| 41 | 48 | | |
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| 42 | 49 | | [ revenue and taxation - deduction for donation of |
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| 43 | 50 | | proceeds from real estate transactions - |
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| 44 | 51 | | limitations on deduction - effective date ] |
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| 45 | 52 | | |
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| 46 | 53 | | |
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| 47 | 54 | | |
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| 48 | 55 | | |
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| 49 | 56 | | |
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| 50 | 57 | | |
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| 51 | 58 | | |
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| 52 | 59 | | |
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| 53 | 60 | | BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA: |
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| 54 | 61 | | SECTION 1. AMENDATORY 68 O.S. 2021, Section 2358, as |
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| 55 | 62 | | amended by Section 2, C hapter 341, O.S.L. 2022 (68 O.S. Supp. 2022, |
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| 56 | 63 | | Section 2358), is amended to read as follows: |
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| 57 | 64 | | Section 2358. For all tax years beginning after December 31, |
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| 58 | 65 | | 1981, taxable income and adjusted gross income shall be adjusted to |
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| 87 | 95 | | A. The taxable income of a ny taxpayer shall be adjusted to |
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| 88 | 96 | | arrive at Oklahoma taxable inco me for corporations and Oklahoma |
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| 89 | 97 | | adjusted gross income for individuals, as foll ows: |
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| 90 | 98 | | 1. There shall be added interest income on obligations of any |
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| 91 | 99 | | state or political subdivision thereto which is not otherwise |
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| 92 | 100 | | exempted pursuant to other laws of this state, to the extent that |
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| 93 | 101 | | such interest is not included in taxable income and adjusted gross |
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| 94 | 102 | | income. |
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| 95 | 103 | | 2. There shall be deducted amounts included in suc h income that |
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| 96 | 104 | | the state is prohibited from taxi ng because of the provisions of the |
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| 97 | 105 | | Federal Constitution, the St ate Constitution, federal laws or laws |
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| 98 | 106 | | of Oklahoma. |
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| 99 | 107 | | 3. The amount of any feder al net operating loss deduction shall |
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| 100 | 108 | | be adjusted as follows: |
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| 101 | 109 | | a. For carryovers and carrybacks to taxable years |
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| 102 | 110 | | beginning before January 1, 1981, the amount of any |
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| 103 | 111 | | net operating loss deduction allowed to a taxpayer for |
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| 104 | 112 | | federal income tax purposes shall be reduced to an |
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| 105 | 113 | | amount which is the same portion thereof as the lo ss |
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| 106 | 114 | | from sources within this state, as determined pursuant |
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| 107 | 115 | | to this section and Section 2362 of this title, for |
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| 136 | 145 | | b. For carryovers and carrybacks to taxable years |
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| 137 | 146 | | beginning after December 31, 1980, the amount of any |
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| 138 | 147 | | net operating loss deduction allowed for the taxable |
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| 139 | 148 | | year shall be an amount equal to the aggregate of the |
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| 140 | 149 | | Oklahoma net operating loss carryovers and carrybacks |
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| 141 | 150 | | to such year. Oklahoma net operating losses shall b e |
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| 142 | 151 | | separately determined by reference to Section 17 2 of |
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| 143 | 152 | | the Internal Revenue Code, 26 U.S.C., Section 172, as |
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| 144 | 153 | | modified by the Oklahoma Income Tax Act, Section 2351 |
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| 145 | 154 | | et seq. of this title, and sha ll be allowed without |
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| 146 | 155 | | regard to the existence of a federal net operating |
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| 147 | 156 | | loss. For tax years beginning after Dec ember 31, |
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| 148 | 157 | | 2000, and ending before January 1, 2008, the years to |
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| 149 | 158 | | which such losses may be carried shall be determined |
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| 150 | 159 | | solely by reference to Sec tion 172 of the Internal |
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| 151 | 160 | | Revenue Code, 26 U.S.C., Section 172, with the |
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| 152 | 161 | | exception that the terms "net operating loss" and |
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| 153 | 162 | | "taxable income" shall be replaced with "Oklahoma net |
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| 154 | 163 | | operating loss" and "Oklahoma taxable income ". For |
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| 155 | 164 | | tax years beginning after De cember 31, 2007, and |
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| 156 | 165 | | ending before January 1, 2009, years to wh ich such |
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| 157 | 166 | | losses may be carried back shall be limit ed to two (2) |
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| 186 | 196 | | back shall be determined s olely by reference to |
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| 187 | 197 | | Section 172 of the Internal Revenue Code, 26 U.S.C., |
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| 188 | 198 | | Section 172, with the exception that t he terms "net |
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| 189 | 199 | | operating loss" and "taxable income" shall be replaced |
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| 190 | 200 | | with "Oklahoma net operating loss " and "Oklahoma |
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| 191 | 201 | | taxable income". |
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| 192 | 202 | | 4. Items of the following nature shall be allocated as |
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| 193 | 203 | | indicated. Allowable deductions attributable to items separately |
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| 194 | 204 | | allocable in subparagraphs a, b and c of this paragraph, whethe r or |
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| 195 | 205 | | not such items of income were actually received, shall be allocated |
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| 196 | 206 | | on the same basis as those items: |
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| 197 | 207 | | a. Income from real and tangible personal property, such |
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| 198 | 208 | | as rents, oil and mining pro duction or royalties, and |
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| 199 | 209 | | gains or losses from sales of such pro perty, shall be |
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| 200 | 210 | | allocated in accordance with the situs of such |
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| 201 | 211 | | property; |
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| 202 | 212 | | b. Income from intangible personal property, such as |
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| 203 | 213 | | interest, dividends, patent or copyright royalties, |
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| 204 | 214 | | and gains or losses from sales of such property, shall |
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| 205 | 215 | | be allocated in accorda nce with the domiciliary situs |
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| 206 | 216 | | of the taxpayer, except that: |
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| 236 | 247 | | allocated in accordance with such business or |
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| 237 | 248 | | commercial situs; interest income from |
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| 238 | 249 | | investments held to generate working capital for |
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| 239 | 250 | | a unitary business enterprise shall be included |
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| 240 | 251 | | in apportionable income; a resident trust or |
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| 241 | 252 | | resident estate shal l be treated as having a |
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| 242 | 253 | | separate commercial or business situs i nsofar as |
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| 243 | 254 | | undistributed income is concerned, but shall not |
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| 244 | 255 | | be treated as having a separate commercial or |
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| 245 | 256 | | business situs insofar as distrib uted income is |
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| 246 | 257 | | concerned, |
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| 247 | 258 | | (2) for taxable years beginn ing after December 31, |
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| 248 | 259 | | 2003, capital or ordinary gains or losses from |
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| 249 | 260 | | the sale of an ownership interest in a publicly |
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| 250 | 261 | | traded partnership, as de fined by Section 7704(b) |
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| 251 | 262 | | of the Internal Revenue Code, sha ll be allocated |
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| 252 | 263 | | to this state in the ratio of the origi nal cost |
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| 253 | 264 | | of such partnership's tangible property in this |
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| 254 | 265 | | state to the original cost of such partnership 's |
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| 255 | 266 | | tangible property everywhere, as dete rmined at |
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| 256 | 267 | | the time of the sale; if more than fifty percent |
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| 286 | 298 | | ownership interest in the partnership shall be |
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| 287 | 299 | | allocated to this state in accordance with the |
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| 288 | 300 | | sales factor of the partner ship for its first |
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| 289 | 301 | | full tax period immediately precedin g its tax |
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| 290 | 302 | | period during which the ownership interest in the |
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| 291 | 303 | | partnership was sold; the provisions of this |
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| 292 | 304 | | division shall only apply if the capit al or |
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| 293 | 305 | | ordinary gains or losses from the sale of an |
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| 294 | 306 | | ownership interest in a partnership do not |
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| 295 | 307 | | constitute qualifying gain receiving capital |
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| 296 | 308 | | treatment as defined in subparagraph a of |
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| 297 | 309 | | paragraph 2 of subsection F of this section, |
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| 298 | 310 | | (3) income from such property which is required to be |
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| 299 | 311 | | allocated pursuant to the provisi ons of paragraph |
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| 300 | 312 | | 5 of this subsection shall be allocated as herein |
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| 301 | 313 | | provided; |
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| 302 | 314 | | c. Net income or loss from a business activ ity which is |
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| 303 | 315 | | not a part of business carried on within or without |
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| 304 | 316 | | the state of a unitary character shall be separately |
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| 305 | 317 | | allocated to the state in which such activity is |
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| 306 | 318 | | conducted; |
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| 336 | 349 | | (1) sales having a situs without this state, shipped |
|---|
| 337 | 350 | | directly to a point from without the state to a |
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| 338 | 351 | | purchaser within the state, co mmonly known as |
|---|
| 339 | 352 | | interstate sales, |
|---|
| 340 | 353 | | (2) sales of the product store d in public warehouses |
|---|
| 341 | 354 | | within the state pursuant to "in transit" |
|---|
| 342 | 355 | | tariffs, as prescribed and allowed by the |
|---|
| 343 | 356 | | Interstate Commerce Commi ssion, to a purchaser |
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| 344 | 357 | | within the state, |
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| 345 | 358 | | (3) sales of the product stored in public warehouses |
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| 346 | 359 | | within the state where the ship ment to such |
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| 347 | 360 | | warehouses is not covered by "in transit" |
|---|
| 348 | 361 | | tariffs, as prescribed a nd allowed by the |
|---|
| 349 | 362 | | Interstate Commerce Commission, to a purchaser |
|---|
| 350 | 363 | | within or without the state, |
|---|
| 351 | 364 | | the Oklahoma net income shall, at the option of the |
|---|
| 352 | 365 | | taxpayer, be that portion of th e total net income of |
|---|
| 353 | 366 | | the taxpayer for federal income tax purposes derived |
|---|
| 354 | 367 | | from the manufacture and/or processing and sales |
|---|
| 355 | 368 | | everywhere as determined by the ratio of the sales |
|---|
| 356 | 369 | | defined in this section made to the purchaser within |
|---|
| 385 | 399 | | a licensed public warehouse, the principal business of |
|---|
| 386 | 400 | | which is warehousing merchandise for the public; |
|---|
| 387 | 401 | | e. In the case of insurance companies, Oklahoma taxable |
|---|
| 388 | 402 | | income shall be taxable income of the taxpayer for |
|---|
| 389 | 403 | | federal tax purposes, as adjusted for the adjus tments |
|---|
| 390 | 404 | | provided pursuant to the provisions of paragraphs 1 |
|---|
| 391 | 405 | | and 2 of this subsection, apportioned as follows: |
|---|
| 392 | 406 | | (1) except as otherwise provided by division (2) of |
|---|
| 393 | 407 | | this subparagraph, taxable income of an insurance |
|---|
| 394 | 408 | | company for a taxable year shall be apportion ed |
|---|
| 395 | 409 | | to this state by multiplying such income by a |
|---|
| 396 | 410 | | fraction, the numerator of which is the direct |
|---|
| 397 | 411 | | premiums written for insurance on property or |
|---|
| 398 | 412 | | risks in this state, and the denomi nator of which |
|---|
| 399 | 413 | | is the direct premiums written for insurance on |
|---|
| 400 | 414 | | property or risks everywhere. For purposes of |
|---|
| 401 | 415 | | this subsection, the term "direct premiums |
|---|
| 402 | 416 | | written" means the total amount of dire ct |
|---|
| 403 | 417 | | premiums written, assessments and annuity |
|---|
| 404 | 418 | | considerations as reported for the taxable year |
|---|
| 405 | 419 | | on the annual statement filed by the company with |
|---|
| 406 | 420 | | the Insurance Commissioner in the form approved |
|---|
| 434 | 449 | | Commissioners, or such o ther form as may be |
|---|
| 435 | 450 | | prescribed in lieu thereof, |
|---|
| 436 | 451 | | (2) if the principal source of premiums written by an |
|---|
| 437 | 452 | | insurance company consists of premiums fo r |
|---|
| 438 | 453 | | reinsurance accepted by it, the taxable income of |
|---|
| 439 | 454 | | such company shall be apportioned to this state |
|---|
| 440 | 455 | | by multiplying such income by a fraction, the |
|---|
| 441 | 456 | | numerator of which is the sum o f (a) direct |
|---|
| 442 | 457 | | premiums written for insurance on property or |
|---|
| 443 | 458 | | risks in this state, plus (b) premiums written |
|---|
| 444 | 459 | | for reinsurance accepted in respect of property |
|---|
| 445 | 460 | | or risks in this state, and the denomi nator of |
|---|
| 446 | 461 | | which is the sum of (c) direct premiums written |
|---|
| 447 | 462 | | for insurance on property or risks everywhere, |
|---|
| 448 | 463 | | plus (d) premiums written for reinsuran ce |
|---|
| 449 | 464 | | accepted in respect of property or risks |
|---|
| 450 | 465 | | everywhere. For purposes of this paragraph, |
|---|
| 451 | 466 | | premiums written for rei nsurance accepted in |
|---|
| 452 | 467 | | respect of property or risks in this state, |
|---|
| 453 | 468 | | whether or not otherwise determinable, may at the |
|---|
| 454 | 469 | | election of the company be d etermined on the |
|---|
| 455 | 470 | | basis of the proportion which premiums written |
|---|
| 456 | 471 | | for insurance accepted from companies |
|---|
| 484 | 500 | | premiums written for reinsuranc e accepted from |
|---|
| 485 | 501 | | all sources, or alternatively in the proportion |
|---|
| 486 | 502 | | which the sum of the direct premiums written for |
|---|
| 487 | 503 | | insurance on property or risks in this state by |
|---|
| 488 | 504 | | each ceding company from which reinsurance is |
|---|
| 489 | 505 | | accepted bears to the sum of the total direct |
|---|
| 490 | 506 | | premiums written by each such ceding company for |
|---|
| 491 | 507 | | the taxable year. |
|---|
| 492 | 508 | | 5. The net income or loss remaining after the separate |
|---|
| 493 | 509 | | allocation in paragraph 4 of this subsection, being that which is |
|---|
| 494 | 510 | | derived from a unitary business enterprise, shall be apportioned to |
|---|
| 495 | 511 | | this state on the basis of the arithmetical average of three factors |
|---|
| 496 | 512 | | consisting of property, payroll and sales or gross revenue |
|---|
| 497 | 513 | | enumerated as subparagraphs a, b and c of this paragraph. Net |
|---|
| 498 | 514 | | income or loss as used in this paragraph includes that derived from |
|---|
| 499 | 515 | | patent or copyright royalties, purchase discounts, and interest on |
|---|
| 500 | 516 | | accounts receivable relating to or arising from a business activity, |
|---|
| 501 | 517 | | the income from which is apportioned pursuant to this subsection, |
|---|
| 502 | 518 | | including the sale or other disposition of such prope rty and any |
|---|
| 503 | 519 | | other property used in the unitary enterprise . Deductions used in |
|---|
| 504 | 520 | | computing such net income or loss shall not include taxes based on |
|---|
| 505 | 521 | | or measured by income. Provided, for corpora tions whose property |
|---|
| 506 | 522 | | for purposes of the tax imposed by Section 2 355 of this title has an |
|---|
| 534 | 551 | | Dollars ($200,000,000.00) and such investment is made on or after |
|---|
| 535 | 552 | | July 1, 1997, or for corporations which expand their property or |
|---|
| 536 | 553 | | facilities in this state and such expansion has an investment cost |
|---|
| 537 | 554 | | equaling or exceeding Two Hundred Million Doll ars ($200,000,000.00) |
|---|
| 538 | 555 | | over a period not to exceed three (3) years, and such expansion is |
|---|
| 539 | 556 | | commenced on or after J anuary 1, 2000, the three factors shall be |
|---|
| 540 | 557 | | apportioned with prope rty and payroll, each comprising twenty -five |
|---|
| 541 | 558 | | percent (25%) of the apportionment factor and sales comprising fifty |
|---|
| 542 | 559 | | percent (50%) of the apportionment factor. The apportionment |
|---|
| 543 | 560 | | factors shall be computed as follows: |
|---|
| 544 | 561 | | a. The property factor is a fraction, the numerator of |
|---|
| 545 | 562 | | which is the average value of the taxpayer 's real and |
|---|
| 546 | 563 | | tangible personal property owned or rented and used in |
|---|
| 547 | 564 | | this state during the tax period and the denominator |
|---|
| 548 | 565 | | of which is the average value of all the taxpayer 's |
|---|
| 549 | 566 | | real and tangible personal pr operty everywhere owned |
|---|
| 550 | 567 | | or rented and used during the tax period. |
|---|
| 551 | 568 | | (1) Property, the income from which is separately |
|---|
| 552 | 569 | | allocated in paragraph 4 of this subsection, |
|---|
| 553 | 570 | | shall not be included in determining this |
|---|
| 554 | 571 | | fraction. The numerator of the fraction shall |
|---|
| 555 | 572 | | include a portion of the investment in |
|---|
| 556 | 573 | | transportation and other equipment having no |
|---|
| 584 | 602 | | and trailers, including machinery and equipment |
|---|
| 585 | 603 | | carried thereon, airplanes, salespersons' |
|---|
| 586 | 604 | | automobiles and other similar equipmen t, in the |
|---|
| 587 | 605 | | proportion that miles traveled in Oklahoma by |
|---|
| 588 | 606 | | such equipment bears to total miles traveled, |
|---|
| 589 | 607 | | (2) Property owned by the taxpayer is valued at its |
|---|
| 590 | 608 | | original cost. Property rented by the taxpayer |
|---|
| 591 | 609 | | is valued at eight times the net annual rental |
|---|
| 592 | 610 | | rate. Net annual rental rate is the annual |
|---|
| 593 | 611 | | rental rate paid by the taxpayer, less any annual |
|---|
| 594 | 612 | | rental rate received by the taxpayer from |
|---|
| 595 | 613 | | subrentals, |
|---|
| 596 | 614 | | (3) The average value of property shall be determined |
|---|
| 597 | 615 | | by averaging the values at the beginning and |
|---|
| 598 | 616 | | ending of the tax period but the Oklahoma Tax |
|---|
| 599 | 617 | | Commission may require the averaging of monthly |
|---|
| 600 | 618 | | values during the tax period if reasonably |
|---|
| 601 | 619 | | required to reflect properly the average value of |
|---|
| 602 | 620 | | the taxpayer's property; |
|---|
| 603 | 621 | | b. The payroll factor is a fraction, the numerator of |
|---|
| 604 | 622 | | which is the total compensation for services rendered |
|---|
| 605 | 623 | | in the state during the tax per iod, and the |
|---|
| 606 | 624 | | denominator of which is the total compensation for |
|---|
| 634 | 653 | | "Compensation", as used in this subsection means those |
|---|
| 635 | 654 | | paid-for services to the extent related to the unitary |
|---|
| 636 | 655 | | business but does not include officers' salaries, |
|---|
| 637 | 656 | | wages and other compensation. |
|---|
| 638 | 657 | | (1) In the case of a transportation enterprise, the |
|---|
| 639 | 658 | | numerator of the fraction shall include a portion |
|---|
| 640 | 659 | | of such expenditure in c onnection with employees |
|---|
| 641 | 660 | | operating equipment over a fixed route, such as |
|---|
| 642 | 661 | | railroad employees, airline pilots, or bus |
|---|
| 643 | 662 | | drivers, in this state only a part of the time, |
|---|
| 644 | 663 | | in the proportion that mileage traveled in |
|---|
| 645 | 664 | | Oklahoma bears to total mileage traveled by such |
|---|
| 646 | 665 | | employees, |
|---|
| 647 | 666 | | (2) In any case the numerator of the fraction shall |
|---|
| 648 | 667 | | include a portion of such expenditures in |
|---|
| 649 | 668 | | connection with itinerant employees, such as |
|---|
| 650 | 669 | | traveling salespersons, in this state only a part |
|---|
| 651 | 670 | | of the time, in the proportion that time spent in |
|---|
| 652 | 671 | | Oklahoma bears to total time spent in furtherance |
|---|
| 653 | 672 | | of the enterprise by such employees ; |
|---|
| 654 | 673 | | c. The sales factor is a fraction, the numerator of which |
|---|
| 655 | 674 | | is the total sales or gross revenue of the taxpayer in |
|---|
| 656 | 675 | | this state during the tax period, and the denominator |
|---|
| 684 | 704 | | taxpayer everywhere during the tax period. "Sales", |
|---|
| 685 | 705 | | as used in this subsection does not include sales or |
|---|
| 686 | 706 | | gross revenue which are separately allocated in |
|---|
| 687 | 707 | | paragraph 4 of this subsection. |
|---|
| 688 | 708 | | (1) Sales of tangible pers onal property have a situs |
|---|
| 689 | 709 | | in this state if the property is delivered or |
|---|
| 690 | 710 | | shipped to a purchaser other than the United |
|---|
| 691 | 711 | | States government, within this state regardless |
|---|
| 692 | 712 | | of the FOB point or other conditions of the sale; |
|---|
| 693 | 713 | | or the property is shipped from an offic e, store, |
|---|
| 694 | 714 | | warehouse, factory or other place of storage in |
|---|
| 695 | 715 | | this state and (a) th e purchaser is the United |
|---|
| 696 | 716 | | States government or (b) the taxpayer is not |
|---|
| 697 | 717 | | doing business in the state of the destination of |
|---|
| 698 | 718 | | the shipment. |
|---|
| 699 | 719 | | (2) In the case of a railroad or interurba n railway |
|---|
| 700 | 720 | | enterprise, the numerator of the fraction shall |
|---|
| 701 | 721 | | not be less than the allocation of revenues to |
|---|
| 702 | 722 | | this state as shown in its annual report to the |
|---|
| 703 | 723 | | Corporation Commission. |
|---|
| 704 | 724 | | (3) In the case of an airline, truck or bus |
|---|
| 705 | 725 | | enterprise or freight car, tank car , refrigerator |
|---|
| 706 | 726 | | car or other railroad equipment enterprise, the |
|---|
| 734 | 755 | | of revenue from interstate transporta tion in the |
|---|
| 735 | 756 | | proportion that interstate mileage traveled in |
|---|
| 736 | 757 | | Oklahoma bears to total interstate mileage |
|---|
| 737 | 758 | | traveled. |
|---|
| 738 | 759 | | (4) In the case of an oil, gasoline or gas pipeline |
|---|
| 739 | 760 | | enterprise, the numer ator of the fraction shall |
|---|
| 740 | 761 | | be either the total of traffic units of the |
|---|
| 741 | 762 | | enterprise within Oklahoma or the revenue |
|---|
| 742 | 763 | | allocated to Oklahoma based upon miles moved, at |
|---|
| 743 | 764 | | the option of the taxpayer, and the denominator |
|---|
| 744 | 765 | | of which shall be the total of traffic units o f |
|---|
| 745 | 766 | | the enterprise or the revenue of the enterprise |
|---|
| 746 | 767 | | everywhere as appropr iate to the numerator. A |
|---|
| 747 | 768 | | "traffic unit" is hereby defined as the |
|---|
| 748 | 769 | | transportation for a distance of one (1) mile of |
|---|
| 749 | 770 | | one (1) barrel of oil, one (1) gallon of gasoline |
|---|
| 750 | 771 | | or one thousand (1,0 00) cubic feet of natural or |
|---|
| 751 | 772 | | casinghead gas, as the case may be. |
|---|
| 752 | 773 | | (5) In the case of a telephone or telegraph or other |
|---|
| 753 | 774 | | communication enterprise, the numerator of the |
|---|
| 754 | 775 | | fraction shall include that portion of the |
|---|
| 755 | 776 | | interstate revenue as is allocated pursuant to |
|---|
| 756 | 777 | | the accounting procedures prescribed by the |
|---|
| 784 | 806 | | in respect to each corporation or business entity |
|---|
| 785 | 807 | | required by the Federal Communicati ons Commission |
|---|
| 786 | 808 | | to keep its books and records in accordance with |
|---|
| 787 | 809 | | a uniform system of accounts prescribed by such |
|---|
| 788 | 810 | | Commission, the intrastate net income shall be |
|---|
| 789 | 811 | | determined separately in the manner provided by |
|---|
| 790 | 812 | | such uniform system of accounts and only the |
|---|
| 791 | 813 | | interstate income shall be subject to allocation |
|---|
| 792 | 814 | | pursuant to the provisions of this subsection. |
|---|
| 793 | 815 | | Provided further, that the gross revenue factors |
|---|
| 794 | 816 | | shall be those as are determined pursuant to the |
|---|
| 795 | 817 | | accounting procedures prescribed by the Federal |
|---|
| 796 | 818 | | Communications Commission. |
|---|
| 797 | 819 | | In any case where the apportionment of the three factors |
|---|
| 798 | 820 | | prescribed in this paragraph attributes to Oklahoma a portion of net |
|---|
| 799 | 821 | | income of the enterprise out of all appropriate proportion to the |
|---|
| 800 | 822 | | property owned and/or business transacted within this state, because |
|---|
| 801 | 823 | | of the fact that one or more of the factors so prescribed are no t |
|---|
| 802 | 824 | | employed to any appreciable extent in furtherance of the enterprise; |
|---|
| 803 | 825 | | or because one or more factors not so prescribed are employed to a |
|---|
| 804 | 826 | | considerable extent in furtherance of t he enterprise; or because of |
|---|
| 805 | 827 | | other reasons, the Tax Commission is empowered to permit, after a |
|---|
| 806 | 828 | | showing by taxpayer that an excessive portion of net in come has been |
|---|
| 834 | 857 | | insufficient portion of net inco me has been attributed to Oklahoma, |
|---|
| 835 | 858 | | the elimination, substitution, or use of ad ditional factors, or |
|---|
| 836 | 859 | | reduction or increase in the weight of such prescr ibed factors. |
|---|
| 837 | 860 | | Provided, however, that any such variance from such prescribed |
|---|
| 838 | 861 | | factors which has the effect of increasing the portion of net income |
|---|
| 839 | 862 | | attributable to Oklahoma must not be i nherently arbitrary, and |
|---|
| 840 | 863 | | application of the recomputed final apportionm ent to the net income |
|---|
| 841 | 864 | | of the enterprise must attribute to Oklahoma only a reasonable |
|---|
| 842 | 865 | | portion thereof. |
|---|
| 843 | 866 | | 6. For calendar years 1997 and 1998, the owner of a new or |
|---|
| 844 | 867 | | expanded agricultural c ommodity processing facility in this state |
|---|
| 845 | 868 | | may exclude from Oklahoma ta xable income, or in the case of an |
|---|
| 846 | 869 | | individual, the Oklahoma adjusted gross income, fifteen percent |
|---|
| 847 | 870 | | (15%) of the investment by the owner in the new or expanded |
|---|
| 848 | 871 | | agricultural commodity pro cessing facility. For calendar year 1999, |
|---|
| 849 | 872 | | and all subsequent years, th e percentage, not to exceed fifteen |
|---|
| 850 | 873 | | percent (15%), available to the owner of a new or expanded |
|---|
| 851 | 874 | | agricultural commodity processing facility in this state claiming |
|---|
| 852 | 875 | | the exemption shall be a djusted annually so that the total estimated |
|---|
| 853 | 876 | | reduction in tax liability does not exceed One Million Dollars |
|---|
| 854 | 877 | | ($1,000,000.00) annually. The Tax Commission shall promulgate rules |
|---|
| 855 | 878 | | for determining the percentage of the investment which each eligible |
|---|
| 856 | 879 | | taxpayer may exclude. The exclusion provided by this paragraph |
|---|
| 884 | 908 | | the event the total reduction in tax liability authoriz ed by this |
|---|
| 885 | 909 | | paragraph exceeds One Million Dollars ($1,000,000.00) in any |
|---|
| 886 | 910 | | calendar year, the Tax Commission shall permit any excess over One |
|---|
| 887 | 911 | | Million Dollars ($1,000,000.00) and shall factor such excess into |
|---|
| 888 | 912 | | the percentage for subsequent years . Any amount of the exemption |
|---|
| 889 | 913 | | permitted to be excluded pursuant to the provisions of this |
|---|
| 890 | 914 | | paragraph but not used in any year may be carried forward as an |
|---|
| 891 | 915 | | exemption from income pursuant to the provisions of this paragraph |
|---|
| 892 | 916 | | for a period not exceeding six (6) years following the year in which |
|---|
| 893 | 917 | | the investment was originally made. |
|---|
| 894 | 918 | | For purposes of this par agraph: |
|---|
| 895 | 919 | | a. "Agricultural commodity processing facility" means |
|---|
| 896 | 920 | | building, structures, fixtures and improvements used |
|---|
| 897 | 921 | | or operated primarily for the processing or production |
|---|
| 898 | 922 | | of marketable products from agricultural commodities . |
|---|
| 899 | 923 | | The term shall also mean a dair y operation that |
|---|
| 900 | 924 | | requires a depreciable investment of at least Two |
|---|
| 901 | 925 | | Hundred Fifty Thousand Dollars ($250,000.00) and which |
|---|
| 902 | 926 | | produces milk from dairy cows . The term does not |
|---|
| 903 | 927 | | include a facility that provides only, and nothing |
|---|
| 904 | 928 | | more than, storage, cleaning, dry ing or transportation |
|---|
| 905 | 929 | | of agricultural commodities, and |
|---|
| 934 | 959 | | (1) the processing of agricultural commodities, |
|---|
| 935 | 960 | | including receiving or storing agricultural |
|---|
| 936 | 961 | | commodities, or the p roduction of milk at a dairy |
|---|
| 937 | 962 | | operation, |
|---|
| 938 | 963 | | (2) transporting the agricultur al commodities or |
|---|
| 939 | 964 | | product before, during or after the processing, |
|---|
| 940 | 965 | | or |
|---|
| 941 | 966 | | (3) packaging or otherwise preparing the product for |
|---|
| 942 | 967 | | sale or shipment. |
|---|
| 943 | 968 | | 7. Despite any provision to the contrary in paragraph 3 of this |
|---|
| 944 | 969 | | subsection, for taxable years beginning after Decem ber 31, 1999, in |
|---|
| 945 | 970 | | the case of a taxpayer which has a farming loss, such farming loss |
|---|
| 946 | 971 | | shall be considered a net operating loss carryback in accordance |
|---|
| 947 | 972 | | with and to the extent of the Intern al Revenue Code, 26 U.S.C., |
|---|
| 948 | 973 | | Section 172(b)(G). However, the amount of the net operating loss |
|---|
| 949 | 974 | | carryback shall not exceed the lesser of: |
|---|
| 950 | 975 | | a. Sixty Thousand Dollars ($60,000.00), o r |
|---|
| 951 | 976 | | b. the loss properly shown on Schedule F of the Internal |
|---|
| 952 | 977 | | Revenue Service Form 1040 reduced by one-half (1/2) of |
|---|
| 953 | 978 | | the income from all other sources ot her than reflected |
|---|
| 954 | 979 | | on Schedule F. |
|---|
| 984 | 1010 | | The deduction allowed pursua nt to this paragraph shall only be |
|---|
| 985 | 1011 | | permitted for the tax years in which the federal tax credit pursuant |
|---|
| 986 | 1012 | | to 26 U.S.C.A., Section 45A, is allowed . For purposes of this |
|---|
| 987 | 1013 | | paragraph, "qualified wages" means those wages used to calculate the |
|---|
| 988 | 1014 | | federal credit pursu ant to 26 U.S.C.A., Section 45A. |
|---|
| 989 | 1015 | | 9. In taxable years beginning after December 31, 2005, an |
|---|
| 990 | 1016 | | employer that is eligible for and utilizes the Safety Pays OSHA |
|---|
| 991 | 1017 | | Consultation Service provided by the Oklahoma Department of Labor |
|---|
| 992 | 1018 | | shall receive an exemption from ta xable income in the amount of One |
|---|
| 993 | 1019 | | Thousand Dollars ($1,000.00) for the tax year that the service is |
|---|
| 994 | 1020 | | utilized. |
|---|
| 995 | 1021 | | 10. For taxable years beginning on or after January 1, 2010, |
|---|
| 996 | 1022 | | there shall be added to Oklahoma taxable income an amount equal to |
|---|
| 997 | 1023 | | the amount of deferred income not included in such taxable income |
|---|
| 998 | 1024 | | pursuant to Section 108(i)(1) of the Internal Revenue Cod e of 1986 |
|---|
| 999 | 1025 | | as amended by Section 1231 of the American Recovery and Reinvestment |
|---|
| 1000 | 1026 | | Act of 2009 (P.L. No. 111-5). There shall be subtracted from |
|---|
| 1001 | 1027 | | Oklahoma taxable income an amount equal to the amou nt of deferred |
|---|
| 1002 | 1028 | | income included in such taxable income pursuant t o Section 108(i)(1) |
|---|
| 1003 | 1029 | | of the Internal Revenue Code by Section 1231 of the America n |
|---|
| 1004 | 1030 | | Recovery and Reinvestment Act of 2009 (P.L. No. 111-5). |
|---|
| 1034 | 1061 | | Oklahoma taxable income or adjusted gross income any item of loss or |
|---|
| 1035 | 1062 | | deduction that in the absence of an election pursuant to the |
|---|
| 1036 | 1063 | | provisions of the Pass -Through Entity Tax Equit y Act of 2019 would |
|---|
| 1037 | 1064 | | be allocated to a member or to an indirect member of an ele cting |
|---|
| 1038 | 1065 | | pass-through entity pursuant to Section 2351 et seq. of this titl e, |
|---|
| 1039 | 1066 | | if (i) the electing pass-through entity has accounted for such item |
|---|
| 1040 | 1067 | | in computing its Oklahoma net entit y income or loss pursuant to the |
|---|
| 1041 | 1068 | | provisions of the Pass -Through Entity Tax Equi ty Act of 2019, and |
|---|
| 1042 | 1069 | | (ii) the total amount of tax attributable to any re sulting Oklahoma |
|---|
| 1043 | 1070 | | net entity income has bee n paid. The Oklahoma Tax Commission shall |
|---|
| 1044 | 1071 | | promulgate rules for the reporting of such exclusion to direct and |
|---|
| 1045 | 1072 | | indirect members of the electing pass-through entity. As used in |
|---|
| 1046 | 1073 | | this paragraph, "electing pass-through entity", "indirect member", |
|---|
| 1047 | 1074 | | and "member" shall be defined in the same manner as prescribed by |
|---|
| 1048 | 1075 | | Section 2355.1P-2 of this title. Notwithstanding the application of |
|---|
| 1049 | 1076 | | this paragraph, the a djusted tax basis of any ownership interest in |
|---|
| 1050 | 1077 | | a pass-through entity for purposes of Section 2351 et seq. of this |
|---|
| 1051 | 1078 | | title shall be equal to its adjusted tax basis for federal inco me |
|---|
| 1052 | 1079 | | tax purposes. |
|---|
| 1053 | 1080 | | B. 1. The taxable income of any corporation shall be further |
|---|
| 1054 | 1081 | | adjusted to arrive at Oklahoma taxable income, except those |
|---|
| 1084 | 1112 | | Accelerated Cost Recovery System as defined and allowed in the |
|---|
| 1085 | 1113 | | Economic Recovery Tax Act of 1981, Public Law 97-34, 26 U.S.C., |
|---|
| 1086 | 1114 | | Section 168, for depreciation of assets place d into service after |
|---|
| 1087 | 1115 | | December 31, 1981, shall not be allowed in calculating Okl ahoma |
|---|
| 1088 | 1116 | | taxable income. Such corporations shall be allowed a deduction f or |
|---|
| 1089 | 1117 | | depreciation of assets placed into serv ice after December 31, 1981, |
|---|
| 1090 | 1118 | | in accordance with provisions of th e Internal Revenue Code, 26 |
|---|
| 1091 | 1119 | | U.S.C., Section 1 et seq., in effect immediately pr ior to the |
|---|
| 1092 | 1120 | | enactment of the Accelerated Cost Recovery System . The Oklahoma tax |
|---|
| 1093 | 1121 | | basis for all such assets placed into service after December 31, |
|---|
| 1094 | 1122 | | 1981, calculated in this section shall be retained and utilized for |
|---|
| 1095 | 1123 | | all Oklahoma income tax purposes through th e final disposition of |
|---|
| 1096 | 1124 | | such assets. |
|---|
| 1097 | 1125 | | Notwithstanding any other provision s of the Oklahoma Income Tax |
|---|
| 1098 | 1126 | | Act, Section 2351 et seq. of this title, or of the Internal Revenue |
|---|
| 1099 | 1127 | | Code to the contrary, this subsection shall control calculation of |
|---|
| 1100 | 1128 | | depreciation of asset s placed into service after December 31, 1981, |
|---|
| 1101 | 1129 | | and before January 1, 19 83. |
|---|
| 1102 | 1130 | | For assets placed in service and held by a corporation in which |
|---|
| 1103 | 1131 | | accelerated cost recovery system was p reviously disallowed, an |
|---|
| 1104 | 1132 | | adjustment to taxable income is required in the first taxable year |
|---|
| 1134 | 1163 | | for depreciation accounts between that reported to the Internal |
|---|
| 1135 | 1164 | | Revenue Service and that reported to Oklahoma. |
|---|
| 1136 | 1165 | | 2. For tax years beginning on or after January 1, 2009, and |
|---|
| 1137 | 1166 | | ending on or before December 31, 2009, there shall be added to |
|---|
| 1138 | 1167 | | Oklahoma taxable income any amount in excess of One Hundred Seventy - |
|---|
| 1139 | 1168 | | five Thousand Dollars ($175,000.00) which has been deducted as a |
|---|
| 1140 | 1169 | | small business expense under Internal Revenue Cod e, Section 179 as |
|---|
| 1141 | 1170 | | provided in the American Recovery and Reinvest ment Act of 2009. |
|---|
| 1142 | 1171 | | C. 1. For taxable years beginning after December 31, 1987, the |
|---|
| 1143 | 1172 | | taxable income of any corporation shall be further adjusted to |
|---|
| 1144 | 1173 | | arrive at Oklahoma taxable income for transfer s of technology to |
|---|
| 1145 | 1174 | | qualified small businesses located in Oklahom a. Such transferor |
|---|
| 1146 | 1175 | | corporation shall be allowed an exemption from taxable inco me of an |
|---|
| 1147 | 1176 | | amount equal to the amount of royalty payment received as a re sult |
|---|
| 1148 | 1177 | | of such transfer; provided, however, such amount shall not exceed |
|---|
| 1149 | 1178 | | ten percent (10%) of the amount of gross proceeds received by such |
|---|
| 1150 | 1179 | | transferor corporation as a result of the techn ology transfer. Such |
|---|
| 1151 | 1180 | | exemption shall be allowed for a period not to ex ceed ten (10) years |
|---|
| 1152 | 1181 | | from the date of recei pt of the first royalty payment accruing from |
|---|
| 1153 | 1182 | | such transfer. No exemption may be claimed for transfers of |
|---|
| 1183 | 1213 | | a. "Qualified small business" means an entity, whether |
|---|
| 1184 | 1214 | | organized as a corporation, partnership, or |
|---|
| 1185 | 1215 | | proprietorship, organized for profit with its |
|---|
| 1186 | 1216 | | principal place of business located wi thin this state |
|---|
| 1187 | 1217 | | and which meets the following criteria: |
|---|
| 1188 | 1218 | | (1) Capitalization of not more than Two Hundred Fifty |
|---|
| 1189 | 1219 | | Thousand Dollars ($250,000.00), |
|---|
| 1190 | 1220 | | (2) Having at least fifty percent ( 50%) of its |
|---|
| 1191 | 1221 | | employees and assets located in Oklahoma at the |
|---|
| 1192 | 1222 | | time of the transfer, and |
|---|
| 1193 | 1223 | | (3) Not a subsidiary or affiliate of the transferor |
|---|
| 1194 | 1224 | | corporation; |
|---|
| 1195 | 1225 | | b. "Technology" means a proprietary proce ss, formula, |
|---|
| 1196 | 1226 | | pattern, device or compilation of scientific or |
|---|
| 1197 | 1227 | | technical information which is not in the public |
|---|
| 1198 | 1228 | | domain; |
|---|
| 1199 | 1229 | | c. "Transferor corporatio n" means a corporation which is |
|---|
| 1200 | 1230 | | the exclusive and undisputed owner of t he technology |
|---|
| 1201 | 1231 | | at the time the transfer is made; and |
|---|
| 1233 | 1264 | | adjusted for qualifying gains re ceiving capital treatment . Such |
|---|
| 1234 | 1265 | | corporations, estates or trusts shall be allow ed a deduction from |
|---|
| 1235 | 1266 | | Oklahoma taxable income for the amount of qualifyi ng gains receiving |
|---|
| 1236 | 1267 | | capital treatment earned by the corporation, estate or trust during |
|---|
| 1237 | 1268 | | the taxable year and included in the federal taxable income of such |
|---|
| 1238 | 1269 | | corporation, estate or trust. |
|---|
| 1239 | 1270 | | 2. As used in this subsection: |
|---|
| 1240 | 1271 | | a. "qualifying gains receiving capita l treatment" means |
|---|
| 1241 | 1272 | | the amount of net capital gains, as defined in Section |
|---|
| 1242 | 1273 | | 1222(11) of the Internal Revenue Co de, included in the |
|---|
| 1243 | 1274 | | federal income tax return of the corporation, estate |
|---|
| 1244 | 1275 | | or trust that result from: |
|---|
| 1245 | 1276 | | (1) the sale of real property or tangible pers onal |
|---|
| 1246 | 1277 | | property located within Oklahoma that has been |
|---|
| 1247 | 1278 | | directly or indirectly owned by the corporation, |
|---|
| 1248 | 1279 | | estate or trust for a holding period of at least |
|---|
| 1249 | 1280 | | five (5) years prior to the date of the |
|---|
| 1250 | 1281 | | transaction from which such net capital gains |
|---|
| 1251 | 1282 | | arise, |
|---|
| 1283 | 1315 | | trust for a holding period of at least three (3) |
|---|
| 1284 | 1316 | | years prior to the date of the transaction from |
|---|
| 1285 | 1317 | | which the net capital gains arise, or |
|---|
| 1286 | 1318 | | (3) the sale of real property, tangible personal |
|---|
| 1287 | 1319 | | property or intangible personal propert y located |
|---|
| 1288 | 1320 | | within Oklahoma as part of the sale of all or |
|---|
| 1289 | 1321 | | substantially all of the assets of an Oklahoma |
|---|
| 1290 | 1322 | | company, limited liability company, or |
|---|
| 1291 | 1323 | | partnership where such property has been directly |
|---|
| 1292 | 1324 | | or indirectly owned by such entity owned by the |
|---|
| 1293 | 1325 | | owners of such entity, and used in or derived |
|---|
| 1294 | 1326 | | from such entity for a period of at least three |
|---|
| 1295 | 1327 | | (3) years prior to the date of the transaction |
|---|
| 1296 | 1328 | | from which the net capital gains arise, |
|---|
| 1297 | 1329 | | b. "holding period" means an uninterrupted period of |
|---|
| 1298 | 1330 | | time. The holding period shall inclu de any additional |
|---|
| 1299 | 1331 | | period when the property was held by another |
|---|
| 1300 | 1332 | | individual or entity, if such additional period is |
|---|
| 1333 | 1366 | | of the transaction fro m which the net capital gains |
|---|
| 1334 | 1367 | | arise, |
|---|
| 1335 | 1368 | | d. "direct" means the taxpayer directly owns the asset, |
|---|
| 1336 | 1369 | | and |
|---|
| 1337 | 1370 | | e. "indirect" means the taxpayer owns an in terest in a |
|---|
| 1338 | 1371 | | pass-through entity (or chain of pass-through |
|---|
| 1339 | 1372 | | entities) that sells the asset that gives rise to the |
|---|
| 1340 | 1373 | | qualifying gains receiving capital treatment. |
|---|
| 1341 | 1374 | | (1) With respect to sales of rea l property or |
|---|
| 1342 | 1375 | | tangible personal property located within |
|---|
| 1343 | 1376 | | Oklahoma, the deduction described in this |
|---|
| 1344 | 1377 | | subsection shall not apply unless the pass- |
|---|
| 1345 | 1378 | | through entity that makes the sale has he ld the |
|---|
| 1346 | 1379 | | property for not less than five (5) uninterrupted |
|---|
| 1347 | 1380 | | years prior to the date of the transaction that |
|---|
| 1348 | 1381 | | created the capital gain, and each pass-through |
|---|
| 1349 | 1382 | | entity included in the chain of ownersh ip has |
|---|
| 1350 | 1383 | | been a member, partner, or shareholder of the |
|---|
| 1383 | 1417 | | liability company, or partnership, the deduction |
|---|
| 1384 | 1418 | | described in this subsection shall not apply |
|---|
| 1385 | 1419 | | unless the pass-through entity that makes the |
|---|
| 1386 | 1420 | | sale has held the stock or ownership interest or |
|---|
| 1387 | 1421 | | the assets for not less than three (3) |
|---|
| 1388 | 1422 | | uninterrupted years prior to the date of the |
|---|
| 1389 | 1423 | | transaction that created the capital gain, and |
|---|
| 1390 | 1424 | | each pass-through entity included in the chain of |
|---|
| 1391 | 1425 | | ownership has been a member, partn er or |
|---|
| 1392 | 1426 | | shareholder of the pass-through entity in the |
|---|
| 1393 | 1427 | | tier immediately below it for an uninterrupted |
|---|
| 1394 | 1428 | | period of not less than three (3) years. |
|---|
| 1395 | 1429 | | E. The Oklahoma adjusted gross income of any indi vidual |
|---|
| 1396 | 1430 | | taxpayer shall be further adjusted as follows to arrive at Oklahoma |
|---|
| 1397 | 1431 | | taxable income: |
|---|
| 1398 | 1432 | | 1. a. In the case of individu als, there shall be added or |
|---|
| 1399 | 1433 | | deducted, as the case may be, the d ifference necessary |
|---|
| 1400 | 1434 | | to allow personal exemptions of One Thousand Dollar s |
|---|
| 1433 | 1468 | | only if the central visual acuity of the individual |
|---|
| 1434 | 1469 | | does not exceed 20/200 in the better eye with |
|---|
| 1435 | 1470 | | correcting lenses, or if the visual acui ty of the |
|---|
| 1436 | 1471 | | individual is greater than 20/200, but is accompanied |
|---|
| 1437 | 1472 | | by a limitation in the fields of vision such that the |
|---|
| 1438 | 1473 | | widest diameter of the visual field subtends an angle |
|---|
| 1439 | 1474 | | no greater than twen ty (20) degrees. |
|---|
| 1440 | 1475 | | c. There shall be allowed an additional exempti on of One |
|---|
| 1441 | 1476 | | Thousand Dollars ($1,000.00) for each taxpayer or |
|---|
| 1442 | 1477 | | spouse who is sixty-five (65) years of age or older at |
|---|
| 1443 | 1478 | | the close of the tax year based upon the filing status |
|---|
| 1444 | 1479 | | and federal adjusted g ross income of the taxpayer. |
|---|
| 1445 | 1480 | | Taxpayers with the following filin g status may claim |
|---|
| 1446 | 1481 | | this exemption if the federal adjusted gross incom e |
|---|
| 1447 | 1482 | | does not exceed: |
|---|
| 1448 | 1483 | | (1) Twenty-five Thousand Dollars ($25,000.00) if |
|---|
| 1449 | 1484 | | married and filing jointly; |
|---|
| 1482 | 1518 | | Provided, for taxable years beginning after December |
|---|
| 1483 | 1519 | | 31, 1999, amounts included in the calculation of |
|---|
| 1484 | 1520 | | federal adjusted gross income pursuant to the |
|---|
| 1485 | 1521 | | conversion of a traditional individual r etirement |
|---|
| 1486 | 1522 | | account to a Roth individual retirement account shall |
|---|
| 1487 | 1523 | | be excluded from federal adjusted gross income for |
|---|
| 1488 | 1524 | | purposes of the income thresholds provided in this |
|---|
| 1489 | 1525 | | subparagraph. |
|---|
| 1490 | 1526 | | 2. a. For taxable years beginning on or before December 31, |
|---|
| 1491 | 1527 | | 2005, in the case of individuals who use the standard |
|---|
| 1492 | 1528 | | deduction in determining taxable income, there shall |
|---|
| 1493 | 1529 | | be added or deducted, as the case may be, the |
|---|
| 1494 | 1530 | | difference necessary to allow a standard deduction in |
|---|
| 1495 | 1531 | | lieu of the standard deduction allowed by the Internal |
|---|
| 1496 | 1532 | | Revenue Code, in an amount equal to the larger of |
|---|
| 1497 | 1533 | | fifteen percent (15%) of the Oklahoma adjusted gross |
|---|
| 1498 | 1534 | | income or One Thousand Dollars ($1, 000.00), but not to |
|---|
| 1499 | 1535 | | exceed Two Thousand Dollars ($2,000.00), exc ept that |
|---|
| 1532 | 1569 | | b. For taxable years beginning on or aft er January 1, |
|---|
| 1533 | 1570 | | 2006, and before January 1, 2007, in the case of |
|---|
| 1534 | 1571 | | individuals who use the standard deduction in |
|---|
| 1535 | 1572 | | determining taxable i ncome, there shall be added or |
|---|
| 1536 | 1573 | | deducted, as the case may be, the difference necessary |
|---|
| 1537 | 1574 | | to allow a standard deduction in lieu of the standard |
|---|
| 1538 | 1575 | | deduction allowed by the Internal Revenue Code, in an |
|---|
| 1539 | 1576 | | amount equal to: |
|---|
| 1540 | 1577 | | (1) Three Thousand Dollars ($3,000.00), if th e filing |
|---|
| 1541 | 1578 | | status is married filing joint, head of household |
|---|
| 1542 | 1579 | | or qualifying widow; or |
|---|
| 1543 | 1580 | | (2) Two Thousand Dollars ($2,000.00), if the filing |
|---|
| 1544 | 1581 | | status is single or married filing separate. |
|---|
| 1545 | 1582 | | c. For the taxable year beginning on January 1, 2007, and |
|---|
| 1546 | 1583 | | ending December 31, 2007, in the case of individuals |
|---|
| 1547 | 1584 | | who use the standard deductio n in determining taxable |
|---|
| 1548 | 1585 | | income, there shall be added or de ducted, as the case |
|---|
| 1549 | 1586 | | may be, the difference necessary to allow a standard |
|---|
| 1581 | 1619 | | (2) Four Thousand One Hundred Twenty-five Dollars |
|---|
| 1582 | 1620 | | ($4,125.00) for a head of household; or |
|---|
| 1583 | 1621 | | (3) Two Thousand Seven Hundred Fifty Dollars |
|---|
| 1584 | 1622 | | ($2,750.00), if the filing status is single or |
|---|
| 1585 | 1623 | | married filing separate. |
|---|
| 1586 | 1624 | | d. For the taxable year beginning on January 1, 2008, and |
|---|
| 1587 | 1625 | | ending December 31, 2008, in the case o f individuals |
|---|
| 1588 | 1626 | | who use the standard deducti on in determining taxable |
|---|
| 1589 | 1627 | | income, there shall be added or deduct ed, as the case |
|---|
| 1590 | 1628 | | may be, the difference necessary to all ow a standard |
|---|
| 1591 | 1629 | | deduction in lieu of the standard deduction allowed by |
|---|
| 1592 | 1630 | | the Internal Revenue Code, in an amount equal to: |
|---|
| 1593 | 1631 | | (1) Six Thousand Five Hundred Dollars ($6,500.00), if |
|---|
| 1594 | 1632 | | the filing status is married filing joint or |
|---|
| 1595 | 1633 | | qualifying widow, or |
|---|
| 1596 | 1634 | | (2) Four Thousand Eight Hundred Seventy-five Dollars |
|---|
| 1597 | 1635 | | ($4,875.00) for a head of household, or |
|---|
| 1598 | 1663 | | (3) Three Thousand Two Hundred Fifty Dollars |
|---|
| 1599 | 1664 | | ($3,250.00), if the filing status is single or |
|---|
| 1600 | 1665 | | married filing separate. |
|---|
| 1601 | 1666 | | e. For the taxable year beginning on January 1, 2009, and |
|---|
| 1602 | 1667 | | ending December 31, 2009, in the case of individuals |
|---|
| 1603 | 1668 | | who use the standard deduction in determining t axable |
|---|
| 1604 | 1669 | | income, there shall be added or ded ucted, as the case |
|---|
| 1631 | 1670 | | may be, the difference necessary to allow a s tandard |
|---|
| 1632 | 1671 | | deduction in lieu of the standard deduction allowed by |
|---|
| 1633 | 1672 | | the Internal Revenue Code, in an amount equal to: |
|---|
| 1634 | 1673 | | (1) Eight Thousand Five Hundred Dolla rs ($8,500.00), |
|---|
| 1635 | 1674 | | if the filing status is ma rried filing joint or |
|---|
| 1636 | 1675 | | qualifying widow, or |
|---|
| 1637 | 1676 | | (2) Six Thousand Three Hundred Seventy-five Dollars |
|---|
| 1638 | 1677 | | ($6,375.00) for a head of household, or |
|---|
| 1639 | 1678 | | (3) Four Thousand Two Hundred Fifty Dollars |
|---|
| 1640 | 1679 | | ($4,250.00), if the filing status i s single or |
|---|
| 1641 | 1680 | | married filing separate. |
|---|
| 1642 | 1681 | | Oklahoma adjusted gross income shall be increased by |
|---|
| 1643 | 1682 | | any amounts paid for motor vehicle excise taxes which |
|---|
| 1644 | 1683 | | were deducted as allowed by the Internal Revenue Code. |
|---|
| 1645 | 1684 | | f. For taxable years beginning on or after January 1, |
|---|
| 1646 | 1685 | | 2010, and ending on December 31, 2016, in the case of |
|---|
| 1647 | 1686 | | individuals who use the standard deduction in |
|---|
| 1681 | 1721 | | g. For taxable years beginning on or after January 1, |
|---|
| 1682 | 1722 | | 2017, in the case of individ uals who use the standard |
|---|
| 1683 | 1723 | | deduction in determining taxable income, there shall |
|---|
| 1684 | 1724 | | be added or deducted, as th e case may be, the |
|---|
| 1685 | 1725 | | difference necessary to al low a standard deduction in |
|---|
| 1686 | 1726 | | lieu of the standard deduction allowed by the Internal |
|---|
| 1687 | 1727 | | Revenue Code, as follo ws: |
|---|
| 1688 | 1728 | | (1) Six Thousand Three Hundred Fifty D ollars |
|---|
| 1689 | 1729 | | ($6,350.00) for single or married filing |
|---|
| 1690 | 1730 | | separately, |
|---|
| 1691 | 1731 | | (2) Twelve Thousand Seven Hundred Dollars |
|---|
| 1692 | 1732 | | ($12,700.00) for married filing jointly o r |
|---|
| 1693 | 1733 | | qualifying widower with dependent child, and |
|---|
| 1694 | 1734 | | (3) Nine Thousand Three Hundred Fifty Dollars |
|---|
| 1695 | 1735 | | ($9,350.00) for head of household. |
|---|
| 1696 | 1736 | | 3. a. In the case of resident and part -year resident |
|---|
| 1697 | 1737 | | individuals having adjusted gross inc ome from sources |
|---|
| 1731 | 1772 | | but allowable moving ex pense shall be fully deductible |
|---|
| 1732 | 1773 | | for those taxpayers moving withi n or into Oklahoma and |
|---|
| 1733 | 1774 | | no part of moving expense shall be deductible for |
|---|
| 1734 | 1775 | | those taxpayers moving without or out of Oklahoma. |
|---|
| 1735 | 1776 | | All other itemized or sta ndard deductions and personal |
|---|
| 1736 | 1777 | | exemptions shall be subject to proration as provided |
|---|
| 1737 | 1778 | | by law. |
|---|
| 1738 | 1779 | | b. For taxable years beginning on or after January 1, |
|---|
| 1739 | 1780 | | 2018, the net amount of itemized deducti ons allowable |
|---|
| 1740 | 1781 | | on an Oklahoma income tax return, subject to the |
|---|
| 1741 | 1782 | | provisions of paragraph 24 of this subsection, sha ll |
|---|
| 1742 | 1783 | | not exceed Seventeen Thousand Dollars ($17,000.00) . |
|---|
| 1743 | 1784 | | For purposes of this subparagraph, charitable |
|---|
| 1744 | 1785 | | contributions and medical expenses deduct ible for |
|---|
| 1745 | 1786 | | federal income tax purposes shall be excluded from the |
|---|
| 1746 | 1787 | | amount of Seventeen Thousand Dollars ($17,000.00) as |
|---|
| 1747 | 1788 | | specified by this subparagraph. |
|---|
| 1781 | 1823 | | physical disability con stituting a substantial handicap to |
|---|
| 1782 | 1824 | | employment. The Tax Commission shall promulgate rules containing a |
|---|
| 1783 | 1825 | | list of combinations of common disabili ties and modifications which |
|---|
| 1784 | 1826 | | may be presumed to qualify for this deduct ion. The Tax Commission |
|---|
| 1785 | 1827 | | shall prescribe necessary requirements for verification. |
|---|
| 1786 | 1828 | | 5. a. Before July 1, 2010, the first One Thousand Five |
|---|
| 1787 | 1829 | | Hundred Dollars ($1,500.00) received by any pers on |
|---|
| 1788 | 1830 | | from the United States as salary or compensation in |
|---|
| 1789 | 1831 | | any form, other than retirement benefits, as a member |
|---|
| 1790 | 1832 | | of any component of the Armed Forces of the United |
|---|
| 1791 | 1833 | | States shall be deducted from taxable income. |
|---|
| 1792 | 1834 | | b. On or after July 1, 2010, one hundred percent ( 100%) |
|---|
| 1793 | 1835 | | of the income received by any person from the United |
|---|
| 1794 | 1836 | | States as salary or compensation in any form, other |
|---|
| 1795 | 1837 | | than retirement benefits, as a member of any component |
|---|
| 1796 | 1838 | | of the Armed Forces of the United States shall b e |
|---|
| 1797 | 1839 | | deducted from taxable income. |
|---|
| 1831 | 1874 | | (2) absence from the State of Oklahoma while on |
|---|
| 1832 | 1875 | | active duty; or |
|---|
| 1833 | 1876 | | (3) confinement in a hospital within th e United |
|---|
| 1834 | 1877 | | States for treatment of wounds, injuries or |
|---|
| 1835 | 1878 | | disease, |
|---|
| 1836 | 1879 | | the time for filing a return and p aying an income tax |
|---|
| 1837 | 1880 | | shall be and is hereby exte nded without incurring |
|---|
| 1838 | 1881 | | liability for interest or penalties, to the fift eenth |
|---|
| 1839 | 1882 | | day of the third month following the month in which: |
|---|
| 1840 | 1883 | | (a) Such individual shall return to the United |
|---|
| 1841 | 1884 | | States if the extension is gran ted pursuant |
|---|
| 1842 | 1885 | | to subparagraph a of this paragraph , return |
|---|
| 1843 | 1886 | | to the State of Oklahoma if the extension is |
|---|
| 1844 | 1887 | | granted pursuant to subparagraph b of this |
|---|
| 1845 | 1888 | | paragraph or be discharged from such |
|---|
| 1846 | 1889 | | hospital if the extension is granted |
|---|
| 1847 | 1917 | | pursuant to subparagraph c of this |
|---|
| 1848 | 1918 | | paragraph; or |
|---|
| 1849 | 1919 | | (b) An executor, administrator, or c onservator |
|---|
| 1850 | 1920 | | of the estate of the taxpayer is appointed, |
|---|
| 1851 | 1921 | | whichever event occurs the earliest. |
|---|
| 1852 | 1922 | | Provided, that the Ta x Commission may, in its discretion, grant |
|---|
| 1853 | 1923 | | any member of the Arm ed Forces of the United State s an extension of |
|---|
| 1854 | 1924 | | time for filing of income tax re turns and payment of income tax |
|---|
| 1881 | 1925 | | without incurring liabilities for inter est or penalties. Such |
|---|
| 1882 | 1926 | | extension may be granted only when in the judgment of the Tax |
|---|
| 1883 | 1927 | | Commission a good ca use exists therefor and may b e for a period in |
|---|
| 1884 | 1928 | | excess of six (6) months . A record of every such extension granted, |
|---|
| 1885 | 1929 | | and the reason therefor, shall be kept. |
|---|
| 1886 | 1930 | | 6. Before July 1, 2010, the salary or any other form of |
|---|
| 1887 | 1931 | | compensation, received from the United Stat es by a member of any |
|---|
| 1888 | 1932 | | component of the Armed Forces of the United States, shall be |
|---|
| 1889 | 1933 | | deducted from taxable income during the time in which the person is |
|---|
| 1890 | 1934 | | detained by the enemy in a conflict, is a prisoner of war or is |
|---|
| 1891 | 1935 | | missing in action and not deceased; provi ded, after July 1, 2010, |
|---|
| 1892 | 1936 | | all such salary or compensation shall be subject to th e deduction as |
|---|
| 1893 | 1937 | | provided pursuant to paragraph 5 of this subsection. |
|---|
| 1894 | 1938 | | 7. a. An individual taxpayer, whether residen t or |
|---|
| 1895 | 1939 | | nonresident, may deduct an amount equal to the federal |
|---|
| 1896 | 1967 | | income taxes paid by the taxpay er during the taxable |
|---|
| 1897 | 1968 | | year. |
|---|
| 1898 | 1969 | | b. Federal taxes as desc ribed in subparagraph a of this |
|---|
| 1899 | 1970 | | paragraph shall be deductible by any in dividual |
|---|
| 1900 | 1971 | | taxpayer, whether resident or non resident, only to the |
|---|
| 1901 | 1972 | | extent they relate to income subject to ta xation |
|---|
| 1902 | 1973 | | pursuant to the provisions of the Oklahoma Income Tax |
|---|
| 1903 | 1974 | | Act. The maximum amount allowable in the preceding |
|---|
| 1904 | 1975 | | paragraph shall be prorated on the ra tio of the |
|---|
| 1931 | 1976 | | Oklahoma adjusted gross income to federal adjusted |
|---|
| 1932 | 1977 | | gross income. |
|---|
| 1933 | 1978 | | c. For the purpose of this par agraph, "federal income |
|---|
| 1934 | 1979 | | taxes paid" shall mean federal income taxes, surtaxes |
|---|
| 1935 | 1980 | | imposed on incomes or excess profits taxes, as though |
|---|
| 1936 | 1981 | | the taxpayer was on the accrual basis. In determining |
|---|
| 1937 | 1982 | | the amount of deduction for federal income taxes for |
|---|
| 1938 | 1983 | | tax year 2001, the amount of the deductio n shall not |
|---|
| 1939 | 1984 | | be adjusted by the amount of any accelerat ed ten |
|---|
| 1940 | 1985 | | percent (10%) tax rate bracket credit or advanced |
|---|
| 1941 | 1986 | | refund of the credit received during the tax year |
|---|
| 1942 | 1987 | | provided pursuant to the federal Economic Growth and |
|---|
| 1943 | 1988 | | Tax Relief Reconciliation Act of 2001, P.L . No. 107- |
|---|
| 1944 | 1989 | | 16, and the advanced refund of such credit s hall not |
|---|
| 1945 | 1990 | | be subject to taxation. |
|---|
| 1946 | 2018 | | d. The provisions of this paragraph sh all apply to all |
|---|
| 1947 | 2019 | | taxable years ending afte r December 31, 1978, and |
|---|
| 1948 | 2020 | | beginning before January 1, 2006. |
|---|
| 1949 | 2021 | | 8. Retirement benefits not to exceed Five Thousand Five Hundred |
|---|
| 1950 | 2022 | | Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five |
|---|
| 1951 | 2023 | | Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Thousand |
|---|
| 1952 | 2024 | | Dollars ($10,000.00) for the 2006 tax year and all subsequent tax |
|---|
| 1953 | 2025 | | years, which are receiv ed by an individual from the civil service of |
|---|
| 1954 | 2026 | | the United States, the Oklahoma Public Employees Retirement System, |
|---|
| 1981 | 2027 | | the Teachers' Retirement System of Oklahoma, the Oklaho ma Law |
|---|
| 1982 | 2028 | | Enforcement Retirement System, the Oklahoma Firefighters Pension and |
|---|
| 1983 | 2029 | | Retirement System, the Oklahoma Police Pension and Retirement |
|---|
| 1984 | 2030 | | System, the employee retirement systems created by counties pursuant |
|---|
| 1985 | 2031 | | to Section 951 et seq. of Title 19 of the Oklahom a Statutes, the |
|---|
| 1986 | 2032 | | Uniform Retirement System for Justices and Judge s, the Oklahoma |
|---|
| 1987 | 2033 | | Wildlife Conservation Department Retirement Fund, the Oklahoma |
|---|
| 1988 | 2034 | | Employment Security Commission Retirement Plan, or the employee |
|---|
| 1989 | 2035 | | retirement systems created by municipalities purs uant to Section 48- |
|---|
| 1990 | 2036 | | 101 et seq. of Title 11 of the Oklahoma Statu tes shall be exempt |
|---|
| 1991 | 2037 | | from taxable income. |
|---|
| 1992 | 2038 | | 9. In taxable years beginning after D ecember 3l, 1984, Social |
|---|
| 1993 | 2039 | | Security benefits received by an individual sh all be exempt from |
|---|
| 1994 | 2040 | | taxable income, to the extent such benefits are included in the |
|---|
| 1995 | 2068 | | federal adjusted gross income pursuant to the provisions of Section |
|---|
| 1996 | 2069 | | 86 of the Internal Revenue Code, 2 6 U.S.C., Section 86. |
|---|
| 1997 | 2070 | | 10. For taxable years beginning after December 3 1, 1994, lump- |
|---|
| 1998 | 2071 | | sum distributions from emplo yer plans of deferred compensation, |
|---|
| 1999 | 2072 | | which are not qualified plan s within the meaning of Section 401(a) |
|---|
| 2000 | 2073 | | of the Internal Revenue Code, 26 U.S.C., Section 401(a), and which |
|---|
| 2001 | 2074 | | are deposited in and accounted for within a separate bank account or |
|---|
| 2002 | 2075 | | brokerage account in a financial institution within this state, |
|---|
| 2003 | 2076 | | shall be excluded from taxable income in the same manner as a |
|---|
| 2004 | 2077 | | qualifying rollover contribution t o an individual retirement account |
|---|
| 2031 | 2078 | | within the meaning of Section 408 of the Internal Revenue Code, 26 |
|---|
| 2032 | 2079 | | U.S.C., Section 408. Amounts withdrawn from such bank or brokerage |
|---|
| 2033 | 2080 | | account, including any earni ngs thereon, shall be included in |
|---|
| 2034 | 2081 | | taxable income when with drawn in the same manner as withdrawals from |
|---|
| 2035 | 2082 | | individual retirement acco unts within the meaning of Section 408 of |
|---|
| 2036 | 2083 | | the Internal Revenue Code. |
|---|
| 2037 | 2084 | | 11. In taxable years beginning after December 31, 1995, |
|---|
| 2038 | 2085 | | contributions made to and interest received from a medical savings |
|---|
| 2039 | 2086 | | account established pursuant to Sections 2621 through 2623 of T itle |
|---|
| 2040 | 2087 | | 63 of the Oklahoma Statutes shall be exempt from taxable income. |
|---|
| 2041 | 2088 | | 12. For taxable years beginning aft er December 31, 1996, the |
|---|
| 2042 | 2089 | | Oklahoma adjusted gross income of any individual taxp ayer who is a |
|---|
| 2043 | 2090 | | swine or poultry producer may be further adjusted for the deduction |
|---|
| 2044 | 2091 | | for depreciation allowed for ne w construction or expansion costs |
|---|
| 2045 | 2119 | | which may be computed using th e same depreciation method elected for |
|---|
| 2046 | 2120 | | federal income tax purposes except that the useful life shall be |
|---|
| 2047 | 2121 | | seven (7) years for purposes of this paragraph . If depreciation is |
|---|
| 2048 | 2122 | | allowed as a deducti on in determining the adjusted gross income of |
|---|
| 2049 | 2123 | | an individual, any depreciation calculated and claimed pursuant to |
|---|
| 2050 | 2124 | | this section shall in no even t be a duplication of any depreciation |
|---|
| 2051 | 2125 | | allowed or permitted on the fede ral income tax return of the |
|---|
| 2052 | 2126 | | individual. |
|---|
| 2053 | 2127 | | 13. a. In taxable years beginning before January 1, 2005, |
|---|
| 2054 | 2128 | | retirement benefits not to exceed the amounts |
|---|
| 2081 | 2129 | | specified in this paragraph, which are received by an |
|---|
| 2082 | 2130 | | individual sixty-five (65) years of age or older and |
|---|
| 2083 | 2131 | | whose Oklahoma adjusted gross income is Twenty-five |
|---|
| 2084 | 2132 | | Thousand Dollars ($25,000.00) or less if the filing |
|---|
| 2085 | 2133 | | status is single, head of household, or married filing |
|---|
| 2086 | 2134 | | separate, or Fifty Thousand Dollars ($50,000.00) or |
|---|
| 2087 | 2135 | | less if the filing status is married filing joint or |
|---|
| 2088 | 2136 | | qualifying widow, shall be ex empt from taxable income. |
|---|
| 2089 | 2137 | | In taxable years beginning after December 31, 200 4, |
|---|
| 2090 | 2138 | | retirement benefits not to exceed the amounts |
|---|
| 2091 | 2139 | | specified in this paragra ph, which are received by an |
|---|
| 2092 | 2140 | | individual whose Oklahoma adjusted gross income is |
|---|
| 2093 | 2141 | | less than the qualifying a mount specified in this |
|---|
| 2094 | 2142 | | paragraph, shall be exempt from taxable income. |
|---|
| 2095 | 2170 | | b. For purposes of this paragraph, the qualifying amount |
|---|
| 2096 | 2171 | | shall be as follows: |
|---|
| 2097 | 2172 | | (1) in taxable years beginning after December 31, |
|---|
| 2098 | 2173 | | 2004, and prior to January 1, 2007, the |
|---|
| 2099 | 2174 | | qualifying amount shall be Thirty-seven Thousand |
|---|
| 2100 | 2175 | | Five Hundred Dollars ($37,500.00) or less if the |
|---|
| 2101 | 2176 | | filing status is single, head of household, or |
|---|
| 2102 | 2177 | | married filing separa te, or Seventy-five Thousand |
|---|
| 2103 | 2178 | | Dollars ($75,000.00) or less if the filing status |
|---|
| 2104 | 2179 | | is married filing jointly o r qualifying widow, |
|---|
| 2131 | 2180 | | (2) in the taxable year beginning January 1, 2007, |
|---|
| 2132 | 2181 | | the qualifying amount shall be Fifty Thousand |
|---|
| 2133 | 2182 | | Dollars ($50,000.00) or less if t he filing status |
|---|
| 2134 | 2183 | | is single, head of household, or married filing |
|---|
| 2135 | 2184 | | separate, or One Hundred Thousand Dollars |
|---|
| 2136 | 2185 | | ($100,000.00) or less if the filing status is |
|---|
| 2137 | 2186 | | married filing jointly or qualifying widow, |
|---|
| 2138 | 2187 | | (3) in the taxable year beginning January 1, 2008, |
|---|
| 2139 | 2188 | | the qualifying amount shall be Sixty-two Thousand |
|---|
| 2140 | 2189 | | Five Hundred Dollars ($62,500.00) or less if the |
|---|
| 2141 | 2190 | | filing status is single, head of household, or |
|---|
| 2142 | 2191 | | married filing separate, or One Hundred Twenty- |
|---|
| 2143 | 2192 | | five Thousand Dollars ($125,000.00) or less if |
|---|
| 2144 | 2220 | | the filing status is mar ried filing jointly or |
|---|
| 2145 | 2221 | | qualifying widow, |
|---|
| 2146 | 2222 | | (4) in the taxable year beginning January 1, 2009, |
|---|
| 2147 | 2223 | | the qualifying amount shall be One Hundred |
|---|
| 2148 | 2224 | | Thousand Dollars ($100,000.00) or less if the |
|---|
| 2149 | 2225 | | filing status is single, head of household, or |
|---|
| 2150 | 2226 | | married filing separate, or Two Hundred Thousand |
|---|
| 2151 | 2227 | | Dollars ($200,000.00) or less if the filing |
|---|
| 2152 | 2228 | | status is married filing jointly or quali fying |
|---|
| 2153 | 2229 | | widow, and |
|---|
| 2180 | 2230 | | (5) in the taxable year beginning January 1, 2010, |
|---|
| 2181 | 2231 | | and subsequent taxable years, there shall be no |
|---|
| 2182 | 2232 | | limitation upon the qualifying amo unt. |
|---|
| 2183 | 2233 | | c. For purposes of this paragraph, "retirement benefits" |
|---|
| 2184 | 2234 | | means the total distributions or withdrawals from the |
|---|
| 2185 | 2235 | | following: |
|---|
| 2186 | 2236 | | (1) an employee pension benefit plan which sati sfies |
|---|
| 2187 | 2237 | | the requirements of Section 401 of the Internal |
|---|
| 2188 | 2238 | | Revenue Code, 26 U.S.C., Sec tion 401, |
|---|
| 2189 | 2239 | | (2) an eligible deferred compensation plan that |
|---|
| 2190 | 2240 | | satisfies the requirements of Section 457 of the |
|---|
| 2191 | 2241 | | Internal Revenue Code, 26 U.S.C., Section 457, |
|---|
| 2192 | 2242 | | (3) an individual retirement account, annuity or |
|---|
| 2193 | 2243 | | trust or simplified employee pension that |
|---|
| 2194 | 2271 | | satisfies the requirements of Section 408 of the |
|---|
| 2195 | 2272 | | Internal Revenue Code, 26 U.S.C., Section 408, |
|---|
| 2196 | 2273 | | (4) an employee annuity subject to the provisions of |
|---|
| 2197 | 2274 | | Section 403(a) or (b) of the Inte rnal Revenue |
|---|
| 2198 | 2275 | | Code, 26 U.S.C., Section 403(a) or (b), |
|---|
| 2199 | 2276 | | (5) United States Retirement Bon ds which satisfy the |
|---|
| 2200 | 2277 | | requirements of Section 86 of the Internal |
|---|
| 2201 | 2278 | | Revenue Code, 26 U.S.C., Section 86, or |
|---|
| 2202 | 2279 | | (6) lump-sum distributions from a retirement plan |
|---|
| 2203 | 2280 | | which satisfies the requirements of Section |
|---|
| 2230 | 2281 | | 402(e) of the Internal Revenue Code, 26 U.S.C., |
|---|
| 2231 | 2282 | | Section 402(e). |
|---|
| 2232 | 2283 | | d. The amount of the exemption provided by this paragraph |
|---|
| 2233 | 2284 | | shall be limited to Five Thousand Five Hundred Dollars |
|---|
| 2234 | 2285 | | ($5,500.00) for the 2004 tax year, Seven Thousand Five |
|---|
| 2235 | 2286 | | Hundred Dollars ($7,500.00) for the 2005 tax year and |
|---|
| 2236 | 2287 | | Ten Thousand Dollars ($10,00 0.00) for the tax year |
|---|
| 2237 | 2288 | | 2006 and for all subsequent tax years. Any individual |
|---|
| 2238 | 2289 | | who claims the exemption provided for in paragraph 8 |
|---|
| 2239 | 2290 | | of this subsection shall not be permi tted to claim a |
|---|
| 2240 | 2291 | | combined total exemption pursuant to this paragraph |
|---|
| 2241 | 2292 | | and paragraph 8 of t his subsection in an amount |
|---|
| 2242 | 2293 | | exceeding Five Thousand Five Hundred Dollars |
|---|
| 2243 | 2294 | | ($5,500.00) for the 2004 tax y ear, Seven Thousand Five |
|---|
| 2244 | 2322 | | Hundred Dollars ($7,500.00) for the 2005 tax year and |
|---|
| 2245 | 2323 | | Ten Thousand Dollars ($10,000.00) for the 2006 tax |
|---|
| 2246 | 2324 | | year and all subsequent tax years. |
|---|
| 2247 | 2325 | | 14. In taxable years beginning after December 31, 1999, for an |
|---|
| 2248 | 2326 | | individual engaged in production agriculture who has filed a |
|---|
| 2249 | 2327 | | Schedule F form with the t axpayer's federal income tax return for |
|---|
| 2250 | 2328 | | such taxable year, there shall be excluded from t axable income any |
|---|
| 2251 | 2329 | | amount which was included as federal taxable income or federal |
|---|
| 2252 | 2330 | | adjusted gross income and which consists of the discharge of an |
|---|
| 2279 | 2331 | | obligation by a credit or of the taxpayer incurred to finance the |
|---|
| 2280 | 2332 | | production of agricultural products. |
|---|
| 2281 | 2333 | | 15. In taxable years beginning December 31, 2000, an amount |
|---|
| 2282 | 2334 | | equal to one hundred percent (100%) of the am ount of any scholarship |
|---|
| 2283 | 2335 | | or stipend received from participation in the Oklahoma Police Corps |
|---|
| 2284 | 2336 | | Program, as established in Section 2-140.3 of Title 47 of the |
|---|
| 2285 | 2337 | | Oklahoma Statutes shall be exempt from taxable income. |
|---|
| 2286 | 2338 | | 16. a. In taxable years beginning after December 31, 2001, |
|---|
| 2287 | 2339 | | and before January 1, 2005, there shall be all owed a |
|---|
| 2288 | 2340 | | deduction in the amount of contributions to accounts |
|---|
| 2289 | 2341 | | established pursuant to the Oklaho ma College Savings |
|---|
| 2290 | 2342 | | Plan Act. The deduction shall equal the amount of |
|---|
| 2291 | 2343 | | contributions to accounts, but in no event shall the |
|---|
| 2292 | 2344 | | deduction for each contributor exceed T wo Thousand |
|---|
| 2293 | 2372 | | Five Hundred Dollars ($2,500.00) each taxable year for |
|---|
| 2294 | 2373 | | each account. |
|---|
| 2295 | 2374 | | b. In taxable years beginning after December 31, 2004, |
|---|
| 2296 | 2375 | | each taxpayer shall be allowed a deduction for |
|---|
| 2297 | 2376 | | contributions to accounts established pursuant to the |
|---|
| 2298 | 2377 | | Oklahoma College Savings Plan Act. The maximum annual |
|---|
| 2299 | 2378 | | deduction shall equal the amount of contributions to |
|---|
| 2300 | 2379 | | all such accounts plus any contributions to such |
|---|
| 2301 | 2380 | | accounts by the taxpayer for prior taxable years aft er |
|---|
| 2302 | 2381 | | December 31, 2004, which we re not deducted, but in no |
|---|
| 2329 | 2382 | | event shall the deduction for each tax year exceed Ten |
|---|
| 2330 | 2383 | | Thousand Dollars ($10,000.00) for each individua l |
|---|
| 2331 | 2384 | | taxpayer or Twenty Thousand Dollars ($20,000.00) for |
|---|
| 2332 | 2385 | | taxpayers filing a joint return . Any amount of a |
|---|
| 2333 | 2386 | | contribution that is not deducted by the taxpayer in |
|---|
| 2334 | 2387 | | the year for which the c ontribution is made may be |
|---|
| 2335 | 2388 | | carried forward as a deduction from income for the |
|---|
| 2336 | 2389 | | succeeding five (5) years. For taxable years |
|---|
| 2337 | 2390 | | beginning after December 31, 2005, deductions may be |
|---|
| 2338 | 2391 | | taken for contributions and rollovers made during a |
|---|
| 2339 | 2392 | | taxable year and up to Apri l 15 of the succeeding |
|---|
| 2340 | 2393 | | year, or the due date of a taxpayer's state income tax |
|---|
| 2341 | 2394 | | return, excluding extensions, whichever is later. |
|---|
| 2342 | 2422 | | Provided, a deduction for the same contri bution may |
|---|
| 2343 | 2423 | | not be taken for two (2) different taxable years. |
|---|
| 2344 | 2424 | | c. In taxable years begi nning after December 31, 2006, |
|---|
| 2345 | 2425 | | deductions for contributions made pursuant t o |
|---|
| 2346 | 2426 | | subparagraph b of this paragraph shall be limited as |
|---|
| 2347 | 2427 | | follows: |
|---|
| 2348 | 2428 | | (1) for a taxpayer who qualifi ed for the five-year |
|---|
| 2349 | 2429 | | carryforward election and who takes a rollov er or |
|---|
| 2350 | 2430 | | nonqualified withdrawal during that period, the |
|---|
| 2351 | 2431 | | tax deduction otherwise available pursuant to |
|---|
| 2352 | 2432 | | subparagraph b of this paragraph shall be reduced |
|---|
| 2379 | 2433 | | by the amount which is equal to the rollo ver or |
|---|
| 2380 | 2434 | | nonqualified withdrawal, and |
|---|
| 2381 | 2435 | | (2) for a taxpayer who elect s to take a rollover or |
|---|
| 2382 | 2436 | | nonqualified withdrawal within the same tax year |
|---|
| 2383 | 2437 | | in which a contribution w as made to the |
|---|
| 2384 | 2438 | | taxpayer's account, the tax deduction otherwise |
|---|
| 2385 | 2439 | | available pursuant to subparag raph b of this |
|---|
| 2386 | 2440 | | paragraph shall be reduced by the amount of the |
|---|
| 2387 | 2441 | | contribution which is e qual to the rollover or |
|---|
| 2388 | 2442 | | nonqualified withdrawal. |
|---|
| 2389 | 2443 | | d. If a taxpayer elects to t ake a rollover on a |
|---|
| 2390 | 2444 | | contribution for which a deduction has been taken |
|---|
| 2391 | 2445 | | pursuant to subparagra ph b of this paragraph within |
|---|
| 2392 | 2473 | | one (1) year of the date of contrib ution, the amount |
|---|
| 2393 | 2474 | | of such rollover shall be included in the adjusted |
|---|
| 2394 | 2475 | | gross income of the taxpayer i n the taxable year of |
|---|
| 2395 | 2476 | | the rollover. |
|---|
| 2396 | 2477 | | e. If a taxpayer makes a nonqualified withdrawal of |
|---|
| 2397 | 2478 | | contributions for which a deduction wa s taken pursuant |
|---|
| 2398 | 2479 | | to subparagraph b of this paragrap h, such nonqualified |
|---|
| 2399 | 2480 | | withdrawal and any earnings thereon shall be included |
|---|
| 2400 | 2481 | | in the adjusted gross income of the taxpayer in the |
|---|
| 2401 | 2482 | | taxable year of the nonqualified withdrawal . |
|---|
| 2402 | 2483 | | f. As used in this paragraph: |
|---|
| 2429 | 2484 | | (1) "non-qualified withdrawal " means a withdrawal |
|---|
| 2430 | 2485 | | from an Oklahoma College Savings Plan account |
|---|
| 2431 | 2486 | | other than one of the following: |
|---|
| 2432 | 2487 | | (a) a qualified withdrawal, |
|---|
| 2433 | 2488 | | (b) a withdrawal made as a result of the death |
|---|
| 2434 | 2489 | | or disability of the designated beneficiary |
|---|
| 2435 | 2490 | | of an account, |
|---|
| 2436 | 2491 | | (c) a withdrawal that is made on the accou nt of |
|---|
| 2437 | 2492 | | a scholarship or the allowance or payment |
|---|
| 2438 | 2493 | | described in Section 135(d)(1)(B) or (C) or |
|---|
| 2439 | 2494 | | by the Internal Revenue Code, received by |
|---|
| 2440 | 2495 | | the designated beneficiary to the ex tent the |
|---|
| 2441 | 2496 | | amount of the refund does not e xceed the |
|---|
| 2442 | 2524 | | amount of the scholarship, allowance , or |
|---|
| 2443 | 2525 | | payment, or |
|---|
| 2444 | 2526 | | (d) a rollover or change of designated |
|---|
| 2445 | 2527 | | beneficiary as permitted by subsection F of |
|---|
| 2446 | 2528 | | Section 3970.7 of Title 70 of Oklahoma |
|---|
| 2447 | 2529 | | Statutes, and |
|---|
| 2448 | 2530 | | (2) "rollover" means the transfer of funds from the |
|---|
| 2449 | 2531 | | Oklahoma College Savings Pla n to any other plan |
|---|
| 2450 | 2532 | | under Section 529 of the Internal Revenue Cod e. |
|---|
| 2451 | 2533 | | 17. For taxable years beginning aft er December 31, 2005, |
|---|
| 2452 | 2534 | | retirement benefits received by an individual from any compo nent of |
|---|
| 2479 | 2535 | | the Armed Forces of the United States i n an amount not to exceed the |
|---|
| 2480 | 2536 | | greater of seventy-five percent (75%) of such benefits or Ten |
|---|
| 2481 | 2537 | | Thousand Dollars ($10,000.00) shall be exempt from taxable income |
|---|
| 2482 | 2538 | | but in no case less than the amount of the exemptio n provided by |
|---|
| 2483 | 2539 | | paragraph 13 of this subsection. |
|---|
| 2484 | 2540 | | 18. For taxable years beginning after Dec ember 31, 2006, |
|---|
| 2485 | 2541 | | retirement benefits received by federal civi l service retirees, |
|---|
| 2486 | 2542 | | including survivor annuities, paid in li eu of Social Security |
|---|
| 2487 | 2543 | | benefits shall be exempt from taxable income t o the extent such |
|---|
| 2488 | 2544 | | benefits are included in the federal adjusted gros s income pursuant |
|---|
| 2489 | 2545 | | to the provisions of Section 86 of the Int ernal Revenue Code, 26 |
|---|
| 2490 | 2546 | | U.S.C., Section 86, according to the following schedule: |
|---|
| 2491 | 2574 | | a. in the taxable year beginning January 1, 2007 , twenty |
|---|
| 2492 | 2575 | | percent (20%) of such benefits shall be exempt, |
|---|
| 2493 | 2576 | | b. in the taxable year beginning January 1, 2008, forty |
|---|
| 2494 | 2577 | | percent (40%) of such benefits shall be exempt, |
|---|
| 2495 | 2578 | | c. in the taxable year begi nning January 1, 2009, sixty |
|---|
| 2496 | 2579 | | percent (60%) of such benefits shall be exempt, |
|---|
| 2497 | 2580 | | d. in the taxable year beginning January 1, 2010, eight y |
|---|
| 2498 | 2581 | | percent (80%) of such benefits shall be exempt, and |
|---|
| 2499 | 2582 | | e. in the taxable year beginning January 1, 2011, and |
|---|
| 2500 | 2583 | | subsequent taxable years, one hundred percent (100 %) |
|---|
| 2501 | 2584 | | of such benefits shall be exemp t. |
|---|
| 2528 | 2585 | | 19. a. For taxable years beginning after December 31, 2007, a |
|---|
| 2529 | 2586 | | resident individual may deduct up to Ten Thousand |
|---|
| 2530 | 2587 | | Dollars ($10,000.00) from Oklahoma adjusted gross |
|---|
| 2531 | 2588 | | income if the individua l, or the dependent of the |
|---|
| 2532 | 2589 | | individual, while living, donates one or more human |
|---|
| 2533 | 2590 | | organs of the individual to another human being for |
|---|
| 2534 | 2591 | | human organ transplantation. As used in this |
|---|
| 2535 | 2592 | | paragraph, "human organ" means all or part of a liver, |
|---|
| 2536 | 2593 | | pancreas, kidney, intest ine, lung, or bone marrow. A |
|---|
| 2537 | 2594 | | deduction that is claimed under th is paragraph may be |
|---|
| 2538 | 2595 | | claimed in the taxable year in which the human organ |
|---|
| 2539 | 2596 | | transplantation occurs. |
|---|
| 2540 | 2624 | | b. An individual may claim this ded uction only once, and |
|---|
| 2541 | 2625 | | the deduction may be claimed only for unreimbursed |
|---|
| 2542 | 2626 | | expenses that are incurred by the individual and |
|---|
| 2543 | 2627 | | related to the organ donation of the individual. |
|---|
| 2544 | 2628 | | c. The Oklahoma Tax Commission shall promulgate rules to |
|---|
| 2545 | 2629 | | implement the provisions of this paragraph which shall |
|---|
| 2546 | 2630 | | contain a specific list of expens es which may be |
|---|
| 2547 | 2631 | | presumed to qualify for the deduction. The Tax |
|---|
| 2548 | 2632 | | Commission shall prescribe necessary requirements for |
|---|
| 2549 | 2633 | | verification. |
|---|
| 2550 | 2634 | | 20. For taxable years beginning after December 31, 2009, there |
|---|
| 2551 | 2635 | | shall be exempt from taxable income any amount received by the |
|---|
| 2578 | 2636 | | beneficiary of the death benefit for an emergency medical technician |
|---|
| 2579 | 2637 | | or a registered emergency medical responder provided by Section 1- |
|---|
| 2580 | 2638 | | 2505.1 of Title 63 of the Oklahoma Statutes. |
|---|
| 2581 | 2639 | | 21. For taxable years beginning after December 31, 2008, |
|---|
| 2582 | 2640 | | taxable income shall be increased by any unemployment compensation |
|---|
| 2583 | 2641 | | exempted under Section 85(c) of the Internal Revenue Code, 26 |
|---|
| 2584 | 2642 | | U.S.C., Section 85(c)(2009). |
|---|
| 2585 | 2643 | | 22. For taxable years beginning after December 31, 2 008, there |
|---|
| 2586 | 2644 | | shall be exempt from taxable income a ny payment in an amount less |
|---|
| 2587 | 2645 | | than Six Hundred Dollars ($600.00) rec eived by a person as an award |
|---|
| 2588 | 2646 | | for participation in a competitive liv estock show event. For |
|---|
| 2589 | 2647 | | purposes of this paragraph, the payment shall be treated as a |
|---|
| 2590 | 2675 | | scholarship amount paid by the enti ty sponsoring the event and the |
|---|
| 2591 | 2676 | | sponsoring entity shall cause the p ayment to be categor ized as a |
|---|
| 2592 | 2677 | | scholarship in its books and records. |
|---|
| 2593 | 2678 | | 23. For taxable years beginning on or after January 1, 2016, |
|---|
| 2594 | 2679 | | taxable income shall be increased by any amount of stat e and local |
|---|
| 2595 | 2680 | | sales or income taxes deducted under 26 U.S.C., Section 164 of the |
|---|
| 2596 | 2681 | | Internal Revenue Code. If the amount of state and local taxes |
|---|
| 2597 | 2682 | | deducted on the feder al return is limited, taxable income on the |
|---|
| 2598 | 2683 | | state return shall be increased only by the amoun t actually deducted |
|---|
| 2599 | 2684 | | after any such limitations are applied. |
|---|
| 2600 | 2685 | | 24. For taxable years beginning after December 31 , 2020, each |
|---|
| 2601 | 2686 | | taxpayer shall be allowed a deduction f or contributions to accounts |
|---|
| 2628 | 2687 | | established pursuant to the Achieving a Better Life Experienc e |
|---|
| 2629 | 2688 | | (ABLE) Program as established in Section 4001.1 et seq. of Title 56 |
|---|
| 2630 | 2689 | | of the Oklahoma Statutes. For any tax year, the deduction provided |
|---|
| 2631 | 2690 | | for in this paragraph shall not exceed Ten Thousand Dollars |
|---|
| 2632 | 2691 | | ($10,000.00) for an individual taxpayer or Twenty Thousand Dollars |
|---|
| 2633 | 2692 | | ($20,000.00) for taxpayers filing a joint return . Any amount of |
|---|
| 2634 | 2693 | | contribution not deducted by the taxpaye r in the tax year for which |
|---|
| 2635 | 2694 | | the contribution is made may be carried forward as a deduction from |
|---|
| 2636 | 2695 | | income for up to five (5) tax years. Deductions may be taken for |
|---|
| 2637 | 2696 | | contributions made during the tax year and throug h April 15 of the |
|---|
| 2638 | 2697 | | succeeding tax year, or thr ough the due date of a taxpayer's state |
|---|
| 2639 | 2698 | | income tax return excluding extensions, whichever is later . |
|---|
| 2640 | 2726 | | Provided, a deduction for the same contri bution may not be taken in |
|---|
| 2641 | 2727 | | more than one (1) tax year. |
|---|
| 2642 | 2728 | | 25. For taxable years beg inning on or after January 1, 2024, |
|---|
| 2643 | 2729 | | there shall be allowed as a deduction from Oklahoma a djusted gross |
|---|
| 2644 | 2730 | | income for the donation of proceeds from the sale of residential |
|---|
| 2645 | 2731 | | real property by an individual holding title to such real property |
|---|
| 2646 | 2732 | | at the time of the sale or by an individual having legal authority |
|---|
| 2647 | 2733 | | to make disposition of the sale proceeds if the person is not the |
|---|
| 2648 | 2734 | | owner of record. The deduc tion authorized by this paragraph shall |
|---|
| 2649 | 2735 | | be limited to one percent (1%) of the sale price of the real |
|---|
| 2650 | 2736 | | property. For purposes of this paragraph the maximum sale price of |
|---|
| 2651 | 2737 | | residential real property for which the donation deduction may be |
|---|
| 2678 | 2738 | | claimed shall not exceed Five M illion Dollars ($5,000,000.00). The |
|---|
| 2679 | 2739 | | donation shall be paid directly to the Ok lahoma Housing Finance |
|---|
| 2680 | 2740 | | Agency to be used by the agency to prom ote affordable housing in the |
|---|
| 2681 | 2741 | | state. |
|---|
| 2682 | 2742 | | F. 1. For taxable years beginning after December 31, 2004, a |
|---|
| 2683 | 2743 | | deduction from the Oklahoma adjusted gross inco me of any individual |
|---|
| 2684 | 2744 | | taxpayer shall be allowed for qualifying gains receiving capital |
|---|
| 2685 | 2745 | | treatment that are included in the federal adjusted gross income of |
|---|
| 2686 | 2746 | | such individual taxpayer during the taxable year. |
|---|
| 2687 | 2747 | | 2. As used in this subsection: |
|---|
| 2688 | 2748 | | a. "qualifying gains receiving capital treatment" means |
|---|
| 2689 | 2749 | | the amount of net capital gains, as defined in Section |
|---|
| 2690 | 2777 | | 1222(11) of the Internal Revenue Code, included in an |
|---|
| 2691 | 2778 | | individual taxpayer's federal income tax return that |
|---|
| 2692 | 2779 | | result from: |
|---|
| 2693 | 2780 | | (1) the sale of real property or tangible personal |
|---|
| 2694 | 2781 | | property located within Oklahoma that has bee n |
|---|
| 2695 | 2782 | | directly or indirectly owned by the in dividual |
|---|
| 2696 | 2783 | | taxpayer for a holding period of at least five |
|---|
| 2697 | 2784 | | (5) years prior to the date of the transaction |
|---|
| 2698 | 2785 | | from which such net capital gains arise, |
|---|
| 2699 | 2786 | | (2) the sale of stock or the sale of a direct or |
|---|
| 2700 | 2787 | | indirect ownership inte rest in an Oklahoma |
|---|
| 2701 | 2788 | | company, limited lia bility company, or |
|---|
| 2728 | 2789 | | partnership where such stock or ownership |
|---|
| 2729 | 2790 | | interest has been directly or indirectly owned by |
|---|
| 2730 | 2791 | | the individual taxpayer f or a holding period of |
|---|
| 2731 | 2792 | | at least two (2) years prior to the date of the |
|---|
| 2732 | 2793 | | transaction from which the net capital gains |
|---|
| 2733 | 2794 | | arise, or |
|---|
| 2734 | 2795 | | (3) the sale of real property, tangible personal |
|---|
| 2735 | 2796 | | property or intangible personal property located |
|---|
| 2736 | 2797 | | within Oklahoma as part of the s ale of all or |
|---|
| 2737 | 2798 | | substantially all of the assets of an Oklahoma |
|---|
| 2738 | 2799 | | company, limited liability company, or |
|---|
| 2739 | 2800 | | partnership or an Ok lahoma proprietorship |
|---|
| 2740 | 2828 | | business enterprise where such property has been |
|---|
| 2741 | 2829 | | directly or indirectly owned by such entity or |
|---|
| 2742 | 2830 | | business enterprise or owned by the owners of |
|---|
| 2743 | 2831 | | such entity or business enterprise for a period |
|---|
| 2744 | 2832 | | of at least two (2) years prior to the date of |
|---|
| 2745 | 2833 | | the transaction from which the net capital gains |
|---|
| 2746 | 2834 | | arise, |
|---|
| 2747 | 2835 | | b. "holding period" means an uninterrupted period of |
|---|
| 2748 | 2836 | | time. The holding period shall include any add itional |
|---|
| 2749 | 2837 | | period when the property was held by another |
|---|
| 2750 | 2838 | | individual or entity, if such additional per iod is |
|---|
| 2777 | 2839 | | included in the taxpayer's holding period for the |
|---|
| 2778 | 2840 | | asset pursuant to the Internal Revenue Code, |
|---|
| 2779 | 2841 | | c. "Oklahoma company," "limited liability company," or |
|---|
| 2780 | 2842 | | "partnership" means an entity whose primary |
|---|
| 2781 | 2843 | | headquarters have been located in Oklahoma for at |
|---|
| 2782 | 2844 | | least three (3) uninterrupted years prior to the date |
|---|
| 2783 | 2845 | | of the transaction fr om which the net capital gains |
|---|
| 2784 | 2846 | | arise, |
|---|
| 2785 | 2847 | | d. "direct" means the individual taxpayer directl y owns |
|---|
| 2786 | 2848 | | the asset, |
|---|
| 2787 | 2849 | | e. "indirect" means the individual taxpay er owns an |
|---|
| 2788 | 2850 | | interest in a pass-through entity (or chain of pass- |
|---|
| 2789 | 2878 | | through entities) that sells the asset that giv es rise |
|---|
| 2790 | 2879 | | to the qualifying gains receiving capital treatment. |
|---|
| 2791 | 2880 | | (1) With respect to sales of real property or |
|---|
| 2792 | 2881 | | tangible personal property located with in |
|---|
| 2793 | 2882 | | Oklahoma, the deduction described in this |
|---|
| 2794 | 2883 | | subsection shall not apply unless the pass- |
|---|
| 2795 | 2884 | | through entity that ma kes the sale has held the |
|---|
| 2796 | 2885 | | property for not less than five (5) u ninterrupted |
|---|
| 2797 | 2886 | | years prior to the date of the transaction that |
|---|
| 2798 | 2887 | | created the capital ga in, and each pass-through |
|---|
| 2799 | 2888 | | entity included in the chain of ownership has |
|---|
| 2800 | 2889 | | been a member, partner, or shareholder of the |
|---|
| 2827 | 2890 | | pass-through entity in the tier immediately below |
|---|
| 2828 | 2891 | | it for an uninterrupted period of not less than |
|---|
| 2829 | 2892 | | five (5) years. |
|---|
| 2830 | 2893 | | (2) With respect to sale s of stock or ownership |
|---|
| 2831 | 2894 | | interest in or sales of all or substantially all |
|---|
| 2832 | 2895 | | of the assets of an Oklahoma company, limited |
|---|
| 2833 | 2896 | | liability company, partnership or Oklahoma |
|---|
| 2834 | 2897 | | proprietorship business enterprise, the deduction |
|---|
| 2835 | 2898 | | described in this subsection shall not apply |
|---|
| 2836 | 2899 | | unless the pass-through entity that mak es the |
|---|
| 2837 | 2900 | | sale has held the stock or ownership interest for |
|---|
| 2838 | 2901 | | not less than two (2) uninterrupted years prior |
|---|
| 2839 | 2929 | | to the date of the transact ion that created the |
|---|
| 2840 | 2930 | | capital gain, and each pass-through entity |
|---|
| 2841 | 2931 | | included in the chai n of ownership has been a |
|---|
| 2842 | 2932 | | member, partner or shareholder of the pass- |
|---|
| 2843 | 2933 | | through entity in the tier immediately be low it |
|---|
| 2844 | 2934 | | for an uninterrupted period of not less than two |
|---|
| 2845 | 2935 | | (2) years. For purposes of this division, |
|---|
| 2846 | 2936 | | uninterrupted ownership prior to July 1, 2007, |
|---|
| 2847 | 2937 | | shall be included in the determination o f the |
|---|
| 2848 | 2938 | | required holding period prescribed by this |
|---|
| 2849 | 2939 | | division, and |
|---|
| 2876 | 2940 | | f. "Oklahoma proprietorship business enterprise " means a |
|---|
| 2877 | 2941 | | business enterprise whose income and expenses have |
|---|
| 2878 | 2942 | | been reported on Schedule C or F of an indivi dual |
|---|
| 2879 | 2943 | | taxpayer's federal income tax retur n, or any similar |
|---|
| 2880 | 2944 | | successor schedule published by the Internal Revenue |
|---|
| 2881 | 2945 | | Service and whose primary headquarters have been |
|---|
| 2882 | 2946 | | located in Oklahoma for at least three (3) |
|---|
| 2883 | 2947 | | uninterrupted years prior to the date of the |
|---|
| 2884 | 2948 | | transaction from which the net capital gains ari se. |
|---|
| 2885 | 2949 | | G. 1. For purposes of computing its Oklahoma taxable income |
|---|
| 2886 | 2950 | | under this section, the dividends -paid deduction otherwise allow ed |
|---|
| 2887 | 2951 | | by federal law in computing net income of a real estate investment |
|---|
| 2888 | 2952 | | trust that is subject to federal income tax shall be add ed back in |
|---|
| 2889 | 2980 | | computing the tax imposed by this state under this title if the real |
|---|
| 2890 | 2981 | | estate investment trust is a captive real estate i nvestment trust. |
|---|
| 2891 | 2982 | | 2. For purposes of computing its Oklahoma taxable income under |
|---|
| 2892 | 2983 | | this section, a taxpayer shall add back other wise deductible rents |
|---|
| 2893 | 2984 | | and interest expenses paid to a captive real est ate investment trust |
|---|
| 2894 | 2985 | | that is not subject to the provisions of paragraph 1 of this |
|---|
| 2895 | 2986 | | subsection. As used in this subsection: |
|---|
| 2896 | 2987 | | a. the term "real estate investment trust" or "REIT" |
|---|
| 2897 | 2988 | | means the meaning ascribed to such term in Section 856 |
|---|
| 2898 | 2989 | | of the Internal Revenue Code, |
|---|
| 2925 | 2990 | | b. the term "captive real estate investment trust " means |
|---|
| 2926 | 2991 | | a real estate investment trust, the shares or |
|---|
| 2927 | 2992 | | beneficial interests of which are not regularly traded |
|---|
| 2928 | 2993 | | on an established secur ities market and more than |
|---|
| 2929 | 2994 | | fifty percent (50%) of the voting power o r value of |
|---|
| 2930 | 2995 | | the beneficial interests or shares of which are owned |
|---|
| 2931 | 2996 | | or controlled, directly or indirectly, or |
|---|
| 2932 | 2997 | | constructively, by a single entity that i s: |
|---|
| 2933 | 2998 | | (1) treated as an association taxable as a |
|---|
| 2934 | 2999 | | corporation under the Internal Revenue Code, and |
|---|
| 2935 | 3000 | | (2) not exempt from federal income tax pursuant to |
|---|
| 2936 | 3001 | | the provisions of Section 501(a) of the Internal |
|---|
| 2937 | 3002 | | Revenue Code. |
|---|
| 2938 | 3030 | | The term shall not include a real estate invest ment |
|---|
| 2939 | 3031 | | trust that is intended to be regula rly traded on an |
|---|
| 2940 | 3032 | | established securities market, and that satisfie s the |
|---|
| 2941 | 3033 | | requirements of Section 856(a)(5) and (6) of the U.S. |
|---|
| 2942 | 3034 | | Internal Revenue Code by reason of Section 856(h)(2) |
|---|
| 2943 | 3035 | | of the Internal Revenue Code, |
|---|
| 2944 | 3036 | | c. the term "association taxable as a corporati on" shall |
|---|
| 2945 | 3037 | | not include the following entities: |
|---|
| 2946 | 3038 | | (1) any real estate investment trust as defined in |
|---|
| 2947 | 3039 | | paragraph a of this subsec tion other than a |
|---|
| 2948 | 3040 | | "captive real estate invest ment trust", or |
|---|
| 2975 | 3041 | | (2) any qualified real estate inv estment trust |
|---|
| 2976 | 3042 | | subsidiary under Section 856(i) of the Internal |
|---|
| 2977 | 3043 | | Revenue Code, other than a qualified REI T |
|---|
| 2978 | 3044 | | subsidiary of a "captive real estate investment |
|---|
| 2979 | 3045 | | trust", or |
|---|
| 2980 | 3046 | | (3) any Listed Australian Property Trust (me aning an |
|---|
| 2981 | 3047 | | Australian unit trust registered as a "Managed |
|---|
| 2982 | 3048 | | Investment Scheme" under the Australian |
|---|
| 2983 | 3049 | | Corporations Act in which the principal class of |
|---|
| 2984 | 3050 | | units is listed on a recognized stock exchange in |
|---|
| 2985 | 3051 | | Australia and is regularly traded on an |
|---|
| 2986 | 3052 | | established securitie s market), or an entity |
|---|
| 2987 | 3053 | | organized as a trust, pro vided that a Listed |
|---|
| 2988 | 3081 | | Australian Property Trust owns or controls, |
|---|
| 2989 | 3082 | | directly or indirectly, seventy -five percent |
|---|
| 2990 | 3083 | | (75%) or more of the voting power or value of the |
|---|
| 2991 | 3084 | | beneficial interests or shares of such trust, or |
|---|
| 2992 | 3085 | | (4) any Qualified Foreign Entity, meaning a |
|---|
| 2993 | 3086 | | corporation, trust, association or partnership |
|---|
| 2994 | 3087 | | organized outside the laws of the United States |
|---|
| 2995 | 3088 | | and which satisfies the following criteria: |
|---|
| 2996 | 3089 | | (a) at least seventy-five percent (75%) of the |
|---|
| 2997 | 3090 | | entity's total asset value at the close of |
|---|
| 2998 | 3091 | | its taxable year is represented by real |
|---|
| 3025 | 3092 | | estate assets, as defined in Section |
|---|
| 3026 | 3093 | | 856(c)(5)(B) of the Internal Revenue Code, |
|---|
| 3027 | 3094 | | thereby including shares or certificates of |
|---|
| 3028 | 3095 | | beneficial interest in an y real estate |
|---|
| 3029 | 3096 | | investment trust, cash and cash equ ivalents, |
|---|
| 3030 | 3097 | | and U.S. Government securities, |
|---|
| 3031 | 3098 | | (b) the entity receives a dividend-paid |
|---|
| 3032 | 3099 | | deduction comparable to Section 561 of the |
|---|
| 3033 | 3100 | | Internal Revenue Code, or is exempt from |
|---|
| 3034 | 3101 | | entity level tax, |
|---|
| 3035 | 3102 | | (c) the entity is required to distribute at |
|---|
| 3036 | 3103 | | least eighty-five percent (85%) of its |
|---|
| 3037 | 3104 | | taxable income, as computed in the |
|---|
| 3038 | 3132 | | jurisdiction in which it is organized, to |
|---|
| 3039 | 3133 | | the holders of its shares or certificates of |
|---|
| 3040 | 3134 | | beneficial interest on an annual basis, |
|---|
| 3041 | 3135 | | (d) not more than ten percent ( 10%) of the |
|---|
| 3042 | 3136 | | voting power or value in such entity is held |
|---|
| 3043 | 3137 | | directly or indirectly or constructively by |
|---|
| 3044 | 3138 | | a single entity or individual, or the shares |
|---|
| 3045 | 3139 | | or beneficial interests of such entity are |
|---|
| 3046 | 3140 | | regularly traded on an established |
|---|
| 3047 | 3141 | | securities market, and |
|---|
| 3074 | 3142 | | (e) the entity is organized in a country which |
|---|
| 3075 | 3143 | | has a tax treaty with the United States. |
|---|
| 3076 | 3144 | | 3. For purposes of this subsection, the constructive ownership |
|---|
| 3077 | 3145 | | rules of Section 318(a) of the Internal Revenue Code , as modified by |
|---|
| 3078 | 3146 | | Section 856(d)(5) of the Internal Revenue Code, shall apply in |
|---|
| 3079 | 3147 | | determining the ownership of stoc k, assets, or net profits of any |
|---|
| 3080 | 3148 | | person. |
|---|
| 3081 | 3149 | | 4. A real estate investment trust that does not become |
|---|
| 3082 | 3150 | | regularly traded on an established securities market within one (1) |
|---|
| 3083 | 3151 | | year of the date on which it first b ecomes a real estate i nvestment |
|---|
| 3084 | 3152 | | trust shall be deemed n ot to have been regularly traded on an |
|---|
| 3085 | 3153 | | established securities market, retroactive to the date it first |
|---|
| 3086 | 3154 | | became a real estate investment trust, and shall file an amended |
|---|
| 3087 | 3155 | | return reflecting such retroactiv e designation for any tax year or |
|---|
| 3088 | 3183 | | part year occurring d uring its initial year of status as a real |
|---|
| 3089 | 3184 | | estate investment trust. For purposes of this subsection, a real |
|---|
| 3090 | 3185 | | estate investment trust becomes a real estate investment trust on |
|---|
| 3091 | 3186 | | the first day it has both met the requirements o f Section 856 of the |
|---|
| 3092 | 3187 | | Internal Revenue Code and has elected to be treated as a real estate |
|---|
| 3093 | 3188 | | investment trust pursuant to Section 856(c)(1) of the Internal |
|---|
| 3094 | 3189 | | Revenue Code. |
|---|
| 3095 | 3190 | | SECTION 2. This act shall become effective November 1, 2023. |
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| 3096 | 3191 | | |
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| 3097 | | - | |
|---|
| 3098 | | - | ENGR. H. B. NO. 2098 Page 63 1 |
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| 3122 | | - | |
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| 3123 | | - | Passed the House of Representatives the 14th day of March, 2023. |
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| 3124 | | - | |
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| 3125 | | - | |
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| 3126 | | - | |
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| 3127 | | - | |
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| 3128 | | - | Presiding Officer of the House |
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| 3129 | | - | of Representatives |
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| 3130 | | - | |
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| 3131 | | - | |
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| 3132 | | - | Passed the Senate the ___ day of __________, 2023. |
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| 3133 | | - | |
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| 3134 | | - | |
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| 3135 | | - | |
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| 3136 | | - | |
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| 3137 | | - | Presiding Officer of the Senate |
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| 3138 | | - | |
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| 3139 | | - | |
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| 3192 | + | COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS AND BUDGET , dated |
|---|
| 3193 | + | 03/02/2023 - DO PASS, As Amended and Coauthored. |
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