dollars ($20,000. 00) for |
|---|
| 2485 | 3726 | | taxpayers filing a joint return. Any amount of a |
|---|
| 2486 | 3727 | | contribution that is not deducted by the taxpayer in |
|---|
| 2487 | 3728 | | the year for which the contribution is made may be |
|---|
| 2488 | 3729 | | carried forward as a deduction from income for the |
|---|
| 2489 | 3730 | | succeeding five (5) years. For taxable yea rs |
|---|
| 2490 | 3731 | | beginning after December 31, 2005, deductions may be |
|---|
| 2491 | 3732 | | taken for contributions and rollovers made during a |
|---|
| 2492 | 3733 | | taxable year and up to April 15 of the succeeding |
|---|
| 2493 | 3734 | | year, or the due date of a taxpayer’s state income tax |
|---|
| 2494 | 3735 | | return, excluding extensions, whichever is later. |
|---|
| 2522 | 3736 | | Provided, a deduction for the same contribution may |
|---|
| 2523 | 3737 | | not be taken for two (2) different taxable years. |
|---|
| 2524 | 3738 | | c. In taxable years beginning after December 31, 2006, |
|---|
| 2525 | 3739 | | deductions for contributions made pursuant to |
|---|
| 2526 | 3740 | | subparagraph b of this paragraph shall be lim ited as |
|---|
| 2527 | 3741 | | follows: |
|---|
| 2528 | 3742 | | (1) for a taxpayer who qualified for the five-year |
|---|
| 2529 | 3743 | | carryforward election and who takes a rollover or |
|---|
| 2530 | 3744 | | nonqualified withdrawal during that period, the |
|---|
| 2531 | 3745 | | tax deduction otherwise available pursuant to |
|---|
| 2532 | 3746 | | subparagraph b of this paragraph shall be r educed |
|---|
| 2533 | 3747 | | by the amount which is equal to the rollover or |
|---|
| 2534 | 3748 | | nonqualified withdrawal, and |
|---|
| 2535 | 3800 | | (2) for a taxpayer who elects to take a rollover or |
|---|
| 2536 | 3801 | | nonqualified withdrawal within the same tax year |
|---|
| 2537 | 3802 | | in which a contribution was made to the |
|---|
| 2538 | 3803 | | taxpayer’s account, the tax de duction otherwise |
|---|
| 2539 | 3804 | | available pursuant to subparagraph b of this |
|---|
| 2540 | 3805 | | paragraph shall be reduced by the amount of the |
|---|
| 2541 | 3806 | | contribution which is equal to the rollover or |
|---|
| 2542 | 3807 | | nonqualified withdrawal. |
|---|
| 2543 | 3808 | | d. If a taxpayer elects to take a rollover on a |
|---|
| 2544 | 3809 | | contribution for which a deduction has been tak en |
|---|
| 2545 | 3810 | | pursuant to subparagraph b of this paragraph withi n |
|---|
| 2573 | 3811 | | one (1) year of the date of contribution, the amount |
|---|
| 2574 | 3812 | | of such rollover shall be included in the adjusted |
|---|
| 2575 | 3813 | | gross income of the taxpayer in the taxable year o f |
|---|
| 2576 | 3814 | | the rollover. |
|---|
| 2577 | 3815 | | e. If a taxpayer makes a nonqua lified withdrawal of |
|---|
| 2578 | 3816 | | contributions for which a deduct ion was taken pursuant |
|---|
| 2579 | 3817 | | to subparagraph b of this paragraph, such nonqualified |
|---|
| 2580 | 3818 | | withdrawal and any earnings thereon shall be included |
|---|
| 2581 | 3819 | | in the adjusted gross in come of the taxpayer in the |
|---|
| 2582 | 3820 | | taxable year of the nonqualified withdrawal. |
|---|
| 2583 | 3821 | | f. As used in this paragrap h: |
|---|
| 2584 | 3873 | | (1) “non-qualified withdrawal” means a withdrawal |
|---|
| 2585 | 3874 | | from an Oklahoma College Savings Plan account |
|---|
| 2586 | 3875 | | other than one of the following: |
|---|
| 2587 | 3876 | | (a) a qualified withdraw al, |
|---|
| 2588 | 3877 | | (b) a withdrawal made as a result of the de ath |
|---|
| 2589 | 3878 | | or disability of the designated beneficiary |
|---|
| 2590 | 3879 | | of an account, |
|---|
| 2591 | 3880 | | (c) a withdrawal that is made on the account of |
|---|
| 2592 | 3881 | | a scholarship or the allowance or payment |
|---|
| 2593 | 3882 | | described in Section 135(d)(1)(B) or (C) or |
|---|
| 2594 | 3883 | | by the Internal Revenue Code, received by |
|---|
| 2595 | 3884 | | the designated beneficiary to the extent the |
|---|
| 2596 | 3885 | | amount of the refund does not exceed the |
|---|
| 2624 | 3886 | | amount of the scholarship, allowance, or |
|---|
| 2625 | 3887 | | payment, or |
|---|
| 2626 | 3888 | | (d) a rollover or change of designated |
|---|
| 2627 | 3889 | | beneficiary as permitted by subsection F of |
|---|
| 2628 | 3890 | | Section 3970.7 of Tit le 70 of Oklahoma |
|---|
| 2629 | 3891 | | Statutes, and |
|---|
| 2630 | 3892 | | (2) “rollover” means the transfer of funds from the |
|---|
| 2631 | 3893 | | Oklahoma College Savings Plan to any other plan |
|---|
| 2632 | 3894 | | under Section 529 of the Internal Revenue Code. |
|---|
| 2633 | 3895 | | 18. For tax years 2006 through 2021, retirement benefits |
|---|
| 2634 | 3896 | | received by an individual from any component of the Armed Forces of |
|---|
| 2635 | 3948 | | the United States in an amount no t to exceed the greater of seventy- |
|---|
| 2636 | 3949 | | five percent (75%) of such benefits or Ten Thousand Dollars |
|---|
| 2637 | 3950 | | ($10,000.00) shall be exempt from taxable income but in no case less |
|---|
| 2638 | 3951 | | than the amount of the exemption provided by paragraph 14 of t his |
|---|
| 2639 | 3952 | | subsection. For tax year 2022 and subsequent tax yea rs, retirement |
|---|
| 2640 | 3953 | | benefits received by an individual from any component of the Armed |
|---|
| 2641 | 3954 | | Forces of the United States shall be exempt from taxable income. |
|---|
| 2642 | 3955 | | 19. For taxable years beginning after December 31, 2006, |
|---|
| 2643 | 3956 | | retirement benefits rece ived by federal civil servi ce retirees, |
|---|
| 2644 | 3957 | | including survivor annuities, paid in lieu of Social Securi ty |
|---|
| 2645 | 3958 | | benefits shall be exempt from taxable income to the extent suc h |
|---|
| 2646 | 3959 | | benefits are included in the federal adjusted gross income p ursuant |
|---|
| 2674 | 3960 | | to the provisions of S ection 86 of the Internal R evenue Code, 26 |
|---|
| 2675 | 3961 | | U.S.C., Section 86, according to the following schedule: |
|---|
| 2676 | 3962 | | a. in the taxable year beginning January 1, 2007, twenty |
|---|
| 2677 | 3963 | | percent (20%) of such benefits shall be exempt, |
|---|
| 2678 | 3964 | | b. in the taxable year beginning January 1, 2008, f orty |
|---|
| 2679 | 3965 | | percent (40%) of such benefits shall be exempt, |
|---|
| 2680 | 3966 | | c. in the taxable year beginning January 1, 20 09, sixty |
|---|
| 2681 | 3967 | | percent (60%) of such benefits shall be exempt, |
|---|
| 2682 | 3968 | | d. in the taxable year beginning January 1, 2010, eighty |
|---|
| 2683 | 3969 | | percent (80%) of such benefits shall be ex empt, and |
|---|
| 2684 | 4021 | | e. in the taxable year beginning January 1, 2011, and |
|---|
| 2685 | 4022 | | subsequent taxable years, one hundr ed percent (100%) |
|---|
| 2686 | 4023 | | of such benefits shall be exempt. |
|---|
| 2687 | 4024 | | 20. a. For taxable years beginning after December 31, 2007, a |
|---|
| 2688 | 4025 | | resident individual may deduct up to Ten Th ousand |
|---|
| 2689 | 4026 | | Dollars ($10,000.00) from Oklahoma adjusted gross |
|---|
| 2690 | 4027 | | income if the individual, or the dependen t of the |
|---|
| 2691 | 4028 | | individual, while living, donates one or more human |
|---|
| 2692 | 4029 | | organs of the individual to another human being for |
|---|
| 2693 | 4030 | | human organ transplantation. As used in this |
|---|
| 2694 | 4031 | | paragraph, “human organ” means all or part of a liver, |
|---|
| 2695 | 4032 | | pancreas, kidney, intestine, lung, or bone marrow. A |
|---|
| 2696 | 4033 | | deduction that is claimed under this paragraph m ay be |
|---|
| 2724 | 4034 | | claimed in the taxable year in which the human organ |
|---|
| 2725 | 4035 | | transplantation occurs. |
|---|
| 2726 | 4036 | | b. An individual may claim this deduction only once, and |
|---|
| 2727 | 4037 | | the deduction may be claimed only for unreimbursed |
|---|
| 2728 | 4038 | | expenses that are incurred by the individual and |
|---|
| 2729 | 4039 | | related to the organ donation of the individual. |
|---|
| 2730 | 4040 | | c. The Oklahoma Tax Commission shal l promulgate rules to |
|---|
| 2731 | 4041 | | implement the provisions of this pa ragraph which shall |
|---|
| 2732 | 4042 | | contain a specific list of expenses which may be |
|---|
| 2733 | 4043 | | presumed to qualify for the deduction. The Tax |
|---|
| 2734 | 4095 | | Commission shall prescribe necessary requirements for |
|---|
| 2735 | 4096 | | verification. |
|---|
| 2736 | 4097 | | 21. For taxable years beginning after Decem ber 31, 2009, there |
|---|
| 2737 | 4098 | | shall be exempt from taxable income any amount received by the |
|---|
| 2738 | 4099 | | beneficiary of the death benefit for an emergency medical technician |
|---|
| 2739 | 4100 | | or a registered emergency medical responder provided by Section 1- |
|---|
| 2740 | 4101 | | 2505.1 of Title 63 of the Oklahoma Sta tutes. |
|---|
| 2741 | 4102 | | 22. For taxable yea rs beginning after December 31, 2008, |
|---|
| 2742 | 4103 | | taxable income shall be increased by any unemployment compensation |
|---|
| 2743 | 4104 | | exempted under Section 85(c) of the Internal Revenue Code, 26 |
|---|
| 2744 | 4105 | | U.S.C., Section 85(c)(2009). |
|---|
| 2745 | 4106 | | 23. For taxable years beginning after December 31, 2008, th ere |
|---|
| 2746 | 4107 | | shall be exempt from taxable income any payment in an amou nt less |
|---|
| 2747 | 4108 | | than Six Hundred Dollars ($600.00) received by a person as an award |
|---|
| 2775 | 4109 | | for participation in a competitive livestock show event. For |
|---|
| 2776 | 4110 | | purposes of this paragraph, t he payment shall be treated as a |
|---|
| 2777 | 4111 | | scholarship amount paid by the entity sponsoring the eve nt and the |
|---|
| 2778 | 4112 | | sponsoring entity shall cause the payment to be categ orized as a |
|---|
| 2779 | 4113 | | scholarship in its books and records. |
|---|
| 2780 | 4114 | | 24. For taxable years beginning on or after January 1, 2016, |
|---|
| 2781 | 4115 | | taxable income shall be increased by any amount of state and local |
|---|
| 2782 | 4116 | | sales or income taxes deducted under 26 U.S.C., Section 164 of the |
|---|
| 2783 | 4117 | | Internal Revenue Code. If the amount of state and local taxes |
|---|
| 2784 | 4118 | | deducted on the fede ral return is limited, taxable income on the |
|---|
| 2785 | 4170 | | state return shall be increased only by the amount actually deducted |
|---|
| 2786 | 4171 | | after any such limitations are applied. |
|---|
| 2787 | 4172 | | 25. For taxable years begi nning after December 31, 2020, each |
|---|
| 2788 | 4173 | | taxpayer shall be allowed a deduction f or contributions to accounts |
|---|
| 2789 | 4174 | | established pursuant to the Achieving a Better Life Experience |
|---|
| 2790 | 4175 | | (ABLE) Program as established in Sec tion 4001.1 et seq. of Title 56 |
|---|
| 2791 | 4176 | | of the Oklahoma Statu tes. For any tax year, the deduction provided |
|---|
| 2792 | 4177 | | for in this paragraph shall not exceed Ten Thousand Dollar s |
|---|
| 2793 | 4178 | | ($10,000.00) for an individual taxpayer or Twenty Thousand Dollars |
|---|
| 2794 | 4179 | | ($20,000.00) for taxpayers fi ling a joint return. Any amount of |
|---|
| 2795 | 4180 | | contribution not deducted by the taxpayer in the tax year for which |
|---|
| 2796 | 4181 | | the contribution is made may be carried forward as a d eduction from |
|---|
| 2797 | 4182 | | income for up to five (5) tax years. Deductions may be taken for |
|---|
| 2798 | 4183 | | contributions made during the tax year and through April 15 of the |
|---|
| 2826 | 4184 | | succeeding tax year, or through the due date of a taxpayer’s state |
|---|
| 2827 | 4185 | | income tax return excluding extensions, wh ichever is later. |
|---|
| 2828 | 4186 | | Provided, a deduction for the same contribution may not be taken in |
|---|
| 2829 | 4187 | | more than one (1) tax year. |
|---|
| 2830 | 4188 | | F. 1. For taxable years beginning after December 31, 2004, a |
|---|
| 2831 | 4189 | | deduction from the Oklahoma adjusted gross income of any individual |
|---|
| 2832 | 4190 | | taxpayer shall be allowed for qualifyi ng gains receiving capital |
|---|
| 2833 | 4191 | | treatment that are includ ed in the federal adjusted gross income of |
|---|
| 2834 | 4192 | | such individual taxpayer du ring the taxable year. |
|---|
| 2835 | 4193 | | 2. As used in this subsection: |
|---|
| 2836 | 4245 | | a. “qualifying gains receiving capital treatment” means |
|---|
| 2837 | 4246 | | the amount of net capit al gains, as defined in Section |
|---|
| 2838 | 4247 | | 1222(11) of the Inte rnal Revenue Code, included in an |
|---|
| 2839 | 4248 | | individual taxpayer’s federal income tax return that |
|---|
| 2840 | 4249 | | result from: |
|---|
| 2841 | 4250 | | (1) the sale of real property or tangible personal |
|---|
| 2842 | 4251 | | property located within Oklahoma that has been |
|---|
| 2843 | 4252 | | directly or indirectly owned by the individual |
|---|
| 2844 | 4253 | | taxpayer for a holding period of at least five |
|---|
| 2845 | 4254 | | (5) years prior to the date of the transaction |
|---|
| 2846 | 4255 | | from which such net capital gains arise, |
|---|
| 2847 | 4256 | | (2) the sale of stock or the sale of a direct or |
|---|
| 2848 | 4257 | | indirect ownership interest in an Oklahoma |
|---|
| 2849 | 4258 | | company, limited liability company, or |
|---|
| 2877 | 4259 | | partnership where such stock or ownership |
|---|
| 2878 | 4260 | | interest has been directl y or indirectly owned by |
|---|
| 2879 | 4261 | | the individual taxpayer for a holding period of |
|---|
| 2880 | 4262 | | at least two (2) years prior to the date of the |
|---|
| 2881 | 4263 | | transaction from which the net capital gains |
|---|
| 2882 | 4264 | | arise, or |
|---|
| 2883 | 4265 | | (3) the sale of real property, tangible personal |
|---|
| 2884 | 4266 | | property, or intangible persona l property located |
|---|
| 2885 | 4267 | | within Oklahoma as part of the sale of all or |
|---|
| 2886 | 4268 | | substantially all of the assets of an Oklahoma |
|---|
| 2887 | 4320 | | company, limited liability company, or |
|---|
| 2888 | 4321 | | partnership, or an Oklahoma proprietorshi p |
|---|
| 2889 | 4322 | | business enterprise where such property has been |
|---|
| 2890 | 4323 | | directly or indirectly owned by such entity or |
|---|
| 2891 | 4324 | | business enterprise or owned by the owners of |
|---|
| 2892 | 4325 | | such entity or business enterprise for a period |
|---|
| 2893 | 4326 | | of at least two (2) years prior to the date of |
|---|
| 2894 | 4327 | | the transaction from which the net capital gains |
|---|
| 2895 | 4328 | | arise, |
|---|
| 2896 | 4329 | | b. “holding period” means an uninterrupted period of |
|---|
| 2897 | 4330 | | time. The holding period shall include any additional |
|---|
| 2898 | 4331 | | period when the property was held by another |
|---|
| 2899 | 4332 | | individual or entity, if such additional period is |
|---|
| 2927 | 4333 | | included in the taxpayer’s holding period for the |
|---|
| 2928 | 4334 | | asset pursuant to the Internal Revenue Code, |
|---|
| 2929 | 4335 | | c. “Oklahoma company,” company”, “limited liability |
|---|
| 2930 | 4336 | | company,” company”, or “partnership” means an entity |
|---|
| 2931 | 4337 | | whose primary headquarters have been located in |
|---|
| 2932 | 4338 | | Oklahoma for at least three ( 3) uninterrupted years |
|---|
| 2933 | 4339 | | prior to the date of the transaction from wh ich the |
|---|
| 2934 | 4340 | | net capital gains arise, |
|---|
| 2935 | 4341 | | d. “direct” means the individual taxpayer directly owns |
|---|
| 2936 | 4342 | | the asset, |
|---|
| 2937 | 4394 | | e. “indirect” means the individual taxpayer owns an |
|---|
| 2938 | 4395 | | interest in a pass-through entity (or chain of pass- |
|---|
| 2939 | 4396 | | through entities) that sells the asset that gives ri se |
|---|
| 2940 | 4397 | | to the qualifying gains receiving capital treatment. |
|---|
| 2941 | 4398 | | (1) With respect to sales of real property or |
|---|
| 2942 | 4399 | | tangible personal property located within |
|---|
| 2943 | 4400 | | Oklahoma, the deduction described in this |
|---|
| 2944 | 4401 | | subsection shall not apply unless the pass- |
|---|
| 2945 | 4402 | | through entity that makes t he sale has held the |
|---|
| 2946 | 4403 | | property for not less than five (5) uninterrupted |
|---|
| 2947 | 4404 | | years prior to the date of the transaction tha t |
|---|
| 2948 | 4405 | | created the capital gain, and each pass-through |
|---|
| 2949 | 4406 | | entity included in the chain of ownership has |
|---|
| 2950 | 4407 | | been a member, partner, or shareholder of t he |
|---|
| 2978 | 4408 | | pass-through entity in the tier immediately below |
|---|
| 2979 | 4409 | | it for an uninterrupted period of not less than |
|---|
| 2980 | 4410 | | five (5) years. |
|---|
| 2981 | 4411 | | (2) With respect to sales of stock or ownership |
|---|
| 2982 | 4412 | | interest in or sales of all or substantially all |
|---|
| 2983 | 4413 | | of the assets of an Oklahoma company, limi ted |
|---|
| 2984 | 4414 | | liability company, partnership, or Oklahoma |
|---|
| 2985 | 4415 | | proprietorship business enterprise, the deduction |
|---|
| 2986 | 4416 | | described in this su bsection shall not apply |
|---|
| 2987 | 4417 | | unless the pass-through entity that makes the |
|---|
| 2988 | 4469 | | sale has held the stock or ownership interest for |
|---|
| 2989 | 4470 | | not less than two (2) uninterrupted years prior |
|---|
| 2990 | 4471 | | to the date of the transaction that created the |
|---|
| 2991 | 4472 | | capital gain, and each pass -through entity |
|---|
| 2992 | 4473 | | included in the chain of ownership has been a |
|---|
| 2993 | 4474 | | member, partner, or shareholder of the pass- |
|---|
| 2994 | 4475 | | through entity in the tier immediately below it |
|---|
| 2995 | 4476 | | for an uninterrupted period of not less than two |
|---|
| 2996 | 4477 | | (2) years. For purposes of this division, |
|---|
| 2997 | 4478 | | uninterrupted ownership prior to July 1, 2007, |
|---|
| 2998 | 4479 | | shall be included in the determination of the |
|---|
| 2999 | 4480 | | required holding period prescribed by this |
|---|
| 3000 | 4481 | | division, and |
|---|
| 3028 | 4482 | | f. “Oklahoma proprietorship business enterprise” means a |
|---|
| 3029 | 4483 | | business enterprise whose income and expenses have |
|---|
| 3030 | 4484 | | been reported on Sche dule C or F of an individual |
|---|
| 3031 | 4485 | | taxpayer’s federal income tax return, or any similar |
|---|
| 3032 | 4486 | | successor schedule published by the Internal Revenue |
|---|
| 3033 | 4487 | | Service and whose primary headquarters have been |
|---|
| 3034 | 4488 | | located in Oklahoma for at least three (3) |
|---|
| 3035 | 4489 | | uninterrupted years prior to the date of the |
|---|
| 3036 | 4490 | | transaction from which the net capital gains arise. |
|---|
| 3037 | 4491 | | G. 1. For purposes of computing its Oklahoma taxable income |
|---|
| 3038 | 4492 | | under this section, the dividends-paid deduction otherwise allowed |
|---|
| 3039 | 4544 | | by federal law in computing net income of a real estate inv estment |
|---|
| 3040 | 4545 | | trust that is subject to federal income tax shall be added bac k in |
|---|
| 3041 | 4546 | | computing the tax imposed by this state under this title if the real |
|---|
| 3042 | 4547 | | estate investment trust is a captive real estate investment trust. |
|---|
| 3043 | 4548 | | 2. For purposes of computing its Oklahoma ta xable income under |
|---|
| 3044 | 4549 | | this section, a taxpayer shall add back otherwise d eductible rents |
|---|
| 3045 | 4550 | | and interest expenses paid to a captive real estate investment trust |
|---|
| 3046 | 4551 | | that is not subject to the provisions of paragraph 1 of this |
|---|
| 3047 | 4552 | | subsection. As used in this subsection: |
|---|
| 3048 | 4553 | | a. the term “real estate investment trust” or “REIT” |
|---|
| 3049 | 4554 | | means the meaning ascribed to such term in Section 856 |
|---|
| 3050 | 4555 | | of the Internal Revenue Code, |
|---|
| 3078 | 4556 | | b. the term “captive real estate investment trust” means |
|---|
| 3079 | 4557 | | a real estate investment trust, the shares or |
|---|
| 3080 | 4558 | | beneficial interests of which are not regularly traded |
|---|
| 3081 | 4559 | | on an established securities market and more than |
|---|
| 3082 | 4560 | | fifty percent (50%) of the voting power or valu e of |
|---|
| 3083 | 4561 | | the beneficial interests or shares of which are owned |
|---|
| 3084 | 4562 | | or controlled, directly or indirectly, or |
|---|
| 3085 | 4563 | | constructively, by a single entity that is: |
|---|
| 3086 | 4564 | | (1) treated as an association taxable as a |
|---|
| 3087 | 4565 | | corporation under the Internal Revenue Code, and |
|---|
| 3088 | 4617 | | (2) not exempt from federal income tax pursuant t o |
|---|
| 3089 | 4618 | | the provisions of Section 501(a) of the Internal |
|---|
| 3090 | 4619 | | Revenue Code. |
|---|
| 3091 | 4620 | | The term shall not incl ude a real estate investment |
|---|
| 3092 | 4621 | | trust that is intended to be regularly tr aded on an |
|---|
| 3093 | 4622 | | established securities market, and that satisfies the |
|---|
| 3094 | 4623 | | requirements of Section 856(a)(5) and (6) of the U.S. |
|---|
| 3095 | 4624 | | Internal Revenue Code by reason of Section 856(h)(2) |
|---|
| 3096 | 4625 | | of the Internal Revenue Code, |
|---|
| 3097 | 4626 | | c. the term “association taxable as a corporation ” shall |
|---|
| 3098 | 4627 | | not include the following entities: |
|---|
| 3099 | 4628 | | (1) any real estate inve stment trust as defined in |
|---|
| 3100 | 4629 | | paragraph a of this subsection other than a |
|---|
| 3101 | 4630 | | “captive real estate investment trust”, or |
|---|
| 3129 | 4631 | | (2) any qualified real estate investment trust |
|---|
| 3130 | 4632 | | subsidiary under Section 856(i) of the Internal |
|---|
| 3131 | 4633 | | Revenue Code, other than a qualified REIT |
|---|
| 3132 | 4634 | | subsidiary of a “captive captive real estate |
|---|
| 3133 | 4635 | | investment trust”, or trust, |
|---|
| 3134 | 4636 | | (3) any Listed Australian Property Trust (meaning an |
|---|
| 3135 | 4637 | | Australian unit trust registered as a “Managed |
|---|
| 3136 | 4638 | | Investment Scheme” under the Australian |
|---|
| 3137 | 4639 | | Corporations Act in which the principa l class of |
|---|
| 3138 | 4640 | | units is listed on a recognized stock exchange i n |
|---|
| 3139 | 4692 | | Australia and is regularly traded on an |
|---|
| 3140 | 4693 | | established securities market), or an enti ty |
|---|
| 3141 | 4694 | | organized as a trust, provided that a Listed |
|---|
| 3142 | 4695 | | Australian Property Trust owns or controls, |
|---|
| 3143 | 4696 | | directly or indirectl y, seventy-five percent |
|---|
| 3144 | 4697 | | (75%) or more of the voting power o r value of the |
|---|
| 3145 | 4698 | | beneficial interests or shares of such trust, or |
|---|
| 3146 | 4699 | | (4) any Qualified Foreign Entity, meaning a |
|---|
| 3147 | 4700 | | corporation, trust, association or partnership |
|---|
| 3148 | 4701 | | organized outside the laws of the United S tates |
|---|
| 3149 | 4702 | | and which satisfies the following criteria: |
|---|
| 3150 | 4703 | | (a) at least seventy-five percent (75%) of the |
|---|
| 3151 | 4704 | | entity’s total asset value at the close of |
|---|
| 3152 | 4705 | | its taxable year is represented by real |
|---|
| 3180 | 4706 | | estate assets, as defined in Section |
|---|
| 3181 | 4707 | | 856(c)(5)(B) of the Internal Revenue Co de, |
|---|
| 3182 | 4708 | | thereby including shares or certificates of |
|---|
| 3183 | 4709 | | beneficial interest in any real estate |
|---|
| 3184 | 4710 | | investment trust, cash and cash equivalents, |
|---|
| 3185 | 4711 | | and U.S. Government securities, |
|---|
| 3186 | 4712 | | (b) the entity receives a dividend-paid |
|---|
| 3187 | 4713 | | deduction comparable to Section 561 of the |
|---|
| 3188 | 4714 | | Internal Revenue Code, or is exempt from |
|---|
| 3189 | 4715 | | entity level tax, |
|---|
| 3190 | 4767 | | (c) the entity is required to distribute at |
|---|
| 3191 | 4768 | | least eighty-five percent (85%) of its |
|---|
| 3192 | 4769 | | taxable income, as computed in the |
|---|
| 3193 | 4770 | | jurisdiction in which it is organized, to |
|---|
| 3194 | 4771 | | the holders of its shares or certificates of |
|---|
| 3195 | 4772 | | beneficial interest on an annual basis, |
|---|
| 3196 | 4773 | | (d) not more than ten percent (10%) of the |
|---|
| 3197 | 4774 | | voting power or value in such entity is held |
|---|
| 3198 | 4775 | | directly or indirectly or constructively by |
|---|
| 3199 | 4776 | | a single entity or individual, or the shares |
|---|
| 3200 | 4777 | | or beneficial interests of such entity a re |
|---|
| 3201 | 4778 | | regularly traded on an established |
|---|
| 3202 | 4779 | | securities market, an d |
|---|
| 3230 | 4780 | | (e) the entity is organized in a country which |
|---|
| 3231 | 4781 | | has a tax treaty with the United St ates. |
|---|
| 3232 | 4782 | | 3. For purposes of this subsection, the constructive ownership |
|---|
| 3233 | 4783 | | rules of Section 318(a) of the Internal Rev enue Code, as modified by |
|---|
| 3234 | 4784 | | Section 856(d)(5) of the Internal Revenue Code, shall apply in |
|---|
| 3235 | 4785 | | determining the ownership of stock, assets, or net pro fits of any |
|---|
| 3236 | 4786 | | person. |
|---|
| 3237 | 4787 | | 4. A real estate investment trust that does not become |
|---|
| 3238 | 4788 | | regularly traded on an established se curities market within one (1) |
|---|
| 3239 | 4789 | | year of the date on which it first becomes a real estate investment |
|---|
| 3240 | 4790 | | trust shall be deemed not to have been regul arly traded on an |
|---|
| 3241 | 4842 | | established securities market, retroactive to the date it first |
|---|
| 3242 | 4843 | | became a real estate investment trust, and shall file an amended |
|---|
| 3243 | 4844 | | return reflecting such re troactive designation for any tax year or |
|---|
| 3244 | 4845 | | part year occurring during its initial yea r of status as a real |
|---|
| 3245 | 4846 | | estate investment trust. For purposes of this subsection, a real |
|---|
| 3246 | 4847 | | estate investment trust b ecomes a real estate investment trust on |
|---|
| 3247 | 4848 | | the first day it has both met the requirements of Section 856 of the |
|---|
| 3248 | 4849 | | Internal Revenue Code and has ele cted to be treated as a real estate |
|---|
| 3249 | 4850 | | investment trust pursuant to Section 856(c)(1) of the Internal |
|---|
| 3250 | 4851 | | Revenue Code. |
|---|
| 3251 | 4852 | | SECTION 2. This act shall become effective November 1, 2023. |
|---|