OK
Oklahoma Senate Bill SB626

Oklahoma 2023 Regular Session

Oklahoma Senate Bill SB626 Compare Versions

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29-SENATE FLOOR VERSION
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33-SENATE BILL NO. 626 By: Bergstrom
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39-[ income tax - taxable income - gross income -
40-exemption - effective date ]
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53+STATE OF OKLAHOMA
54+
55+1st Session of the 59th Legislature (2023)
56+
57+SENATE BILL 626 By: Bergstrom
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65+AS INTRODUCED
66+
67+An Act relating to income tax; amending 68 O.S. 2021,
68+Section 2358, as last amend ed by Section 1, Chapter
69+377, O.S.L. 2022 (68 O.S. Supp. 2022, Section 2358),
70+which relates to adjustments to arrive at Okl ahoma
71+taxable income and Oklahoma adjusted gross income;
72+providing exemption to limit on itemi zed deduction
73+for gambling losses; and providing an effective date .
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4480
4581 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
4682 SECTION 1. AMENDATORY 68 O.S. 2021, Section 2358, as
4783 last amended by Section 1, Chapter 377, O.S.L. 2022 (68 O.S. Supp.
4884 2022, Section 2358), is amended to read as follows:
4985 Section 2358. For all tax years beginning after December 31,
5086 1981, taxable income and adjusted gross incom e shall be adjusted to
5187 arrive at Oklahoma taxable income and Okl ahoma adjusted gross income
5288 as required by this section.
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53140 A. The taxable income of any taxp ayer shall be adjusted to
54141 arrive at Oklahoma taxable income for corporations and Oklahoma
55142 adjusted gross income for individuals, as fol lows:
56143 1. There shall be added interest income on obligations of any
57144 state or political subdivision thereto which is not otherwise
58145 exempted pursuant to other laws of this state, to the extent that
59146 such interest is not incl uded in taxable income and adjuste d gross
60147 income.
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88148 2. There shall be deducted amounts included in such income that
89149 the state is prohibited from taxing beca use of the provisions of the
90150 Federal Constitution, the State Constitution, federal laws , or laws
91151 of Oklahoma.
92152 3. The amount of any fede ral net operating loss deducti on shall
93153 be adjusted as follows:
94154 a. For carryovers and carrybacks to taxable years
95155 beginning before January 1, 1981, the amount of any
96156 net operating loss deduction allowed to a taxpayer for
97157 federal income tax purposes shall be reduced to an
98158 amount which is the same portion thereof as the loss
99159 from sources within this state, as determined pursuan t
100160 to this section and Section 2362 of this title, for
101161 the taxable year in which such loss is sustaine d is of
102162 the total loss for such ye ar; and
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103214 b. For carryovers and carr ybacks to taxable years
104215 beginning after December 31, 1980, the amount of any
105216 net operating loss deduction allowed for the taxable
106217 year shall be an amount equal to the aggregate of the
107218 Oklahoma net operating loss carryovers and carrybacks
108219 to such year. Oklahoma net operating losses shall be
109220 separately determined by reference to Section 172 of
110221 the Internal Revenue Code, 26 U.S.C., Section 172, as
111222 modified by the Oklahoma Income Tax Act, Section 2351
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139223 et seq. of this title, and sh all be allowed without
140224 regard to the existence of a federal net operating
141225 loss. For tax years beginning after December 3 1,
142226 2000, and ending before January 1, 2008, the years to
143227 which such losses may be carried shall be de termined
144228 solely by reference to Se ction 172 of the Internal
145229 Revenue Code, 26 U.S.C., Section 172, with the
146230 exception that the terms "net operating loss" and
147231 "taxable income" shall be replaced with "Oklahoma net
148232 operating loss" and "Oklahoma taxable income ". For
149233 tax years beginning after D ecember 31, 2007, and
150234 ending before January 1, 2009, years to which such
151235 losses may be carried back shall be limited to t wo (2)
152236 years. For tax years beginning after December 31,
153237 2008, the years to which such losses may be carried
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154289 back shall be determined solely by reference to
155290 Section 172 of the Internal Revenue Code, 26 U.S.C.,
156291 Section 172, with the exception that the term s "net
157292 operating loss" and "taxable income" shall be replaced
158293 with "Oklahoma net operating loss " and "Oklahoma
159294 taxable income".
160295 4. Items of the following nature sha ll be allocated as
161296 indicated. Allowable deductions attributable to items separately
162297 allocable in subparagraphs a, b, and c of this paragraph, whether or
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190298 not such items of income were actually received, shall be allocated
191299 on the same basis as those items:
192300 a. Income from real and tangible personal property, such
193301 as rents, oil and mining productio n or royalties, and
194302 gains or losses from sales of such property, shall be
195303 allocated in accordance with the situs of such
196304 property;
197305 b. Income from intangible personal property, such as
198306 interest, dividends, patent or copyright royalties,
199307 and gains or losses from sales of such property, shall
200308 be allocated in accordance with the domiciliary situs
201309 of the taxpayer, except that:
202310 (1) where such property has acquired a nonunit ary
203311 business or commercial situs apart from the
204312 domicile of the taxpayer such income shall be
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205364 allocated in accordance with such business or
206365 commercial situs; interest income from
207366 investments held to generate workin g capital for
208367 a unitary business enterpris e shall be included
209368 in apportionable income; a resident trust or
210369 resident estate shall be t reated as having a
211370 separate commercial or business situs insofar as
212371 undistributed income is concerned, but shall not
213372 be treated as having a separate commercial or
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241373 business situs insofar as distributed income is
242374 concerned,
243375 (2) for taxable years beginning af ter December 31,
244376 2003, capital or ordinary gains or losses from
245377 the sale of an ownership interest in a publicly
246378 traded partnership, as defined by Section 7704(b)
247379 of the Internal Revenue Code, shall be allocated
248380 to this state in the ratio of the original co st
249381 of such partnership's tangible property in this
250382 state to the original cost of such partnership 's
251383 tangible property every where, as determined at
252384 the time of the sale; if more than fifty percent
253385 (50%) of the value of the partnership's assets
254386 consists of intangible assets, capital or
255387 ordinary gains or losses from the sale of an
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256439 ownership interest in the pa rtnership shall be
257440 allocated to this state in accordance with t he
258441 sales factor of the partnership for its first
259442 full tax period immediately preceding its tax
260443 period during which the ownership interest in the
261444 partnership was sold; the provisions of this
262445 division shall only appl y if the capital or
263446 ordinary gains or loss es from the sale of an
264447 ownership interest in a partnership do not
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292448 constitute qualifying gai n receiving capital
293449 treatment as defined in subparagraph a of
294450 paragraph 2 of subsection F of this sect ion, and
295451 (3) income from such property which is required to be
296452 allocated pursuant to the provisions of paragraph
297453 5 of this subsection shall be allocated a s herein
298454 provided;
299455 c. Net income or loss from a business activity which is
300456 not a part of business carried on within or without
301457 the state of a unitary character shall be separately
302458 allocated to the state in which such activity is
303459 conducted;
304460 d. In the case of a manufacturing or processing
305461 enterprise the business of which in Oklahoma consists
306462 solely of marketing its products by:
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307514 (1) sales having a situs without this state, s hipped
308515 directly to a point from without the state to a
309516 purchaser within the state, comm only known as
310517 interstate sales,
311518 (2) sales of the product stored in public warehouses
312519 within the state purs uant to "in transit"
313520 tariffs, as prescribed and allowed by the
314521 Interstate Commerce Commission, to a purchaser
315522 within the state, or
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343523 (3) sales of the product stored in public warehouses
344524 within the state where the shipment to such
345525 warehouses is not covered by "in transit"
346526 tariffs, as prescribed and allowed by the
347527 Interstate Commerce Commission, to a purchaser
348528 within or without the state,
349529 the Oklahoma net income shall, at the option of the
350530 taxpayer, be that portion of the total net income of
351531 the taxpayer for feder al income tax purpose s derived
352532 from the manufacture and/or proc essing and sales
353533 everywhere as determined by the ratio of the sales
354534 defined in this section made to the purchaser within
355535 the state to the total sales everywhere. The term
356536 "public warehouse" as used in this subpara graph means
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357588 a licensed public warehouse, t he principal business of
358589 which is warehousing merchandise for the public;
359590 e. In the case of insurance companies, Oklahoma taxable
360591 income shall be taxable income of the taxpayer for
361592 federal tax purposes, as adjusted for the adjustments
362593 provided pursuant to the provisions of paragraphs 1
363594 and 2 of this subsection, apportioned as follows:
364595 (1) except as otherwise provided by division (2) of
365596 this subparagraph, taxable income of an insurance
366597 company for a taxable year shal l be apportioned
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394598 to this state by multiply ing such income by a
395599 fraction, the numerator of which is the direct
396600 premiums written for insurance on property or
397601 risks in this state, and the denominator of which
398602 is the direct premiums writte n for insurance on
399603 property or risks everywhere. For purposes of
400604 this subsection, the term "direct premiums
401605 written" means the total amount of dir ect
402606 premiums written, assessments, and annuity
403607 considerations as reported for the taxable year
404608 on the annual statement filed by the company with
405609 the Insurance Commissioner i n the form approved
406610 by the National Association of Insurance
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407662 Commissioners, or such other form as may be
408663 prescribed in lieu thereof, and
409664 (2) if the principal source of premiums written by an
410665 insurance company consists of premiums for
411666 reinsurance accepted by it , the taxable income of
412667 such company shall be apportioned to this state
413668 by multiplying such income by a fraction, the
414669 numerator of which is the sum of (a) direct
415670 premiums written for insurance on property or
416671 risks in this state, plus (b) premiums written
417672 for reinsurance accepted in respect of property
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445673 or risks in this state, and the denominator of
446674 which is the sum of (c) direct premiums written
447675 for insurance on property or risks everywhere,
448676 plus (d) premiums written for reinsurance
449677 accepted in respect of pr operty or risks
450678 everywhere. For purposes of this paragraph,
451679 premiums written for reinsurance accep ted in
452680 respect of property or risks in this state,
453681 whether or not otherwise determinable, may at the
454682 election of the company be determined on the
455683 basis of the proportion which premiums written
456684 for insurance accepted from companies
457685 commercially domiciled in Oklahoma bears to
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458737 premiums written for reinsurance accepted from
459738 all sources, or alternativel y in the proportion
460739 which the sum of the direct premiums writte n for
461740 insurance on property or risks in this state by
462741 each ceding company from which reinsurance is
463742 accepted bears to the sum of the total direct
464743 premiums written by each such ceding company fo r
465744 the taxable year.
466745 5. The net income or loss remaining after the separate
467746 allocation in paragraph 4 of this subsection, being that which is
468747 derived from a unita ry business enterprise, shall be apportioned to
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496748 this state on the basis of the arithmetical av erage of three facto rs
497749 consisting of property, payroll, and sales or gross revenue
498750 enumerated as subparagraphs a, b, and c of this paragraph. Net
499751 income or loss as used in this paragraph includes that derived from
500752 patent or copyright royalties, purchase dis counts, and interest on
501753 accounts receivable relating to or ar ising from a business activity,
502754 the income from which is apportioned pursuant to this subsection,
503755 including the sale or other disposition of such property and any
504756 other property used in the unita ry enterprise. Dedu ctions used in
505757 computing such net income or loss shall not include taxes based on
506758 or measured by income. Provided, for corporations whose pro perty
507759 for purposes of the tax imposed by Section 2355 of this title has an
508760 initial investment cost equaling or exc eeding Two Hundred Million
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509812 Dollars ($200,000,000.00) and such investment is made on or after
510813 July 1, 1997, or for corporations which expand th eir property or
511814 facilities in this state and such expansion has an investment cost
512815 equaling or exceeding Two Hundred Million Dollars ($200,000,000.00)
513816 over a period not to exceed three (3) years, and such expansion is
514817 commenced on or after January 1, 2000, the three factors shall be
515818 apportioned with property and payroll, each comprising twenty -five
516819 percent (25%) of the apportionment factor and sales comprisi ng fifty
517820 percent (50%) of the apportionment factor. The apportionment
518821 factors shall be computed as f ollows:
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546822 a. The property factor is a fraction, the numerator of
547823 which is the average value of t he taxpayer's real and
548824 tangible personal property owned or re nted and used in
549825 this state during the tax period and the denominator
550826 of which is the average value o f all the taxpayer's
551827 real and tangible personal property everywhere owned
552828 or rented and used d uring the tax period.
553829 (1) Property, the income from which is separately
554830 allocated in paragraph 4 of this subsection,
555831 shall not be included in determining this
556832 fraction. The numerator of the fraction shall
557833 include a portion of the investment in
558834 transportation and other equipment having no
559835 fixed situs, such as rolli ng stock, buses, trucks
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560887 and trailers, including machinery and equipment
561888 carried thereon, airplanes, sa lespersons'
562889 automobiles, and other similar equipment, in the
563890 proportion that miles traveled in Oklahoma by
564891 such equipment bears to total miles traveled,
565892 (2) Property owned by the taxpayer is valued at its
566893 original cost. Property rented by the taxpayer
567894 is valued at eight times the net annual rental
568895 rate. Net annual rental rate is the annual
569896 rental rate paid by the taxpayer, less any annual
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597897 rental rate received by the taxpayer from
598898 subrentals,
599899 (3) The average value of property shall be determined
600900 by averaging the values at the beginning and
601901 ending of the tax period , but the Oklahoma Tax
602902 Commission may require the averaging of monthly
603903 values during the tax period if reasonably
604904 required to reflect properly the average value of
605905 the taxpayer's property;
606906 b. The payroll factor is a fraction, the numerator of
607907 which is the total compensation for services rende red
608908 in the state during the tax period, and the
609909 denominator of which is the total compensation for
610910 services rendered everywhere during the tax period.
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611962 "Compensation", as used in this subsection means those
612963 paid-for services to the extent related to the un itary
613964 business but does not include officers' salaries,
614965 wages, and other compensation.
615966 (1) In the case of a transportation enterprise, the
616967 numerator of the fractio n shall include a portion
617968 of such expenditure in connection with employees
618969 operating equipment over a fixed route, such as
619970 railroad employees, airline pilots, or bus
620971 drivers, in this state only a part of the time,
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648972 in the proportion that mileage traveled in
649973 Oklahoma bears to total mileage traveled by such
650974 employees,
651975 (2) In any case the numerator of the fraction shall
652976 include a portion of such expenditures in
653977 connection with itinerant employees, such as
654978 traveling salespersons, in this state only a part
655979 of the time, in the proportion that time spent in
656980 Oklahoma bears to total time spent in furtherance
657981 of the enterprise by such employees;
658982 c. The sales factor is a fraction, the numerator of which
659983 is the total sales or gross revenue of the taxpayer in
660984 this state during the tax period, and the denominator
661985 of which is the total sales or gross revenue of the
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6621037 taxpayer everywhere during the tax period. "Sales",
6631038 as used in this subsection does not include sales or
6641039 gross revenue which are separately allocated in
6651040 paragraph 4 of this subsection.
6661041 (1) Sales of tangible personal property have a situs
6671042 in this state if the property is delivered or
6681043 shipped to a purchaser other than the United
6691044 States government, within this state regardless
6701045 of the FOB point or other conditions of the sale;
6711046 or the property is shipped from an office, store,
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6991047 warehouse, factory, or other place of storage in
7001048 this state and (a) t he purchaser is the United
7011049 States government or (b) the taxpayer is not
7021050 doing business in the state of the destination of
7031051 the shipment.
7041052 (2) In the case of a railroad or interurban railway
7051053 enterprise, the numerator of the f raction shall
7061054 not be less than the allocation of revenues to
7071055 this state as shown in its annual report to the
7081056 Corporation Commission.
7091057 (3) In the case of an airline , truck, or bus
7101058 enterprise or freight car, tank car, refrigerator
7111059 car, or other railroad equipme nt enterprise, the
7121060 numerator of the fraction shall include a portion
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7131112 of revenue from interstate transportation in the
7141113 proportion that interstate mileage traveled in
7151114 Oklahoma bears to total interstate mileage
7161115 traveled.
7171116 (4) In the case of an oil, gasoline or gas pipeline
7181117 enterprise, the nume rator of the fraction shall
7191118 be either the total of traffic units of the
7201119 enterprise within Oklahoma or the revenue
7211120 allocated to Oklahoma based upon miles moved, at
7221121 the option of the taxpayer, and the denominator
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7501122 of which shall be the total of traffic units of
7511123 the enterprise or the revenue of the enterprise
7521124 everywhere as appropriate to the numerator. A
7531125 "traffic unit" is hereby defined as the
7541126 transportation for a distance of one (1) mile of
7551127 one (1) barrel of oil, one (1) gall on of
7561128 gasoline, or one thousand (1,000) cubic feet of
7571129 natural or casinghead gas, as the case may be.
7581130 (5) In the case of a telephone or telegraph or other
7591131 communication enterprise, the numerator of the
7601132 fraction shall include that portion of the
7611133 interstate revenue as is allocated pursuant to
7621134 the accounting procedures prescribed by the
7631135 Federal Communications Commission; provided that
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7641187 in respect to each corporation or b usiness entity
7651188 required by the Federal Communications Commission
7661189 to keep its books and records in accordance with
7671190 a uniform system of accounts prescribed by such
7681191 Commission, the intrastate net income shall be
7691192 determined separately in the manner provided by
7701193 such uniform system of accounts and only the
7711194 interstate income shall be subject to allocation
7721195 pursuant to the provisions of thi s subsection.
7731196 Provided further, that the gross revenue factors
774-
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8011197 shall be those as are determined pursuant to the
8021198 accounting procedures prescribed by the Federal
8031199 Communications Commission.
8041200 In any case where the apportionmen t of the three factors
8051201 prescribed in this paragraph attributes to Oklahoma a portion of net
8061202 income of the enterprise out of all appropriate proportion to the
8071203 property owned and/or business transacted within this state, because
8081204 of the fact that one or more of the factors so prescribed are not
8091205 employed to any appreciable extent in furtherance of the enterprise;
8101206 or because one or more factors not so prescribed are emp loyed to a
8111207 considerable extent in furtherance of the enterprise; or because of
8121208 other reasons, the Tax Commission is empowered to permit, after a
8131209 showing by a taxpayer that an excessive portion of net income has
8141210 been attributed to Oklahoma, or require, when i n its judgment an
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8151262 insufficient portion of net income has been attributed to Oklahoma,
8161263 the elimination, substitution, or use of a dditional factors, or
8171264 reduction or increase in the weight of such prescribed factors.
8181265 Provided, however, that any such variance from such prescribed
8191266 factors which has the effect of increasing the portion of net income
8201267 attributable to Oklahoma must not be inherently arbitrary, and
8211268 application of the recomputed final apportionment to the net income
8221269 of the enterprise must attribute t o Oklahoma only a reasonable
8231270 portion thereof.
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8511271 6. For calendar years 1997 and 1998, the owner of a new or
8521272 expanded agricultural commodity processing facility in this state
8531273 may exclude from Oklahoma taxable income, or in the case of an
8541274 individual, the Oklah oma adjusted gross income, fifteen percent
8551275 (15%) of the investment by the owner in the new or expanded
8561276 agricultural commodity pr ocessing facility. For calendar year 1999,
8571277 and all subsequent years, the percentage, not to exceed fifteen
8581278 percent (15%), avail able to the owner of a new or expanded
8591279 agricultural commodity processing facility in this stat e claiming
8601280 the exemption shall be adjusted annually so that the total estimated
8611281 reduction in tax liability does not exceed One Million Dollars
8621282 ($1,000,000.00) annually. The Tax Commission shall promulgate rules
8631283 for determining the percentage of the invest ment which each eligible
8641284 taxpayer may exclude. The exclusion provided by this paragraph
8651285 shall be taken in the taxable year when the investment is made. In
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8661337 the event the total reduction in tax liability authorized by this
8671338 paragraph exceeds One Million Dol lars ($1,000,000.00) in any
8681339 calendar year, the Tax Commission shall permit any excess over One
8691340 Million Dollars ($1,000,000.00) and shall factor such excess into
8701341 the percentage for subsequent years. Any amount of the exemption
8711342 permitted to be excluded purs uant to the provisions of this
8721343 paragraph but not used in any year may be carried forward as an
8731344 exemption from income pursuant to the provisions of this paragraph
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9011345 for a period not exceeding six (6) years following the year in which
9021346 the investment was origin ally made.
9031347 For purposes of this paragraph:
9041348 a. "Agricultural commodity processing facility" means
9051349 building buildings, structures, fixtures, and
9061350 improvements used or operated primarily for the
9071351 processing or production of marketable products from
9081352 agricultural commoditie s. The term shall also mean a
9091353 dairy operation that requires a depreciable investment
9101354 of at least Two Hundred Fifty Thousand Dollars
9111355 ($250,000.00) and which produ ces milk from dairy cows.
9121356 The term does not include a facility that provides
9131357 only, and nothing more than, storage, cleaning,
9141358 drying, or transportation of agricultural commodities,
9151359 and
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9161411 b. "Facility" means each part of the facility which is
9171412 used in a process primarily for:
9181413 (1) the processing of agricultural commodities ,
9191414 including receiving or storing agricultural
9201415 commodities, or the production of milk at a dairy
9211416 operation,
9221417 (2) transporting the agricultural commodities or
9231418 product before, during , or after the processing,
9241419 or
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9521420 (3) packaging or otherwise preparing the product for
9531421 sale or shipment.
9541422 7. Despite any provision to the contrary in paragraph 3 of this
9551423 subsection, for taxable years beginning after December 31, 1999, in
9561424 the case of a taxpayer which has a farm ing loss, such farming loss
9571425 shall be considered a net operating loss carryback in accordance
9581426 with and to the extent of the Internal Revenue Code, 26 U.S.C.,
9591427 Section 172(b)(G). However, the amount of the net operating loss
9601428 carryback shall not exceed the le sser of:
9611429 a. Sixty Thousand Dollars ($60,000.00), or
9621430 b. the loss properly shown on Schedule F of the Internal
9631431 Revenue Service Form 1040 reduced by one-half (1/2) of
9641432 the income from all other sources other than reflected
9651433 on Schedule F.
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9661485 8. In taxable years b eginning after December 31, 1995, all
9671486 qualified wages equal to the federal income tax cre dit set forth in
9681487 26 U.S.C.A., Section 4 5A, shall be deducted from taxable income.
9691488 The deduction allowed pursuant to this paragraph shall only be
9701489 permitted for the tax years in which the federal tax credit pursuant
9711490 to 26 U.S.C.A., Section 45A, is allowed. For purposes of this
9721491 paragraph, "qualified wages" means those wages used to calculate the
9731492 federal credit pursuant to 26 U.S.C.A., Section 45A.
9741493 9. In taxable years be ginning after December 31, 2005, an
9751494 employer that is eligible for and utilizes the Safet y Pays OSHA
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10031495 Consultation Service provide d by the Oklahoma Department of Labor
10041496 shall receive an exemption from taxable income in the amount of One
10051497 Thousand Dollars ($1,0 00.00) for the tax year that the service is
10061498 utilized.
10071499 10. For taxable years beginning on or after January 1, 2010,
10081500 there shall be added to Oklahoma taxable income an amount equal to
10091501 the amount of deferred income not included in such taxable income
10101502 pursuant to Section 108(i)(1) of the Internal Revenue Code of 1986
10111503 as amended by Section 1231 of the American Recovery and Reinvestment
10121504 Act of 2009 (P.L. No. 111-5). There shall be subtracted from
10131505 Oklahoma taxable income an amount equal to the amount of deferred
10141506 income included in such taxable income pursuant to Section 108(i)(1)
10151507 of the Internal Revenue Code by Section 1231 of the Americ an
10161508 Recovery and Reinvestment Act of 2009 (P.L. No. 111-5).
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10171560 11. For taxable years beginning on or after Ja nuary 1, 2019,
10181561 there shall be subtracted from Oklahoma taxable income or adjusted
10191562 gross income any item of i ncome or gain, and there shall be added to
10201563 Oklahoma taxable income or adjusted gross income any item of loss or
10211564 deduction that in the absence of an election pursuant to t he
10221565 provisions of the Pass-Through Entity Tax Equity Act of 2019 would
10231566 be allocated to a member or to an indirect member of an el ecting
10241567 pass-through entity pursuant to Section 2351 et seq. of this title,
10251568 if (i) the electing pass-through entity has accounted for such item
10261569 in computing its Oklahoma net entity income or loss pursuant to the
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10541570 provisions of the Pass-Through Entity Tax Equ ity Act of 2019, and
10551571 (ii) the total amount of tax attributable to any resulting Oklahoma
10561572 net entity income has been paid. The O klahoma Tax Commission shall
10571573 promulgate rules for the reporting of such exclusion to d irect and
10581574 indirect members of the electing pass-through entity. As used in
10591575 this paragraph, "electing pass-through entity", "indirect member",
10601576 and "member" shall be defined in the same manner as prescribed by
10611577 Section 2355.1P-2 of this title. Notwithstanding the application of
10621578 this paragraph, the adjusted tax basis of any ownership interest in
10631579 a pass-through entity for purposes of Section 2351 et seq. of this
10641580 title shall be equal to its adjusted tax basis for federal income
10651581 tax purposes.
10661582 B. 1. The taxable income of any corporation shall be furth er
10671583 adjusted to arrive at Oklahoma taxable income, except those
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10681635 corporations electing treatment as provided in subchapter S of the
10691636 Internal Revenue Code, 26 U.S.C., Section 1361 et seq., and Section
10701637 2365 of this title, deductions pursuant to the provisions of the
10711638 Accelerated Cost Recovery System as defined and allowed in the
10721639 Economic Recovery Tax Act of 1981, Public Law 97 -34, 26 U.S.C.,
10731640 Section 168, for depreciation of assets placed into service after
10741641 December 31, 1981, shall not be allowed in calculating O klahoma
10751642 taxable income. Such corporations shall be allowed a deduction for
10761643 depreciation of assets placed into service after Dece mber 31, 1981,
10771644 in accordance with provisions of the Internal Revenue Cod e, 26
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11051645 U.S.C., Section 1 et seq., in effect immediately prior to the
11061646 enactment of the Accelerated Cost Recovery System. The Oklahoma tax
11071647 basis for all such assets placed into service a fter December 31,
11081648 1981, calculated in this section shall be retained and utilized for
11091649 all Oklahoma income tax purposes through the final disposition of
11101650 such assets.
11111651 Notwithstanding any other provisions of the Oklahoma Income Tax
11121652 Act, Section 2351 et seq. o f this title, or of the Internal Revenue
11131653 Code to the contrary, this subs ection shall control calculation o f
11141654 depreciation of assets placed into service after December 31, 1981,
11151655 and before January 1, 1983.
11161656 For assets placed in service and held by a corporati on in which
11171657 accelerated cost recovery system was previously disallowed, an
11181658 adjustment to taxable income is required in the first taxable year
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11191710 beginning after December 31, 1982, to reconcile the basis of such
11201711 assets to the basis allowed in the Internal Reve nue Code. The
11211712 purpose of this adjustment is to equalize the basis and a llowance
11221713 for depreciation accounts between that reported to the Internal
11231714 Revenue Service and that reported to Oklahoma.
11241715 2. For tax years beginning on or after January 1, 2009, and
11251716 ending on or before December 31, 2009, there shall be added to
11261717 Oklahoma taxable income any amount in excess o f One Hundred Seventy-
11271718 five Thousand Dollars ($175,000.00) which has been deducted as a
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11551719 small business expense under Internal Revenue Code, Section 179 as
11561720 provided in the American Recovery and Reinvestment Act of 2009.
11571721 C. 1. For taxable years beginning af ter December 31, 1987, the
11581722 taxable income of any corporation shall be further adjusted to
11591723 arrive at Oklahoma taxable income for transfers of technolog y to
11601724 qualified small businesses located in Oklahoma. Such transferor
11611725 corporation shall be allowed an exem ption from taxable income of an
11621726 amount equal to the amount of royalty payment received as a result
11631727 of such transfer; provided, however, such amount sh all not exceed
11641728 ten percent (10%) of the amount of gross proceeds receive d by such
11651729 transferor corporation a s a result of the technology transfer. Such
11661730 exemption shall be allowed for a period not to exceed ten (10) years
11671731 from the date of receipt of the firs t royalty payment accruing from
11681732 such transfer. No exemption may be clai med for transfers of
1733+
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11691784 technology to qualified small businesses made prior to January 1,
11701785 1988.
11711786 2. For purposes of this subsection:
11721787 a. "Qualified small business" means an entity, whether
11731788 organized as a corporation, partnership, or
11741789 proprietorship, organized f or profit with its
11751790 principal place of business located within this state
11761791 and which meets the following criteria:
11771792 (1) Capitalization capitalization of not more than
11781793 Two Hundred Fifty Thousand Dollars ($250,000.00),
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12061794 (2) Having having at least fifty percent (50%) of its
12071795 employees and assets located in Oklahoma at the
12081796 time of the transfer, and
12091797 (3) Not not a subsidiary or affiliate of the
12101798 transferor corporation;
12111799 b. "Technology" means a proprietary process, formula,
12121800 pattern, device, or compilation of scientific or
12131801 technical information whi ch is not in the public
12141802 domain;
12151803 c. "Transferor corporation" means a corporation which is
12161804 the exclusive and undisputed owner of the technolog y
12171805 at the time the transfer is made; and
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12181857 d. "Gross proceeds" means the total amount of
12191858 consideration for the transfer of technology, whether
12201859 the consideration is in money or otherwise.
12211860 D. 1. For taxable years beginning after December 31, 2005, the
12221861 taxable income of any corporation, estate , or trust, shall be
12231862 further adjusted for qualifying gains receiving capital treatm ent.
12241863 Such corporations, estates , or trusts shall be allowed a deduction
12251864 from Oklahoma taxable income for the amount of qualifying gains
12261865 receiving capital treatment earned by the corpor ation, estate, or
12271866 trust during the taxable year and included in the feder al taxable
12281867 income of such corporat ion, estate, or trust.
12291868 2. As used in this subsection:
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12571869 a. "qualifying gains receiving capital treatment " means
12581870 the amount of net capital gains, as defi ned in Section
12591871 1222(11) of the Internal Revenue Code, included in the
12601872 federal income tax return of the co rporation, estate,
12611873 or trust that result from:
12621874 (1) the sale of real property or tangible personal
12631875 property located within Oklahoma that has been
12641876 directly or indirectly owned by the corporation,
12651877 estate, or trust for a holdin g period of at least
12661878 five (5) years prior to the date of the
12671879 transaction from which such net capital gains
12681880 arise,
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12691932 (2) the sale of stock or on the sale of an ownership
12701933 interest in an Oklah oma company, limited
12711934 liability company, or partnership where such
12721935 stock or ownership interest has been directly or
12731936 indirectly owned by the corporation, estate, or
12741937 trust for a holding period of at least three (3)
12751938 years prior to the date of the transaction fr om
12761939 which the net capital gains arise, or
12771940 (3) the sale of real prope rty, tangible personal
12781941 property, or intangible personal property located
12791942 within Oklahoma as part of the sale of all or
12801943 substantially all of the assets of an Oklahoma
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13081944 company, limited liabili ty company, or
13091945 partnership where such property has been directly
13101946 or indirectly owned by such entity o wned by the
13111947 owners of such entity, and used in or derived
13121948 from such entity for a period of at least three
13131949 (3) years prior to the date of the transaction
13141950 from which the net capital gains arise,
13151951 b. "holding period" means an uninterrupted period of
13161952 time. The holding period shall include any additional
13171953 period when the property was held by another
13181954 individual or entity, if such additional period is
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13192006 included in the taxpayer's holding period for the
13202007 asset pursuant to the Internal Revenue Code,
13212008 c. "Oklahoma company", "limited liability company", or
13222009 "partnership" means an entity whose primary
13232010 headquarters have been located in Oklahoma for at
13242011 least three (3) uninterrup ted years prior to the date
13252012 of the transaction from which the net capital gains
13262013 arise,
13272014 d. "direct" means the taxpayer directly owns the asset,
13282015 and
13292016 e. "indirect" means the taxpayer owns an interest in a
13302017 pass-through entity (or chain of pass -through
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13582018 entities) that sells the asset that gives rise to the
13592019 qualifying gains receiving capital treatment.
2020+(1) With respect to sales of real property or
2021+tangible personal property located within
2022+Oklahoma, the deduction described in this
2023+subsection shall not apply unless the pass-
2024+through entity that makes the sale has held the
2025+property for not less than five (5) uninterrupted
2026+years prior to the date of the transaction that
2027+created the capital gain, and each pass-through
2028+entity included in the chain of ownership has
2029+been a member, partner, or shareholder of the
2030+
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2081+pass-through entity in the tier immediately below
2082+it for an uninterrupted period of not less than
2083+five (5) years.
2084+(2) With respect to sales of stock or ownership
2085+interest in or sales of all or substantially all
2086+of the assets of an Oklahoma company, limited
2087+liability company, or partnership, the deduction
2088+described in this subsection shall not apply
2089+unless the pass-through entity that makes the
2090+sale has held the stock or ownership interest or
2091+the assets for not less tha n three (3)
2092+uninterrupted years prior to the date of the
2093+transaction that created the capital gain, and
2094+each pass-through entity included in the chain of
2095+ownership has been a member, partner or
2096+shareholder of the pass -through entity in the
2097+tier immediately below it for an uninterrupted
2098+period of not less than three (3) years.
2099+E. The Oklahoma adjusted gross income of any individual
2100+taxpayer shall be further adjusted as follows to arrive at Oklahoma
2101+taxable income:
2102+1. a. In the case of individuals, there sha ll be added or
2103+deducted, as the case may be, the difference necessary
2104+to allow personal exemptions of One Thousand Dollars
2105+
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2156+($1,000.00) in lieu of the personal exemptions allowed
2157+by the Internal Revenue Code.
2158+b. There shall be allowed an additional exemptio n of One
2159+Thousand Dollars ($1,000.00) for each taxpayer or
2160+spouse who is blind at the close of the tax year. For
2161+purposes of this subparagraph, an individual is blind
2162+only if the central visual acuity of the individual
2163+does not exceed 20/200 in the better eye with
2164+correcting lenses, or if the visual acuity of the
2165+individual is greater than 20/200, but is accompanied
2166+by a limitation in the fields of vision such that the
2167+widest diameter of the visual field subtends an angle
2168+no greater than twenty (20) degree s.
2169+c. There shall be allowed an additional exemption of One
2170+Thousand Dollars ($1,000.00) for each taxpayer or
2171+spouse who is sixty-five (65) years of age or older at
2172+the close of the tax year based upon the filing status
2173+and federal adjusted gross income of the taxpayer.
2174+Taxpayers with the following filing status may claim
2175+this exemption if the federal adjusted gross income
2176+does not exceed:
2177+(1) Twenty-five Thousand Dollars ($25,000.00) if
2178+married and filing jointly ;,
2179+
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2230+(2) Twelve Thousand Five Hundred Dollars ($12,500.00)
2231+if married and filing separately;,
2232+(3) Fifteen Thousand Dollars ($15,000.00) if single;,
2233+and
2234+(4) Nineteen Thousand Dollars ($19,000.00) if a
2235+qualifying head of household.
2236+Provided, for taxable years beginning after December
2237+31, 1999, amounts inc luded in the calculation of
2238+federal adjusted gross income pursuant to the
2239+conversion of a traditional individual retirement
2240+account to a Roth individual retirement account shall
2241+be excluded from federal adjusted gross income for
2242+purposes of the income thre sholds provided in this
2243+subparagraph.
2244+2. a. For taxable years beginning on or before December 31,
2245+2005, in the case of individuals who use the standard
2246+deduction in determining taxable income, there shall
2247+be added or deducted, as the case may be, the
2248+difference necessary to allow a standard deduction in
2249+lieu of the standard deduction allowed by the Internal
2250+Revenue Code, in an amount equal to the larger of
2251+fifteen percent (15%) of the Oklahoma adjusted gross
2252+income or One Thousand Dollars ($1,000.00), but n ot to
2253+exceed Two Thousand Dollars ($2,000.00), except that
2254+
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2305+in the case of a married individual filing a separate
2306+return such deduction shall be the larger of fifteen
2307+percent (15%) of such Oklahoma adjusted gross income
2308+or Five Hundred Dollars ($500.00), bu t not to exceed
2309+the maximum amount of One Thousand Dollars
2310+($1,000.00).
2311+b. For taxable years beginning on or after January 1,
2312+2006, and before January 1, 2007, in the case of
2313+individuals who use the standard deduction in
2314+determining taxable income, there s hall be added or
2315+deducted, as the case may be, the difference necessary
2316+to allow a standard deduction in lieu of the standard
2317+deduction allowed by the Internal Revenue Code, in an
2318+amount equal to:
2319+(1) Three Thousand Dollars ($3,000.00), if the filing
2320+status is married filing joint, head of
2321+household, or qualifying widow;, or
2322+(2) Two Thousand Dollars ($2,000.00), if the filing
2323+status is single or married filing separate.
2324+c. For the taxable year beginning on January 1, 2007, and
2325+ending December 31, 2007, in the case of individuals
2326+who use the standard deduction in determining taxable
2327+income, there shall be added or deducted, as the case
2328+may be, the difference necessary to allow a standard
2329+
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2380+deduction in lieu of the standard deduction allowed by
2381+the Internal Revenue Code, in an amount equal to:
2382+(1) Five Thousand Five Hundred Dollars ($5,500.00),
2383+if the filing status is married filing joint or
2384+qualifying widow; or,
2385+(2) Four Thousand One Hundred Twenty -five Dollars
2386+($4,125.00) for a head of household ;, or
2387+(3) Two Thousand Seven Hundred Fifty Dollars
2388+($2,750.00), if the filing status is single or
2389+married filing separate.
2390+d. For the taxable year beginning on January 1, 2008, and
2391+ending December 31, 2008, in the case of individuals
2392+who use the standard deduction in determin ing taxable
2393+income, there shall be added or deducted, as the case
2394+may be, the difference necessary to allow a standard
2395+deduction in lieu of the standard deduction allowed by
2396+the Internal Revenue Code, in an amount equal to:
2397+(1) Six Thousand Five Hundred Do llars ($6,500.00), if
2398+the filing status is married filing joint or
2399+qualifying widow, or
2400+(2) Four Thousand Eight Hundred Seventy-five Dollars
2401+($4,875.00) for a head of household, or
2402+
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2453+(3) Three Thousand Two Hundred Fifty Dollars
2454+($3,250.00), if the filing sta tus is single or
2455+married filing separate.
2456+e. For the taxable year beginning on January 1, 2009, and
2457+ending December 31, 2009, in the case of individuals
2458+who use the standard deduction in determining taxable
2459+income, there shall be added or deducted, as the case
2460+may be, the difference necessary to allow a standard
2461+deduction in lieu of the standard deduction allowed by
2462+the Internal Revenue Code, in an amount equal to:
2463+(1) Eight Thousand Five Hundred Dollars ($8,500.00),
2464+if the filing status is married filing j oint or
2465+qualifying widow, or
2466+(2) Six Thousand Three Hundred Seventy-five Dollars
2467+($6,375.00) for a head of household, or
2468+(3) Four Thousand Two Hundred Fifty Dollars
2469+($4,250.00), if the filing status is single or
2470+married filing separate.
2471+Oklahoma adjusted gross income shall be increased by
2472+any amounts paid for motor vehicle excise taxes which
2473+were deducted as allowed by the Internal Revenue Code.
2474+f. For taxable years beginning on or after January 1,
2475+2010, and ending on December 31, 2016, in the case of
2476+individuals who use the standard deduction in
2477+
2478+
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2528+determining taxable income, there shall be added or
2529+deducted, as the case may be, the difference necessary
2530+to allow a standard deduction equal to the standard
2531+deduction allowed by the Internal Revenue Code, based
2532+upon the amount and filing status prescribed by such
2533+Code for purposes of filing federal individual income
2534+tax returns.
2535+g. For taxable years beginning on or after January 1,
2536+2017, in the case of individuals who use the standard
2537+deduction in determining taxab le income, there shall
2538+be added or deducted, as the case may be, the
2539+difference necessary to allow a standard deduction in
2540+lieu of the standard deduction allowed by the Internal
2541+Revenue Code, as follows:
2542+(1) Six Thousand Three Hundred Fifty Dollars
2543+($6,350.00) for single or married filing
2544+separately,
2545+(2) Twelve Thousand Seven Hundred Dollars
2546+($12,700.00) for married filing jointly or
2547+qualifying widower with dependent child, and
2548+(3) Nine Thousand Three Hundred Fifty Dollars
2549+($9,350.00) for head of household.
2550+3. a. In the case of resident and part-year resident
2551+individuals having adjusted gross income from sources
2552+
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2603+both within and without the state, the itemized or
2604+standard deductions and personal exemptions shall be
2605+reduced to an amount which is the same porti on of the
2606+total thereof as Oklahoma adjusted gross income is of
2607+adjusted gross income. To the extent itemized
2608+deductions include allowable moving expense, proration
2609+of moving expense shall not be required or permitted
2610+but allowable moving expense shall be fully deductible
2611+for those taxpayers moving within or into Oklahoma and
2612+no part of moving expense shall be deductible for
2613+those taxpayers moving without or out of Oklahoma.
2614+All other itemized or standard deductions and personal
2615+exemptions shall be subjec t to proration as provided
2616+by law.
2617+b. For taxable years beginning on or after January 1,
2618+2018, the net amount of itemized deductions allowable
2619+on an Oklahoma income tax return, subject to the
2620+provisions of paragraph 24 of this subsection, shall
2621+not exceed Seventeen Thousand Dollars ($17,000.00).
2622+For purposes of this subparagraph, charitable
2623+contributions and medical expenses, and, for tax year
2624+2024 and subsequent ta x years, gambling losses,
2625+deductible for federal income tax p urposes shall be
2626+
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2677+excluded from the amount of Seventeen Thousand Dollars
2678+($17,000.00) as specified by this subparagraph.
2679+4. A resident individual with a physical disability
2680+constituting a substantial handicap to employment may deduct from
2681+Oklahoma adjusted gross income such expenditures to modify a motor
2682+vehicle, home, or workplace as are necessary to c ompensate for his
2683+or her handicap. A veteran certified by the Department of Veterans
2684+Affairs of the federal government as having a service-connected
2685+disability shall be conclusively presumed to be an individual with a
2686+physical disability constituting a su bstantial handicap to
2687+employment. The Tax Commission shall promulgate rules containing a
2688+list of combinations of common disabilities and modifications which
2689+may be presumed to qualify for this deduction. The Tax Commission
2690+shall prescribe necessary requi rements for verification.
2691+5. a. Before July 1, 2010, the first One Thousand Five
2692+Hundred Dollars ($1,500.00) received by any person
2693+from the United States as salary or compensation in
2694+any form, other than retirement benefits, as a member
2695+of any component of the Armed Forces of the United
2696+States shall be deducted from taxable income.
2697+b. On or after July 1, 2010, one hundred percent (100%)
2698+of the income received by any person from the United
2699+States as salary or compensation in any form, other
2700+than retirement benefits, as a member of any component
2701+
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2752+of the Armed Forces of the United States shall be
2753+deducted from taxable income.
2754+c. Whenever the filing of a timely inco me tax return by a
2755+member of the Armed Forces of the United States is
2756+made impracticable or imposs ible of accomplishment by
2757+reason of:
2758+(1) absence from the United States, which term
2759+includes only the states and the District of
2760+Columbia;,
2761+(2) absence from the State of Oklahoma this state
2762+while on active duty ;, or
2763+(3) confinement in a hospital within the United
2764+States for treatment of wounds, injuries, or
2765+disease,
2766+the time for filing a return and paying an income tax
2767+shall be and is hereby ext ended without incurring
2768+liability for interest or penalties, to the fifteenth
2769+day of the third month following the month in whic h:
2770+(a) Such such individual shall return to the
2771+United States if the extension is granted
2772+pursuant to subparagraph a of this
2773+paragraph, return to the State of Oklahoma
2774+this state if the extension is granted
2775+pursuant to subparagraph b of this paragraph
2776+
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2827+or be discharged from such hospital if the
2828+extension is granted pursuant to
2829+subparagraph c of this paragraph;, or
2830+(b) An an executor, administrator, or
2831+conservator of the estate of t he taxpayer is
2832+appointed, whichever event occurs the
2833+earliest.
2834+Provided, that the Tax Commission may, in its discretion, grant
2835+any member of the Armed Forces of the United States an extension of
2836+time for filing of income tax r eturns and payment of income t ax
2837+without incurring liabilities for interest or penalties. Such
2838+extension may be granted only when in the judgment of the Tax
2839+Commission a good cause exists therefor and may be for a period in
2840+excess of six (6) months. A re cord of every such extension g ranted,
2841+and the reason therefor, shall be kept.
2842+6. Before July 1, 2010, the salar y or any other form of
2843+compensation, received from the United States by a member of any
2844+component of the Armed Forces of t he United States, shal l be
2845+deducted from taxable inc ome during the time in which the person is
2846+detained by the enemy in a conflict, is a prisoner of war or is
2847+missing in action and not deceased; provided, after July 1, 2010,
2848+all such salary or compensation shall be subject to t he deduction as
2849+provided pursuant to paragraph 5 of this subsection.
2850+
2851+
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2901+7. a. An individual taxpayer, whether res ident or
2902+nonresident, may deduct an amount equal to the federal
2903+income taxes paid by the taxpayer during the taxable
2904+year.
2905+b. Federal taxes as des cribed in subparagraph a of th is
2906+paragraph shall be deductible by any individual
2907+taxpayer, whether resident or nonresident, only to the
2908+extent they relate to income subject to taxation
2909+pursuant to the provisions of the Oklahoma Income Tax
2910+Act. The maximum amount allowable in the prece ding
2911+paragraph shall be prorated on the ratio of the
2912+Oklahoma adjusted gross inc ome to federal adjusted
2913+gross income.
2914+c. For the purpose of this paragraph, "federal income
2915+taxes paid" shall mean federal i ncome taxes, surtaxes
2916+imposed on incomes or excess p rofits taxes, as though
2917+the taxpayer was on the accrual basis. In determining
2918+the amount of deduction for federal income taxes for
2919+tax year 2001, the amount of the deduction shall not
2920+be adjusted by the amount of any accelera ted ten
2921+percent (10%) tax rate bracket credit or advanced
2922+refund of the credit received during the tax year
2923+provided pursuant to the federal Economic Growth and
2924+Tax Relief Reconciliation Act of 2001, P.L. No. 107-
2925+
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2976+16, and the advanced refund of such credit shall not
2977+be subject to taxati on.
2978+d. The provisions of this paragraph shall apply to all
2979+taxable years ending after December 31, 1978, and
2980+beginning before January 1, 2006.
2981+8. Retirement benefits not to exceed Five Thousand Five Hund red
2982+Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five
2983+Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Thousan d
2984+Dollars ($10,000.00) for the 2006 tax year and all subsequent tax
2985+years, which are received by an individual from the civi l service of
2986+the United States, the Oklahoma Public Employees Retirement System,
2987+the Teachers' Retirement System of Oklahoma, the Ok lahoma Law
2988+Enforcement Retirement System, the Oklahoma Firefighters Pension and
2989+Retirement System, the Oklahoma Police Pensi on and Retirement
2990+System, the employee retirement sy stems created by counties pursuant
2991+to Section 951 et seq. of Title 19 of the Okl ahoma Statutes, the
2992+Uniform Retirement System for Justices and Judges, the Oklahoma
2993+Wildlife Conservation Department Retirem ent Fund, the Oklahoma
2994+Employment Security Commissio n Retirement Plan, or the employee
2995+retirement systems created by municipalities pursuant to Section 48-
2996+101 et seq. of Title 11 of the Oklahoma Statutes shall be exempt
2997+from taxable income.
2998+9. In taxable years beginning after December 3l, 1984, Social
2999+Security benefits received by an individual shall be exempt from
3000+
3001+
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3051+taxable income, to the extent such benefits are included in the
3052+federal adjusted gross income pursuant to the provisions of Section
3053+86 of the Internal Revenue Code, 26 U.S.C., Section 86.
3054+10. For taxable years beginning after December 31, 1994, lump -
3055+sum distributions from e mployer plans of deferred compensation,
3056+which are not qualified plans within the meaning of Section 401(a)
3057+of the Internal Revenue Code, 26 U.S.C. , Section 401(a), and which
3058+are deposited in and accounted for within a separate bank account or
3059+brokerage account in a financial institution within this state,
3060+shall be excluded from taxable income in the same manner as a
3061+qualifying rollover contribution to an individual retirement ac count
3062+within the meaning of Section 408 of the Internal Revenue Code, 26
3063+U.S.C., Section 408. Amounts withdrawn from such bank or brokerage
3064+account, including any earnings thereon, shall be included in
3065+taxable income when wit hdrawn in the same manner as w ithdrawals from
3066+individual retirement accounts within the meaning of Section 408 of
3067+the Internal Revenue Code.
3068+11. In taxable years beginning after December 31, 1995,
3069+contributions made to and interest r eceived from a medical savings
3070+account established p ursuant to Sections 2621 through 2623 of Title
3071+63 of the Oklahoma Statutes shall be exempt from taxable income.
3072+12. For taxable years beginning after December 31, 1996, the
3073+Oklahoma adjusted gross income of any individual tax payer who is a
3074+swine or poultry producer may be further adjusted for the deduction
3075+
3076+
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3126+for depreciation allowed fo r new construction or expansion costs
3127+which may be computed using the same depreciation method elected for
3128+federal income tax purposes except that the useful life shall be
3129+seven (7) years for purposes of this paragraph. If depreciation is
3130+allowed as a deduction in determining the adjusted gross income of
3131+an individual, any depreciation calculated and claimed pursuant to
3132+this section shall in no eve nt be a duplication of any dep reciation
3133+allowed or permitted on the federal income tax return of the
3134+individual.
3135+13. a. In taxable years beginning after December 31, 2002,
3136+nonrecurring adoption expenses paid by a resident
3137+individual taxpayer in connection with:
3138+(1) the adoption of a mi nor, or
3139+(2) a proposed adoption of a minor which did not
3140+result in a decreed ad option,
3141+may be deducted from the Oklahoma adjusted gross
3142+income.
3143+b. The deductions for adoptions and proposed adoptions
3144+authorized by this paragrap h shall not exceed Twenty
3145+Thousand Dollars ($20,000.00) per calendar year.
3146+c. The Tax Commission shall promul gate rules to implement
3147+the provisions of this paragraph which shall contain a
3148+specific list of nonrecurring adoption expense s which
3149+may be presumed to qualify for the deduction . The Tax
3150+
3151+
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3201+Commission shall prescribe necessary requirements for
3202+verification.
3203+d. "Nonrecurring adoption expenses" means adoption fees,
3204+court costs, medical expenses, attorney fees, and
3205+expenses which are directly related to th e legal
3206+process of adoption of a child including, but not
3207+limited to, costs relating to the adoption study,
3208+health and psychological examinations, transportation,
3209+and reasonable costs of lodging and food for the child
3210+or adoptive parents which are incurred to complete the
3211+adoption process and are not reimbursed by other
3212+sources. The term "nonrecurring adoption expenses"
3213+shall not include attorney fees incurred for the
3214+purpose of litigating a contested adoption, from and
3215+after the point of the initiation of the contest,
3216+costs associated with physical remodeling, renovation
3217+and alteration of the adoptive parents ' home or
3218+property, except for a special needs child as
3219+authorized by the court.
3220+14. a. In taxable years beginning before January 1, 2005,
3221+retirement benefits not to exceed the amou nts
3222+specified in this paragraph, which are received by an
3223+individual sixty-five (65) years of age or older and
3224+whose Oklahoma adjusted gross income is Twenty-five
3225+
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3276+Thousand Dollars ($25,000.00) or less if the filing
3277+status is single, head of household, or m arried filing
3278+separate, or Fifty Thousand Dollars ($50,000.00) or
3279+less if the filing status is married filing joint or
3280+qualifying widow, shall be exempt from taxable income.
3281+In taxable years beginning af ter December 31, 2004,
3282+retirement benefits not to ex ceed the amounts
3283+specified in this paragraph, which are received by an
3284+individual whose Oklahoma adjusted gross income is
3285+less than the qualifying amount specified in this
3286+paragraph, shall be exempt from taxable income.
3287+b. For purposes of this paragraph, t he qualifying amount
3288+shall be as follows:
3289+(1) in taxable years beginning aft er December 31,
3290+2004, and prior to January 1, 2007, the
3291+qualifying amount shall be Thirty-seven Thousand
3292+Five Hundred Dollars ($ 37,500.00) or less if the
3293+filing status is single, h ead of household, or
3294+married filing separate, or Seventy -five Thousand
3295+Dollars ($75,000.00) or less if the filing status
3296+is married filing jointly or qualifying widow,
3297+(2) in the taxable year beginning Ja nuary 1, 2007,
3298+the qualifying amount shall be Fifty Thousand
3299+Dollars ($50,000.00) or less if the filing status
3300+
3301+
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3351+is single, head of household, or married filing
3352+separate, or One Hundred Thousand Dollars
3353+($100,000.00) or less if the filing status is
3354+married filing jointly or quali fying widow,
3355+(3) in the taxable year beginning January 1, 2008,
3356+the qualifying amount shall be Sixty -two Thousand
3357+Five Hundred Dollars ($62,500.00) or less if the
3358+filing status is single, head of household, or
3359+married filing separate, or One Hundred Twenty -
3360+five Thousand Dollars ($125,0 00.00) or less if
3361+the filing status is married filing jointly or
3362+qualifying widow,
3363+(4) in the taxable year beginning January 1, 2009,
3364+the qualifying amount shall be One Hundred
3365+Thousand Dollars ($100,000. 00) or less if the
3366+filing status is single, head of household, or
3367+married filing separate, or Two Hundred Thousand
3368+Dollars ($200,000.00) or less if the filing
3369+status is married filing jointly or qualifying
3370+widow, and
3371+(5) in the taxable year beginning Janua ry 1, 2010,
3372+and subsequent taxable years, there shal l be no
3373+limitation upon the qualifying amount.
3374+
3375+
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3425+c. For purposes of this parag raph, "retirement benefits"
3426+means the total distributions or withdrawals from the
3427+following:
3428+(1) an employee pension benefit pla n which satisfies
3429+the requirements of Section 401 of the Internal
3430+Revenue Code, 26 U.S.C., Section 401,
3431+(2) an eligible deferred compensation plan that
3432+satisfies the requirements of Section 457 of the
3433+Internal Revenue Code, 26 U.S.C., Section 457,
3434+(3) an individual retirement a ccount, annuity or
3435+trust, or simplified employee pension that
3436+satisfies the requirements of Section 408 of the
3437+Internal Revenue Code, 26 U.S.C., Section 408,
3438+(4) an employee annuity subject to the provisions of
3439+Section 403(a) or (b) of the Internal Revenue
3440+Code, 26 U.S.C., Section 403(a ) or (b),
3441+(5) United States Retirement Bonds which satisfy the
3442+requirements of Section 86 of the Internal
3443+Revenue Code, 26 U.S.C., Section 86, or
3444+(6) lump-sum distributions from a retirement plan
3445+which satisfies the requiremen ts of Section
3446+402(e) of the Internal Revenue Code, 26 U.S.C.,
3447+Section 402(e).
3448+
3449+
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3499+d. The amount of the exempt ion provided by this paragraph
3500+shall be limited to Five Thousand Five Hundred Dollars
3501+($5,500.00) for the 2004 tax year, Seven Th ousand Five
3502+Hundred Dollars ($7,500.00) for the 2005 tax year and
3503+Ten Thousand Dollars ($10,000.00) for the tax year
3504+2006 and for all subsequent tax years. Any individual
3505+who claims the exemption provided for in paragraph 8
3506+of this subsection shall not be permitted to claim a
3507+combined total exemption pursu ant to this paragraph
3508+and paragraph 8 of this subse ction in an amount
3509+exceeding Five Thousand Five Hundred Dollars
3510+($5,500.00) for the 2004 tax year, Seven Thousand Five
3511+Hundred Dollars ($7,500.00) for th e 2005 tax year and
3512+Ten Thousand Dollars ($10,000.00 ) for the 2006 tax
3513+year and all subsequent tax year s.
3514+15. In taxable years beginning after December 31, 1999, for an
3515+individual engaged in production agriculture who has filed a
3516+Schedule F form with the taxpayer's federal income tax return for
3517+such taxable year, there shall be excluded from taxable income any
3518+amount which was included as federal taxable income or federal
3519+adjusted gross income and which consists of the discharge of an
3520+obligation by a credi tor of the taxpayer in curred to finance the
3521+production of agricultural products.
3522+
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3573+16. In taxable years beginning December 31, 2 000, an amount
3574+equal to one hundred percent (100%) of the amount of any scholarship
3575+or stipend received from participation in the Oklahoma Police Corps
3576+Program, as established in Se ction 2-140.3 of Title 47 of the
3577+Oklahoma Statutes shall be exempt from tax able income.
3578+17. a. In taxable years beginning after December 31, 2001,
3579+and before January 1, 2005, there shall be allowed a
3580+deduction in the amount of contributions to accounts
3581+established pursuant to the Oklahoma College Savings
3582+Plan Act. The deduction shall equal the amount of
3583+contributions to accounts, but in no event shall the
3584+deduction for each contributor exceed Two Thousand
3585+Five Hundred Dollars ($2,500.00) each taxable year for
3586+each account.
3587+b. In taxable years beginning aft er December 31, 2004,
3588+each taxpayer shall be allowed a deduction for
3589+contributions to accounts established pursuant to the
3590+Oklahoma College Savings Plan Act. The maximum annu al
3591+deduction shall equal the a mount of contributions to
3592+all such accounts plus an y contributions to such
3593+accounts by the taxpayer for prior taxable years after
3594+December 31, 2004, which were not deducted, but in no
3595+event shall the dedu ction for each tax yea r exceed Ten
3596+Thousand Dollars ($10,000.00) for each individual
3597+
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3648+taxpayer or Twenty Thousand Dollars ($20, 000.00) for
3649+taxpayers filing a joint return. Any amount of a
3650+contribution that is not deducted by the taxpayer in
3651+the year for which the contribution i s made may be
3652+carried forward as a deduction from income for the
3653+succeeding five (5) years. For taxable years
3654+beginning after December 31, 2005, deductions may be
3655+taken for contributions and rollovers made during a
3656+taxable year and up to April 15 of the s ucceeding
3657+year, or the due dat e of a taxpayer's state income tax
3658+return, excluding extensions, whichever is later.
3659+Provided, a deduction for the same contribution may
3660+not be taken for two (2) different taxable years.
3661+c. In taxable years beginning after De cember 31, 2006,
3662+deductions for contributions made pursuant to
3663+subparagraph b of this paragraph shall be limited as
3664+follows:
3665+(1) for a taxpayer who qualified for the five-year
3666+carryforward election and who takes a rollover or
3667+nonqualified withdrawal during that period, the
3668+tax deduction otherwise available pursuant to
3669+subparagraph b of this paragraph shall b e reduced
3670+by the amount which is equal to the rollover or
3671+nonqualified withdrawal, and
3672+
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3723+(2) for a taxpayer who elects to take a rol lover or
3724+nonqualified withdrawal within the same tax year
3725+in which a contribution was made to the
3726+taxpayer's account, the tax deduction otherwise
3727+available pursuant to subparagraph b of this
3728+paragraph shall be reduced by the amount of the
3729+contribution which is equal to the roll over or
3730+nonqualified withdrawa l.
3731+d. If a taxpayer elects to take a rollover on a
3732+contribution for which a deduction has been tak en
3733+pursuant to subparagraph b of this paragraph within
3734+one (1) year of the date of contribution, the amoun t
3735+of such rollover sha ll be included in the adjusted
3736+gross income of the taxpayer in the taxable year o f
3737+the rollover.
3738+e. If a taxpayer makes a nonqua lified withdrawal of
3739+contributions for which a deduction was taken pursuant
3740+to subparagraph b of this para graph, such nonqualifi ed
3741+withdrawal and any earnings thereon shall be included
3742+in the adjusted gross in come of the taxpayer in the
3743+taxable year of the nonqualified withdrawal.
3744+f. As used in this paragraph:
3745+
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3796+(1) "non-qualified withdrawal" means a withdrawal
3797+from an Oklahoma Colle ge Savings Plan account
3798+other than one of the following:
3799+(a) a qualified withdraw al,
3800+(b) a withdrawal made as a result of the de ath
3801+or disability of the designated beneficiary
3802+of an account,
3803+(c) a withdrawal that is made on the accoun t of
3804+a scholarship or the allowance or payment
3805+described in Section 135(d)(1)(B) or (C) or
3806+by the Internal Revenue Code, received by
3807+the designated beneficiary to the extent the
3808+amount of the refund does not exceed the
3809+amount of the scholarship, allowance, or
3810+payment, or
3811+(d) a rollover or change of designat ed
3812+beneficiary as permitted by subsection F of
3813+Section 3970.7 of Tit le 70 of Oklahoma
3814+Statutes, and
3815+(2) "rollover" means the transfer of funds from the
3816+Oklahoma College Savings Plan to any other plan
3817+under Section 529 of the I nternal Revenue Code.
3818+18. For tax years 2006 through 2021, retirement benefits
3819+received by an individual from any component of the Armed Forces of
3820+
3821+
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3871+the United States in an amount not to exceed the greater of seventy-
3872+five percent (75%) of such benefits or Ten Thousand Dollars
3873+($10,000.00) shall be exempt from taxable income but in no case less
3874+than the amount of the exemption provided by paragraph 14 of this
3875+subsection. For tax year 2022 and subsequent tax years, retirement
3876+benefits received by an individual from any component of the A rmed
3877+Forces of the United States shall be exempt from taxable income.
3878+19. For taxable years beginning after December 31, 2006,
3879+retirement benefits received by federal civil service retirees,
3880+including survivor annuities, paid in lieu of Social Security
3881+benefits shall be exempt from taxable income to the extent suc h
3882+benefits are included in the federal adjusted gross income pursuant
3883+to the provisions of Section 86 of the Internal Revenue Code, 26
3884+U.S.C., Section 86, according to the following schedule:
3885+a. in the taxable year beginning January 1, 2007, twenty
3886+percent (20%) of such benefits shall be exempt,
3887+b. in the taxable year beginning January 1, 2008, forty
3888+percent (40%) of such benefits shall be exempt,
3889+c. in the taxable year beginning January 1, 2009, s ixty
3890+percent (60%) of such benefits shall be exempt,
3891+d. in the taxable year beginning January 1, 2010, eighty
3892+percent (80%) of such benefits shall be exempt, and
3893+
3894+
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3944+e. in the taxable year beginning January 1, 2011, and
3945+subsequent taxable years, one hundred pe rcent (100%)
3946+of such benefits shall be exempt.
3947+20. a. For taxable years beginning after December 31, 2007, a
3948+resident individual may deduct up to Ten Thousand
3949+Dollars ($10,000.00) from Oklahoma adjusted gross
3950+income if the individual, or the dependent of t he
3951+individual, while living, donates one or more human
3952+organs of the individual to another human being for
3953+human organ transplantation. As used in this
3954+paragraph, "human organ" means all or part of a liver,
3955+pancreas, kidney, intestine, lung, or bone marro w. A
3956+deduction that is claimed under this paragraph m ay be
3957+claimed in the taxable year in which the human organ
3958+transplantation occurs.
3959+b. An individual may claim this deduction only once, and
3960+the deduction may be claimed only for unreimbursed
3961+expenses that are incurred by the individual and
3962+related to the organ donation of the individual.
3963+c. The Oklahoma Tax Commission shall promulgate rules to
3964+implement the provisions of this paragraph which shall
3965+contain a specific list of expenses which may be
3966+presumed to qualify for the deduction. The Tax
3967+
3968+
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4018+Commission shall prescribe necessary requirements for
4019+verification.
4020+21. For taxable years beginning after December 31, 2009, there
4021+shall be exempt from taxable income any amount received by the
4022+beneficiary of the de ath benefit for an emergency medical technician
4023+or a registered emergency medical responder provided by Section 1-
4024+2505.1 of Title 63 of the Oklahoma Statutes.
4025+22. For taxable years beginning after December 31, 2008,
4026+taxable income shall be increased by any unemployment compensation
4027+exempted under Section 85(c) of the Internal Revenue Code, 26
4028+U.S.C., Section 85(c)(2009).
4029+23. For taxable years beginning after December 31, 2008, there
4030+shall be exempt from taxable income any payment in an amou nt less
4031+than Six Hundred Dollars ($600.00) received by a person as an award
4032+for participation in a competitive livestock show event. For
4033+purposes of this paragraph, the payment shall be treated as a
4034+scholarship amount paid by the entity sponsoring the eve nt and the
4035+sponsoring entity shall cause the payment to be categ orized as a
4036+scholarship in its books and records.
4037+24. For taxable years beginning on or after January 1, 2016,
4038+taxable income shall be increased by any amount of state and local
4039+sales or income taxes deducted under 26 U.S.C., Section 164 of the
4040+Internal Revenue Code. If the amount of state and local taxes
4041+deducted on the federal return is limited, taxable income on the
4042+
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4093+state return shall be increased only by the amount actually deducted
4094+after any such limitations are applied.
4095+25. For taxable years begi nning after December 31, 2020, each
4096+taxpayer shall be allowed a deduction for contributions to accounts
4097+established pursuant to the Achieving a Better Life Experience
4098+(ABLE) Program as established in Section 40 01.1 et seq. of Title 56
4099+of the Oklahoma Statu tes. For any tax year, the deduction provided
4100+for in this paragraph shall not exceed Ten Thousand Dollars
4101+($10,000.00) for an individual taxpayer or Twenty Thousand Dollars
4102+($20,000.00) for taxpayers filing a joint return. Any amount of
4103+contribution not deducted by the taxpayer in the tax year for which
4104+the contribution is made may be carried forward as a deduction from
4105+income for up to five (5) tax years. Deductions may be taken for
4106+contributions made during the tax year and through April 15 of the
4107+succeeding tax year, or through the due date of a taxpayer's state
4108+income tax return excluding extensions, whichever is later.
4109+Provided, a deduction for the same contribution may not be taken in
4110+more than one (1) tax year.
4111+F. 1. For taxable years beginning after December 31, 2004, a
4112+deduction from the Oklahoma adjusted gross income of any individual
4113+taxpayer shall be allowed for qualifying gains receiving capital
4114+treatment that are includ ed in the federal adjuste d gross income of
4115+such individual taxpayer du ring the taxable year.
4116+2. As used in this subsection:
4117+
4118+
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4167+
4168+a. "qualifying gains receiving capital treatment" means
4169+the amount of net capital gains, as defined in Section
4170+1222(11) of the Inte rnal Revenue Code, includ ed in an
4171+individual taxpayer's federal income tax return that
4172+result from:
4173+(1) the sale of real property or tangible personal
4174+property located within Oklahoma that has been
4175+directly or indirectly owned by the individual
4176+taxpayer for a holding period of at least five
4177+(5) years prior to the date of the transaction
4178+from which such net capital gains arise,
4179+(2) the sale of stock or the sale of a direct or
4180+indirect ownership interest in an Oklahoma
4181+company, limited liability company, or
4182+partnership where such st ock or ownership
4183+interest has been directl y or indirectly owned by
4184+the individual taxpayer for a holding period of
4185+at least two (2) years prior to the date of the
4186+transaction from which the net capital gains
4187+arise, or
4188+(3) the sale of real property, tangib le personal
4189+property, or intangible persona l property located
4190+within Oklahoma as part of the sale of all or
4191+substantially all of the assets of an Oklahoma
4192+
4193+
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4242+
4243+company, limited liability company, or
4244+partnership, or an Oklahoma proprietorshi p
4245+business enterprise w here such property has been
4246+directly or indirectly owned by such entity or
4247+business enterprise or owned by the owners of
4248+such entity or business enterprise for a period
4249+of at least two (2) years prior to the date of
4250+the transaction from which the net capit al gains
4251+arise,
4252+b. "holding period" means an uninterrupted period of
4253+time. The holding period shall include any additional
4254+period when the property was held by another
4255+individual or entity, if such additional period is
4256+included in the taxpayer's holding period for the
4257+asset pursuant to the Internal Revenue Code,
4258+c. "Oklahoma company," company", "limited liability
4259+company," company", or "partnership" means an entity
4260+whose primary headquarters have been located in
4261+Oklahoma for at least three ( 3) uninterrupted years
4262+prior to the date of the transaction from wh ich the
4263+net capital gains arise,
4264+d. "direct" means the individual taxpayer directly owns
4265+the asset,
4266+
4267+
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4317+e. "indirect" means the individual taxpayer owns an
4318+interest in a pass-through entity (or chain of pass-
4319+through entities) that sells the asset that gives ri se
4320+to the qualifying gains receiving capital treatment.
13604321 (1) With respect to sales of real property or
13614322 tangible personal property located within
13624323 Oklahoma, the deduction described in this
13634324 subsection shall not apply unless the pass-
13644325 through entity that makes t he sale has held the
13654326 property for not less than five (5) uninterrupted
13664327 years prior to the date of the transaction that
13674328 created the capital gain, and each pass-through
13684329 entity included in the chain of ownership has
13694330 been a member, partner, or shareholder of t he
13704331 pass-through entity in the tier immediately below
13714332 it for an uninterrupted period of not less than
13724333 five (5) years.
13734334 (2) With respect to sales of sto ck or ownership
13744335 interest in or sales of all or substantially all
13754336 of the assets of an Oklahoma company, limi ted
1376-liability company, or partnership, the deduction
1377-described in this subsection shall not apply
1378-unless the pass-through entity that makes the
1379-sale has held the stock or ownership interest or
1380-the assets for not less than three (3)
1381-uninterrupted years prior to the date of the
1382-
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1409-transaction that created the capital gain, and
1410-each pass-through entity included in the chain of
1411-ownership has been a member, partner or
1412-shareholder of the pass -through entity in the
1413-tier immediately below it for an uninterrupted
1414-period of not less than three (3) years.
1415-E. The Oklahoma adjusted gross income of any individual
1416-taxpayer shall be further adjusted as follows to arrive at Oklahoma
1417-taxable income:
1418-1. a. In the case of individuals, ther e shall be added or
1419-deducted, as the case may be, the difference necessary
1420-to allow personal exemptions of One Thousand Dollars
1421-($1,000.00) in lieu of the personal exemptions allowed
1422-by the Internal Revenue Code.
1423-b. There shall be allowed an additional exe mption of One
1424-Thousand Dollars ($1,000.00) for each taxpayer or
1425-spouse who is blind at the close of the tax year. For
1426-purposes of this subparagraph, an individual is blind
1427-only if the central visual acuity of the individual
1428-does not exceed 20/200 in the b etter eye with
1429-correcting lenses, or if the visual acuity of the
1430-individual is greater than 20/200, but is accompanied
1431-by a limitation in the fields of vision such that the
1432-
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1458-
1459-widest diameter of the visual field subtends an angle
1460-no greater than twenty (20) d egrees.
1461-c. There shall be allowed an additional exemption of One
1462-Thousand Dollars ($1,000.00) for each taxpayer or
1463-spouse who is sixty-five (65) years of age or older at
1464-the close of the tax year based upon the filing status
1465-and federal adjusted gross inco me of the taxpayer.
1466-Taxpayers with the following filing status may claim
1467-this exemption if the federal adjusted gross income
1468-does not exceed:
1469-(1) Twenty-five Thousand Dollars ($25,000.00) if
1470-married and filing jointly ;,
1471-(2) Twelve Thousand Five Hundred Do llars ($12,500.00)
1472-if married and filing separately;,
1473-(3) Fifteen Thousand Dollars ($15,000.00) if single;,
1474-and
1475-(4) Nineteen Thousand Dollars ($19,000.00) if a
1476-qualifying head of household.
1477-Provided, for taxable years beginning after December
1478-31, 1999, amounts included in the calculation of
1479-federal adjusted gross income pursuant to the
1480-conversion of a traditional individual retirement
1481-account to a Roth individual retirement account shall
1482-be excluded from federal adjusted gross income for
1483-
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1503-19
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1508-24
1509-
1510-purposes of the income thresholds provided in this
1511-subparagraph.
1512-2. a. For taxable years beginning on or before December 31,
1513-2005, in the case of individuals who use the standard
1514-deduction in determining taxable income, there shall
1515-be added or deducted, as the case may be, the
1516-difference necessary to allow a standard deduction in
1517-lieu of the standard deduction allowed by the Internal
1518-Revenue Code, in an amount equal to the larger of
1519-fifteen percent (15%) of the Oklahoma adjusted gross
1520-income or One Thousand Dollars ($1,000. 00), but not to
1521-exceed Two Thousand Dollars ($2,000.00), except that
1522-in the case of a married individual filing a separate
1523-return such deduction shall be the larger of fifteen
1524-percent (15%) of such Oklahoma adjusted gross income
1525-or Five Hundred Dollars ($5 00.00), but not to exceed
1526-the maximum amount of One Thousand Dollars
1527-($1,000.00).
1528-b. For taxable years beginning on or after January 1,
1529-2006, and before January 1, 2007, in the case of
1530-individuals who use the standard deduction in
1531-determining taxable incom e, there shall be added or
1532-deducted, as the case may be, the difference necessary
1533-to allow a standard deduction in lieu of the standard
1534-
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1560-
1561-deduction allowed by the Internal Revenue Code, in an
1562-amount equal to:
1563-(1) Three Thousand Dollars ($3,000.00), if the fi ling
1564-status is married filing joint, head of
1565-household, or qualifying widow;, or
1566-(2) Two Thousand Dollars ($2,000.00), if the filing
1567-status is single or married filing separate.
1568-c. For the taxable year beginning on January 1, 2007, and
1569-ending December 31, 2007, in the case of individuals
1570-who use the standard deduction in determining taxable
1571-income, there shall be added or deducted, as the case
1572-may be, the difference necessary to allow a standard
1573-deduction in lieu of the standard deduction allowed by
1574-the Internal Revenue Code, in an amount equal to:
1575-(1) Five Thousand Five Hundred Dollars ($5,500.00),
1576-if the filing status is married filing joint or
1577-qualifying widow; or,
1578-(2) Four Thousand One Hundred Twenty -five Dollars
1579-($4,125.00) for a head of household ;, or
1580-(3) Two Thousand Seven Hundred Fifty Dollars
1581-($2,750.00), if the filing status is single or
1582-married filing separate.
1583-d. For the taxable year beginning on January 1, 2008, and
1584-ending December 31, 2008, in the case of individuals
1585-
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1611-
1612-who use the standard deducti on in determining taxable
1613-income, there shall be added or deducted, as the case
1614-may be, the difference necessary to allow a standard
1615-deduction in lieu of the standard deduction allowed by
1616-the Internal Revenue Code, in an amount equal to:
1617-(1) Six Thousand Five Hundred Dollars ($6,500.00), if
1618-the filing status is married filing joint or
1619-qualifying widow, or
1620-(2) Four Thousand Eight Hundred Seventy-five Dollars
1621-($4,875.00) for a head of household, or
1622-(3) Three Thousand Two Hundred Fifty Dollars
1623-($3,250.00), if the filing status is single or
1624-married filing separate.
1625-e. For the taxable year beginning on January 1, 2009, and
1626-ending December 31, 2009, in the case of individuals
1627-who use the standard deduction in determining taxable
1628-income, there shall be added or ded ucted, as the case
1629-may be, the difference necessary to allow a standard
1630-deduction in lieu of the standard deduction allowed by
1631-the Internal Revenue Code, in an amount equal to:
1632-(1) Eight Thousand Five Hundred Dollars ($8,500.00),
1633-if the filing status is ma rried filing joint or
1634-qualifying widow, or
1635-
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1661-
1662-(2) Six Thousand Three Hundred Seventy-five Dollars
1663-($6,375.00) for a head of household, or
1664-(3) Four Thousand Two Hundred Fifty Dollars
1665-($4,250.00), if the filing status is single or
1666-married filing separate.
1667-Oklahoma adjusted gross income shall be increased by
1668-any amounts paid for motor vehicle excise taxes which
1669-were deducted as allowed by the Internal Revenue Code.
1670-f. For taxable years beginning on or after January 1,
1671-2010, and ending on December 31, 2016, in the case of
1672-individuals who use the standard deduction in
1673-determining taxable income, there shall be added or
1674-deducted, as the case may be, the difference necessary
1675-to allow a standard deduction equal to the standard
1676-deduction allowed by the Internal Revenue Code, based
1677-upon the amount and filing status prescribed by such
1678-Code for purposes of filing federal individual income
1679-tax returns.
1680-g. For taxable years beginning on or after January 1,
1681-2017, in the case of individuals who use the standard
1682-deduction in determining taxable income, there shall
1683-be added or deducted, as the case may be, the
1684-difference necessary to allow a standard deduction in
1685-
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1711-
1712-lieu of the standard deduction allowed by the Internal
1713-Revenue Code, as follows:
1714-(1) Six Thousand Three Hundred Fifty D ollars
1715-($6,350.00) for single or married filing
1716-separately,
1717-(2) Twelve Thousand Seven Hundred Dollars
1718-($12,700.00) for married filing jointly or
1719-qualifying widower with dependent child, and
1720-(3) Nine Thousand Three Hundred Fifty Dollars
1721-($9,350.00) for head of household.
1722-3. a. In the case of resident and part-year resident
1723-individuals having adjusted gross income from sources
1724-both within and without the state, the itemized or
1725-standard deductions and personal exemptions shall be
1726-reduced to an amount which i s the same portion of the
1727-total thereof as Oklahoma adjusted gross income is of
1728-adjusted gross income. To the extent itemized
1729-deductions include allowable moving expense, proration
1730-of moving expense shall not be required or permitted
1731-but allowable moving expense shall be fully deductible
1732-for those taxpayers moving within or into Oklahoma and
1733-no part of moving expense shall be deductible for
1734-those taxpayers moving without or out of Oklahoma.
1735-All other itemized or standard deductions and personal
1736-
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1762-
1763-exemptions shall be subject to proration as provided
1764-by law.
1765-b. For taxable years beginning on or after January 1,
1766-2018, the net amount of itemized deductions allowable
1767-on an Oklahoma income tax return, subject to the
1768-provisions of paragraph 24 of this subsection, s hall
1769-not exceed Seventeen Thousand Dollars ($17,000.00).
1770-For purposes of this subparagraph, charitable
1771-contributions and medical expenses, and, for tax year
1772-2024 and subsequent tax years, gambling losses,
1773-deductible for federal income tax p urposes shall be
1774-excluded from the amount of Seventeen Thousand Dollars
1775-($17,000.00) as specified by this subparagraph.
1776-4. A resident individual with a physical disability
1777-constituting a substantial ha ndicap to employment may deduct from
1778-Oklahoma adjusted gross income such expenditures to modify a motor
1779-vehicle, home, or workplace as are necessary to c ompensate for his
1780-or her handicap. A veteran certified by the Department of Veterans
1781-Affairs of the federal government as having a service-connected
1782-disability shall be conclusively presumed to be an individual with a
1783-physical disability constituting a su bstantial handicap to
1784-employment. The Tax Commission shall promulgate rules containing a
1785-list of combinations of common disabilities and modifications which
1786-
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1811-24
1812-
1813-may be presumed to qualify for this deduction. The Tax Commission
1814-shall prescribe necessary requi rements for verification.
1815-5. a. Before July 1, 2010, the first One Thousand Five
1816-Hundred Dollars ($1, 500.00) received by any person
1817-from the United States as salary or compensation in
1818-any form, other than retirement benefits, as a member
1819-of any component of the Armed Forces of the United
1820-States shall be deducted from taxable income.
1821-b. On or after July 1, 2010, one hundred percent (100%)
1822-of the income received by any person from the United
1823-States as salary or compensation in any form, other
1824-than retirement benefits, as a member of any component
1825-of the Armed Forces of the United States shall be
1826-deducted from taxable income.
1827-c. Whenever the filing of a timely inco me tax return by a
1828-member of the Armed Forces of the United States is
1829-made impracticable or imposs ible of accomplishment by
1830-reason of:
1831-(1) absence from the United States, which term
1832-includes only the states and the District of
1833-Columbia;,
1834-(2) absence from the State of Oklahoma this state
1835-while on active duty ;, or
1836-
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1861-24
1862-
1863-(3) confinement in a hospital within the United
1864-States for treatment of wounds, injuries, or
1865-disease,
1866-the time for filing a return and paying an income tax
1867-shall be and is hereby ext ended without incurring
1868-liability for interest or penalties, to the fifteenth
1869-day of the third month following the month in whic h:
1870-(a) Such such individual shall return to the
1871-United States if the extension is granted
1872-pursuant to subparagraph a of this
1873-paragraph, return to the State of Oklahoma
1874-this state if the extension is granted
1875-pursuant to subparagraph b of this paragraph
1876-or be discharged from such hospital if the
1877-extension is granted pursuant to
1878-subparagraph c of this paragraph;, or
1879-(b) An an executor, administrator, or
1880-conservator of the estate of the taxpayer is
1881-appointed, whichever event occurs the
1882-earliest.
1883-Provided, that the Tax Commission may, in its discretion, grant
1884-any member of the Armed Forces of the United States an extension of
1885-time for filing of income tax r eturns and payment of income tax
1886-without incurring liabilities for interest or penalties. Such
1887-
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1902-14
1903-15
1904-16
1905-17
1906-18
1907-19
1908-20
1909-21
1910-22
1911-23
1912-24
1913-
1914-extension may be granted only when in the judgment of the Tax
1915-Commission a good cause exists therefor and may be for a period in
1916-excess of six (6) months. A re cord of every such extension granted,
1917-and the reason therefor, shall be kept.
1918-6. Before July 1, 2010, the salar y or any other form of
1919-compensation, received from the United States by a member of any
1920-component of the Armed Forces of t he United States, shal l be
1921-deducted from taxable income during the time in which the person is
1922-detained by the enemy in a conflict, is a prisoner of war or is
1923-missing in action and not deceased; provided, after July 1, 2010,
1924-all such salary or compensation shall be subject to t he deduction as
1925-provided pursuant to paragraph 5 of this subsection.
1926-7. a. An individual taxpayer, whether res ident or
1927-nonresident, may deduct an amount equal to the federal
1928-income taxes paid by the taxpayer during the taxable
1929-year.
1930-b. Federal taxes as des cribed in subparagraph a of this
1931-paragraph shall be deductible by any individual
1932-taxpayer, whether resident or nonresident, only to the
1933-extent they relate to income subject to taxation
1934-pursuant to the provisions of the Oklahoma Income Tax
1935-Act. The maximum amount allowable in the preceding
1936-paragraph shall be prorated on the ratio of the
1937-
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1963-
1964-Oklahoma adjusted gross inc ome to federal adjusted
1965-gross income.
1966-c. For the purpose of this paragraph, "federal income
1967-taxes paid" shall mean federal i ncome taxes, surtaxes
1968-imposed on incomes or excess profits taxes, as though
1969-the taxpayer was on the accrual basis. In determining
1970-the amount of deduction for federal income taxes for
1971-tax year 2001, the amount of the deduction shall not
1972-be adjusted by the amount of any accelera ted ten
1973-percent (10%) tax rate bracket credit or advanced
1974-refund of the credit received during the tax year
1975-provided pursuant to the federal Economic Growth and
1976-Tax Relief Reconciliation Act of 2001, P.L. No. 107-
1977-16, and the advanced refund of such credit shall not
1978-be subject to taxation.
1979-d. The provisions of this paragraph shall apply to all
1980-taxable years ending after December 31, 1978, and
1981-beginning before January 1, 2006.
1982-8. Retirement benefits not to exceed Five Thousand Five Hund red
1983-Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five
1984-Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Thousan d
1985-Dollars ($10,000.00) for the 2006 tax year and all subsequent tax
1986-years, which are received by an individual from the civi l service of
1987-the United States, the Oklahoma Public Employees Retirement System,
1988-
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1992-3
1993-4
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1995-6
1996-7
1997-8
1998-9
1999-10
2000-11
2001-12
2002-13
2003-14
2004-15
2005-16
2006-17
2007-18
2008-19
2009-20
2010-21
2011-22
2012-23
2013-24
2014-
2015-the Teachers' Retirement System of Oklahoma, the Ok lahoma Law
2016-Enforcement Retirement System, the Oklahoma Firefighters Pension and
2017-Retirement System, the Oklahoma Police Pensi on and Retirement
2018-System, the employee retirement systems created by counties pursuant
2019-to Section 951 et seq. of Title 19 of the Okl ahoma Statutes, the
2020-Uniform Retirement System for Justices and Judges, the Oklahoma
2021-Wildlife Conservation Department Retirem ent Fund, the Oklahoma
2022-Employment Security Commission Retirement Plan, or the employee
2023-retirement systems created by municipalities pursuant to Section 48-
2024-101 et seq. of Title 11 of the Oklahoma Statutes shall be exempt
2025-from taxable income.
2026-9. In taxable years beginning after December 3l, 1984, Social
2027-Security benefits received by an individual shall be exempt from
2028-taxable income, to the extent such benefits are included in the
2029-federal adjusted gross income pursuant to the provisions of Section
2030-86 of the Internal Revenue Code, 26 U.S.C., Section 86.
2031-10. For taxable years beginning after December 31, 1994, lump -
2032-sum distributions from e mployer plans of deferred compensation,
2033-which are not qualified plans within the meaning of Section 401(a)
2034-of the Internal Revenue Code, 26 U.S.C. , Section 401(a), and which
2035-are deposited in and accounted for within a separate bank account or
2036-brokerage account in a financial institution within this state,
2037-shall be excluded from taxable income in the same manner as a
2038-qualifying rollover contribution to an individual retirement account
2039-
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2061-21
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2063-23
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2065-
2066-within the meaning of Section 408 of the Internal Revenue Code, 26
2067-U.S.C., Section 408. Amounts withdrawn from such bank or brokerage
2068-account, including any earnings thereon, shall be included in
2069-taxable income when wit hdrawn in the same manner as withdrawals from
2070-individual retirement accounts within the meaning of Section 408 of
2071-the Internal Revenue Code.
2072-11. In taxable years beginning after December 31, 1995,
2073-contributions made to and interest r eceived from a medical savings
2074-account established pursuant to Sections 2621 through 2623 of Title
2075-63 of the Oklahoma Statutes shall be exempt from taxable income.
2076-12. For taxable years beginning after December 31, 1996, the
2077-Oklahoma adjusted gross income of any individual tax payer who is a
2078-swine or poultry producer may be further adjusted for the deduction
2079-for depreciation allowed fo r new construction or expansion costs
2080-which may be computed using the same depreciation method elected for
2081-federal income tax purposes except that the useful life shall be
2082-seven (7) years for purposes of this paragraph. If depreciation is
2083-allowed as a deduction in determining the adjusted gross income of
2084-an individual, any depreciation calculated and claimed pursuant to
2085-this section shall in no eve nt be a duplication of any depreciation
2086-allowed or permitted on the federal income tax return of the
2087-individual.
2088-
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2114-
2115-13. a. In taxable years beginning after December 31, 2002,
2116-nonrecurring adoption expenses paid by a resident
2117-individual taxpayer in connection with:
2118-(1) the adoption of a minor, or
2119-(2) a proposed adoption of a minor which did not
2120-result in a decreed ad option,
2121-may be deducted from the Oklahoma adjusted gross
2122-income.
2123-b. The deductions for adoptions and proposed adoptions
2124-authorized by this paragrap h shall not exceed Twenty
2125-Thousand Dollars ($20,000.00) per calendar year.
2126-c. The Tax Commission shall promul gate rules to implement
2127-the provisions of this paragraph which shall contain a
2128-specific list of nonrecurring adoption expense s which
2129-may be presumed to qualify for the deduction. The Tax
2130-Commission shall prescribe necessary requirements for
2131-verification.
2132-d. "Nonrecurring adoption expenses" means adoption fees,
2133-court costs, medical expenses, attorney fees, and
2134-expenses which are directly related to th e legal
2135-process of adoption of a child including, but not
2136-limited to, costs relating to the adoption study,
2137-health and psychological examinations, transportation,
2138-and reasonable costs of lodging and food for the child
2139-
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2163-23
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2165-
2166-or adoptive parents which are incurred to complete the
2167-adoption process and are not reimbursed by other
2168-sources. The term "nonrecurring adoption expenses"
2169-shall not include attorney fees incurred for the
2170-purpose of litigating a contested adoption, from and
2171-after the point of the initiation of the contest,
2172-costs associated with physical remodeling, renovation
2173-and alteration of the adoptive parents ' home or
2174-property, except for a special needs child as
2175-authorized by the court.
2176-14. a. In taxable years beginning before January 1, 2005,
2177-retirement benefits not to exceed the amounts
2178-specified in this paragraph, which are received by an
2179-individual sixty-five (65) years of age or older and
2180-whose Oklahoma adjusted gross income is Twenty-five
2181-Thousand Dollars ($25,000.00) or less if the filing
2182-status is single, head of household, or married filing
2183-separate, or Fifty Thousand Dollars ($50,000.00) or
2184-less if the filing status is married filing joint or
2185-qualifying widow, shall be exempt from taxable income.
2186-In taxable years beginning af ter December 31, 2004,
2187-retirement benefits not to exceed the amounts
2188-specified in this paragraph, which are received by an
2189-individual whose Oklahoma adjusted gross income is
2190-
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2199-8
2200-9
2201-10
2202-11
2203-12
2204-13
2205-14
2206-15
2207-16
2208-17
2209-18
2210-19
2211-20
2212-21
2213-22
2214-23
2215-24
2216-
2217-less than the qualifying amount specified in this
2218-paragraph, shall be exempt from taxable income.
2219-b. For purposes of this paragraph, the qualifying amount
2220-shall be as follows:
2221-(1) in taxable years beginning aft er December 31,
2222-2004, and prior to January 1, 2007, the
2223-qualifying amount shall be Thirty-seven Thousand
2224-Five Hundred Dollars ($ 37,500.00) or less if the
2225-filing status is single, head of household, or
2226-married filing separate, or Seventy -five Thousand
2227-Dollars ($75,000.00) or less if the filing status
2228-is married filing jointly or qualifying widow,
2229-(2) in the taxable year beginning Ja nuary 1, 2007,
2230-the qualifying amount shall be Fifty Thousand
2231-Dollars ($50,000.00) or less if the filing status
2232-is single, head of household, or married filing
2233-separate, or One Hundred Thousand Dollars
2234-($100,000.00) or less if the filing status is
2235-married filing jointly or quali fying widow,
2236-(3) in the taxable year beginning January 1, 2008,
2237-the qualifying amount shall be Sixty -two Thousand
2238-Five Hundred Dollars ($62,500.00) or less if the
2239-filing status is single, head of household, or
2240-married filing separate, or One Hundred Twenty -
2241-
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2251-9
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2253-11
2254-12
2255-13
2256-14
2257-15
2258-16
2259-17
2260-18
2261-19
2262-20
2263-21
2264-22
2265-23
2266-24
2267-
2268-five Thousand Dollars ($125,000.00) or less if
2269-the filing status is married filing jointly or
2270-qualifying widow,
2271-(4) in the taxable year beginning January 1, 2009,
2272-the qualifying amount shall be One Hundred
2273-Thousand Dollars ($100,000. 00) or less if the
2274-filing status is single, head of household, or
2275-married filing separate, or Two Hundred Thousand
2276-Dollars ($200,000.00) or less if the filing
2277-status is married filing jointly or qualifying
2278-widow, and
2279-(5) in the taxable year beginning Janua ry 1, 2010,
2280-and subsequent taxable years, there shall be no
2281-limitation upon the qualifying amount.
2282-c. For purposes of this parag raph, "retirement benefits"
2283-means the total distributions or withdrawals from the
2284-following:
2285-(1) an employee pension benefit pla n which satisfies
2286-the requirements of Section 401 of the Internal
2287-Revenue Code, 26 U.S.C., Section 401,
2288-(2) an eligible deferred compensation plan that
2289-satisfies the requirements of Section 457 of the
2290-Internal Revenue Code, 26 U.S.C., Section 457,
2291-
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2297-5
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2299-7
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2301-9
2302-10
2303-11
2304-12
2305-13
2306-14
2307-15
2308-16
2309-17
2310-18
2311-19
2312-20
2313-21
2314-22
2315-23
2316-24
2317-
2318-(3) an individual retirement a ccount, annuity or
2319-trust, or simplified employee pension that
2320-satisfies the requirements of Section 408 of the
2321-Internal Revenue Code, 26 U.S.C., Section 408,
2322-(4) an employee annuity subject to the provisions of
2323-Section 403(a) or (b) of the Internal Revenue
2324-Code, 26 U.S.C., Section 403(a) or (b),
2325-(5) United States Retirement Bonds which satisfy the
2326-requirements of Section 86 of the Internal
2327-Revenue Code, 26 U.S.C., Section 86, or
2328-(6) lump-sum distributions from a retirement plan
2329-which satisfies the requiremen ts of Section
2330-402(e) of the Internal Revenue Code, 26 U.S.C.,
2331-Section 402(e).
2332-d. The amount of the exempt ion provided by this paragraph
2333-shall be limited to Five Thousand Five Hundred Dollars
2334-($5,500.00) for the 2004 tax year, Seven Th ousand Five
2335-Hundred Dollars ($7,500.00) for the 2005 tax year and
2336-Ten Thousand Dollars ($10,000.00) for the tax year
2337-2006 and for all subsequent tax years. Any individual
2338-who claims the exemption provided for in paragraph 8
2339-of this subsection shall not be permitted to claim a
2340-combined total exemption pursuant to this paragraph
2341-and paragraph 8 of this subse ction in an amount
2342-
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2359-16
2360-17
2361-18
2362-19
2363-20
2364-21
2365-22
2366-23
2367-24
2368-
2369-exceeding Five Thousand Five Hundred Dollars
2370-($5,500.00) for the 2004 tax year, Seven Thousand Five
2371-Hundred Dollars ($7,500.00) for th e 2005 tax year and
2372-Ten Thousand Dollars ($10,000.00) for the 2006 tax
2373-year and all subsequent tax year s.
2374-15. In taxable years beginning after December 31, 1999, for an
2375-individual engaged in production agriculture who has filed a
2376-Schedule F form with the taxpayer's federal income tax return for
2377-such taxable year, there shall be excluded from taxable income any
2378-amount which was included as federal taxable income or federal
2379-adjusted gross income and which consists of the discharge of an
2380-obligation by a credi tor of the taxpayer in curred to finance the
2381-production of agricultural products.
2382-16. In taxable years beginning December 31, 2 000, an amount
2383-equal to one hundred percent (100%) of the amount of any scholarship
2384-or stipend received from participation in the Oklahoma Police Corps
2385-Program, as established in Section 2-140.3 of Title 47 of the
2386-Oklahoma Statutes shall be exempt from tax able income.
2387-17. a. In taxable years beginning after December 31, 2001,
2388-and before January 1, 2005, there shall be allowed a
2389-deduction in the amount of contributions to accounts
2390-established pursuant to the Oklahoma College Savings
2391-Plan Act. The deduction shall equal the amount of
2392-contributions to accounts, but in no event shall the
2393-
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2399-5
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2403-9
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2405-11
2406-12
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2411-17
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2414-20
2415-21
2416-22
2417-23
2418-24
2419-
2420-deduction for each contributor exceed Two Thousand
2421-Five Hundred Dollars ($2,500.00) each taxable year for
2422-each account.
2423-b. In taxable years beginning aft er December 31, 2004,
2424-each taxpayer shall be allowed a deduction for
2425-contributions to accounts established pursuant to the
2426-Oklahoma College Savings Plan Act. The maximum annu al
2427-deduction shall equal the amount of contributions to
2428-all such accounts plus an y contributions to such
2429-accounts by the taxpayer for prior taxable years after
2430-December 31, 2004, which were not deducted, but in no
2431-event shall the dedu ction for each tax yea r exceed Ten
2432-Thousand Dollars ($10,000.00) for each individual
2433-taxpayer or Twenty Thousand Dollars ($20, 000.00) for
2434-taxpayers filing a joint return. Any amount of a
2435-contribution that is not deducted by the taxpayer in
2436-the year for which the contribution i s made may be
2437-carried forward as a deduction from income for the
2438-succeeding five (5) years. For taxable years
2439-beginning after December 31, 2005, deductions may be
2440-taken for contributions and rollovers made during a
2441-taxable year and up to April 15 of the s ucceeding
2442-year, or the due date of a taxpayer's state income tax
2443-return, excluding extensions, whichever is later.
2444-
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2465-20
2466-21
2467-22
2468-23
2469-24
2470-
2471-Provided, a deduction for the same contribution may
2472-not be taken for two (2) different taxable years.
2473-c. In taxable years beginning after De cember 31, 2006,
2474-deductions for contributions made pursuant to
2475-subparagraph b of this paragraph shall be limited as
2476-follows:
2477-(1) for a taxpayer who qualified for the five-year
2478-carryforward election and who takes a rollover or
2479-nonqualified withdrawal during that period, the
2480-tax deduction otherwise available pursuant to
2481-subparagraph b of this paragraph shall b e reduced
2482-by the amount which is equal to the rollover or
2483-nonqualified withdrawal, and
2484-(2) for a taxpayer who elects to take a rol lover or
2485-nonqualified withdrawal within the same tax year
2486-in which a contribution was made to the
2487-taxpayer's account, the tax deduction otherwise
2488-available pursuant to subparagraph b of this
2489-paragraph shall be reduced by the amount of the
2490-contribution which is equal to the roll over or
2491-nonqualified withdrawal.
2492-d. If a taxpayer elects to take a rollover on a
2493-contribution for which a deduction has been tak en
2494-pursuant to subparagraph b of this paragraph within
2495-
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2519-23
2520-24
2521-
2522-one (1) year of the date of contribution, the amoun t
2523-of such rollover sha ll be included in the adjusted
2524-gross income of the taxpayer in the taxable year o f
2525-the rollover.
2526-e. If a taxpayer makes a nonqua lified withdrawal of
2527-contributions for which a deduction was taken pursuant
2528-to subparagraph b of this para graph, such nonqualifi ed
2529-withdrawal and any earnings thereon shall be included
2530-in the adjusted gross in come of the taxpayer in the
2531-taxable year of the nonqualified withdrawal.
2532-f. As used in this paragraph:
2533-(1) "non-qualified withdrawal" means a withdrawal
2534-from an Oklahoma Colle ge Savings Plan account
2535-other than one of the following:
2536-(a) a qualified withdraw al,
2537-(b) a withdrawal made as a result of the de ath
2538-or disability of the designated beneficiary
2539-of an account,
2540-(c) a withdrawal that is made on the accoun t of
2541-a scholarship or the allowance or payment
2542-described in Section 135(d)(1)(B) or (C) or
2543-by the Internal Revenue Code, received by
2544-the designated beneficiary to the extent the
2545-amount of the refund does not exceed the
2546-
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2568-21
2569-22
2570-23
2571-24
2572-
2573-amount of the scholarship, allowance, or
2574-payment, or
2575-(d) a rollover or change of designated
2576-beneficiary as permitted by subsection F of
2577-Section 3970.7 of Tit le 70 of Oklahoma
2578-Statutes, and
2579-(2) "rollover" means the transfer of funds from the
2580-Oklahoma College Savings Plan to any other plan
2581-under Section 529 of the I nternal Revenue Code.
2582-18. For tax years 2006 through 2021, retirement benefits
2583-received by an individual from any component of the Armed Forces of
2584-the United States in an amount not to exceed the greater of seventy-
2585-five percent (75%) of such benefits or Ten Thousand Dollars
2586-($10,000.00) shall be exempt from taxable income but in no case less
2587-than the amount of the exemption provided by paragraph 14 of this
2588-subsection. For tax year 2022 and subsequent tax years, retirement
2589-benefits received by an individual from any component of the Armed
2590-Forces of the United States shall be exempt from taxable income.
2591-19. For taxable years beginning after December 31, 2006,
2592-retirement benefits received by federal civil service retirees,
2593-including survivor annuities, paid in lieu of Social Security
2594-benefits shall be exempt from taxable income to the extent suc h
2595-benefits are included in the federal adjusted gross income pursuant
2596-
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2600-3
2601-4
2602-5
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2604-7
2605-8
2606-9
2607-10
2608-11
2609-12
2610-13
2611-14
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2613-16
2614-17
2615-18
2616-19
2617-20
2618-21
2619-22
2620-23
2621-24
2622-
2623-to the provisions of Section 86 of the Internal Revenue Code, 26
2624-U.S.C., Section 86, according to t he following schedule:
2625-a. in the taxable year beginning January 1, 2007, twenty
2626-percent (20%) of such benefits shall be exempt,
2627-b. in the taxable year beginning January 1, 2008, forty
2628-percent (40%) of such benefits shall be exempt,
2629-c. in the taxable year b eginning January 1, 2009, sixty
2630-percent (60%) of such benefits shall be exempt,
2631-d. in the taxable year beginning January 1, 2010, eighty
2632-percent (80%) of such benefits shall be exempt, and
2633-e. in the taxable year beginning January 1, 2011, and
2634-subsequent taxable years, one hundred percent (100%)
2635-of such benefits shall be exempt.
2636-20. a. For taxable years beginning after December 31, 2007, a
2637-resident individual may deduct up to Ten Thousand
2638-Dollars ($10,000.00) from Oklahoma adjusted gross
2639-income if the individual, or the dependent of the
2640-individual, while living, donates one or more human
2641-organs of the individual to another human being for
2642-human organ transplantation. As used in this
2643-paragraph, "human organ" means all or part of a liver,
2644-pancreas, kidney, in testine, lung, or bone marrow. A
2645-deduction that is claimed under this paragraph m ay be
2646-
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2672-
2673-claimed in the taxable year in which the human organ
2674-transplantation occurs.
2675-b. An individual may claim this deduction only once, and
2676-the deduction may be claimed only for unreimbursed
2677-expenses that are incurred by the individual and
2678-related to the organ donation of the individual.
2679-c. The Oklahoma Tax Commission shall promulgate rules to
2680-implement the provisions of this paragraph which shall
2681-contain a specific list of ex penses which may be
2682-presumed to qualify for the deduction. The Tax
2683-Commission shall prescribe necessary requirements for
2684-verification.
2685-21. For taxable years beginning after December 31, 2009, there
2686-shall be exempt from taxable income any amount received by the
2687-beneficiary of the death benefit for an emergency medical technician
2688-or a registered emergency medical responder provided by Section 1-
2689-2505.1 of Title 63 of the Oklahoma Statutes.
2690-22. For taxable years beginning after December 31, 2008,
2691-taxable income shall be increased by any unemployment compensation
2692-exempted under Section 85(c) of the Internal Revenue Code, 26
2693-U.S.C., Section 85(c)(2009).
2694-23. For taxable years beginning after December 31, 2008, there
2695-shall be exempt from taxable income any payme nt in an amount less
2696-than Six Hundred Dollars ($600.00) received by a person as an award
2697-
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2723-
2724-for participation in a competitive livestock show event. For
2725-purposes of this paragraph, the payment shall be treated as a
2726-scholarship amount paid by the entity spons oring the event and the
2727-sponsoring entity shall cause the payment to be categ orized as a
2728-scholarship in its books and records.
2729-24. For taxable years beginning on or after January 1, 2016,
2730-taxable income shall be increased by any amount of state and local
2731-sales or income taxes deducted under 26 U.S.C., Section 164 of the
2732-Internal Revenue Code. If the amount of state and local taxes
2733-deducted on the federal return is limited, taxable income on the
2734-state return shall be increased only by the amount actually d educted
2735-after any such limitations are applied.
2736-25. For taxable years begi nning after December 31, 2020, each
2737-taxpayer shall be allowed a deduction for contributions to accounts
2738-established pursuant to the Achieving a Better Life Experience
2739-(ABLE) Program as established in Section 4001.1 et seq. of Title 56
2740-of the Oklahoma Statu tes. For any tax year, the deduction provided
2741-for in this paragraph shall not exceed Ten Thousand Dollars
2742-($10,000.00) for an individual taxpayer or Twenty Thousand Dollars
2743-($20,000.00) for taxpayers filing a joint return. Any amount of
2744-contribution not deducted by the taxpayer in the tax year for which
2745-the contribution is made may be carried forward as a deduction from
2746-income for up to five (5) tax years. Deductions may be taken for
2747-contributions made during the tax year and through April 15 of the
2748-
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2775-succeeding tax year, or through the due date of a taxpayer's state
2776-income tax return excluding extensions, whichever is later.
2777-Provided, a deduction for the same contribution may not b e taken in
2778-more than one (1) tax year.
2779-F. 1. For taxable years beginning after December 31, 2004, a
2780-deduction from the Oklahoma adjusted gross income of any individual
2781-taxpayer shall be allowed for qualifying gains receiving capital
2782-treatment that are in cluded in the federal adjusted gross income of
2783-such individual taxpayer du ring the taxable year.
2784-2. As used in this subsection:
2785-a. "qualifying gains receiving capital treatment" means
2786-the amount of net capital gains, as defined in Section
2787-1222(11) of the Internal Revenue Code, included in an
2788-individual taxpayer's federal income tax return that
2789-result from:
2790-(1) the sale of real property or tangible personal
2791-property located within Oklahoma that has been
2792-directly or indirectly owned by the individual
2793-taxpayer for a holding period of at least five
2794-(5) years prior to the date of the transaction
2795-from which such net capital gains arise,
2796-(2) the sale of stock or the sale of a direct or
2797-indirect ownership interest in an Oklahoma
2798-company, limited liability company, or
2799-
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2826-partnership where such stock or ownership
2827-interest has been directl y or indirectly owned by
2828-the individual taxpayer for a holding period of
2829-at least two (2) years prior to the date of the
2830-transaction from which the net capital gains
2831-arise, or
2832-(3) the sale of real property, tangible personal
2833-property, or intangible persona l property located
2834-within Oklahoma as part of the sale of all or
2835-substantially all of the assets of an Oklahoma
2836-company, limited liability company, or
2837-partnership, or an Oklahoma proprie torship
2838-business enterprise where such property has been
2839-directly or indirectly owned by such entity or
2840-business enterprise or owned by the owners of
2841-such entity or business enterprise for a period
2842-of at least two (2) years prior to the date of
2843-the transaction from which the net capital gains
2844-arise,
2845-b. "holding period" means an uninterrupted period of
2846-time. The holding period shall include any additional
2847-period when the property was held by another
2848-individual or entity, if such additional period is
2849-
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2875-
2876-included in the taxpayer's holding period for the
2877-asset pursuant to the Internal Revenue Code,
2878-c. "Oklahoma company," company", "limited liability
2879-company," company", or "partnership" means an entity
2880-whose primary headquarters have been located in
2881-Oklahoma for at least three (3) uninterrupted years
2882-prior to the date of the transaction from wh ich the
2883-net capital gains arise,
2884-d. "direct" means the individual taxpayer directly owns
2885-the asset,
2886-e. "indirect" means the individual taxpayer owns an
2887-interest in a pass-through entity (or chain of pass-
2888-through entities) that sells the asset that gives ri se
2889-to the qualifying gains receiving capital treatment.
2890-(1) With respect to sales of real property or
2891-tangible personal property located within
2892-Oklahoma, the deduction describ ed in this
2893-subsection shall not apply unless the pass-
2894-through entity that makes t he sale has held the
2895-property for not less than five (5) uninterrupted
2896-years prior to the date of the tr ansaction that
2897-created the capital gain, and each pass-through
2898-entity included in the chain of ownership has
2899-been a member, partner, or shareholder of t he
2900-
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2927-pass-through entity in the tier immediately below
2928-it for an uninterrupted period of not less than
2929-five (5) years.
2930-(2) With respect to sales of sto ck or ownership
2931-interest in or sales of all or substantially all
2932-of the assets of an Oklahoma company, limi ted
29334337 liability company, partnership, or Oklahoma
29344338 proprietorship business enterprise, the deduction
29354339 described in this subsection shall not apply
29364340 unless the pass-through entity that makes the
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29374392 sale has held the stock or ownership interest for
29384393 not less than two (2) uninterrupted years prior
29394394 to the date of the transaction that created the
29404395 capital gain, and each pass-through entity
29414396 included in the chain of own ership has been a
29424397 member, partner, or shareholder of the pass-
29434398 through entity in the tier immediately below it
29444399 for an uninterrupted period of not less than two
29454400 (2) years. For purposes of this division,
29464401 uninterrupted ownership prior to July 1, 2007,
29474402 shall be included in the determination of the
29484403 required holding period prescribed by this
29494404 division, and
2950-
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29774405 f. "Oklahoma proprietorship business enterprise" means a
29784406 business enterprise whose income and expenses have
29794407 been reported on Schedule C or F of an individual
29804408 taxpayer's federal income tax return, or any similar
29814409 successor schedule published by the Internal Revenue
29824410 Service and whose primary headquarters have been
29834411 located in Oklahoma for at least three (3)
29844412 uninterrupted years prior to the date of the
29854413 transaction from which the net capital gains arise.
29864414 G. 1. For purposes of computing its Oklahoma taxable income
29874415 under this section, the dividends-paid deduction otherwise allowed
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29884467 by federal law in computing net income of a real estate investment
29894468 trust that is subject to federal income tax shall be added bac k in
29904469 computing the tax imposed by this state under this title if the real
29914470 estate investment trust is a captive real estate investment trust.
29924471 2. For purposes of computing its Oklahoma taxable income under
29934472 this section, a taxpayer shall add back otherwise d eductible rents
29944473 and interest expenses paid to a captive real estate investment trust
29954474 that is not subject to the provisions of paragraph 1 of this
29964475 subsection. As used in this subsection:
29974476 a. the term "real estate investment trust" or "REIT"
29984477 means the meaning ascribed to such term in Section 856
29994478 of the Internal Revenue Code,
3000-
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30274479 b. the term "captive real estate investment trust" means
30284480 a real estate investment trust, the shares or
30294481 beneficial interests of which are not regularl y traded
30304482 on an established securities market and more than
30314483 fifty percent (50%) of the voting power or valu e of
30324484 the beneficial interests or shares of which are owned
30334485 or controlled, directly or indirectly, or
30344486 constructively, by a single entity that is:
30354487 (1) treated as an association taxable as a
30364488 corporation under the Int ernal Revenue Code, and
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30374540 (2) not exempt from federal income tax pursuant to
30384541 the provisions of Section 501(a) of the Internal
30394542 Revenue Code.
30404543 The term shall not include a real estate investment
30414544 trust that is intended to be regularly tr aded on an
30424545 established securities market, and that satisfies the
30434546 requirements of Section 856(a)(5) and (6) of the U.S.
30444547 Internal Revenue Code by reason of Section 856(h)(2)
30454548 of the Internal Revenue Code,
30464549 c. the term "association taxable as a corporation " shall
30474550 not include the following entities:
30484551 (1) any real estate inve stment trust as defined in
30494552 paragraph a of this subsection other than a
30504553 "captive real estate investment trust", or
3051-
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3077-
30784554 (2) any qualified real estate investment trust
30794555 subsidiary under Section 856(i) of the Internal
30804556 Revenue Code, other than a qualified REIT
30814557 subsidiary of a "captive captive real estate
30824558 investment trust", or trust,
30834559 (3) any Listed Australian Property Trust (meaning an
30844560 Australian unit trust registered as a "Managed
30854561 Investment Scheme" under the Australian
30864562 Corporations Act in which the principa l class of
30874563 units is listed on a recognized stock exchange i n
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30884615 Australia and is regularly traded on an
30894616 established securities market), or an entity
30904617 organized as a trust, provided th at a Listed
30914618 Australian Property Trust owns or controls,
30924619 directly or indirectl y, seventy-five percent
30934620 (75%) or more of the voting power o r value of the
30944621 beneficial interests or shares of such trust, or
30954622 (4) any Qualified Foreign Entity, meaning a
30964623 corporation, trust, association or partnership
30974624 organized outside the laws of the United S tates
30984625 and which satisfies the following criteria:
30994626 (a) at least seventy-five percent (75%) of the
31004627 entity's total asset value at the close of
31014628 its taxable year is represented by real
3102-
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31294629 estate assets, as defined in Section
31304630 856(c)(5)(B) of the Internal Revenue Co de,
31314631 thereby including shares or certificates of
31324632 beneficial interest in any real estate
31334633 investment trust, cash and cash equivalents,
31344634 and U.S. Government securities,
31354635 (b) the entity receives a dividend-paid
31364636 deduction comparable to Section 561 of the
31374637 Internal Revenue Code, or is exempt from
31384638 entity level tax,
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31394690 (c) the entity is required to distribute at
31404691 least eighty-five percent (85%) of its
31414692 taxable income, as computed in the
31424693 jurisdiction in which it is organized, to
31434694 the holders of its shares or certificates of
31444695 beneficial interest on an annual basis,
31454696 (d) not more than ten percent (10%) of the
31464697 voting power or value in such entity is held
31474698 directly or indirectly or constructively by
31484699 a single entity or individual, or the shares
31494700 or beneficial interests of such entity a re
31504701 regularly traded on an established
31514702 securities market, an d
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31794703 (e) the entity is organized in a country which
31804704 has a tax treaty with the United States.
31814705 3. For purposes of this subse ction, the constructive ownership
31824706 rules of Section 318(a) of the Internal Rev enue Code, as modified by
31834707 Section 856(d)(5) of the Internal Revenue Code, shall apply in
31844708 determining the ownership of stock, assets, or net profits of any
31854709 person.
31864710 4. A real estate investment trust that does not become
31874711 regularly traded on an established se curities market within one (1)
31884712 year of the date on which it first becomes a real estate investment
31894713 trust shall be deemed not to have been regularly traded on an
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31904765 established securities market, retroactive to the date it first
31914766 became a real estate investment trust, and shall file an amended
31924767 return reflecting such re troactive designation for any tax year or
31934768 part year occurring during its initial year of status as a real
31944769 estate investment trust. For purposes of this subsection, a re al
31954770 estate investment trust b ecomes a real estate investment trust on
31964771 the first day it has both met the requirements of Section 856 of the
31974772 Internal Revenue Code and has elected to be treated as a real estate
31984773 investment trust pursuant to Section 856(c)(1) of the Internal
31994774 Revenue Code.
32004775 SECTION 2. This act shall become effective N ovember 1, 2023.
3201-COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS
3202-March 1, 2023 - DO PASS
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