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HB3058
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Oklahoma House Bill HB3058

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Oklahoma 2024 Regular Session

Oklahoma House Bill HB3058 Compare Versions

Only one version of the bill is available at this time.

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1
2	2
3	3
4	4		Req. No. 9039 Page 1 1
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53	53		STATE OF OKLAHOMA
54	54
55	55		2nd Session of the 59th Legislature (2024)
56	56
57	57		HOUSE BILL 3058 By: Steagall
58	58
59	59
60	60
61	61
62	62
63	63		AS INTRODUCED
64	64
65	65		An Act relating to revenue and taxation; amending 68
66	66		O.S. 2021, Section 2355, as last amended by Section
67	67		1, Chapter 27, O.S.L. 2023, 1st Extraordinary Session
68	68		of the 59th Oklahoma Legislature (68 O.S. Supp. 2023,
69	69		Section 2355), which relates to income taxation;
70	70		providing for reduction of individual income tax
71	71		rates; providing formula for income tax rate
72	72		reductions; providing for reduction of corporate
73	73		income tax rate; providing formula for income tax
74	74		rate reductions; specifying income tax years for
75	75		which reductions applicable; modifying references;
76	76		amending 68 O.S. 2021, Section 2355.1 P-4, which
77	77		relates to income tax imposed on certain bus iness
78	78		entities; providing for reduction of tax rates; and
79	79		providing an effective date .
80	80
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85	85		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
86	86		SECTION 1. AMENDATORY 68 O.S. 2021, Section 2355, as
87	87		last amended by Section 1, Chapter 27, O.S.L. 2023, 1st
88	88		Extraordinary Session of the 59th Oklahoma Legislature (68 O.S.
89	89		Supp. 2023, Section 2355), is amended to read as fo llows:
90	90		Section 2355. A. Individuals. For all taxable years beginning
91	91		after December 31, 1998, and before January 1, 2006, a tax is hereby
92	92
93	93
94	94		Req. No. 9039 Page 2 1
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143	143		imposed upon the Oklahoma taxable in come of every resident or
144	144		nonresident individual, which tax shall be computed at the option of
145	145		the taxpayer under one of the two following methods:
146	146		1. METHOD 1.
147	147		a. Single individuals and married individuals filing
148	148		separately not deducting federal income t ax:
149	149		(1) 1/2% tax on first $1,000.00 or part there of,
150	150		(2) 1% tax on next $1,500.00 or part thereof,
151	151		(3) 2% tax on next $1,250.00 or part thereof,
152	152		(4) 3% tax on next $1,150.00 or part thereof,
153	153		(5) 4% tax on next $1,300.00 or part thereof,
154	154		(6) 5% tax on next $1,500.00 or part thereof,
155	155		(7) 6% tax on next $2,300.00 or part thereof, and
156	156		(8) (a) for taxable years beginning after December
157	157		31, 1998, and before January 1, 2002, 6.75%
158	158		tax on the remainder,
159	159		(b) for taxable years beginning on or after
160	160		January 1, 2002, and before January 1, 2004,
161	161		7% tax on the remainde r, and
162	162		(c) for taxable years beginning on o r after
163	163		January 1, 2004, 6.65% tax on the remainder.
164	164		b. Married individuals filing jointly and surviving
165	165		spouse to the extent and in the manner that a
166	166		surviving spouse is permitted to file a joint return
167	167
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218	218		under the provisions of the Internal Revenue Code a nd
219	219		heads of households as defined in the Internal Revenue
220	220		Code not deducting federal income tax:
221	221		(1) 1/2% tax on first $2,000.00 or part thereof,
222	222		(2) 1% tax on next $3,000.00 or part thereof,
223	223		(3) 2% tax on next $2,500.00 or part thereof,
224	224		(4) 3% tax on next $2,300.00 or part thereof,
225	225		(5) 4% tax on next $2,400.00 or part thereof,
226	226		(6) 5% tax on next $2,800.00 or part thereof,
227	227		(7) 6% tax on next $6,000.00 or part thereof, and
228	228		(8) (a) for taxable years beginning after De cember
229	229		31, 1998, and before Januar y 1, 2002, 6.75%
230	230		tax on the remainder,
231	231		(b) for taxable years beginning on or after
232	232		January 1, 2002, and before January 1, 2004,
233	233		7% tax on the remainder, and
234	234		(c) for taxable years beginning on or after
235	235		January 1, 2004, 6.65 % tax on the remainder.
236	236		2. METHOD 2.
237	237		a. Single individuals and married individuals filing
238	238		separately deducting federa l income tax:
239	239		(1) 1/2% tax on first $1,000.00 or part thereof,
240	240		(2) 1% tax on next $1,500. 00 or part thereof,
241	241		(3) 2% tax on next $1,250.00 or part thereof,
242	242
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293	293		(4) 3% tax on next $1,150.00 or part thereof,
294	294		(5) 4% tax on next $1,200.00 or part thereof,
295	295		(6) 5% tax on next $1,400.00 or part thereof,
296	296		(7) 6% tax on next $1,500.00 or part thereof,
297	297		(8) 7% tax on next $1,500.00 or part thereof,
298	298		(9) 8% tax on next $2,000.00 or part thereof,
299	299		(10) 9% tax on next $3,500.00 or part thereof, and
300	300		(11) 10% tax on the remainder.
301	301		b. Married individuals filing jointly and surviving
302	302		spouse to the extent and in the mann er that a
303	303		surviving spouse is permitted to file a joint return
304	304		under the provisions of the Internal Reve nue Code and
305	305		heads of households as defined in the Internal Rev enue
306	306		Code deducting federal income tax:
307	307		(1) 1/2% tax on the first $2,000.00 or part there of,
308	308		(2) 1% tax on the next $3,000.00 or part thereof,
309	309		(3) 2% tax on the next $2,500.00 or part thereof,
310	310		(4) 3% tax on the next $1,400.00 or part thereof,
311	311		(5) 4% tax on the next $1,500.00 or part thereof,
312	312		(6) 5% tax on the next $1,600.00 or part thereof,
313	313		(7) 6% tax on the next $1,250.00 or part thereof,
314	314		(8) 7% tax on the next $1,750.00 or part thereof,
315	315		(9) 8% tax on the next $3,000.00 or part thereof,
316	316		(10) 9% tax on the next $6,000.00 or part thereof, and
317	317
318	318
319	319		Req. No. 9039 Page 5 1
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368	368		(11) 10% tax on the remainder.
369	369		B. Individuals. For all taxable years beginning on or after
370	370		January 1, 2008, and ending any tax year which begins after Dece mber
371	371		31, 2015, for which the determination required pursuant to Sections
372	372		4 and 5 of this act is made by the State Board of Equalization, a
373	373		tax is hereby imposed upon the Oklahoma taxable income of ever y
374	374		resident or nonresident individual, which tax shall b e computed as
375	375		follows:
376	376		1. Single individuals and married indiv iduals filing
377	377		separately:
378	378		(a) 1/2% tax on first $1,000.00 or part thereof,
379	379		(b) 1% tax on next $1,500.00 or part thereof,
380	380		(c) 2% tax on next $1,250.00 or part thereof,
381	381		(d) 3% tax on next $1,150.00 or part thereof,
382	382		(e) 4% tax on next $2,300.00 or part thereo f,
383	383		(f) 5% tax on next $1,500.00 or part thereof,
384	384		(g) 5.50% tax on the remainder for the 2 008 tax year and
385	385		any subsequent tax year unless the rate prescribed by
386	386		subparagraph (h) of this p aragraph is in effect, and
387	387		(h) 5.25% tax on the remainder for the 2009 and subsequent
388	388		tax years. The decrease in the top marginal
389	389		individual income tax rate o therwise authorized by
390	390		this subparagraph shall be contingent upon the
391	391		determination required to be made by the State Board
392	392
393	393
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443	443		of Equalization pursuant to Section 2355.1A of this
444	444		title.
445	445		2. Married individuals filing jointly and surviving spouse to
446	446		the extent and in the manner that a surviving spouse is permitted to
447	447		file a joint return under the provisi ons of the Internal Revenue
448	448		Code and heads of households as defined in t he Internal Revenue
449	449		Code:
450	450		(a) 1/2% tax on first $2,000.00 or part thereof,
451	451		(b) 1% tax on next $3,000.00 or part thereof,
452	452		(c) 2% tax on next $2,500.00 or part thereof,
453	453		(d) 3% tax on next $2,300.00 or part thereof,
454	454		(e) 4% tax on next $2,400.00 or part thereo f,
455	455		(f) 5% tax on next $2,800.00 or part thereof,
456	456		(g) 5.50% tax on the remainder for the 2 008 tax year and
457	457		any subsequent tax year unless the rate prescribed by
458	458		subparagraph (h) of this paragraph is in effect, and
459	459		(h) 5.25% tax on the remainder for the 2009 and subsequent
460	460		tax years. The decrease in the top marginal
461	461		individual income tax rate o therwise authorized by
462	462		this subparagraph shall be contingent upon the
463	463		determination required to be made by the State Board
464	464		of Equalization pursuant to Section 2355.1A of this
465	465		title.
466	466
467	467
468	468		Req. No. 9039 Page 7 1
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517	517		C. Individuals. For all taxable years beginning on or after
518	518		January 1, 2022 2024, and ending not later than Decemb er 31, 2024, a
519	519		tax is hereby imposed upon the Oklaho ma taxable income of every
520	520		resident or nonresident individual, which tax shall be computed as
521	521		follows:
522	522		1. Single individuals and married individuals filing
523	523		separately:
524	524		(a) 0.25% tax on first $1,000.00 or part thereof,
525	525		(b) 0.75% tax on next $1,500.00 or part thereof,
526	526		(c) 1.75% tax on next $1,250.00 or part thereof,
527	527		(d) 2.75% tax on next $1,150.00 or part thereof,
528	528		(e) 3.75% tax on next $2,300.00 or part thereof,
529	529		(f) 4.75% tax on the remainder.
530	530		2. Married individuals filing jointly and surviving spouse to
531	531		the extent and in the manner that a surviving spouse is permit ted to
532	532		file a joint return under the provisions of the Int ernal Revenue
533	533		Code and heads of households as defined in the Internal Revenue
534	534		Code:
535	535		(a) 0.25% tax on first $2,000.00 or part thereof,
536	536		(b) 0.75% tax on next $3,000.00 or part thereof,
537	537		(c) 1.75% tax on next $2,500.00 or part thereof,
538	538		(d) 2.75% tax on next $2,300.00 or part thereof,
539	539		(e) 3.75% tax on next $4,600.00 or part thereof,
540	540		(f) 4.75% tax on the remainder.
541	541
542	542
543	543		Req. No. 9039 Page 8 1
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592	592		No deduction for federal income taxes paid shall be allowed to
593	593		any taxpayer to arrive at taxable income.
594	594		D. For taxable years beginning on or after January 1, 2025, the
595	595		rate of tax otherwise prescribed by each of subparagraphs (a)
596	596		through (f) of paragraph 1 and paragraph 2 of subsection C of this
597	597		section, expressed as a decimal, shall be divided by the whole
598	598		number ten (10). The result of that computation shall be the
599	599		numeral used for a reduction of the otherwise applicable income tax
600	600		rate in each of thos e subparagraphs for each income tax year
601	601		beginning with the 2025 income tax year. Ea ch income tax rate shall
602	602		be reduced by the amount resulting from the computation required by
603	603		this subsection for each taxable year until the rate of tax equals
604	604		zero (0). No income tax shall be imp osed for any individual income
605	605		tax year thereafter.
606	606		E. Nonresident aliens. In lieu of the rates set forth in this
607	607		subsection A above, there shall be imposed on nonresident aliens, as
608	608		defined in the Internal Revenue Code, a tax of eight percent (8%),
609	609		or the applicable amount based upon the income tax rate reductions
610	610		prescribed by subsection D of this section, instead of thirty
611	611		percent (30%) as used in the Internal Revenue Code, with respect to
612	612		the Oklahoma taxable income of such nonresident aliens as determined
613	613		under the provision of the Oklahoma Income Tax Act.
614	614		F. Every payer of amounts covered by this subsection E of this
615	615		section shall deduct and withhold from such amounts paid each payee
616	616
617	617
618	618		Req. No. 9039 Page 9 1
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667	667		an amount equal to eight percent (8%) the applicable percentage
668	668		thereof based upon the income tax rate reductions prescribed by
669	669		subsection D of this section. Every payer required to deduct and
670	670		withhold taxes under this subsection shall for each quarterly period
671	671		on or before the last day of the month following the close of each
672	672		such quarterly period, pay over the amount so withheld as taxes to
673	673		the Tax Commission, and shall file a return with each such payment.
674	674		Such return shall be in such form as the Tax Commission shall
675	675		prescribe. Every payer required under this subsection to deduct and
676	676		withhold a tax from a payee shall, as to the total amounts pai d to
677	677		each payee during the calendar year, furnish to such payee, on or
678	678		before January 31, of the succeeding year, a written statement
679	679		showing the name of the payer, the name of the payee and the p ayee's
680	680		Social Security account number, if any, the total amo unt paid
681	681		subject to taxation, and the total amount deducted and withheld as
682	682		tax and such other information as the Tax Commission may require.
683	683		Any payer who fails to withhold or pay to the Tax Com mission any
684	684		sums herein required to be withheld or paid shal l be personally and
685	685		individually liable therefor to the State of Oklahoma.
686	686		E. G. Corporations. For all taxable years beginning after
687	687		December 31, 2021, a A tax is hereby imposed upon the Oklahom a
688	688		taxable income of every corporation doing business within this state
689	689		or deriving income from sources within this state in an amount equal
690	690
691	691
692	692		Req. No. 9039 Page 10 1
693	693		2
694	694		3
695	695		4
696	696		5
697	697		6
698	698		7
699	699		8
700	700		9
701	701		10
702	702		11
703	703		12
704	704		13
705	705		14
706	706		15
707	707		16
708	708		17
709	709		18
710	710		19
711	711		20
712	712		21
713	713		22
714	714		23
715	715		24
716	716		1
717	717		2
718	718		3
719	719		4
720	720		5
721	721		6
722	722		7
723	723		8
724	724		9
725	725		10
726	726		11
727	727		12
728	728		13
729	729		14
730	730		15
731	731		16
732	732		17
733	733		18
734	734		19
735	735		20
736	736		21
737	737		22
738	738		23
739	739		24
740	740
741	741		to four percent (4%) thereof or the applicable reduced percentage as
742	742		prescribed by this subsection.
743	743		1. There shall be no additional Oklahoma income tax imposed on
744	744		accumulated taxable income or on undistributed personal holding
745	745		company income as those terms are defined in the Inter nal Revenue
746	746		Code thereof.
747	747		2. For all taxable years for corporations using a calendar yea r
748	748		for income tax reporting purposes, the changes in the income tax
749	749		rate prescribed by this paragraph shall become effective January 1,
750	750		2025. For all taxable years for corporations using a fiscal year
751	751		for income tax reporting purposes, the changes in the i ncome tax
752	752		rate prescribed by this paragraph shall become effective for the
753	753		first tax year which begins after January 1, 2025. The rate of tax
754	754		otherwise imposed pursuant to the provisions of this subsection,
755	755		expressed as a decimal, shall be divided by the whole number ten
756	756		(10). The result of that computation shall be the numeral us ed for
757	757		a reduction of the otherwise applicable income tax rate beginning
758	758		with the 2025 income tax year. The income tax rate otherwise
759	759		prescribed by this subsection shall be reduced by the amount
760	760		resulting from the computation required by this paragraph for each
761	761		taxable year until the rate of tax equals zero (0). No income tax
762	762		shall be imposed for any income tax year thereafter.
763	763		F. H. Certain foreign corporations.
764	764
765	765
766	766		Req. No. 9039 Page 11 1
767	767		2
768	768		3
769	769		4
770	770		5
771	771		6
772	772		7
773	773		8
774	774		9
775	775		10
776	776		11
777	777		12
778	778		13
779	779		14
780	780		15
781	781		16
782	782		17
783	783		18
784	784		19
785	785		20
786	786		21
787	787		22
788	788		23
789	789		24
790	790		1
791	791		2
792	792		3
793	793		4
794	794		5
795	795		6
796	796		7
797	797		8
798	798		9
799	799		10
800	800		11
801	801		12
802	802		13
803	803		14
804	804		15
805	805		16
806	806		17
807	807		18
808	808		19
809	809		20
810	810		21
811	811		22
812	812		23
813	813		24
814	814
815	815		1. In lieu of the tax imposed in the first paragraph of
816	816		subsection D of by this section, for all taxable years beginni ng
817	817		after December 31, 2021, there shall be imposed on foreign
818	818		corporations, as defined in the Inte rnal Revenue Code, a tax of four
819	819		percent (4%) instead of thirty percent (30%) as used in the Internal
820	820		Revenue Code, where such income is received from sources within
821	821		Oklahoma, in accordance with the provisions of the Internal Revenue
822	822		Code and the Oklahoma Income Tax Act.
823	823		2. For all taxable years for corporations using a calendar year
824	824		for income tax report ing purposes, the changes in the income tax
825	825		rate prescribed by this paragraph shall become effective January 1,
826	826		2025. For all taxable years for corporations using a fiscal y ear
827	827		for income tax reporting purposes, the changes in the income tax
828	828		rate prescribed by this paragraph shall become effective for the
829	829		first tax year which begins after January 1, 2025. The rate of tax
830	830		otherwise imposed pursuant to the provisions of this subsection,
831	831		expressed as a decimal, shall be divided by the whole number ten
832	832		(10). The result of that comput ation shall be the nume ral used for
833	833		a reduction of the otherwise applicable income tax rate beginning
834	834		with the 2025 income tax year. The income tax rate otherwise
835	835		prescribed by this subsection shall be reduced by the amount
836	836		resulting from the computation required by this paragraph for each
837	837		taxable year until the rate of tax equals zero (0). No income tax
838	838		shall be imposed for any income tax year thereafter.
839	839
840	840
841	841		Req. No. 9039 Page 12 1
842	842		2
843	843		3
844	844		4
845	845		5
846	846		6
847	847		7
848	848		8
849	849		9
850	850		10
851	851		11
852	852		12
853	853		13
854	854		14
855	855		15
856	856		16
857	857		17
858	858		18
859	859		19
860	860		20
861	861		21
862	862		22
863	863		23
864	864		24
865	865		1
866	866		2
867	867		3
868	868		4
869	869		5
870	870		6
871	871		7
872	872		8
873	873		9
874	874		10
875	875		11
876	876		12
877	877		13
878	878		14
879	879		15
880	880		16
881	881		17
882	882		18
883	883		19
884	884		20
885	885		21
886	886		22
887	887		23
888	888		24
889	889
890	890		Every payer of amounts covered by this subsection shall deduct
891	891		and withhold from such amounts paid each payee an amount equal to
892	892		four percent (4%) the applicable percentage thereof based upon the
893	893		income tax rate reductions prescribed by paragraph 2 of this
894	894		subsection. Every payer required to deduct and withhold taxes under
895	895		this subsection shall for e ach quarterly period on or before the
896	896		last day of the month following the close of each such quarterly
897	897		period, pay over the amount so withheld as taxes to the Tax
898	898		Commission, and shall file a return with each such payment . Such
899	899		return shall be in such for m as the Tax Commission shall prescribe.
900	900		Every payer required under this subsection to deduct and withhold a
901	901		tax from a payee shall, as to the total amounts paid to each payee
902	902		during the calendar year, furnish to such pay ee, on or before
903	903		January 31, of the succeeding year, a written statement showing the
904	904		name of the payer, the name of the payee and the payee's Social
905	905		Security account number, if any, the total amounts paid subject to
906	906		taxation, the total amount deducted and withheld as tax and such
907	907		other information as the Tax Commission may require. Any payer who
908	908		fails to withhold or pay to the Tax Commission any sums herein
909	909		required to be withheld or paid shall be personally and individually
910	910		liable therefor to the State of Oklahoma.
911	911		G. I. Fiduciaries. A tax is hereby imposed upon the Oklahoma
912	912		taxable income of every trust and estate at the same rates as are
913	913		provided in subsection B or, C, or D of this section for single
914	914
915	915
916	916		Req. No. 9039 Page 13 1
917	917		2
918	918		3
919	919		4
920	920		5
921	921		6
922	922		7
923	923		8
924	924		9
925	925		10
926	926		11
927	927		12
928	928		13
929	929		14
930	930		15
931	931		16
932	932		17
933	933		18
934	934		19
935	935		20
936	936		21
937	937		22
938	938		23
939	939		24
940	940		1
941	941		2
942	942		3
943	943		4
944	944		5
945	945		6
946	946		7
947	947		8
948	948		9
949	949		10
950	950		11
951	951		12
952	952		13
953	953		14
954	954		15
955	955		16
956	956		17
957	957		18
958	958		19
959	959		20
960	960		21
961	961		22
962	962		23
963	963		24
964	964
965	965		individuals. Fiduciaries are not allowed a deduction for any
966	966		federal income tax paid.
967	967		H. J. Tax rate tables. For all taxable years beginning after
968	968		December 31, 1991 2024, in lieu of the tax imposed by subsection A,
969	969		B or, C, or D of this section, as applicable there is her eby imposed
970	970		for each taxable year on the taxable income of every individual,
971	971		whose taxable income for such taxable year does not excee d the
972	972		ceiling amount, a tax determined under tables, applicable to such
973	973		taxable year which shall be prescribed by the Tax Commission and
974	974		which shall be in such form as it determine s appropriate. In the
975	975		table so prescribed, the amounts of the tax shall be computed on the
976	976		basis of the rates prescribed by subsection A, B or, C, or D of this
977	977		section. For purposes of this subsection, t he term "ceiling amount"
978	978		means, with respect to any taxpay er, the amount determined by the
979	979		Tax Commission for the tax rate category in which such taxpayer
980	980		falls.
981	981		SECTION 2. AMENDATORY 68 O.S. 2021, Section 2355.1P-4,
982	982		is amended to read as follows:
983	983		Section 2355.1P-4 A. For Except as otherwise provided by
984	984		subsection I of this section, for tax years beginning on or after
985	985		January 1, 2022, there is hereby levied on each electing pass -
986	986		through entity the pass-through entity tax which shall be calculated
987	987		as follows:
988	988
989	989
990	990		Req. No. 9039 Page 14 1
991	991		2
992	992		3
993	993		4
994	994		5
995	995		6
996	996		7
997	997		8
998	998		9
999	999		10
1000	1000		11
1001	1001		12
1002	1002		13
1003	1003		14
1004	1004		15
1005	1005		16
1006	1006		17
1007	1007		18
1008	1008		19
1009	1009		20
1010	1010		21
1011	1011		22
1012	1012		23
1013	1013		24
1014	1014		1
1015	1015		2
1016	1016		3
1017	1017		4
1018	1018		5
1019	1019		6
1020	1020		7
1021	1021		8
1022	1022		9
1023	1023		10
1024	1024		11
1025	1025		12
1026	1026		13
1027	1027		14
1028	1028		15
1029	1029		16
1030	1030		17
1031	1031		18
1032	1032		19
1033	1033		20
1034	1034		21
1035	1035		22
1036	1036		23
1037	1037		24
1038	1038
1039	1039		1. With regard to each member o f an electing pass-through
1040	1040		entity, the electing pass-through entity shall multiply such
1041	1041		member's Oklahoma distributive share of the electing pass -through
1042	1042		entity's Oklahoma net entity income for the tax year by:
1043	1043		a. the highest Oklahoma marginal income tax r ate levied
1044	1044		on the taxable income of natural persons pursuant to
1045	1045		Section 2355 of this title if the member is an
1046	1046		individual, trust, or estate,
1047	1047		b. four percent (4%) if the member is classified as a
1048	1048		corporation pursuant to the Internal Revenue Code, and
1049	1049		is not classified as an S corp oration,
1050	1050		c. four percent (4%) if the member is a pass -through
1051	1051		entity,
1052	1052		d. four percent (4%) if the member is a financial
1053	1053		institution subject to tax imposed pursuant to the
1054	1054		provisions of Section 2370 o f this title, and
1055	1055		e. the highest Oklahoma marginal income tax rate that
1056	1056		would be applicable to any item of the electin g pass-
1057	1057		through entity's income or gain without the election
1058	1058		made pursuant to subsection F of this section, if the
1059	1059		member is an organization described in Section 2359 o f
1060	1060		this title; and
1061	1061		2. The electing pass-through entity shall aggregate the amounts
1062	1062		determined with respect to all members pursuant to paragraph 1 of
1063	1063
1064	1064
1065	1065		Req. No. 9039 Page 15 1
1066	1066		2
1067	1067		3
1068	1068		4
1069	1069		5
1070	1070		6
1071	1071		7
1072	1072		8
1073	1073		9
1074	1074		10
1075	1075		11
1076	1076		12
1077	1077		13
1078	1078		14
1079	1079		15
1080	1080		16
1081	1081		17
1082	1082		18
1083	1083		19
1084	1084		20
1085	1085		21
1086	1086		22
1087	1087		23
1088	1088		24
1089	1089		1
1090	1090		2
1091	1091		3
1092	1092		4
1093	1093		5
1094	1094		6
1095	1095		7
1096	1096		8
1097	1097		9
1098	1098		10
1099	1099		11
1100	1100		12
1101	1101		13
1102	1102		14
1103	1103		15
1104	1104		16
1105	1105		17
1106	1106		18
1107	1107		19
1108	1108		20
1109	1109		21
1110	1110		22
1111	1111		23
1112	1112		24
1113	1113
1114	1114		this subsection and the pass-through entity tax for t he applicable
1115	1115		tax year shall be equal to such aggregated t ax amount for the tax
1116	1116		year with respect to which the election has been made.
1117	1117		B. Sections 2385.29, 2385.30 and 2385.31 o f this title shall
1118	1118		not be applicable to an electing pass-through entity.
1119	1119		C. The pass-through entity tax shall be due and payable on the
1120	1120		same date as provided f or the filing of the electing pass-through
1121	1121		entity's Oklahoma income tax return, and for tax years beginning on
1122	1122		or after January 1, 2 020, estimated tax payments shall be requi red
1123	1123		as provided in Section 2385.9 o f this title.
1124	1124		D. If the pass-through entity election results in a net entity
1125	1125		loss for Oklahoma income t ax purposes in any tax year, the net
1126	1126		entity loss may be carried back and ca rried forward by the electing
1127	1127		pass-through entity for Oklahoma income tax purposes as set forth in
1128	1128		subparagraph b of paragra ph 3 of subsection A of Section 2358 of
1129	1129		this title.
1130	1130		E. Notwithstanding paragraph 2 of subsection C of Section 2368
1131	1131		of this title, a nonresident individual who is a member of an
1132	1132		electing pass-through entity is not required to file a n Oklahoma
1133	1133		income tax return, if, for the taxable year, the only source of
1134	1134		income allocable or apportionable to this state for the member, or,
1135	1135		if a joint income tax return is filed, the member and h is or her
1136	1136		spouse, is from one or more electing pass -through entities, and each
1137	1137
1138	1138
1139	1139		Req. No. 9039 Page 16 1
1140	1140		2
1141	1141		3
1142	1142		4
1143	1143		5
1144	1144		6
1145	1145		7
1146	1146		8
1147	1147		9
1148	1148		10
1149	1149		11
1150	1150		12
1151	1151		13
1152	1152		14
1153	1153		15
1154	1154		16
1155	1155		17
1156	1156		18
1157	1157		19
1158	1158		20
1159	1159		21
1160	1160		22
1161	1161		23
1162	1162		24
1163	1163		1
1164	1164		2
1165	1165		3
1166	1166		4
1167	1167		5
1168	1168		6
1169	1169		7
1170	1170		8
1171	1171		9
1172	1172		10
1173	1173		11
1174	1174		12
1175	1175		13
1176	1176		14
1177	1177		15
1178	1178		16
1179	1179		17
1180	1180		18
1181	1181		19
1182	1182		20
1183	1183		21
1184	1184		22
1185	1185		23
1186	1186		24
1187	1187
1188	1188		electing pass-through entity files and pays the taxes due u nder this
1189	1189		section.
1190	1190		F. Any entity required to file an Oklahoma partnership i ncome
1191	1191		tax return or an Oklahoma S corporat ion income tax return may elect
1192	1192		to become an electing pass -through entity. The election shall be
1193	1193		made on such form and in such manner as the Oklahoma Tax Commission
1194	1194		may prescribe, and any election under this subse ction shall have
1195	1195		priority over and revoke any election to file a composite Oklahoma
1196	1196		partnership return or requirement of a S ubchapter S corporation to
1197	1197		report and pay tax on behalf of a nonresident shareholder for the
1198	1198		same tax year.
1199	1199		G. Pursuant to procedur es prescribed by the Tax Commission, if
1200	1200		the amount of tax required to be paid by a pass -through entity
1201	1201		pursuant to the provi sions of this section is not paid when due, the
1202	1202		Oklahoma Tax Commission may revoke the pass-through entity's
1203	1203		election under subsecti on F of this section effective for the fir st
1204	1204		year for which the tax is not paid.
1205	1205		H. The election authorized by the provisio ns of this section
1206	1206		shall be made pursuant to procedu res prescribed by the Tax
1207	1207		Commission and shall be filed (i) within sixty (60) d ays of
1208	1208		enactment and pursuant to procedure s prescribed by the Oklahoma Tax
1209	1209		Commission for any income tax year beginning on or after January 1,
1210	1210		2019, and prior to January 1, 2020 , or (ii) for any income tax year
1211	1211		beginning on or after January 1, 2020, at any time during the
1212	1212
1213	1213
1214	1214		Req. No. 9039 Page 17 1
1215	1215		2
1216	1216		3
1217	1217		4
1218	1218		5
1219	1219		6
1220	1220		7
1221	1221		8
1222	1222		9
1223	1223		10
1224	1224		11
1225	1225		12
1226	1226		13
1227	1227		14
1228	1228		15
1229	1229		16
1230	1230		17
1231	1231		18
1232	1232		19
1233	1233		20
1234	1234		21
1235	1235		22
1236	1236		23
1237	1237		24
1238	1238		1
1239	1239		2
1240	1240		3
1241	1241		4
1242	1242		5
1243	1243		6
1244	1244		7
1245	1245		8
1246	1246		9
1247	1247		10
1248	1248		11
1249	1249		12
1250	1250		13
1251	1251		14
1252	1252		15
1253	1253		16
1254	1254		17
1255	1255		18
1256	1256		19
1257	1257		20
1258	1258		21
1259	1259		22
1260	1260		23
1261	1261		24
1262	1262
1263	1263		preceding tax year or two (2) months and fifteen (15) days after the
1264	1264		beginning of the tax year. Any such election shall be binding until
1265	1265		revoked pursuant to pr ocedures prescribed by the Tax Commission.
1266	1266		The effective date of a revocation (i) made within two (2) months
1267	1267		and fifteen (15) days of the electing pass -through entity's taxable
1268	1268		year shall be the first d ay of such taxable year and (ii) made
1269	1269		during the electing pass-through entity's taxable year but after
1270	1270		such fifteenth day shall be e ffective on the first day of the
1271	1271		following taxable year. No election made by a pass -through entity
1272	1272		with respect to income tax to be paid by such entity using the
1273	1273		calculations prescribed by this section shall be binding on any
1274	1274		other pass-through entity, and each pass-through entity shall be
1275	1275		able to make an election under the provisions of this act
1276	1276		independently.
1277	1277		I. For all taxable years for corporations using a calendar year
1278	1278		for income tax reporting purposes, the changes in the income tax
1279	1279		rate prescribed by this subsection shall become effective January 1,
1280	1280		2025. For all taxable years for corporations using a fiscal year
1281	1281		for income tax reporting purposes, the changes in the income tax
1282	1282		rate prescribed by this subsection shall become effective for the
1283	1283		first tax year which begins after January 1, 2025. The rate of tax
1284	1284		otherwise imposed pursuant to the provisions of paragraph 1 of
1285	1285		subsection A of this section, expressed as a decimal, shall be
1286	1286		divided by the whole number ten (10). The result of that
1287	1287
1288	1288
1289	1289		Req. No. 9039 Page 18 1
1290	1290		2
1291	1291		3
1292	1292		4
1293	1293		5
1294	1294		6
1295	1295		7
1296	1296		8
1297	1297		9
1298	1298		10
1299	1299		11
1300	1300		12
1301	1301		13
1302	1302		14
1303	1303		15
1304	1304		16
1305	1305		17
1306	1306		18
1307	1307		19
1308	1308		20
1309	1309		21
1310	1310		22
1311	1311		23
1312	1312		24
1313	1313		1
1314	1314		2
1315	1315		3
1316	1316		4
1317	1317		5
1318	1318		6
1319	1319		7
1320	1320		8
1321	1321		9
1322	1322		10
1323	1323		11
1324	1324		12
1325	1325		13
1326	1326		14
1327	1327		15
1328	1328		16
1329	1329		17
1330	1330		18
1331	1331		19
1332	1332		20
1333	1333		21
1334	1334		22
1335	1335		23
1336	1336		24
1337	1337
1338	1338		computation shall be the numeral used for a reduction of the
1339	1339		otherwise applicable income tax rate beginning with the applicable
1340	1340		income tax year. The income tax rate otherwise prescribed by
1341	1341		paragraph 1 of subsection A of this section shall be reduced by the
1342	1342		amount resulting from the computation required by this subsection
1343	1343		for each taxable year until the rate of tax equals zero (0). No
1344	1344		income tax shall be imposed for any income tax year thereafter.
1345	1345		SECTION 3. This act shall become e ffective January 1, 2024.
1346	1346
1347	1347		59-2-9039 MAH 01/04/24
1348	1348