OK
Oklahoma House Bill HB1642

Oklahoma 2024 Regular Session

Oklahoma House Bill HB1642 Compare Versions

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2828 STATE OF OKLAHOMA
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3030 1st Session of the 59th Legislature (2023)
3131
3232 HOUSE BILL 1642 By: Maynard
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3838 AS INTRODUCED
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4040 An Act relating to entrepreneurial expe rience;
4141 enacting the Oklahoma Youth Entrepreneurs Promotion
4242 and Development Act of 2023; amending 68 O.S. 2021,
4343 Section 2358, as amended by Section 2, Chapter 341,
4444 O.S.L. 2022 (68 O.S. Supp. 2022, Section 2358), which
4545 relates to Oklahoma taxable income and adjusted gross
4646 income; providing exemption for income derived by
4747 business activity conducted by certain persons;
4848 requiring income to be derived fro m activity as sole
4949 proprietor; limiting exemption amount; amending 68
5050 O.S. 2021, Section 1357, as amended by Section 1,
5151 Chapter 206, O.S.L. 2022 (68 O.S. Supp. 2022, Section
5252 1357), which relates to sales tax exemption;
5353 providing sales tax exemption for sales of tangible
5454 personal property and services by certain persons as
5555 sole proprietors; imposing limit on duration of
5656 business activity for purposes of exempt treatment;
5757 exempting certain sole proprietors fr om state or
5858 local business licensing requirements; providing for
5959 noncodification; providing for codification; and
6060 providing an effective date.
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6565 BE IT ENACTED BY THE PEOPLE OF THE STA TE OF OKLAHOMA:
6666 SECTION 1. NEW LAW A new section of law not to be
6767 codified in the Oklahoma Statutes reads as follows:
6868 This act shall be known an d may be cited as the "Oklahoma Youth
6969 Entrepreneurs Promotion and Development Act of 2023 ".
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9696 SECTION 2. AMENDATORY 68 O.S. 2021, Section 2358, as
9797 amended by Section 2, Chapter 341, O.S.L. 2022 (68 O.S. Supp. 2022,
9898 Section 2358), is amended to read as follows:
9999 Section 2358. For all tax years beginning afte r December 31,
100100 1981, taxable income and adjusted gross income shall be adju sted to
101101 arrive at Oklahoma taxable income and Okla homa adjusted gross income
102102 as required by this section.
103103 A. The taxable income of any taxpayer shall be adjusted to
104104 arrive at Oklahoma taxable income for corporations and Oklahoma
105105 adjusted gross income for individuals, as foll ows:
106106 1. There shall be added interest income on obligations of any
107107 state or political subdivision thereto which is not otherwise
108108 exempted pursuant to other laws of this state, to the extent that
109109 such interest is not included in taxable income and adjusted gross
110110 income.
111111 2. There shall be deducted amounts included in suc h income that
112112 the state is prohibited from taxing because of the provisions of the
113113 Federal Constitution, the State Constitution, federal laws or laws
114114 of Oklahoma.
115115 3. The amount of any federal net operating loss deductio n shall
116116 be adjusted as follows:
117117 a. For carryovers and carrybacks to taxable years
118118 beginning before January 1, 1981, the amount of a ny
119119 net operating loss deduction allowed to a taxpayer for
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146146 federal income tax purposes shall be reduced to an
147147 amount which is the same portion thereof as the lo ss
148148 from sources within this state, as determined pur suant
149149 to this section and Section 2362 of thi s title, for
150150 the taxable year in which such loss is sustained is of
151151 the total loss for such yea r;
152152 b. For carryovers and carry backs to taxable years
153153 beginning after December 31, 1980, the amount of any
154154 net operating loss deduction allowed for the taxable
155155 year shall be an amount equal to the aggregate of the
156156 Oklahoma net operating loss carryovers and carrybacks
157157 to such year. Oklahoma net operating losses shall b e
158158 separately determined by reference to Section 172 o f
159159 the Internal Revenue Code, 26 U.S.C., Secti on 172, as
160160 modified by the Oklahoma Income Tax Act, Section 2351
161161 et seq. of this title, and shall be allowed without
162162 regard to the existence of a federal net operating
163163 loss. For tax years beginning after Decemb er 31,
164164 2000, and ending before January 1, 200 8, the years to
165165 which such losses may be carried shall be determined
166166 solely by reference to Section 172 of the Internal
167167 Revenue Code, 26 U.S.C., Section 172, with the
168168 exception that the terms "net operating loss" and
169169 "taxable income" shall be replaced with "Oklahoma net
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196196 operating loss" and "Oklahoma taxable income". For
197197 tax years beginning after De cember 31, 2007, and
198198 ending before January 1, 2009, years to wh ich such
199199 losses may be carried back shall be limited to two (2)
200200 years. For tax years beginning af ter December 31,
201201 2008, the years to which such losses may be carried
202202 back shall be determined s olely by reference to
203203 Section 172 of the Internal Revenue Code, 26 U.S.C.,
204204 Section 172, with the exception that the terms "net
205205 operating loss" and "taxable income" shall be replaced
206206 with "Oklahoma net operating loss" and "Oklahoma
207207 taxable income".
208208 4. Items of the following nature shal l be allocated as
209209 indicated. Allowable deductions attributable to items separately
210210 allocable in subparagraphs a, b and c of this p aragraph, whether or
211211 not such items of income were actually received, shall be allocated
212212 on the same basis as those items:
213213 a. Income from real and tangible personal property, such
214214 as rents, oil and mining produc tion or royalties, and
215215 gains or losses from s ales of such property, shall be
216216 allocated in accordance with the situs of s uch
217217 property;
218218 b. Income from intangible personal p roperty, such as
219219 interest, dividends, patent or copyright royalties,
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246246 and gains or losses from sales of such property, shall
247247 be allocated in accordance with the domiciliary situs
248248 of the taxpayer, except that :
249249 (1) where such property has acquired a nonunitar y
250250 business or commercial situ s apart from the
251251 domicile of the taxpayer such income sha ll be
252252 allocated in accordance with such busin ess or
253253 commercial situs; interest income from
254254 investments held to generate working capital for
255255 a unitary business enterprise shall be included
256256 in apportionable income; a resident trust or
257257 resident estate shall b e treated as having a
258258 separate commercial or business situs insofar as
259259 undistributed income is concerned, but shall not
260260 be treated as having a separate commercial or
261261 business situs insofar as distrib uted income is
262262 concerned,
263263 (2) for taxable years beginning after December 31,
264264 2003, capital or ordinary gains or losses from
265265 the sale of an ownership interest in a publicly
266266 traded partnership, as de fined by Section 7704(b)
267267 of the Internal Revenue Code, sha ll be allocated
268268 to this state in the ratio of the original cost
269269 of such partnership's tangible property in this
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296296 state to the original cost of such partnership's
297297 tangible property everywhere, as determined at
298298 the time of the sale ; if more than fifty percent
299299 (50%) of the value of the partnership's assets
300300 consists of intangible assets, capital or
301301 ordinary gains or losses from the sale of an
302302 ownership interest in the partnership shall be
303303 allocated to this state in accordance with the
304304 sales factor of the partner ship for its first
305305 full tax period immediately preceding i ts tax
306306 period during which the ownership inte rest in the
307307 partnership was sold; the provisions of this
308308 division shall only apply if the capit al or
309309 ordinary gains or losses from the sale of an
310310 ownership interest in a partnership do not
311311 constitute qualifying gain receiving capital
312312 treatment as defined i n subparagraph a of
313313 paragraph 2 of subsection F of this section,
314314 (3) income from such property which is required to be
315315 allocated pursuant to the provisi ons of paragraph
316316 5 of this subsection shall be allocated as herein
317317 provided;
318318 c. Net income or loss from a business activity which is
319319 not a part of business carried on within or wi thout
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346346 the state of a unitary character shall be se parately
347347 allocated to the state in which such activity is
348348 conducted;
349349 d. In the case of a manufacturing or processing
350350 enterprise the business of which in Oklahoma consists
351351 solely of marketing its products by :
352352 (1) sales having a situs without this state, shi pped
353353 directly to a point from without the state to a
354354 purchaser within the state, commo nly known as
355355 interstate sales,
356356 (2) sales of the product stored in public warehouses
357357 within the state pursuant to "in transit"
358358 tariffs, as prescribed and allowed by the
359359 Interstate Commerce Commi ssion, to a purchaser
360360 within the state,
361361 (3) sales of the product stored in public warehouses
362362 within the state where the shipment to such
363363 warehouses is not covered by "in transit"
364364 tariffs, as prescribed a nd allowed by the
365365 Interstate Commerce Commission, to a purchaser
366366 within or without the state,
367367 the Oklahoma net incom e shall, at the option of the
368368 taxpayer, be that portion of the total net income of
369369 the taxpayer for federal income tax p urposes derived
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396396 from the manufacture and/or proces sing and sales
397397 everywhere as determined by the ratio of the sales
398398 defined in this sect ion made to the purchaser within
399399 the state to the total sales everywhere. The term
400400 "public warehouse" as used in this subparagraph means
401401 a licensed public warehouse, the principal business of
402402 which is warehousing merchandise for the public;
403403 e. In the case of insurance companies, Oklahoma taxable
404404 income shall be taxable income of the taxpayer for
405405 federal tax purposes, as ad justed for the adjus tments
406406 provided pursuant to th e provisions of paragraphs 1
407407 and 2 of this subsection, apportioned as follows:
408408 (1) except as otherwise provided by division (2) of
409409 this subparagraph, taxable income of an insurance
410410 company for a taxable yea r shall be apportion ed
411411 to this state by multiplyin g such income by a
412412 fraction, the numerator of which is the direct
413413 premiums written for insurance on property or
414414 risks in this state, and the denominator of which
415415 is the direct premiums written for insurance on
416416 property or risks everywhere. For purposes of
417417 this subsection, the term "direct premiums
418418 written" means the total amount of direc t
419419 premiums written, assessments and annuity
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446446 considerations as reported for the taxable year
447447 on the annual statement filed by the company with
448448 the Insurance Commissioner in the form approved
449449 by the National Association of Insurance
450450 Commissioners, or such ot her form as may be
451451 prescribed in lieu thereof,
452452 (2) if the principal source of premiums written by an
453453 insurance company con sists of premiums fo r
454454 reinsurance accepted by it, the taxable income of
455455 such company shall be apportioned to this state
456456 by multiplying such income by a fraction, the
457457 numerator of which is the sum of (a) direct
458458 premiums written for insurance on property or
459459 risks in this state, plus (b) premiums written
460460 for reinsurance accepted in respect of property
461461 or risks in this state, and the denomi nator of
462462 which is the sum of (c) direct premiums written
463463 for insurance on property or risks everywhere,
464464 plus (d) premiums written for reinsuran ce
465465 accepted in respect of prop erty or risks
466466 everywhere. For purposes of this paragraph,
467467 premiums written for rei nsurance accepted in
468468 respect of property or risk s in this state,
469469 whether or not otherwise determinable, may at the
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496496 election of the company be determined on the
497497 basis of the proportion which premiums written
498498 for insurance accepted from companies
499499 commercially domiciled in Oklahoma bears to
500500 premiums written for reinsurance accepted from
501501 all sources, or alternatively in the propor tion
502502 which the sum of the direct premiums written for
503503 insurance on property or risks in this state by
504504 each ceding company from which reinsurance is
505505 accepted bears to the sum of the total direct
506506 premiums written by each such ceding company for
507507 the taxable year.
508508 5. The net income or loss remaining after th e separate
509509 allocation in paragraph 4 of this subsection, being that which is
510510 derived from a unitary business enterprise, shall be a pportioned to
511511 this state on the basis of the arithmetical average of three factors
512512 consisting of property, payroll and sales or gross revenue
513513 enumerated as subparagraphs a, b and c of this paragraph. Net
514514 income or loss as used in this paragraph includes t hat derived from
515515 patent or copyright royalties, purchase discounts, and int erest on
516516 accounts receivable relating to or arisin g from a business activity,
517517 the income from which is apportioned pursuant to this subsection,
518518 including the sale or other dispositi on of such property and any
519519 other property used in the unitary enterprise . Deductions used in
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546546 computing such net income or l oss shall not include taxes based on
547547 or measured by income. Provided, for corpora tions whose property
548548 for purposes of the tax impo sed by Section 2355 of this title has an
549549 initial investment cost equaling o r exceeding Two Hund red Million
550550 Dollars ($200,000,000.00) and such investment is made on or after
551551 July 1, 1997, or for corporations which expand their property or
552552 facilities in this state and such expansion has an investment cost
553553 equaling or exceeding Two Hundred Million Doll ars ($200,000,000.00)
554554 over a period not to exceed three (3) years, and such expansion is
555555 commenced on or after J anuary 1, 2000, the three factors shall be
556556 apportioned with property and payroll, each comprising twenty-five
557557 percent (25%) of the apportionment factor and sales comprising f ifty
558558 percent (50%) of the apportionment factor. The apportionment
559559 factors shall be computed as follows:
560560 a. The property factor is a fraction, the numerator of
561561 which is the average value of the taxpayer 's real and
562562 tangible personal property owned or rented and used in
563563 this state during the tax period and the denominator
564564 of which is the average value of all the taxpayer 's
565565 real and tangible personal property everywhere owned
566566 or rented and used during the tax p eriod.
567567 (1) Property, the income from which is sepa rately
568568 allocated in paragraph 4 of this subsection,
569569 shall not be included in determining this
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596596 fraction. The numerator of the fract ion shall
597597 include a portion of the investment in
598598 transportation and other e quipment having no
599599 fixed situs, such as rolling st ock, buses, trucks
600600 and trailers, including machinery and equipment
601601 carried thereon, airplanes, salespersons'
602602 automobiles and other similar equipment, in the
603603 proportion that miles traveled in Oklahoma by
604604 such equipment bears to total miles traveled,
605605 (2) Property owned by the taxpayer is valued at its
606606 original cost. Property rented by the taxpayer
607607 is valued at eight times the net annua l rental
608608 rate. Net annual rental rate is the annual
609609 rental rate paid by th e taxpayer, less any annual
610610 rental rate received b y the taxpayer from
611611 subrentals,
612612 (3) The average value of property shall be determined
613613 by averaging the values at the beginning and
614614 ending of the tax period but the Oklahoma Tax
615615 Commission may require the av eraging of monthly
616616 values during the tax period if reasonably
617617 required to reflect properly the average value of
618618 the taxpayer's property;
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645645 b. The payroll factor is a fraction, the num erator of
646646 which is the total compensation for services rendered
647647 in the state during the tax per iod, and the
648648 denominator of which is the total compensation for
649649 services rendered everywhere during the tax period.
650650 "Compensation", as used in this subsection m eans those
651651 paid-for services to the extent related to the unitary
652652 business but does not include officers' salaries,
653653 wages and other compensation.
654654 (1) In the case of a transportation enterprise, the
655655 numerator of the fraction shall include a portion
656656 of such expenditure in connection with employees
657657 operating equipment over a fixed r oute, such as
658658 railroad employees, airline pilots, or bus
659659 drivers, in this state only a part of the time,
660660 in the proportion that mileage traveled in
661661 Oklahoma bears to total mileage t raveled by such
662662 employees,
663663 (2) In any case the numerator of the fraction sh all
664664 include a portion of such expenditures in
665665 connection with itinerant employees, such as
666666 traveling salespersons, in this state only a part
667667 of the time, in the proportion that time spent in
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694694 Oklahoma bears to total time spent in furtherance
695695 of the enterprise by such employees ;
696696 c. The sales factor is a fra ction, the numerator of which
697697 is the total sales or gross revenue of the taxpayer in
698698 this state during the tax period, and the deno minator
699699 of which is the total sales or gross revenue of the
700700 taxpayer everywhere during the tax period. "Sales",
701701 as used in this subsection does not include sales or
702702 gross revenue which are separately allocated in
703703 paragraph 4 of this subsection.
704704 (1) Sales of tangible personal property have a situs
705705 in this state if the property is delivered or
706706 shipped to a purchaser other than th e United
707707 States government, within this state regardless
708708 of the FOB point or other conditions of the sale;
709709 or the property is shipp ed from an office, store,
710710 warehouse, factory or other place of storage in
711711 this state and (a) th e purchaser is the United
712712 States government or (b) the taxpayer is not
713713 doing business in the state of the destination of
714714 the shipment.
715715 (2) In the case of a railr oad or interurban railway
716716 enterprise, the numerator of the fraction shall
717717 not be less than the allocation of revenues to
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744744 this state as shown in its annual report to the
745745 Corporation Commission.
746746 (3) In the case of an airline, truck or bus
747747 enterprise or freight car, tank car, refrigerator
748748 car or other railroad equipment enterprise, the
749749 numerator of the fraction shall include a port ion
750750 of revenue from interstate transporta tion in the
751751 proportion that interstate mileage traveled in
752752 Oklahoma bears to total interst ate mileage
753753 traveled.
754754 (4) In the case of an oil, gasoline or gas pipeline
755755 enterprise, the numer ator of the fraction shall
756756 be either the total of traffic units of the
757757 enterprise within Oklahoma or the revenue
758758 allocated to Oklahoma based upon miles moved, at
759759 the option of the taxpayer, and the denominator
760760 of which shall be the tota l of traffic units o f
761761 the enterprise or the revenu e of the enterprise
762762 everywhere as appropr iate to the numerator. A
763763 "traffic unit" is hereby defined as the
764764 transportation for a dis tance of one (1) mile of
765765 one (1) barrel of oil, one (1) gallon of gasoline
766766 or one thousand (1,0 00) cubic feet of natural or
767767 casinghead gas, as the case may be.
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794794 (5) In the case of a telephone or telegraph or other
795795 communication enterprise, the numerator of the
796796 fraction shall include that portion of the
797797 interstate revenue as is all ocated pursuant to
798798 the accounting procedures presc ribed by the
799799 Federal Communications Commi ssion; provided that
800800 in respect to each corporation or business entity
801801 required by the Federal Communications Commission
802802 to keep its books and records in accordance with
803803 a uniform system of accounts prescribed by su ch
804804 Commission, the intrastate net income shall be
805805 determined separately in the manner provided by
806806 such uniform system of accounts a nd only the
807807 interstate income shall be subject to allocation
808808 pursuant to the provisions of this subsection.
809809 Provided further, that the gross revenue factors
810810 shall be those as are determined pursuant to the
811811 accounting procedures prescribed by the Federal
812812 Communications Commission.
813813 In any case where the apportionment of the three factors
814814 prescribed in this paragraph attributes to Oklahoma a portion of net
815815 income of the enterprise out of all appropriate proportion to the
816816 property owned and/or business transac ted within this state, because
817817 of the fact that one or more of the factors so prescribed are no t
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844844 employed to any appreciable extent in furtherance of the enterprise;
845845 or because one or more factors not so prescribed are employed to a
846846 considerable extent in furtherance of the enterprise; or because of
847847 other reasons, the Tax Commiss ion is empowered to permit, after a
848848 showing by taxpayer that an excessive portion of net in come has been
849849 attributed to Oklahoma, or require, when in its judgment an
850850 insufficient portion of net income has been attributed to Oklahoma,
851851 the elimination, substi tution, or use of ad ditional factors, or
852852 reduction or increase in the weight of such prescr ibed factors.
853853 Provided, however, that any such variance from such prescribed
854854 factors which has the effect of increasing the portion of net income
855855 attributable to Oklahoma must not be i nherently arbitrary, and
856856 application of the recomputed final apportionm ent to the net income
857857 of the enterprise must attribute to Oklahoma only a reasonable
858858 portion thereof.
859859 6. For calendar years 1997 and 1998, the owner of a new or
860860 expanded agricultural c ommodity processing facility i n this state
861861 may exclude from Oklahoma ta xable income, or in the case of an
862862 individual, the Oklahoma adjusted gross income, fifteen percent
863863 (15%) of the investment by the owner in the new or expanded
864864 agricultural commodity pro cessing facility. For calendar year 1999,
865865 and all subsequent years, th e percentage, not to exceed fifteen
866866 percent (15%), available to the owner of a new or expa nded
867867 agricultural commodity processing facility in this state claiming
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894894 the exemption shall be a djusted annually so that the t otal estimated
895895 reduction in tax liability does not exceed One Million Dollars
896896 ($1,000,000.00) annually. The Tax Commission shall p romulgate rules
897897 for determining the percentage of the investment which each eligible
898898 taxpayer may exclude. The exclusion provided by this paragraph
899899 shall be taken in the taxable year when the investment is made. In
900900 the event the total reduction in tax li ability authorized by this
901901 paragraph exceeds One Million Dollars ($1,000,00 0.00) in any
902902 calendar year, the Tax Commission sha ll permit any excess over One
903903 Million Dollars ($1,000,000.00) and shall factor such excess into
904904 the percentage for subsequent years . Any amount of the exemption
905905 permitted to be excluded pursuant to the pro visions of this
906906 paragraph but not used in any year may be carried forward as an
907907 exemption from income pursuant to the provisions of this paragraph
908908 for a period not exceeding six (6) years following the year in which
909909 the investment was originally made.
910910 For purposes of this par agraph:
911911 a. "Agricultural commodity processing facility" means
912912 building, structures, fixtures and improvements used
913913 or operated primarily for the processing or pr oduction
914914 of marketable products from agricultural commodities.
915915 The term shall also mean a dair y operation that
916916 requires a depreciable investment of at least Two
917917 Hundred Fifty Thousand Dollars ($250,000.00) and which
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944944 produces milk from dairy cows . The term does not
945945 include a facility that provides only, and nothing
946946 more than, storage, cleaning, dry ing or transportation
947947 of agricultural commodities, and
948948 b. "Facility" means each part of the facility which is
949949 used in a process primarily for:
950950 (1) the processing of agricultural commodities,
951951 including receiving or storing agricultural
952952 commodities, or the p roduction of milk at a dairy
953953 operation,
954954 (2) transporting the agricultur al commodities or
955955 product before, during or after the processing,
956956 or
957957 (3) packaging or otherwise preparing the product for
958958 sale or shipment.
959959 7. Despite any provision to the contrary in paragraph 3 of this
960960 subsection, for taxable years beginning after Decem ber 31, 1999, in
961961 the case of a taxpayer which has a farming loss, such farming loss
962962 shall be considered a net operating loss carryback in accordance
963963 with and to the extent of the Intern al Revenue Code, 26 U.S.C .,
964964 Section 172(b)(G). However, the amount of the net operating loss
965965 carryback shall not exceed the lesser of:
966966 a. Sixty Thousand Dollars ($60,000.00), or
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993993 b. the loss properly shown on Schedule F of the Internal
994994 Revenue Service Form 1040 reduced by one-half (1/2) of
995995 the income from all other sources ot her than reflected
996996 on Schedule F.
997997 8. In taxable years beginning after December 31, 1995, all
998998 qualified wages equal to the federal income tax credit set forth in
999999 26 U.S.C.A., Section 45 A, shall be deducted f rom taxable income.
10001000 The deduction allowed pursua nt to this paragraph shall only be
10011001 permitted for the tax years in which the federal tax cr edit pursuant
10021002 to 26 U.S.C.A., Section 45A, is allowed. For purposes of this
10031003 paragraph, "qualified wages" means those wages used to calculate the
10041004 federal credit pursu ant to 26 U.S.C.A., Section 45A.
10051005 9. In taxable years beginning after December 31, 2005, a n
10061006 employer that is eligible for and utilizes the Safety Pays OSHA
10071007 Consultation Service provided by the Oklahoma Depa rtment of Labor
10081008 shall receive an exemption from ta xable income in the amount of One
10091009 Thousand Dollars ($1,000.00) for the tax year that the s ervice is
10101010 utilized.
10111011 10. For taxable years beginning on or after January 1, 2010,
10121012 there shall be added to Oklahoma taxable income an amount equal to
10131013 the amount of deferred income not included in such taxable inc ome
10141014 pursuant to Section 108(i)(1) of the Inte rnal Revenue Code of 1986
10151015 as amended by Section 1231 of the American Recove ry and Reinvestment
10161016 Act of 2009 (P.L. No . 111-5). There shall be subtracted from
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10431043 Oklahoma taxable income an amount equal to the amount of deferred
10441044 income included in such taxable i ncome pursuant to Section 108(i)(1)
10451045 of the Internal Revenue Code by Section 1231 of the American
10461046 Recovery and Reinvestment Act of 2009 (P.L. No. 111-5).
10471047 11. For taxable years beginning on or after January 1, 20 19,
10481048 there shall be subtracted from Oklahoma t axable income or adjusted
10491049 gross income any item of income or gain, and ther e shall be added to
10501050 Oklahoma taxable income or adjusted gross income any item of loss or
10511051 deduction that in the absence of an election pu rsuant to the
10521052 provisions of the Pass -Through Entity Tax Equity Act of 2019 would
10531053 be allocated to a member or to an indir ect member of an ele cting
10541054 pass-through entity pursuant to Section 2351 et seq. of this titl e,
10551055 if (i) the electing pass-through entity has accounted for such item
10561056 in computing its Oklahoma net entity income or loss pursuant to the
10571057 provisions of the Pass -Through Entity Tax Equi ty Act of 2019, and
10581058 (ii) the total amount of tax attributable to any re sulting Oklahoma
10591059 net entity income has been p aid. The Oklahoma Tax Commission shall
10601060 promulgate rules for the reporting of such exclusion to direct and
10611061 indirect members of the electing pass-through entity. As used in
10621062 this paragraph, "electing pass-through entity", "indirect member",
10631063 and "member" shall be defined in the same manner as prescribe d by
10641064 Section 2355.1P-2 of this title. Notwithstanding the application of
10651065 this paragraph, the a djusted tax basis of any ownership interest in
10661066 a pass-through entity for purposes of Section 2351 et seq. of this
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10931093 title shall be equal to its adjusted tax basis for federal income
10941094 tax purposes.
10951095 B. 1. The taxable income of any corporat ion shall be further
10961096 adjusted to arrive at Oklahoma taxable income, except those
10971097 corporations electing treatment as provided in subchapt er S of the
10981098 Internal Revenue Code, 26 U.S.C., Section 1361 et seq., and Section
10991099 2365 of this title, deductions pursuant to the provisions of the
11001100 Accelerated Cost Recovery System as defined and allowed in the
11011101 Economic Recovery Tax Act of 1981, Public Law 97 -34, 26 U.S.C.,
11021102 Section 168, for depreciation of assets placed into service after
11031103 December 31, 1981, shall not be allowe d in calculating Okl ahoma
11041104 taxable income. Such corporations shall be allowed a deduction f or
11051105 depreciation of assets placed into service after December 31, 1981,
11061106 in accordance with provisions of the Internal Revenue Code, 26
11071107 U.S.C., Section 1 et seq., in e ffect immediately pr ior to the
11081108 enactment of the Accelerated Cost Recovery System . The Oklahoma tax
11091109 basis for all such assets placed int o service after December 31,
11101110 1981, calculated in this section shall be retained and utilized for
11111111 all Oklahoma income tax purposes through the final disposition of
11121112 such assets.
11131113 Notwithstanding any other provision s of the Oklahoma Income Tax
11141114 Act, Section 2351 et seq. of this title, or of the Internal R evenue
11151115 Code to the contrary, this subsection shall control calculation of
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11421142 depreciation of asset s placed into service after December 31, 1981,
11431143 and before January 1, 19 83.
11441144 For assets placed in service and held by a corporation in which
11451145 accelerated cost recov ery system was previously disallowed, an
11461146 adjustment to taxable income is re quired in the first taxable year
11471147 beginning after December 31, 1982, to reconcile the basis of such
11481148 assets to the basis allowed in the In ternal Revenue Code. The
11491149 purpose of this adjustment is to equalize the basis and allowance
11501150 for depreciation accounts be tween that reported to the Internal
11511151 Revenue Service and that reported to Oklahoma.
11521152 2. For tax years beginning on or after January 1, 20 09, and
11531153 ending on or before December 31, 2009 , there shall be added to
11541154 Oklahoma taxable income any amount in excess of O ne Hundred Seventy-
11551155 five Thousand Dollars ($175,000.00) which has been deducted as a
11561156 small business expense under Internal Revenue Code, Section 179 as
11571157 provided in the American Recov ery and Reinvestment Act of 2009.
11581158 C. 1. For taxable years beginning after December 31, 1987, the
11591159 taxable income of any corporation shall be further adjusted to
11601160 arrive at Oklahoma taxable income for transfers o f technology to
11611161 qualified small businesses lo cated in Oklahoma. Such transferor
11621162 corporation shall be allowed an exempti on from taxable inco me of an
11631163 amount equal to the amount of royalty payment received as a re sult
11641164 of such transfer; provided, however, suc h amount shall not exceed
11651165 ten percent (10%) of the amount of gross proceeds received by such
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11921192 transferor corporation as a result of the technology transfer. Such
11931193 exemption shall be allowed for a period not to ex ceed ten (10) years
11941194 from the date of receipt of the first royalty payment accruing from
11951195 such transfer. No exemption may be claimed for transfers of
11961196 technology to qualified small busine sses made prior to January 1,
11971197 1988.
11981198 2. For purposes of this subsection :
11991199 a. "Qualified small business" means an entity, whether
12001200 organized as a corporation, partn ership, or
12011201 proprietorship, organized for profit with its
12021202 principal place of business located within this state
12031203 and which meets the following criteria:
12041204 (1) Capitalization of not more than Two Hundred Fifty
12051205 Thousand Dollars ($250,000.00),
12061206 (2) Having at least fifty percent (50%) of its
12071207 employees and assets located in Oklahoma at the
12081208 time of the transfer, and
12091209 (3) Not a subsidiary or affiliate of the transferor
12101210 corporation;
12111211 b. "Technology" means a proprietary process, formula,
12121212 pattern, device or compilation of s cientific or
12131213 technical information which is not in the public
12141214 domain;
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12411241 c. "Transferor corporatio n" means a corporation which is
12421242 the exclusive and undisputed owner of t he technology
12431243 at the time the transfer is mad e; and
12441244 d. "Gross proceeds" means the total amount of
12451245 consideration for the transfer of technology, whether
12461246 the consideration is in money or otherwise.
12471247 D. 1. For taxable years beginning after December 31, 2005 , the
12481248 taxable income of any corporation, estat e or trust, shall be further
12491249 adjusted for qualifying gains receiving capital treatment. Such
12501250 corporations, estates or t rusts shall be allow ed a deduction from
12511251 Oklahoma taxable income for the amount of qualifyi ng gains receiving
12521252 capital treatment earned by the corporation, estate or trust during
12531253 the taxable year and included in the federal taxable income of such
12541254 corporation, estate or trust.
12551255 2. As used in this subsection:
12561256 a. "qualifying gains receiving capita l treatment" means
12571257 the amount of net capital gai ns, as defined in Section
12581258 1222(11) of the Internal Revenue Code, included in the
12591259 federal income tax return of the corpor ation, estate
12601260 or trust that result from:
12611261 (1) the sale of real property or tangible pers onal
12621262 property located within Oklahoma that has be en
12631263 directly or indirectly owned by the corpor ation,
12641264 estate or trust for a holding period of at least
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12911291 five (5) years prior to the date of the
12921292 transaction from which such net capital gains
12931293 arise,
12941294 (2) the sale of stock or on the sale of an ownership
12951295 interest in an Oklahoma company, limited
12961296 liability company, or partnership where such
12971297 stock or ownership interest has been direct ly or
12981298 indirectly owned by the corporation, estate or
12991299 trust for a holding period of at least three (3)
13001300 years prior to the date of the tra nsaction from
13011301 which the net capital gains ari se, or
13021302 (3) the sale of real property, tangible personal
13031303 property or intangible personal propert y located
13041304 within Oklahoma as part of the sale of all or
13051305 substantially all of the assets of an Oklahoma
13061306 company, limited liability company, or
13071307 partnership where such property has been directly
13081308 or indirectly owned by such entity owned by the
13091309 owners of such entity, and used in or derived
13101310 from such entity for a period of at least three
13111311 (3) years prior to the date of the tra nsaction
13121312 from which the net capital gains ari se,
13131313 b. "holding period" means an uninterrupted period of
13141314 time. The holding period shall include any additional
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13411341 period when the property was held by another
13421342 individual or entity, if such additional period is
13431343 included in the taxpayer's holding period for th e
13441344 asset pursuant to the Internal Revenue Code,
13451345 c. "Oklahoma company", "limited liability company", or
13461346 "partnership" means an entity whose primary
13471347 headquarters have been located in Oklahoma for at
13481348 least three (3) uninterrupted years prior to the date
13491349 of the transaction from which the net capital gains
13501350 arise,
13511351 d. "direct" means the taxpayer directly owns the asset,
13521352 and
13531353 e. "indirect" means the taxpayer owns an in terest in a
13541354 pass-through entity (or chain of pass-through
13551355 entities) that sells the asset that gives rise to the
13561356 qualifying gains receiving capital treatment.
13571357 (1) With respect to sales of real property or
13581358 tangible personal pro perty located within
13591359 Oklahoma, the deduction described in this
13601360 subsection shall not ap ply unless the pass-
13611361 through entity that makes the sale has held the
13621362 property for not less than five (5) uninterrupted
13631363 years prior to the date of the transaction that
13641364 created the capital gain, and each pass-through
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13911391 entity included in the chain of ownership has
13921392 been a member, partner, or shareholder of the
13931393 pass-through entity in the tier immediately below
13941394 it for an uninterrup ted period of not less than
13951395 five (5) years.
13961396 (2) With respect to sales of stock or ownership
13971397 interest in or sales of all or substantially all
13981398 of the assets of an Oklahoma company, li mited
13991399 liability company, or partnership, the deduction
14001400 described in this su bsection shall not apply
14011401 unless the pass-through entity that makes the
14021402 sale has held the stock or ownership interest or
14031403 the assets for not less than three (3)
14041404 uninterrupted years pr ior to the date of the
14051405 transaction that created the capital gain, and
14061406 each pass-through entity included in the chain of
14071407 ownership has been a member, partn er or
14081408 shareholder of the pass-through entity in the
14091409 tier immediately below it for an uninterrupted
14101410 period of not less than three (3) years.
14111411 E. The Oklahoma adjusted gross incom e of any individual
14121412 taxpayer shall be further adju sted as follows to arrive at Oklahoma
14131413 taxable income:
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14401440 1. a. In the case of individuals , there shall be added or
14411441 deducted, as the case may be, the difference necessary
14421442 to allow personal exemptions of One Tho usand Dollars
14431443 ($1,000.00) in lieu of the personal exemptions allowed
14441444 by the Internal Revenue Code.
14451445 b. There shall be allowed an addition al exemption of One
14461446 Thousand Dollars ($1,000. 00) for each taxpayer or
14471447 spouse who is blind at the close of the tax year . For
14481448 purposes of this subparagraph, an individual is blind
14491449 only if the central visual acuity of the individual
14501450 does not exceed 20/200 in the better eye with
14511451 correcting lenses, or if the visual acuity of the
14521452 individual is greater than 20/200, but is accompa nied
14531453 by a limitation in the fields of vision such that the
14541454 widest diameter of the visual field subtends an angle
14551455 no greater than twenty (20) degrees.
14561456 c. There shall be allowed an ad ditional exemption of One
14571457 Thousand Dollars ($1,000.00) for each taxpayer or
14581458 spouse who is sixty-five (65) years of age or old er at
14591459 the close of the tax year based upon the filing status
14601460 and federal adjusted gros s income of the taxpayer.
14611461 Taxpayers with the following filing status may claim
14621462 this exemption if the federal adjusted g ross income
14631463 does not exceed:
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14901490 (1) Twenty-five Thousand Dollars ($25,000.00) if
14911491 married and filing jointly;
14921492 (2) Twelve Thousand Five Hundr ed Dollars ($12,500.00)
14931493 if married and filing separately;
14941494 (3) Fifteen Thousand Dollars ($15,000.00) if single;
14951495 and
14961496 (4) Nineteen Thousand Dollars ($19,000.00) if a
14971497 qualifying head of household.
14981498 Provided, for taxable years beginning after December
14991499 31, 1999, amounts included in the calculation of
15001500 federal adjusted gross income pursuant to the
15011501 conversion of a traditional individ ual retirement
15021502 account to a Roth individual retire ment account shall
15031503 be excluded from federal adjusted gross income for
15041504 purposes of the income thresholds provided in this
15051505 subparagraph.
15061506 2. a. For taxable years beginning on or before December 31,
15071507 2005, in the case of individuals who use the standard
15081508 deduction in determining taxable income, there shall
15091509 be added or deducted, as the case may be , the
15101510 difference necessary to allow a standar d deduction in
15111511 lieu of the standard deduction allowed by the Internal
15121512 Revenue Code, in an amount equal to the larger of
15131513 fifteen percent (15%) of the Oklahoma adjusted gross
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15401540 income or One Thousand Dollars ($1,000 .00), but not to
15411541 exceed Two Thousand Dollars ($2,000.00), except that
15421542 in the case of a married individual filing a separ ate
15431543 return such deduction shall be the larger of f ifteen
15441544 percent (15%) of such Oklahoma adjusted gross income
15451545 or Five Hundred Dollars ($ 500.00), but not to exceed
15461546 the maximum amount of One Thousand Dollars
15471547 ($1,000.00).
15481548 b. For taxable years beginning on or after January 1,
15491549 2006, and before January 1, 2007, in the case of
15501550 individuals who use the standard deduction in
15511551 determining taxable inco me, there shall be added or
15521552 deducted, as the case may be, the difference necessary
15531553 to allow a standard deduction in lieu of the standard
15541554 deduction allowed by the Internal Revenue Code, in an
15551555 amount equal to:
15561556 (1) Three Thousand Dollars ($3,000.00), if the f iling
15571557 status is married filing joint, head of household
15581558 or qualifying widow; or
15591559 (2) Two Thousand Dollars ($2,000.00), if the filing
15601560 status is single or married filing sep arate.
15611561 c. For the taxable year beginning on January 1, 2007, and
15621562 ending December 31, 2 007, in the case of individuals
15631563 who use the standard deduction in determining taxable
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15901590 income, there shall be added or de ducted, as the case
15911591 may be, the difference necessa ry to allow a standard
15921592 deduction in lieu of the standard deduction allowed by
15931593 the Internal Revenue Code, in an amount equal to:
15941594 (1) Five Thousand Five Hundred Dollars ($5,500.00),
15951595 if the filing status is m arried filing joint or
15961596 qualifying widow; or
15971597 (2) Four Thousand One Hundred Twenty-five Dollars
15981598 ($4,125.00) for a head of household; or
15991599 (3) Two Thousand Seven Hundred Fifty Dollars
16001600 ($2,750.00), if the filing status is single or
16011601 married filing separate.
16021602 d. For the taxable year beginning on January 1, 2008, an d
16031603 ending December 31, 2008, in the case o f individuals
16041604 who use the standard deduction in determining taxable
16051605 income, there shall be added or deducted, as the case
16061606 may be, the difference necessary to all ow a standard
16071607 deduction in lieu of the standard deduct ion allowed by
16081608 the Internal Revenue Code, in an amount equal to:
16091609 (1) Six Thousand Five Hundred Dollars ($6,500.00), if
16101610 the filing status is married filing joint or
16111611 qualifying widow, or
16121612 (2) Four Thousand Eight Hundred Seventy-five Dollars
16131613 ($4,875.00) for a head of household, or
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16401640 (3) Three Thousand Two Hundred Fifty Dollars
16411641 ($3,250.00), if the filing status is single or
16421642 married filing separate.
16431643 e. For the taxable year beginning on January 1, 2009, and
16441644 ending December 31, 2009, in the case of individuals
16451645 who use the standard deduction in determining t axable
16461646 income, there shall be added or deduct ed, as the case
16471647 may be, the difference necess ary to allow a standard
16481648 deduction in lieu of the standard deduction allowed by
16491649 the Internal Revenue Code, in an amount equal to:
16501650 (1) Eight Thousand Five Hundred Dolla rs ($8,500.00),
16511651 if the filing status is marri ed filing joint or
16521652 qualifying widow, or
16531653 (2) Six Thousand Three Hundred Seventy-five Dollars
16541654 ($6,375.00) for a head of household, or
16551655 (3) Four Thousand Two Hundred Fifty Do llars
16561656 ($4,250.00), if the filing status i s single or
16571657 married filing separate.
16581658 Oklahoma adjusted gross income shall be increased by
16591659 any amounts paid for motor vehicle excise taxes which
16601660 were deducted as allowed by the Internal Revenue Code.
16611661 f. For taxable years beginning on or after January 1,
16621662 2010, and ending on December 31, 2016, in the ca se of
16631663 individuals who use the standard deduct ion in
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16901690 determining taxable income, there shall be added or
16911691 deducted, as the case may be, the difference necessary
16921692 to allow a standard deduction equal to the standard
16931693 deduction allowed by the Internal Revenue Cod e, based
16941694 upon the amount and filing status pr escribed by such
16951695 Code for purposes of filing federal individual income
16961696 tax returns.
16971697 g. For taxable years beginning on or afte r January 1,
16981698 2017, in the case of individ uals who use the standard
16991699 deduction in determining taxable income, there shall
17001700 be added or deducted, as the case may be, the
17011701 difference necessary to allow a standard deduction in
17021702 lieu of the standard deduction allow ed by the Internal
17031703 Revenue Code, as follo ws:
17041704 (1) Six Thousand Three Hundred Fifty Doll ars
17051705 ($6,350.00) for single or married filing
17061706 separately,
17071707 (2) Twelve Thousand Seven Hundred Dollars
17081708 ($12,700.00) for married filing jointly o r
17091709 qualifying widower with dep endent child, and
17101710 (3) Nine Thousand Three Hundred Fifty Dollars
17111711 ($9,350.00) for head of household.
17121712 3. a. In the case of resident and part-year resident
17131713 individuals having adjusted gross income from sources
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17401740 both within and witho ut the state, the itemized or
17411741 standard deductions and personal exemptio ns shall be
17421742 reduced to an amount which is the same portion of the
17431743 total thereof as Oklahom a adjusted gross income is of
17441744 adjusted gross income. To the extent itemized
17451745 deductions include allowable moving expense, proration
17461746 of moving expense shall not be req uired or permitted
17471747 but allowable moving expen se shall be fully deductible
17481748 for those taxpayers moving within or into Oklahoma and
17491749 no part of moving expense shall be deductible for
17501750 those taxpayers moving without or out of Oklahoma.
17511751 All other itemized or sta ndard deductions and personal
17521752 exemptions shall be subject to proration as provided
17531753 by law.
17541754 b. For taxable years beginning on or after January 1,
17551755 2018, the net amount of itemized deductions allowable
17561756 on an Oklahoma income tax return, subject to the
17571757 provisions of paragraph 24 of this subsection, shall
17581758 not exceed Seventeen Thousand Dollars ($17,00 0.00).
17591759 For purposes of this subparagraph, charitable
17601760 contributions and medical expenses deduct ible for
17611761 federal income tax purposes shall be excluded from the
17621762 amount of Seventeen Thousand Dollars ($17,000.00) as
17631763 specified by this subparagraph.
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17901790 4. A resident individual with a physical disability
17911791 constituting a substantial handicap to employment may deduct from
17921792 Oklahoma adjusted gross income such expenditures to modify a motor
17931793 vehicle, home or workplace as are nec essary to compensate for his or
17941794 her handicap. A veteran certified by the Department of Veterans
17951795 Affairs of the federal government as having a service-connected
17961796 disability shall be conclusively presumed to be an individual with a
17971797 physical disability consti tuting a substantial handicap to
17981798 employment. The Tax Commission shall promulgate rules containing a
17991799 list of combinations of common disabili ties and modifications wh ich
18001800 may be presumed to qualify for this deduct ion. The Tax Commission
18011801 shall prescribe nece ssary requirements for verification.
18021802 5. a. Before July 1, 2010, the first One Thousand Five
18031803 Hundred Dollars ($1,500.00) received by any pers on
18041804 from the United State s as salary or compensation in
18051805 any form, other than retirement benefits, as a member
18061806 of any component of the Armed Forces of the United
18071807 States shall be deducted from taxable income.
18081808 b. On or after July 1, 2010, one hundred percent ( 100%)
18091809 of the income received by any person from the United
18101810 States as salary or compensation in any form, other
18111811 than retirement benefits, as a member of any compo nent
18121812 of the Armed Forces of the United States shall be
18131813 deducted from taxable income.
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18401840 c. Whenever the filing of a time ly income tax return by a
18411841 member of the Armed For ces of the United States is
18421842 made impracticable or impossible of accomplishment by
18431843 reason of:
18441844 (1) absence from the United States, which term
18451845 includes only the states and the District of
18461846 Columbia;
18471847 (2) absence from the State of Oklahoma while on
18481848 active duty; or
18491849 (3) confinement in a hospital within the U nited
18501850 States for treatment of wounds, injurie s or
18511851 disease,
18521852 the time for filing a return and paying an income tax
18531853 shall be and is hereby exte nded without incurring
18541854 liability for interest or penalties, to the fift eenth
18551855 day of the third month following the mo nth in which:
18561856 (a) Such individual shall retur n to the United
18571857 States if the extension is granted pursuant
18581858 to subparagraph a of this paragraph, return
18591859 to the State of Oklahoma if the extension is
18601860 granted pursuant to subparagraph b of this
18611861 paragraph or be discharged from such
18621862 hospital if the extension i s granted
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18891889 pursuant to subparagraph c of this
18901890 paragraph; or
18911891 (b) An executor, administrator, or conservator
18921892 of the estate of the taxpayer is appointed,
18931893 whichever event occurs the earliest.
18941894 Provided, that the Tax C ommission may, in its discretion, grant
18951895 any member of the Armed Forces of the United States an extension of
18961896 time for filing of income tax re turns and payment of income tax
18971897 without incurring liabilities for inter est or penalties. Such
18981898 extension may be gran ted only when in the judgment of the Tax
18991899 Commission a good cause exists therefor and may be for a period in
19001900 excess of six (6) months. A record of every such extension granted,
19011901 and the reason therefor, shall be kept.
19021902 6. Before July 1, 2010, the salary or any other form of
19031903 compensation, received from the United States by a member of any
19041904 component of the Armed Forces of the United States, shall be
19051905 deducted from taxable income during the time in which the person is
19061906 detained by the enemy in a conflict, is a pr isoner of war or is
19071907 missing in action and not deceased; provided, after July 1, 2010,
19081908 all such salary or compensation shall be subject to th e deduction as
19091909 provided pursuant to paragraph 5 of this subsection.
19101910 7. a. An individual taxpayer, whether resident o r
19111911 nonresident, may deduct an amount equal to the federal
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19371937
19381938 income taxes paid by the taxpayer during the taxable
19391939 year.
19401940 b. Federal taxes as desc ribed in subparagraph a of this
19411941 paragraph shall be deductible by any in dividual
19421942 taxpayer, whether resident or nonres ident, only to the
19431943 extent they relate to inco me subject to taxation
19441944 pursuant to the provisions of the Oklahoma Income Tax
19451945 Act. The maximum amount allowable in the preceding
19461946 paragraph shall be prorated on the ra tio of the
19471947 Oklahoma adjusted gross income to federal adjusted
19481948 gross income.
19491949 c. For the purpose of this paragraph, "federal income
19501950 taxes paid" shall mean federal income taxes, surtaxes
19511951 imposed on incomes or excess profits taxes, as though
19521952 the taxpayer was on the accrual basis. In determining
19531953 the amount of deduction for federal income taxes for
19541954 tax year 2001, the amount of the deduction shall not
19551955 be adjusted by the amount of any accelerat ed ten
19561956 percent (10%) tax rate bracket credit or advanced
19571957 refund of the credit received during the tax year
19581958 provided pursuant to the federal Economic Growth and
19591959 Tax Relief Reconciliation Act of 2001, P.L. No. 107-
19601960 16, and the advanced refund of such credit s hall not
19611961 be subject to taxation.
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19871987
19881988 d. The provisions of this paragraph sh all apply to all
19891989 taxable years ending after D ecember 31, 1978, and
19901990 beginning before Januar y 1, 2006.
19911991 8. Retirement benefits not to exceed Five Thousand Five Hundred
19921992 Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five
19931993 Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Thousand
19941994 Dollars ($10,000.00) for the 2006 tax year and all subsequent tax
19951995 years, which are received by an individual from the civil s ervice of
19961996 the United States, the Oklahoma Public Employees Retirement System,
19971997 the Teachers' Retirement System of Oklahoma, the Oklahoma Law
19981998 Enforcement Retirement System, the Oklaho ma Firefighters Pension and
19991999 Retirement System, the Oklahoma Police Pension and Retirement
20002000 System, the employee retirement systems created by counties pursuant
20012001 to Section 951 et seq. of Title 19 of the Oklahoma S tatutes, the
20022002 Uniform Retirement System for Ju stices and Judges, the Oklahoma
20032003 Wildlife Conservation Department Retirement Fund, the Oklahoma
20042004 Employment Security Commission Retirement Plan, or the employee
20052005 retirement systems created by municipalities pursuan t to Section 48-
20062006 101 et seq. of Title 11 of th e Oklahoma Statutes shall be exempt
20072007 from taxable income.
20082008 9. In taxable years beginning after D ecember 3l, 1984, Social
20092009 Security benefits received by an individual sh all be exempt from
20102010 taxable income, to the ext ent such benefits are included in the
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20372037 federal adjusted gross income pursuant to the provisions of Section
20382038 86 of the Internal Revenue Code, 2 6 U.S.C., Section 86.
20392039 10. For taxable years beginning after December 3 1, 1994, lump-
20402040 sum distributions from employer plans of deferred compensation,
20412041 which are not qualified plans within the meaning of Section 401(a)
20422042 of the Internal Reve nue Code, 26 U.S.C., Section 401(a), and which
20432043 are deposited in and accounted for within a separate bank account or
20442044 brokerage account in a financial institution within this state,
20452045 shall be excluded from taxable income in the same manner as a
20462046 qualifying rollover contribution t o an individual retirement account
20472047 within the meaning of Section 408 of the Internal Revenue Code, 26
20482048 U.S.C., Section 408. Amounts withdrawn from such bank or b rokerage
20492049 account, including any earnings thereon, shall be included in
20502050 taxable income when with drawn in the same manner as withdrawals from
20512051 individual retirement acco unts within the meaning of Section 408 of
20522052 the Internal Revenue Code.
20532053 11. In taxable years beginning after December 31, 1995,
20542054 contributions made to and interest rece ived from a medical savings
20552055 account established pursuant to Sections 2621 through 2623 of T itle
20562056 63 of the Oklahoma Statutes shall be exe mpt from taxable income.
20572057 12. For taxable years beginning after December 31, 1996, the
20582058 Oklahoma adjusted gross income of any individual taxpayer who is a
20592059 swine or poultry producer may be further adjusted for the deduction
20602060 for depreciation allowed for new c onstruction or expansion costs
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20872087 which may be computed using the same depreciation method elected for
20882088 federal income tax p urposes except that the useful life shall be
20892089 seven (7) years for purposes of this paragraph . If depreciation is
20902090 allowed as a deduction in determining the adjusted gross income of
20912091 an individual, any depreciation calculated and claimed pursuant to
20922092 this section shall in no even t be a duplication of any depreciation
20932093 allowed or permitted on the fede ral income tax return of the
20942094 individual.
20952095 13. a. In taxable years beginning before January 1, 2005,
20962096 retirement benefits not to exceed the amounts
20972097 specified in this pa ragraph, which are received by an
20982098 individual sixty-five (65) years of age or older and
20992099 whose Oklahoma adjusted gross income is Twenty-five
21002100 Thousand Dollars ($25,000.00) or less if t he filing
21012101 status is single, head of household, or married filing
21022102 separate, or Fifty Thousand Dollars ($50,000.00) or
21032103 less if the filing status is married filing joint or
21042104 qualifying widow, shall be ex empt from taxable income.
21052105 In taxable years beginning aft er December 31, 2004,
21062106 retirement benefits not to exceed the amounts
21072107 specified in this paragraph, which are received by an
21082108 individual whose Oklahoma adjusted gross income is
21092109 less than the qualifying a mount specified in this
21102110 paragraph, shall be exempt from t axable income.
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21372137 b. For purposes of this paragraph, the qualifying amount
21382138 shall be as follows:
21392139 (1) in taxable years beginning after December 31,
21402140 2004, and prior to January 1, 2007, the
21412141 qualifying amount shall be Thirty-seven Thousand
21422142 Five Hundred Dollars ($3 7,500.00) or less if the
21432143 filing status is single, head of household, or
21442144 married filing separate, or Seventy-five Thousand
21452145 Dollars ($75,000.00) or less if the filing status
21462146 is married filing jointly o r qualifying widow,
21472147 (2) in the taxable year beginning Jan uary 1, 2007,
21482148 the qualifying amount shall be Fifty Thousand
21492149 Dollars ($50,000.00) or less if the filing status
21502150 is single, head of household, or married filing
21512151 separate, or One Hundred Thousand Dollars
21522152 ($100,000.00) or less if the filing status is
21532153 married filing jointly or qualifying widow,
21542154 (3) in the taxable year beginning January 1, 2008,
21552155 the qualifying amount shall be Sixty-two Thousand
21562156 Five Hundred Dollars ($62,500.00) or less if the
21572157 filing status is single, head of household, or
21582158 married filing separate, or One Hundred Twenty-
21592159 five Thousand Dollars ($125,000.00) or less if
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21862186 the filing status is married filing jointly or
21872187 qualifying widow,
21882188 (4) in the taxable year beginning January 1, 2009,
21892189 the qualifying amount shall be One Hundred
21902190 Thousand Dollars ($100,000.0 0) or less if the
21912191 filing status is single, head of household, or
21922192 married filing separate, or Two Hundred Thousand
21932193 Dollars ($200,000.00) or less if the filing
21942194 status is married filing jointly or quali fying
21952195 widow, and
21962196 (5) in the taxable year beginning Januar y 1, 2010,
21972197 and subsequent taxable years, there shall be no
21982198 limitation upon the qualifying amount.
21992199 c. For purposes of this paragraph, "retirement benefits"
22002200 means the total distributions or withdrawals from the
22012201 following:
22022202 (1) an employee pension benefit plan which satisfies
22032203 the requirements of Section 401 of the Internal
22042204 Revenue Code, 26 U.S.C., Section 401,
22052205 (2) an eligible deferred compensation plan that
22062206 satisfies the requirements of Section 457 of the
22072207 Internal Revenue Code, 26 U.S.C., Section 457,
22082208 (3) an individual retirement account, annuity or
22092209 trust or simplified employee pensio n that
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22362236 satisfies the requirements of Section 408 of the
22372237 Internal Revenue Code, 26 U.S.C., Section 408,
22382238 (4) an employee annuity subject to the provisions of
22392239 Section 403(a) or (b) of the Internal Revenue
22402240 Code, 26 U.S.C., Section 403(a) or (b),
22412241 (5) United States Retirement Bonds which satisfy the
22422242 requirements of Section 86 of the Internal
22432243 Revenue Code, 26 U.S.C., Section 86, or
22442244 (6) lump-sum distributions from a retirement plan
22452245 which satisfies the requirements of Section
22462246 402(e) of the Internal Revenue Code, 26 U.S.C.,
22472247 Section 402(e).
22482248 d. The amount of the exemption provided by this paragraph
22492249 shall be limited to Five Thousand Five Hundred Dollars
22502250 ($5,500.00) for the 2004 tax year, Seven Tho usand Five
22512251 Hundred Dollars ($7,500.00) for the 2005 tax year and
22522252 Ten Thousand Dollars ($10,000.00) for the tax year
22532253 2006 and for all subsequent tax years. Any individual
22542254 who claims the exemption provided for in paragraph 8
22552255 of this subsection shall not be permitted to claim a
22562256 combined total exemption pursuant to this paragraph
22572257 and paragraph 8 of this subsection in an amount
22582258 exceeding Five Thousand Five Hundred Dollars
22592259 ($5,500.00) for the 2004 tax y ear, Seven Thousand Five
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22862286 Hundred Dollars ($7,500.00) for the 2005 tax year and
22872287 Ten Thousand Dollars ($10,000.00) for the 2006 tax
22882288 year and all subsequent tax years.
22892289 14. In taxable years beginning after December 31, 1999, for an
22902290 individual engaged in production agriculture who has filed a
22912291 Schedule F form with the t axpayer's federal income tax return for
22922292 such taxable year, there shall be e xcluded from taxable income any
22932293 amount which was included as federal taxable income or federal
22942294 adjusted gross income and which consists of the discharge of an
22952295 obligation by a credit or of the taxpayer incurred to finance the
22962296 production of agricultural produ cts.
22972297 15. In taxable years beginning December 31, 2000, an amount
22982298 equal to one hundred percent (100%) of the am ount of any scholarship
22992299 or stipend received from participation in the Oklahoma Police Corps
23002300 Program, as established in Section 2-140.3 of Title 47 of the
23012301 Oklahoma Statutes shall be exempt from ta xable income.
23022302 16. a. In taxable years beginning after December 31, 2001,
23032303 and before January 1, 2005, there shall be all owed a
23042304 deduction in the amount of contributions to accounts
23052305 established pursuant to the Oklahoma College Savings
23062306 Plan Act. The deduction shall equal the amount of
23072307 contributions to accounts, but in no event shall the
23082308 deduction for each contributor exceed T wo Thousand
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23352335 Five Hundred Dollars ($2,500.00) each taxable year for
23362336 each account.
23372337 b. In taxable years beginning after December 31, 2004,
23382338 each taxpayer shall be allowed a deduction for
23392339 contributions to accounts established pu rsuant to the
23402340 Oklahoma College Savings Plan Act. The maximum annual
23412341 deduction shall equal the amount of contributions t o
23422342 all such accounts plus any contributions to such
23432343 accounts by the taxpayer for prior taxable years aft er
23442344 December 31, 2004, which were not deducted, but in no
23452345 event shall the deduction for each tax year exceed Ten
23462346 Thousand Dollars ($10,000.00) for each in dividual
23472347 taxpayer or Twenty Thousand Dollars ($20, 000.00) for
23482348 taxpayers filing a joint return . Any amount of a
23492349 contribution that is not deducted by the taxpayer in
23502350 the year for which the contribution is made may be
23512351 carried forward as a deduction from inco me for the
23522352 succeeding five (5) years. For taxable years
23532353 beginning after December 31, 2005, deductions may be
23542354 taken for contributions an d rollovers made during a
23552355 taxable year and up to April 15 of the succeeding
23562356 year, or the due date of a taxpayer's state income tax
23572357 return, excluding extensions, whichever is later.
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23842384 Provided, a deduction for the same contri bution may
23852385 not be taken for two ( 2) different taxable years.
23862386 c. In taxable years beginning after December 31, 2006,
23872387 deductions for contributions made pur suant to
23882388 subparagraph b of this paragraph shall be limited as
23892389 follows:
23902390 (1) for a taxpayer who qualifi ed for the five-year
23912391 carryforward election and who takes a rollov er or
23922392 nonqualified withdrawal during that period, the
23932393 tax deduction otherwise available pu rsuant to
23942394 subparagraph b of this paragraph shall b e reduced
23952395 by the amount which is equal to the rollo ver or
23962396 nonqualified withdrawal, and
23972397 (2) for a taxpayer who elect s to take a rollover or
23982398 nonqualified withdrawal within the same tax year
23992399 in which a contribution was made to the
24002400 taxpayer's account, the tax deduction otherwise
24012401 available pursuant to subparag raph b of this
24022402 paragraph shall be re duced by the amount of the
24032403 contribution which is equal to the rollover or
24042404 nonqualified withdrawal.
24052405 d. If a taxpayer elects to take a rollover on a
24062406 contribution for which a deduction has been taken
24072407 pursuant to subparagra ph b of this paragraph within
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24342434 one (1) year of the date of contrib ution, the amount
24352435 of such rollover shall be included in the adjusted
24362436 gross income of the tax payer in the taxable year of
24372437 the rollover.
24382438 e. If a taxpayer makes a nonqualified withdrawal of
24392439 contributions for which a deduction was t aken pursuant
24402440 to subparagraph b of this paragraph, such nonqualified
24412441 withdrawal and any earnings thereon shall be includ ed
24422442 in the adjusted gross income of the taxpayer in the
24432443 taxable year of the nonqualified withdrawal .
24442444 f. As used in this paragraph:
24452445 (1) "non-qualified withdrawal " means a withdrawal
24462446 from an Oklahoma College Savings Plan account
24472447 other than one of the followin g:
24482448 (a) a qualified withdrawal,
24492449 (b) a withdrawal made as a result of the death
24502450 or disability of the designated beneficiary
24512451 of an account,
24522452 (c) a withdrawal that is made on the accou nt of
24532453 a scholarship or the allowance or payment
24542454 described in Section 135(d)(1 )(B) or (C) or
24552455 by the Internal Revenue Code, recei ved by
24562456 the designated beneficiary to the ex tent the
24572457 amount of the refund does not exce ed the
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24842484 amount of the scholarship, allowance , or
24852485 payment, or
24862486 (d) a rollover or change of designated
24872487 beneficiary as permit ted by subsection F of
24882488 Section 3970.7 of Title 70 of Oklahoma
24892489 Statutes, and
24902490 (2) "rollover" means the transfer of funds from the
24912491 Oklahoma College Savings Plan to any other plan
24922492 under Section 529 of the Internal Revenue Code.
24932493 17. For taxable years beginning after December 31, 2005,
24942494 retirement benefits rece ived by an individual from any compo nent of
24952495 the Armed Forces of the United States in a n amount not to exceed the
24962496 greater of seventy-five percent (75%) of such benefits or Ten
24972497 Thousand Dollars ($10,000.00) s hall be exempt from taxable income
24982498 but in no case less than the amount of the exemptio n provided by
24992499 paragraph 13 of this subsection.
25002500 18. For taxable years beginning after Dec ember 31, 2006,
25012501 retirement benefits received by federal civil service retirees,
25022502 including survivor annuities, paid in lieu of Social Security
25032503 benefits shall be exempt from taxable income t o the extent such
25042504 benefits are included in the federal adjusted gros s income pursuant
25052505 to the provisions of Section 86 of the Internal Revenue Code, 2 6
25062506 U.S.C., Section 86, according to the follo wing schedule:
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25332533 a. in the taxable year beginning January 1, 2007 , twenty
25342534 percent (20%) of suc h benefits shall be exempt,
25352535 b. in the taxable year beginning January 1, 2008, forty
25362536 percent (40%) of such benefits shall be exempt,
25372537 c. in the taxable year beginning January 1, 2009, sixty
25382538 percent (60%) of such benefits shall be exempt,
25392539 d. in the taxable year beginning January 1, 2010, eight y
25402540 percent (80%) of such benefits shall be exempt, and
25412541 e. in the taxable year beginnin g January 1, 2011, and
25422542 subsequent taxable ye ars, one hundred percent (100 %)
25432543 of such benefits shall be exemp t.
25442544 19. a. For taxable years beginning after December 31, 2007, a
25452545 resident individual may deduct up to Ten Thousand
25462546 Dollars ($10,000.00) from Oklahoma adjusted gross
25472547 income if the individua l, or the dependent of the
25482548 individual, while living, donates one or more human
25492549 organs of the individual to another human being for
25502550 human organ transplantation. As used in this
25512551 paragraph, "human organ" means all or part of a liver,
25522552 pancreas, kidney, intest ine, lung, or bone marrow. A
25532553 deduction that is claimed under th is paragraph may be
25542554 claimed in the taxable year in which the human organ
25552555 transplantation occurs.
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25822582 b. An individual may claim this deduction only once, and
25832583 the deduction may be claimed only for unreimbursed
25842584 expenses that are incurred by the individual and
25852585 related to the organ donation of the individual.
25862586 c. The Oklahoma Tax Commission shall promulgate rules to
25872587 implement the provisions of this paragraph which shall
25882588 contain a specific list of expens es which may be
25892589 presumed to qualify for the deduction. The Tax
25902590 Commission shall prescribe necessary requirements for
25912591 verification.
25922592 20. For taxable years beginning after December 31, 2009, there
25932593 shall be exempt from taxable income any amount received by the
25942594 beneficiary of the death benefit for an emergency medical technician
25952595 or a registered emergency medical responder provided by Section 1-
25962596 2505.1 of Title 63 of the Oklahoma Statutes.
25972597 21. For taxable years beginning after December 31, 2008,
25982598 taxable income shall be increased by any unemployment compensation
25992599 exempted under Section 85(c) of the Internal Revenue Code, 26
26002600 U.S.C., Section 85(c)(2009).
26012601 22. For taxable years beginning after December 31, 2008, there
26022602 shall be exempt from taxable income a ny payment in an amoun t less
26032603 than Six Hundred Dollars ($600.00) rec eived by a person as an award
26042604 for participation in a competitive liv estock show event. For
26052605 purposes of this paragraph, the payment shall be treated as a
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26322632 scholarship amount paid by the enti ty sponsoring the even t and the
26332633 sponsoring entity shall cause the p ayment to be categor ized as a
26342634 scholarship in its books and records.
26352635 23. For taxable years beginning on or after January 1, 2016,
26362636 taxable income shall be increased by any amount of stat e and local
26372637 sales or income taxes deducted under 26 U.S.C., Section 164 of the
26382638 Internal Revenue Code. If the amount of state and local taxes
26392639 deducted on the federal return is limited, taxable income on the
26402640 state return shall be increased only by the amoun t actually deducted
26412641 after any such limitations are applied.
26422642 24. For taxable years beginning after December 31, 2 020, each
26432643 taxpayer shall be allowed a deduction for contributions to accounts
26442644 established pursuant to the Achieving a Better Life Experience
26452645 (ABLE) Program as established in Section 4001.1 et seq. of Title 56
26462646 of the Oklahoma Statutes. For any tax year, th e deduction provided
26472647 for in this paragraph shall not exceed Ten Thousand Dollars
26482648 ($10,000.00) for an individual taxpayer or Twenty Thousand Dollars
26492649 ($20,000.00) for taxpayers filing a joint return . Any amount of
26502650 contribution not deducted by the taxpayer i n the tax year for which
26512651 the contribution is made may be carried forward as a deduction from
26522652 income for up to five (5) tax years. Deductions may be taken for
26532653 contributions made during the tax year and throug h April 15 of the
26542654 succeeding tax year, or throug h the due date of a taxpayer's state
26552655 income tax return excluding extensions, whichever is later.
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26822682 Provided, a deduction for the same contribution may not be taken in
26832683 more than one (1) tax year.
26842684 25. For taxable years beginning on or after January 1, 2024,
26852685 there shall be exempt from Oklahoma adjusted gross income Five
26862686 Thousand Dollars ($5,000.00) derived from any lawful busi ness
26872687 activity conducted by a person less than eighteen (18) years of age,
26882688 conducting the business as a sole pr oprietor and not through any
26892689 other business entity or other legal entit y if the business activity
26902690 is conducted for a period not in excess of ninet y (90) days during
26912691 the income tax year.
26922692 F. 1. For taxable years beginning after December 31, 2004, a
26932693 deduction from the Oklahoma adjusted gross income of any individual
26942694 taxpayer shall be allowed for qualifying gains receiving capital
26952695 treatment that are included in the federal adjusted gross income of
26962696 such individual taxpayer during the taxable year.
26972697 2. As used in this subsection:
26982698 a. "qualifying gains receiving capital treatment " means
26992699 the amount of net capital gains, as defined in Section
27002700 1222(11) of the Internal Revenue Code, included in an
27012701 individual taxpayer's federal income tax return that
27022702 result from:
27032703 (1) the sale of real property or tangible personal
27042704 property located within O klahoma that has been
27052705 directly or indirectly owned by the individual
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27322732 taxpayer for a holding period of at least five
27332733 (5) years prior to the date of the transaction
27342734 from which such net capital gains arise,
27352735 (2) the sale of stock or the sale of a direct or
27362736 indirect ownership interest in an Oklahoma
27372737 company, limited liability company, or
27382738 partnership where such stock or ownership
27392739 interest has been directly or indirectly owned by
27402740 the individual taxpayer f or a holding period of
27412741 at least two (2) years prior to the d ate of the
27422742 transaction from which the net capital gains
27432743 arise, or
27442744 (3) the sale of real property, tangible personal
27452745 property or intangible personal property located
27462746 within Oklahoma as part of the s ale of all or
27472747 substantially all of the assets of an Oklahoma
27482748 company, limited liability company, or
27492749 partnership or an Oklahoma proprietorship
27502750 business enterprise where such property has been
27512751 directly or indirectly owned by such entity or
27522752 business enterprise or owned by the owners of
27532753 such entity or business enterpri se for a period
27542754 of at least two (2) years prior to the date of
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27812781 the transaction from which the net capital gains
27822782 arise,
27832783 b. "holding period" means an uninterrupted period of
27842784 time. The holding period shall include any additional
27852785 period when the property was held by another
27862786 individual or entity, if such additional period is
27872787 included in the taxpayer's holding period for the
27882788 asset pursuant to the Internal Revenue Code,
27892789 c. "Oklahoma company," "limited liability company," or
27902790 "partnership" means an entity whose pri mary
27912791 headquarters have been located in Oklahoma for at
27922792 least three (3) uninterrupted years prior to the date
27932793 of the transaction fr om which the net capital gains
27942794 arise,
27952795 d. "direct" means the individual taxpayer directly owns
27962796 the asset,
27972797 e. "indirect" means the individual taxpayer owns an
27982798 interest in a pass-through entity (or chain of pass-
27992799 through entities) that sells the asset that giv es rise
28002800 to the qualifying gains receiving capital treatment.
28012801 (1) With respect to sales of real property or
28022802 tangible personal property located within
28032803 Oklahoma, the deduction described in this
28042804 subsection shall not apply unless the pass-
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28312831 through entity that ma kes the sale has held the
28322832 property for not less than five (5) u ninterrupted
28332833 years prior to the date of the transaction that
28342834 created the capital gain, and each pass-through
28352835 entity included in the chain of ownership has
28362836 been a member, partner, or shareholder of the
28372837 pass-through entity in the tier immediately below
28382838 it for an uninterrupted period of not less than
28392839 five (5) years.
28402840 (2) With respect to sales of stock or ownership
28412841 interest in or sales of all or substantially all
28422842 of the assets of an Oklahoma company, limited
28432843 liability company, partnership or Oklahoma
28442844 proprietorship business enterprise, the deduction
28452845 described in this subsec tion shall not apply
28462846 unless the pass-through entity that makes the
28472847 sale has held the stock or ownership interest for
28482848 not less than two (2) uninterrupted years prior
28492849 to the date of the transact ion that created the
28502850 capital gain, and each pass-through entity
28512851 included in the chain of ownership has been a
28522852 member, partner or shareholder of the pass-
28532853 through entity in the tier immediately be low it
28542854 for an uninterrupted period of not less than two
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28812881 (2) years. For purposes of this division,
28822882 uninterrupted ownership pri or to July 1, 2007,
28832883 shall be included in the determination of the
28842884 required holding period prescribed by this
28852885 division, and
28862886 f. "Oklahoma proprietorship business enterprise " means a
28872887 business enterprise whose income and expenses have
28882888 been reported on Schedule C or F of an individual
28892889 taxpayer's federal income tax return, or any similar
28902890 successor schedule published by the Internal Revenue
28912891 Service and whose primary headquarters have been
28922892 located in Oklahoma for at least three (3)
28932893 uninterrupted years prior to the date of the
28942894 transaction from which the net capital gains arise.
28952895 G. 1. For purposes of computing its Oklahoma taxable income
28962896 under this section, the dividends -paid deduction otherwise allow ed
28972897 by federal law in computing net income of a real estate investm ent
28982898 trust that is subject to federal income tax shall be added back in
28992899 computing the tax imposed by this state under this title if the real
29002900 estate investment trust is a captive real estate i nvestment trust.
29012901 2. For purposes of computing its Oklahoma taxabl e income under
29022902 this section, a taxpayer shall add back otherwise deductible rents
29032903 and interest expenses paid to a captive real est ate investment trust
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29302930 that is not subject to the provisions of paragraph 1 of this
29312931 subsection. As used in this subsection:
29322932 a. the term "real estate investment trust" or "REIT"
29332933 means the meaning ascribed to such term in Section 856
29342934 of the Internal Revenue Code,
29352935 b. the term "captive real estate investment trust " means
29362936 a real estate investment trust, the shares or
29372937 beneficial interests of which are not regularly traded
29382938 on an established securities market and more than
29392939 fifty percent (50%) of the voting power o r value of
29402940 the beneficial interests or shares of which are owned
29412941 or controlled, directly or indirectly, or
29422942 constructively, by a single entity that is:
29432943 (1) treated as an association taxable as a
29442944 corporation under the Internal Revenue Code, and
29452945 (2) not exempt from federal income tax pursuant to
29462946 the provisions of Section 501(a) of the Internal
29472947 Revenue Code.
29482948 The term shall not include a real estate investment
29492949 trust that is intended to be regularly traded on an
29502950 established securities market, and that satisfie s the
29512951 requirements of Section 856(a)(5) and (6) of the U.S.
29522952 Internal Revenue Code by reason of Section 856(h)(2)
29532953 of the Internal Revenue Code,
29542954
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29802980 c. the term "association taxable as a corporation" shall
29812981 not include the following entities:
29822982 (1) any real estate investment trust as defined in
29832983 paragraph a of this subsec tion other than a
29842984 "captive real estate investment trust", or
29852985 (2) any qualified real estate investment trust
29862986 subsidiary under Section 856(i) of the Internal
29872987 Revenue Code, other than a qualified REI T
29882988 subsidiary of a "captive real estate investment
29892989 trust", or
29902990 (3) any Listed Australian Property Trust (meaning an
29912991 Australian unit trus t registered as a "Managed
29922992 Investment Scheme" under the Australian
29932993 Corporations Act in which the principal class of
29942994 units is listed on a recognized stock exchange in
29952995 Australia and is regularly traded on an
29962996 established securities market), or an entity
29972997 organized as a trust, provided that a Listed
29982998 Australian Property Trust owns or controls,
29992999 directly or indirectly, seventy -five percent
30003000 (75%) or more of the voting power or value of the
30013001 beneficial interests or shares of such trust, or
30023002 (4) any Qualified Foreign En tity, meaning a
30033003 corporation, trust, association or partnership
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30303030 organized outside the laws of the United States
30313031 and which satisfies the following criteria:
30323032 (a) at least seventy-five percent (75%) of the
30333033 entity's total asset value at the close of
30343034 its taxable year is represented by real
30353035 estate assets, as defined in Section
30363036 856(c)(5)(B) of the Internal Revenue Code,
30373037 thereby including shares or certificates of
30383038 beneficial interest in an y real estate
30393039 investment trust, cash and cash equivalents,
30403040 and U.S. Government securities,
30413041 (b) the entity receives a dividend-paid
30423042 deduction comparable to Section 561 of the
30433043 Internal Revenue Code, or is exempt from
30443044 entity level tax,
30453045 (c) the entity is required to distribute at
30463046 least eighty-five percent (85%) of its
30473047 taxable income, as computed in the
30483048 jurisdiction in which it is organized, to
30493049 the holders of its shares or certificates of
30503050 beneficial interest on an annual basis,
30513051 (d) not more than ten percent ( 10%) of the
30523052 voting power or value in such entity is held
30533053 directly or indirectly o r constructively by
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30803080 a single entity or individual, or the shares
30813081 or beneficial interests of such entity are
30823082 regularly traded on an established
30833083 securities market, and
30843084 (e) the entity is organized in a country which
30853085 has a tax treaty with the United States.
30863086 3. For purposes of this subsection, the constructive ownership
30873087 rules of Section 318(a) of the Internal Revenue Code , as modified by
30883088 Section 856(d)(5) of the Internal Revenue Code, shall apply in
30893089 determining the ownership of stock, assets, or net profits of any
30903090 person.
30913091 4. A real estate investment trust that does not become
30923092 regularly traded on an established securities market within one (1)
30933093 year of the date on which it first b ecomes a real estate i nvestment
30943094 trust shall be deemed not to have been regularly tra ded on an
30953095 established securities market, retroactive to the date it first
30963096 became a real estate investment trust, and shall file an amended
30973097 return reflecting such retroactiv e designation for any tax year or
30983098 part year occurring during its initial year of sta tus as a real
30993099 estate investment trust. For purposes of this subsection, a real
31003100 estate investment trust becomes a real estate investment trust on
31013101 the first day it has both met the requirements o f Section 856 of the
31023102 Internal Revenue Code and has elected to be treated as a real estate
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31293129 investment trust pursuant to Section 856(c)(1) of the Internal
31303130 Revenue Code.
31313131 SECTION 3. AMENDATORY 68 O.S. 2021, Section 1357, as
31323132 amended by Section 1, Chapter 206, O.S.L. 2022 (68 O.S. Supp. 2022,
31333133 Section 1357), is amended to read as follows:
31343134 Section 1357. Exemptions – General.
31353135 There are hereby specifically exempted fr om the tax levied by
31363136 the Oklahoma Sales Tax Code:
31373137 1. Transportation of school pupi ls to and from elementary
31383138 schools or high schools in motor or other vehicles;
31393139 2. Transportation of persons where the fare of each person does
31403140 not exceed One Dollar ($1.00), or local transportatio n of persons
31413141 within the corporate limits of a municipality e xcept by taxicabs;
31423142 3. Sales for resale to persons engaged in the business of
31433143 reselling the articles purchased, whether within or without the
31443144 state, provided that such sales to residents of this s tate are made
31453145 to persons to whom sales tax permits have been issued as provided in
31463146 the Oklahoma Sales Tax Code. This exemption shall not apply to the
31473147 sales of articles made to persons holding permits when such persons
31483148 purchase items for their use and whic h they are not regularly
31493149 engaged in the business of resellin g; neither shall this exemption
31503150 apply to sales of tangible personal property to peddlers, solicitors
31513151 and other salespersons who do not have an established place of
31523152 business and a sales tax permit. The exemption provided by this
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31793179 paragraph shall apply to sa les of motor fuel or diesel fuel to a
31803180 Group Five vendor, but the use of such motor fuel or diesel fuel by
31813181 the Group Five vendor shall not be exempt from the tax levied by th e
31823182 Oklahoma Sales Tax Co de. The purchase of motor fuel or diesel fuel
31833183 is exempt from sales tax when the motor fuel is for shipment outside
31843184 this state and consumed by a common carrier by rail in the conduct
31853185 of its business. The sales tax shall apply to the purchase of motor
31863186 fuel or diesel fuel in Oklahoma by a common carrier by rail when
31873187 such motor fuel is purchased for fueling, within this state, of any
31883188 locomotive or other motorized flanged wheel equipment;
31893189 4. Sales of advertising space in newspapers and periodicals;
31903190 5. Sales of programs relating to s porting and entertainment
31913191 events, and sales of advertising on billboards (including signage,
31923192 posters, panels, marquees or on other similar surfaces, whether
31933193 indoors or outdoors) or in programs relating to spo rting and
31943194 entertainment events, and sales of any advertising, to be displayed
31953195 at or in connection with a sporting event, via the Internet,
31963196 electronic display devices or through public address or broadcast
31973197 systems. The exemption authorized by this paragrap h shall be
31983198 effective for all sales made on or af ter January 1, 2001;
31993199 6. Sales of any advertising, other than the advertising
32003200 described by paragraph 5 of this section, via the Internet,
32013201 electronic display devices or through the electronic media including
32023202 radio, public address o r broadcast systems, tel evision (whether
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32293229 through closed circuit broadcasting systems or otherwise), and cable
32303230 and satellite television, and the servicing of any advertising
32313231 devices;
32323232 7. Eggs, feed, supplies, machinery, and equipment purchased by
32333233 persons regularly engaged in the business of raising worms, fish,
32343234 any insect, or any other form of terrestrial or aquatic animal life
32353235 and used for the purpose of raising same for marketing. This
32363236 exemption shall only be granted and extended to the purchaser when
32373237 the items are to be used a nd in fact are used in the raising of
32383238 animal life as set out above. Each purchaser shall certify, in
32393239 writing, on the invoice or sales ticket retained by the vendor that
32403240 the purchaser is regularly engaged in th e business of raising s uch
32413241 animal life and that the items purchased will be used on ly in such
32423242 business. The vendor shall certify to the Oklahoma Tax Commission
32433243 that the price of the items has been reduced to grant the full
32443244 benefit of the exemption. Viola tion hereof by the purc haser or
32453245 vendor shall be a misdemeanor;
32463246 8. Sale of natural or artificial gas and electricity, and
32473247 associated delivery or transmission services, when sold exclusively
32483248 for residential use. Provided, this exemption shall not apply to
32493249 any sales tax levied by a city or town, or a county or any other
32503250 jurisdiction in this state;
32513251 9. In addition to the exemptions authorized by Section 1357.6
32523252 of this title, sales of drugs sold pursuant to a prescription
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32793279 written for the treatment of human bei ngs by a person license d to
32803280 prescribe the drugs, and sales of insulin and medical oxygen.
32813281 Provided, this exemption shall not apply to over-the-counter drugs;
32823282 10. Transfers of title or possession of empty, partially
32833283 filled, or filled returnable oil and ch emical drums to any per son
32843284 who is not regularly engaged in the business of sellin g, reselling
32853285 or otherwise transferring empty, partially filled or filled
32863286 returnable oil drums;
32873287 11. Sales of one-way utensils, paper napkins, paper cups,
32883288 disposable hot contai ners, and other one-way carry out materials to
32893289 a vendor of meals or beverages;
32903290 12. Sales of food or food products for home consumption which
32913291 are purchased in whole or in part with coupons issued pursuant to
32923292 the federal food stamp program as authorized by Sections 2011
32933293 through 2029 of Title 7 of the United States Code, as to that
32943294 portion purchased with such coupons. The exemption provided for
32953295 such sales shall be inapplicable to such sales upon the effective
32963296 date of any federal law that removes the requirem ent of the
32973297 exemption as a condition for participation by the state in the
32983298 federal food stamp program;
32993299 13. Sales of food or food products, or any equipment or
33003300 supplies used in the preparation of the food or food products to or
33013301 by an organization which:
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33283328 a. is exempt from taxation pursuant to the provisions of
33293329 Section 501(c)(3) of the Internal Revenue Code, 26
33303330 U.S.C., Section 501(c)(3), and which provides and
33313331 delivers prepared meals for home consumption to
33323332 elderly or homebound persons as part of a program
33333333 commonly known as "Meals on Wheels" or "Mobile Meals",
33343334 or
33353335 b. is exempt from taxation pursuant to the provisions of
33363336 Section 501(c)(3) of the Internal Revenue Code, 26
33373337 U.S.C., Section 501(c)(3), and which receives federal
33383338 funding pursuant to the Older Americans Act of 1965,
33393339 as amended, for the purpose of providing nutrition
33403340 programs for the care and benefit of elderly persons;
33413341 14. a. Sales of tangible personal property or services to or
33423342 by organizations which are exempt from taxation
33433343 pursuant to the provisions o f Section 501(c)(3) of the
33443344 Internal Revenue Code, 26 U.S.C ., Section 501(c)(3),
33453345 and:
33463346 (1) are primarily involved in the collection and
33473347 distribution of food and other household products
33483348 to other organizations that facilitate the
33493349 distribution of such products to the needy and
33503350 such distributee organizations are exemp t from
33513351 taxation pursuant to the provisions of Section
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33783378 501(c)(3) of the Internal Revenue Code, 26
33793379 U.S.C., Section 501(c)(3), or
33803380 (2) facilitate the distribution of such products to
33813381 the needy.
33823382 b. Sales made in the course of business for profit or
33833383 savings, competing with other persons engaged in the
33843384 same or similar business shall not be exempt under
33853385 this paragraph;
33863386 15. Sales of tangible personal property or services to
33873387 children's homes which are located on church-owned property and are
33883388 operated by organization s exempt from taxation pursuant to the
33893389 provisions of the Internal Revenue Code, 26 U.S.C., Section
33903390 501(c)(3);
33913391 16. Sales of computers, data processing equipment, related
33923392 peripherals, and telephone, telegraph or telecommun ications service
33933393 and equipment for use in a qualified aircraft maintenance or
33943394 manufacturing facility. For purposes of this paragraph, "qualified
33953395 aircraft maintenance or manufacturing facility" means a new or
33963396 expanding facility prima rily engaged in aircraf t repair, building or
33973397 rebuilding whether or not on a factory basis, whose total cost of
33983398 construction exceeds the sum of Five Million Dollars ($5,000,000.00)
33993399 and which employs at least two hundred fifty (250) new full-time-
34003400 equivalent employees, as certified by the Oklahoma Employment
34013401 Security Commission, upon completion of the facility. In order to
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34283428 qualify for the exemption provided for by this paragraph, the cost
34293429 of the items purchased by the qualified aircraft maintenance or
34303430 manufacturing facility shall e qual or exceed the sum of Two Millio n
34313431 Dollars ($2,000,000.00);
34323432 17. Sales of tangible personal property consumed or
34333433 incorporated in the construction or expansion of a qualified
34343434 aircraft maintenance or manufacturing facility as define d in
34353435 paragraph 16 of this section. For purposes of this pa ragraph, sales
34363436 made to a contractor or subcontractor that has previously entered
34373437 into a contractual relationship with a qualified aircraft
34383438 maintenance or manufacturing facility for construction or expansion
34393439 of such a facility shall be considered sales made to a qualified
34403440 aircraft maintenance or manufacturing facility;
34413441 18. Sales of the following telecommunications services:
34423442 a. Interstate and International "800 service". "800
34433443 service" means a "telecommunications service " that
34443444 allows a caller to dial a toll-free number without
34453445 incurring a charge for the call. The service is
34463446 typically marketed under the name "800", "855", "866",
34473447 "877" and "888" toll-free calling, and any subsequent
34483448 numbers designated by the Federal Communic ations
34493449 Commission,
34503450 b. Interstate and International "900 service". "900
34513451 service" means an inbound toll "telecommunications
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34783478 service" purchased by a subscriber that allows the
34793479 subscriber's customers to call in to the subscriber 's
34803480 prerecorded announcement or live service. "900
34813481 service" does not include the charge for: collection
34823482 services provided by the seller of the
34833483 "telecommunications services" to the subscriber, or
34843484 service or product sold by the subscriber to the
34853485 subscriber's customer. The service is t ypically
34863486 marketed under the na me "900" service, and any
34873487 subsequent numbers designated by the Federal
34883488 Communications Commission,
34893489 c. Interstate and International "private communications
34903490 service". "Private communications service " means a
34913491 "telecommunications service" that entitles the
34923492 customer to exclusive or priority use of a
34933493 communications channel or group of channels between or
34943494 among termination points, regardless of the manner in
34953495 which such channel or channels are connected, and
34963496 includes switching capacity , extension lines, stations
34973497 and any other associated services that are provided in
34983498 connection with the use of such channel or channels,
34993499 d. "Value-added nonvoice data service". "Value-added
35003500 nonvoice data service" means a service that otherwise
35013501 meets the definition of "telecommunications services"
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35283528 in which computer processing applications are used to
35293529 act on the form, content, code or protocol of the
35303530 information or data primarily for a purpose ot her than
35313531 transmission, conveyance , or routing,
35323532 e. Interstate and International telecommunications
35333533 service which is:
35343534 (1) rendered by a company for private use within its
35353535 organization, or
35363536 (2) used, allocated or distributed by a company to
35373537 its affiliated group,
35383538 f. Regulatory assessments and charges including charges
35393539 to fund the Oklahoma Universal Service Fund, the
35403540 Oklahoma Lifeline Fund and the Oklahoma High Cost
35413541 Fund, and
35423542 g. Telecommunications nonrecurring charges including but
35433543 not limited to the installation , connection, change,
35443544 or initiation of telecommunications se rvices which are
35453545 not associated with a retail consumer sale;
35463546 19. Sales of railroad track spikes manufactured and sold for
35473547 use in this state in the construction or repair of railroad tracks,
35483548 switches, sidings, and turnouts;
35493549 20. Sales of aircraft and aircraft parts provided such sales
35503550 occur at a qualified aircraft ma intenance facility. As used in this
35513551 paragraph, "qualified aircraft maintenance facility" means a
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35783578 facility operated by an air common carrier including one or more
35793579 component overhaul support buildings or structures in an area owned,
35803580 leased, or controlled by the air common carrier, at which there were
35813581 employed at least two thousand (2,000) full-time-equivalent
35823582 employees in the preceding year as certified by the Oklahoma
35833583 Employment Security Commission and which is primarily related to the
35843584 fabrication, repair, alteration, modification, refurbishing,
35853585 maintenance, building, or rebuilding of commercial aircraft or
35863586 aircraft parts used in air common carriage. For purposes of this
35873587 paragraph, "air common carrier" shall also include members of an
35883588 affiliated group as d efined by Section 1504 of the Internal Revenue
35893589 Code, 26 U.S.C., Section 1504. Beginning July 1, 2012, sales of
35903590 machinery, tools, supplies, equipment, and related tangible p ersonal
35913591 property and services used or consumed in the repair, remodeling, or
35923592 maintenance of aircraft, aircraft engines or aircraft component
35933593 parts which occur at a qualified aircraft maintenance facility;
35943594 21. Sales of machinery and equipment purchased and used by
35953595 persons and establishments primarily engaged in computer services
35963596 and data processing:
35973597 a. as defined under Industrial Group Numbers 7372 and
35983598 7373 of the Standard Industrial Classification (SIC)
35993599 Manual, latest version, which derive at least fifty
36003600 percent (50%) of their annual gross revenues from the
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36273627 sale of a product or service t o an out-of-state buyer
36283628 or consumer, and
36293629 b. as defined under Industrial Group Number 7374 of the
36303630 SIC Manual, latest version, which derive at least
36313631 eighty percent (80%) of th eir annual gross revenues
36323632 from the sale of a product or service to an out-of-
36333633 state buyer or consumer.
36343634 Eligibility for the exemption set out in this paragraph shall be
36353635 established, subject to review by the Tax Commission, by annually
36363636 filing an affidavit wit h the Tax Commission stating that the
36373637 facility so qualifies and such information as required by the Tax
36383638 Commission. For purposes of determining whether annual gross
36393639 revenues are derived from sales to out-of-state buyers or consumers,
36403640 all sales to the fede ral government shall be considered to be to an
36413641 out-of-state buyer or consumer;
36423642 22. Sales of prosthetic devices to an individual for use by
36433643 such individual. For purposes of this paragraph, "prosthetic
36443644 device" shall have the same meaning as provided in Sec tion 1357.6 of
36453645 this title, but shall not include corrective eye glasses, contact
36463646 lenses, or hearing aids;
36473647 23. Sales of tangible personal property or services to a motion
36483648 picture or television production company to be used or consumed in
36493649 connection with an eligible production. For purposes of this
36503650 paragraph, "eligible production" means a documentary, special, music
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36773677 video or a television commercial or television program that will
36783678 serve as a pilot for or be a segment of an ongoing dramatic or
36793679 situation comedy series filmed or taped for network or national or
36803680 regional syndication or a featu re-length motion picture intended for
36813681 theatrical release or for network or national or regional
36823682 syndication or broadcast. The provisions of this paragraph shall
36833683 apply to sales occurring on or after July 1, 1996. In order to
36843684 qualify for the exemption, the motion picture or television
36853685 production company shall file any documentation and information
36863686 required to be submitted pursuant to rules promulgated by the Tax
36873687 Commission;
36883688 24. Sales of diesel fuel sold for consumption by commercial
36893689 vessels, barges and oth er commercial watercraft;
36903690 25. Sales of tangible personal property or services to tax-
36913691 exempt independent nonprofit biomedical research foundations that
36923692 provide educational p rograms for Oklahoma science students and
36933693 teachers and to tax-exempt independent no nprofit community blood
36943694 banks headquartered in this state;
36953695 26. Effective May 6, 1992, sales of wireless telecommunications
36963696 equipment to a vendor who subsequently transfers the equipment at no
36973697 charge or for a discounted charge to a consumer as part of a
36983698 promotional package or as an inducement to commence or continue a
36993699 contract for wireless telecommunications services;
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37263726 27. Effective January 1, 1991, leases of rail transportat ion
37273727 cars to haul coal to coal-fired plants located in this state which
37283728 generate electric power;
37293729 28. Beginning July 1, 2005, sales of aircraft engine repairs,
37303730 modification, and replacement parts, sales of aircraft frame repairs
37313731 and modification, aircraft i nterior modification, and paint, and
37323732 sales of services employed in the repair, modi fication, and
37333733 replacement of parts of aircraft engines, aircraft frame and
37343734 interior repair and modification, and paint;
37353735 29. Sales of materials and supplies to the owner or operator of
37363736 a ship, motor vessel, or barge that is used in interstate or
37373737 international commerce if the materials and supplies:
37383738 a. are loaded on the ship, motor vessel, or barge and
37393739 used in the maintenance and operation of the ship,
37403740 motor vessel, or barge, or
37413741 b. enter into and become component parts of the ship,
37423742 motor vessel, or barge;
37433743 30. Sales of tangible personal property made at estate sales at
37443744 which such property is offered for sale on the premises of the
37453745 former residence of the decedent by a person wh o is not required to
37463746 be licensed pursuant to the Transient Merchant Licensing Act, or who
37473747 is not otherwise required to obtain a sales tax permit for the sale
37483748 of such property pursuant to the provisions of Section 1364 of this
37493749 title; provided:
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37763776 a. such sale or event may not be held for a period
37773777 exceeding three (3) consecutive days,
37783778 b. the sale must be conducted within six (6) months of
37793779 the date of death of the decedent, and
37803780 c. the exemption allowed by this paragraph shall not be
37813781 allowed for property that was not part of the
37823782 decedent's estate;
37833783 31. Beginning January 1, 2004, sales of electri city and
37843784 associated delivery and transmission services, when sold exclusively
37853785 for use by an oil and gas operator for reservoir dewatering projects
37863786 and associated operations commencing on or after July 1, 2003, in
37873787 which the initial water-to-oil ratio is greater than or equal to
37883788 five-to-one water-to-oil, and such oil and gas development projects
37893789 have been classified by the Corporation Commission as a reservoir
37903790 dewatering unit;
37913791 32. Sales of prewritten computer software that is delivered
37923792 electronically. For p urposes of this paragraph, "delivered
37933793 electronically" means delivered to the purchaser by means other than
37943794 tangible storage media;
37953795 33. Sales of modular dwelling units whe n built at a production
37963796 facility and moved in whole or in parts, to be assembled on -site,
37973797 and permanently affixed to the real property and used for
37983798 residential or commercial purposes. The exemption provided by this
37993799 paragraph shall equal forty-five percent (45%) of the total sales
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38263826 price of the modular dwelling unit. For purposes of this p aragraph,
38273827 "modular dwelling unit" means a structure that is not subject to the
38283828 motor vehicle excise tax imposed pursuant to Section 2103 of this
38293829 title;
38303830 34. Sales of tangible personal property or services to:
38313831 a. persons who are residents of Oklahoma and ha ve been
38323832 honorably discharged from active service in any branch
38333833 of the Armed Forces of the United States or Oklahoma
38343834 National Guard and who have been certified by the
38353835 United States Department of Ve terans Affairs or its
38363836 successor to be in receipt of disabili ty compensation
38373837 at the one-hundred-percent rate and the disability
38383838 shall be permanent and have been sustained through
38393839 military action or accident or resulting from disea se
38403840 contracted while in such active service and registered
38413841 with the veterans registry cr eated by the Oklahoma
38423842 Department of Veterans Affairs; provided, that if the
38433843 veteran received the sales tax exemption prior to
38443844 November 1, 2020, he or she shall be requir ed to
38453845 register with the vet erans registry prior to July 1,
38463846 2023, in order to remain qua lified, or
38473847 b. the surviving spouse of the person in subparagraph a
38483848 of this paragraph if the person is deceased and the
38493849 spouse has not remarried and the surviving spouse of a
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38763876 person who is determined by the United States
38773877 Department of Defense or any branch of the United
38783878 States military to have died while in the line of duty
38793879 if the spouse has not remarried. Sales for the
38803880 benefit of an eligible person to a spouse of the
38813881 eligible person or to a member of the household in
38823882 which the eligible person resid es and who is
38833883 authorized to make purchases on the person's behalf,
38843884 when such eligible person is not present at the sale,
38853885 shall also be exempt f or purposes of this paragraph.
38863886 The Oklahoma Tax Commission s hall issue a separate
38873887 exemption card to a spouse of an eligible person or to
38883888 a member of the household in which the eligible person
38893889 resides who is authorized to make purchases on the
38903890 person's behalf, if requested by the eligible person.
38913891 Sales qualifying for the exemption authorized by this
38923892 paragraph shall not exceed Twenty-five Thousand
38933893 Dollars ($25,000.00) per year per individual while the
38943894 disabled veteran is living. Sales qualifying for the
38953895 exemption authorized by this paragr aph shall not
38963896 exceed One Thousand Dollars ($1,000.00) per year for
38973897 an unremarried surviving spouse. Upon request of the
38983898 Tax Commission, a person asserting or claiming the
38993899 exemption authorized by this paragraph shall provid e a
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39263926 statement, executed under oat h, that the total sales
39273927 amounts for which the exemption is applicable have not
39283928 exceeded Twenty-five Thousand Dollars ($25,000.00) per
39293929 year per living disabled veteran or One Thousand
39303930 Dollars ($1,000.00) per year for an unre married
39313931 surviving spouse. If the amount of such exempt sales
39323932 exceeds such amount, the sales tax in excess of the
39333933 authorized amount shall be treated as a direct sales
39343934 tax liability and may be recovered by the Tax
39353935 Commission in the same manner provided by l aw for
39363936 other taxes including penalty and interest. The Tax
39373937 Commission shall promulgate any rules necessary to
39383938 implement the provisions of this paragraph, which
39393939 shall include rules providing for the disclosure of
39403940 information about persons eligible for the exemption
39413941 authorized in this paragraph to the Oklahoma
39423942 Department of Veteran's Affairs, as authorized in
39433943 Section 205 of this title;
39443944 35. Sales of electricity to the operator, specifically
39453945 designated by the Corporation Commission, of a spacing unit or lease
39463946 from which oil is produced or attempted to be produced usin g
39473947 enhanced recovery methods including, but not lim ited to, increased
39483948 pressure in a producing formation through the use of water or
39493949 saltwater if the electrical usage is associated with and necessar y
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39763976 for the operation of equipment required to inject or circ ulate
39773977 fluids in a producing formation for the purpo se of forcing oil or
39783978 petroleum into a wellbore for eventual recovery and production from
39793979 the wellhead. In order to be eligible for the sales tax exemption
39803980 authorized by this paragraph, the total content o f oil recovered
39813981 after the use of enhanced recovery methods shall not exceed one
39823982 percent (1%) by volume. The exemption authorized by this paragraph
39833983 shall be applicable only to the state sales tax r ate and shall not
39843984 be applicable to any county or municipal sales tax rate;
39853985 36. Sales of intrastate charter a nd tour bus transportation.
39863986 As used in this paragraph, "intrastate charter and tour bus
39873987 transportation" means the transportation of persons from o ne
39883988 location in this state to another location in this state in a motor
39893989 vehicle which has been constructed in such a manner that it may
39903990 lawfully carry more than eighteen persons, and which is ordinarily
39913991 used or rented to carry persons for compensation. Pro vided, this
39923992 exemption shall not apply to regularly schedule d bus transportation
39933993 for the general public;
39943994 37. Sales of vitamins, minerals, and dietary supplements by a
39953995 licensed chiropractor to a person who is the patient of such
39963996 chiropractor at the physical location where the chiropractor
39973997 provides chiropractic care or services to such patient. The
39983998 provisions of this paragraph shall not be applicable to any drug,
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40254025 medicine, or substance for which a prescription by a licensed
40264026 physician is required;
40274027 38. Sales of goods, wares, merchandise, tangible personal
40284028 property, machinery, and equipment to a web search portal loca ted in
40294029 this state which derives at least eighty percent (80%) of its annual
40304030 gross revenue from the sale of a product or service to an out-of-
40314031 state buyer or consumer. For purposes of this paragraph, "web
40324032 search portal" means an establishment classified und er NAICS code
40334033 519130 which operates websites that use a search engine to generate
40344034 and maintain extensive databases of Internet addresses and conte nt
40354035 in an easily searchable format;
40364036 39. Sales of tangible p ersonal property consumed or
40374037 incorporated in the c onstruction or expansion of a facility for a
40384038 corporation organized under Section 437 et seq. of Title 18 of the
40394039 Oklahoma Statutes as a rural electr ic cooperative. For purposes of
40404040 this paragraph, sales made to a contractor or subcontractor that has
40414041 previously entered into a contractual relationship with a rural
40424042 electric cooperative for construction or expansion of a facility
40434043 shall be considered sales made to a rural electric cooperative;
40444044 40. Sales of tangib le personal property or services to a
40454045 business primarily engaged in the repair of consumer electronic
40464046 goods including, but not limited to, cell phones, compact disc
40474047 players, personal computers, MP3 players, digital devices for the
40484048 storage and retrieval of information through hard -wired or wireless
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40754075 computer or Internet connections, if the devices are sold to the
40764076 business by the original manufacturer of such devices and the
40774077 devices are repaired, refit ted or refurbished for sale by the entity
40784078 qualifying for the exemption authorized by this paragraph directly
40794079 to retail consumers or if the devices are sold to another business
40804080 entity for sale to retail consumers;
40814081 41. On or after July 1, 2019, and prior to July 1, 2024, sales
40824082 or leases of rolling stock when sold o r leased by the manufacturer,
40834083 regardless of whether the purchaser is a public services corporation
40844084 engaged in business as a common carrier of property or passengers by
40854085 railway, for use or consumpti on by a common carrier directly in the
40864086 rendition of public service. For purposes of this paragraph,
40874087 "rolling stock" means locomotives, autocars, and railroad cars and
40884088 "sales or leases" includes railroad car maintenance and retrofitting
40894089 of railroad cars for their further use only on the railways; and
40904090 42. Sales of gold, silver, platinum, palladium or other bull ion
40914091 items such as coins and bars and legal tender of any nation, which
40924092 legal tender is sold according to its value as precious metal or as
40934093 an investment. As used in the paragraph, "bullion" means any
40944094 precious metal including, but not limited to, gold, sil ver,
40954095 platinum, and palladium, that is in such a state or condition that
40964096 its value depends upon its precious metal content and not its form.
40974097 The exemption authorized by this paragraph shall not apply to
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41244124 fabricated metals that have been processed or manufact ured for
41254125 artistic use or as jewelry;
41264126 43. Sales of tangible personal property or services made by a
41274127 person less than eighteen (18) years of age, conducting business as
41284128 a sole proprietor and not through a business entity or any other
41294129 legal entity if the business activity is conducted for a period not
41304130 in excess of ninety (90) days during a calendar year.
41314131 SECTION 4. NEW LAW A new section of law to be codified
41324132 in the Oklahoma Statutes as Section 30001 of Title 74, unless there
41334133 is created a duplication in numbering, reads as follows:
41344134 No person conducting a business as a sole proprietor who is less
41354135 than eighteen (18) years of age shall be required to obtain a
41364136 business license from any entity of state or local government and
41374137 the person shall not be subject to any fine or penalty as a result
41384138 of conducting such bus iness for a period not in excess of ninety
41394139 (90) days during a calendar year .
41404140 SECTION 5. This act shall become effective November 1, 2023.
41414141
41424142 59-1-5669 MAH 01/16/23