Oklahoma 2024 Regular Session

Oklahoma House Bill HB3388 Compare Versions

Version 1 (Old)

Version 2 (New)

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1		-	An Act
2		-	ENROLLED HOUSE
3		-	BILL NO. 3388 By: McCall and Caldwell (Chad)
4		-	of the House
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	28	+	ENGROSSED SENATE AMENDMENT
	29	+	TO
	30	+	ENGROSSED HOUSE
	31	+	BILL NO. 3388 By: McCall of the House
5	32
6	33		and
7	34
8	35		Treat of the Senate
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12	39
13		-
14		-
15		-	An Act relating to income tax credit; amending 68
	40	+	An Act relating to schools; amending Section 2,
	41	+	Chapter 278, O.S.L. 2023 (70 O.S. Supp. 2023,
	42	+	Section 28-101), which relates to the Okla homa
	43	+	Parental Choice Tax Credit Act; modifying
	44	+	definitions; establishing credit amount for private
	45	+	schools serving certain student populations;
	46	+	prohibiting offset of credit for certain liabilities;
	47	+	modifying application of caps from a tax year to a
	48	+	fiscal year; providing for carryover of certain
	49	+	unused credits; exempting certain eligible taxpayers
	50	+	from providing additional income verification;
	51	+	modifying timing and procedures for application
	52	+	process; requiring authorization of certain credits;
	53	+	providing dates for installments; modifying priority
	54	+	of tax credit recipients in certain cases; directing
	55	+	taxpayers to provide notice related to a change in
	56	+	enrollment status; providing for reallocation of
	57	+	certain credits; excluding credits from taxable
	58	+	income; prohibiting issuance of Form 1099s; and
	59	+	declaring an emergency.
	60	+
	61	+
	62	+
	63	+
	64	+	AMENDMENT NO. 1. Page 1, strike the title, enacting clause and
	65	+	entire bill and insert
	66	+
	67	+
	68	+	“An Act relating to income tax credit; amending 68
16	69		O.S. 2021, Section 205.2, which relates to claims for
17	70		deduction of refund; prohibiting claims for deduction
18	71		from certain tax credit; amending 68 O.S. 2021,
19	72		Section 2358, as amended by Section 1, Chapter 377,
20	73		O.S.L. 2022 (68 O.S. Supp. 2023, Section 2358), which
21	74		relates to adjustments to arrive at taxable income;
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22	101		providing exemption for certain tax credits received;
23	102		amending Section 2, Chapter 278, O.S.L. 2023 (70 O.S.
24	103		Supp. 2023, Section 28 -101), which relates to the
25	104		Oklahoma Parental Choice Tax Credit Act; modifying
26	105		definitions; modifying income limitations; all owing
27	106		certain credit to qualifying students; establishing
28	107		credit amount for private schools serving certain
29	108		student populations; prohibiting the use of tax
30	109		credit to offset certain accrued liabilities;
31	110		modifying annual credit limitations; prohibiting the
32	111		Oklahoma Tax Commission from requiring certain
33	112		taxpayers to reapply for certain credit; providing
34	113		for calculation of credit amount; modifying
35	114		limitations on credits allowed during certain fiscal
36	115		years; exempting certain eligible taxpayers from
37	116		providing additional income verification; requiring
38	117		submission of enrollment verification form;
39	118		prescribing application period; requiring credits and
40	119		payments to be allocated by certain dates; providing
41	120		deadline to receive priority consideration; allowing
42	121		certain reallocation of credits; requiring certain
43	122		notification; requiring the Commission to update
44	123		certain information monthly; requiring the Commission
45	124		to publish additional information; prohibiting
46		-	credits from being considered taxable income; ~~ENR. H. B. NO. 3388 Page 2~~
	125	+	credits from being considered taxable income;
47	126		updating statutory ref erences; updating statutory
48	127		language; and declaring an emergency.
49	128
50	129
51	130
52		-
53		-	SUBJECT: Income tax credit
54		-
55	131		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
56		-
57	132		SECTION 1. AMENDATORY 68 O.S. 2021, Section 205.2, is
58	133		amended to read as follows:
59		-
60		-	Section 205.2 A. For purposes of this section, a “qualified
	134	+	Section 205.2. A. For p urposes of this section, a “qualified
61	135		entity” shall mean a:
62		-
63	136		1. State agency;
64		-
65	137		2. Municipal court;
66		-
67	138		3. District court;
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69	165		4. Public housing authority operating pursuant to Section 1062
70	166		of Title 63 of the Oklahoma Statutes;
71		-
72	167		5. District attorney seeking to co llect unpaid court-ordered
73	168		monetary obligations; or
74		-
75	169		6. The designee of an entity described in paragraphs 1 through
76	170		5 of this subsection.
77		-
78	171		B. A qualified entity seeking to collect a debt, unpaid
79	172		municipal or district court fines and costs or final judgment of at
80	173		least Fifty Dollars ($50.00) from an individual who has filed a
81	174		state income tax return may file a claim with the Oklahoma Tax
82	175		Commission requesting that the amount owed to the qualified entity
83	176		be deducted from any state income tax refund due to tha t individual.
84	177		The claim shall be filed electronically in a form prescribed by the
85	178		Tax Commission and shall contain information necessary to identify
86	179		the person owing the debt, including the full name and Social
87	180		Security number of the debtor.
88		-
89	181		1. Upon receiving a claim from a qualified entity, the Tax
90	182		Commission shall deduct the claim amount, plus collection expenses
91		-	as provided in this section, from the tax refund due to the debtor ~~ENR. H. B. NO. 3388 Page 3~~
	183	+	as provided in this section, from the tax refund due to the debtor
92	184		and transfer the amount to the qualified entity. Provided, the Tax
93	185		Commission need not report available funds of less than Fifty
94	186		Dollars ($50.00).
95		-
96	187		2. The qualified entity shall send notice to the debtor by
97	188		regular mail at the last -known address of the debtor as shown by the
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98	215		records of the Tax Commission when seeking to collect a debt not
99	216		reduced to final judgment. The qualified entity shall send notice
100	217		to the judgment debtor or defendant by first -class mail at the last -
101	218		known address of the judgment debtor or defendant as shown by the
102	219		records of the Tax Commission when seeking t o collect a final
103	220		judgment or unpaid court fines and costs. The Tax Commission shall
104	221		provide in an agreed electronic format to the Department of Human
105	222		Services the amount withheld by the Tax Commission, the home address
106	223		and the Social Security number of t he taxpayer. The notice shall
107	224		state:
108		-
109	225		a. that a claim has been filed with the Tax Commission
110	226		for any portion of the tax refund due to the debtor or
111	227		defendant which would satisfy the debt, unpaid court
112	228		fines and costs, or final judgment in full or in part,
113		-
114	229		b. the basis for the claim,
115		-
116	230		c. that the Tax Commission has deducted an amount from
117	231		the refund and remitted it to such qualified entity,
118		-
119	232		d. that the debtor or defendant has the right to contest
120	233		the claim by sending a written request to the
121	234		qualified entity for a hearing to protest the claim,
122	235		and if the debtor or defendant fails to apply for a
123	236		hearing within sixty (60) days after the date of the
124	237		mailing of the notice, the debtor or defendant shall
125	238		be deemed to have waived his or her opportunity to
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126	265		contest the claim. Provided, if the claim was filed
127	266		by the Department of Human Services, the notice shall
128	267		state that the debtor must contest the claim by
129	268		sending a written request to the Department within
130	269		thirty (30) days after the date of the mailing of the
131	270		notice, and
132		-
133	271		e. that a collection expense of five percent (5%) of the
134	272		gross proceeds owed to the qualified entity has been
135	273		charged to the debtor or defendant and withheld from
136		-	the refund. ENR. H. B. NO. 3388 Page 4
137		-
	274	+	the refund.
138	275		3. If the qualified entity determines that a refund is due to
139	276		the taxpayer, the qualified entity shall reimburse the amount
140	277		claimed plus the five -percent collection expense to the taxpayer.
141	278		The qualified entity may request reimbursement of the two -percent
142	279		collection expense retained by the Tax Commission. Such request
143	280		must be made within ninety (90) days of reimbursement to the
144	281		taxpayer. If timely requested, the Tax Commission shall make such
145	282		reimbursement to the qualified entity within ninety (90) days of the
146	283		request.
147		-
148	284		4. In the case of a joint return, the notice shall state:
149		-
150	285		a. the name of any taxpayer named in the return against
151	286		whom no debt, no unpaid court fines and costs, or
152	287		final judgment is claimed,
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154	314		b. the fact that a debt, unpaid court fines and costs, or
155	315		final judgment is not claimed against the taxpayer,
156		-
157	316		c. the fact that the taxpayer is entitled to receive a
158	317		refund if it is due regardless of the debt, court
159	318		fines and costs, or final judgment asserted against
160	319		the debtor or defendant,
161		-
162	320		d. that in order to obtain the refund due, the taxpayer
163	321		must apply, in writing, for a h earing with the
164	322		qualified entity named in the notice within sixty (60)
165	323		days after the date of the mailing of the notice.
166	324		Provided, if the claim was filed by the Department of
167	325		Human Services, the notice shall state that the
168	326		taxpayer must apply, in writing, for a hearing with
169	327		the Department within thirty (30) days after the date
170	328		of the mailing of the notice, and
171		-
172	329		e. if the taxpayer against whom no debt, no unpaid court
173	330		fines and costs, or final judgment is claimed fails to
174	331		apply in writing for a hearing withi n sixty (60) days
175	332		after the mailing of the notice, the taxpayer shall
176	333		have waived his or her right to a refund. Provided,
177	334		if the claim was filed by the Department of Human
178	335		Services, the notice shall state that if the taxpayer
179	336		fails to apply in writing for a hearing with the
180		-	Department within thirty (30) days after the date of ENR. H. B. NO. 3388 Page 5
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181	364		the mailing of the notice, the taxpayer shall have
182	365		waived his or her right to a refund.
183		-
184	366		C. If the qualified entity asserting the claim receives a
185	367		written request for a hearing from t he debtor or taxpayer against
186	368		whom no debt, no court fines and costs, or final judgment is
187	369		claimed, the qualified entity shall grant a hearing according to the
188	370		provisions of the Administrative Procedures Act. It shall be
189	371		determined at the hearing whether the claimed sum is correct or
190	372		whether an adjustment to the claim shall be made. Pending final
191	373		determination at the hearing of the validity of the debt, unpaid
192	374		court fines and costs, or final judgment asserted by the qualified
193	375		entity, no action shall be ta ken in furtherance of the collection of
194	376		the debt, unpaid court fines and costs, or final judgment. Appeals
195	377		from actions taken at the hearing shall be in accordance with the
196	378		provisions of the Administrative Procedures Act.
197		-
198	379		D. Upon final determination at a hearing, as provided for in
199	380		subsection C of this section, of the amount of the debt, unpaid
200	381		court fines and costs, or final judgment, or upon failure of the
201	382		debtor or taxpayer against whom no debt, no unpaid court fines and
202	383		costs, or final judgment is cla imed to request such a hearing, the
203	384		qualified entity shall apply the amount of the claim to the debt
204	385		owed. Any amounts held by the qualified entity in excess of the
205	386		final determination of the debt and collection expense shall be
206	387		refunded by the qualified entity to the taxpayer. However, if the
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207	414		tax refund due is inadequate to pay the collection expense and debt,
208	415		unpaid court fines and costs, or final judgment, the balance due the
209	416		qualified entity shall be a continuing debt or final judgment until
210	417		paid in full.
211		-
212	418		E. Upon receipt of a claim as provided in subsection A of this
213	419		section, the Tax Commission shall:
214		-
215	420		1. Deduct from the refund five percent (5%) of the gross
216	421		proceeds owed to the qualified entity, and distribute it by
217	422		retaining two percent (2%) and tra nsferring three percent (3%) to
218	423		the qualified entity, as an expense of collection. The two percent
219	424		(2%) retained by the Tax Commission shall be deposited in the
220	425		Oklahoma Tax Commission Fund;
221		-
222	426		2. Transfer the amount of the claimed debt, unpaid court fines
223	427		and costs, or final judgment or so much thereof as is available to
224	428		the qualified entity;
225		-	ENR. H. B. NO. 3388 Page 6
226	429		3. Notify the debtor in writing as to how the refund was
227	430		applied; and
228		-
229	431		4. Refund to the debtor any balance remaining after deducting
230	432		the collection expense and debt, unpaid court fines and costs, or
231	433		final judgment.
232		-
233	434		F. The Tax Commission shall deduct from any state tax refund
234	435		due to a taxpayer the amount of delinquent state tax and penalty and
235	436		interest thereon, which such taxpayer owes pursuant to any state tax
236	437		law prior to payment of such refund.
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237	463
238	464		G. The Tax Commission shall have first priority over all other
239	465		qualified entities when the Tax Commission is collecting a debt,
240	466		court fines and costs, or final judgment pursuant to the provisions
241	467		of this section. Subsequent to the Tax Commission priority, a claim
242	468		filed by the Department of Human Services for the collection of
243	469		child support and spousal support shall have priority over all other
244	470		claims filed pursuant to this section. Priority in multiple claims
245	471		by other qualified entities pursuant to the provisions of this
246	472		section shall be in the order in time in which the Tax Commission
247	473		receives the claim from the qualified entities required by the
248	474		provisions of subsection B of this section.
249		-
250	475		H. The Tax Commission shall prescr ibe or approve forms and
251	476		promulgate rules and regulations for implementing the provisions of
252	477		this section.
253		-
254	478		I. The information obtained by a qualified entity from the Tax
255	479		Commission pursuant to the provisions of this section shall be used
256	480		only to aid in collection of the debt, unpaid court fines and costs,
257	481		or final judgment owed to the qualified entity. Disclosure of the
258	482		information for any other purpose shall constitute a misdemeanor.
259	483		Any employee of a qualified entity or person convicted of violating
260	484		this provision shall be subject to a fine not exceeding One Thousand
261	485		Dollars ($1,000.00) or imprisonment in the county jail for a term
262	486		not exceeding one (1) year, or both fine and imprisonment and, if
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263	513		still employed by the qualified entity, shall be dismisse d from
264	514		employment.
265		-
266	515		J. The Tax Commission may employ the procedures provided by
267	516		this section in order to collect a debt owed to the Internal Revenue
268	517		Service if the Internal Revenue Service requires such procedure as a
269	518		condition to providing information to the Commission concerning
270		-	federal income tax. ENR. H. B. NO. 3388 Page 7
271		-
	519	+	federal income tax.
272	520		K. The provisions of this section shall not apply to claims
273	521		filed under the provisions of Section 2906 or Section 5011 of this
274		-	title or Section 28-101 of Title 70 of the Oklahoma Statu tes.
275		-
	522	+	title or Section 28-101 of Title 70.
276	523		SECTION 2. AMENDATORY 68 O.S. 2021, Section 2358, as
277	524		amended by Section 1, Chapter 377, O.S.L. 2022 (68 O.S. Supp. 2023,
278	525		Section 2358), is amended to read as follows:
279		-
280	526		Section 2358. For all tax years beginning after December 31,
281	527		1981, taxable income and adjusted gross income shall be adjusted to
282	528		arrive at Oklahoma taxable income and Oklahoma adjusted gross income
283	529		as required by this section.
284		-
285	530		A. The taxable income of any taxpayer shall be adjusted to
286	531		arrive at Oklahoma taxable income for corporations and Oklahoma
287	532		adjusted gross income for individuals, as follows:
288		-
289	533		1. There shall be added interest income on obligations of any
290	534		state or political subdivision thereto which is not otherwise
291	535		exempted pursuant to other laws of this state, to the extent that
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292	562		such interest is not inclu ded in taxable income and adjusted gross
293	563		income.
294		-
295	564		2. There shall be deducted amounts included in such income that
296	565		the state is prohibited from taxing because of the provisions of the
297	566		Federal Constitution, the State Constitution, federal laws or laws
298	567		of Oklahoma.
299		-
300	568		3. The amount of any federal net operating loss deduction shall
301	569		be adjusted as follows:
302		-
303	570		a. For carryovers and carrybacks to taxable years
304	571		beginning before January 1, 1981, the amount of any
305	572		net operating loss deduction allowed to a taxpayer for
306	573		federal income tax purposes shall be reduced to an
307	574		amount which is the same portion thereof as the loss
308	575		from sources within this state, as determined pursuant
309	576		to this section and Section 2362 of this title, for
310	577		the taxable year in which such loss is sustained is of
311	578		the total loss for such year;
312		-
313	579		b. For carryovers and carrybacks to taxable years
314	580		beginning after December 31, 1980, the amount of any
315		-	net operating loss deduction allowed for the taxable ~~ENR. H. B. NO. 3388 Page 8~~
	581	+	net operating loss deduction allowed for the taxable
316	582		year shall be an amount equal to the aggregate of the
317	583		Oklahoma net operating loss carryovers and carrybacks
318	584		to such year. Oklahoma net operating losses shall be
319	585		separately determined by reference to Section 172 of
	586	+
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	598	+	12
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	600	+	14
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	602	+	16
	603	+	17
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	608	+	22
	609	+	23
	610	+	24
	611	+
320	612		the Internal Revenue Code, 26 U.S.C., Section 172, as
321	613		modified by the Oklahoma Income Tax Act, Section 2 351
322	614		et seq. of this title, and shall be allowed without
323	615		regard to the existence of a federal net operating
324	616		loss. For tax years beginning after December 31,
325	617		2000, and ending before January 1, 2008, the years to
326	618		which such losses may be carried shall be det ermined
327	619		solely by reference to Section 172 of the Internal
328	620		Revenue Code, 26 U.S.C., Section 172, with the
329	621		exception that the terms “net operating loss” and
330	622		“taxable income” shall be replaced with “Oklahoma net
331	623		operating loss” and “Oklahoma taxable income”. For
332	624		tax years beginning after December 31, 2007, and
333	625		ending before January 1, 2009, years to which such
334	626		losses may be carried back shall be limited to two (2)
335	627		years. For tax years beginning after December 31,
336	628		2008, the years to which such losses may be carried
337	629		back shall be determined solely by reference to
338	630		Section 172 of the Internal Revenue Code, 26 U.S.C.,
339	631		Section 172, with the exception that the terms “net
340	632		operating loss” and “taxable income” shall be replaced
341	633		with “Oklahoma net operating loss” and “ Oklahoma
342	634		taxable income”.
343	635
	636	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 13 1
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	647	+	12
	648	+	13
	649	+	14
	650	+	15
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	654	+	19
	655	+	20
	656	+	21
	657	+	22
	658	+	23
	659	+	24
	660	+
344	661		4. Items of the following nature shall be allocated as
345	662		indicated. Allowable deductions attributable to items separately
346	663		allocable in subparagraphs a, b and c of this paragraph, whether or
347	664		not such items of income were actually r eceived, shall be allocated
348	665		on the same basis as those items:
349		-
350	666		a. Income from real and tangible personal property, such
351	667		as rents, oil and mining production or royalties, and
352	668		gains or losses from sales of such property, shall be
353	669		allocated in accordance with the situs of such
354	670		property;
355		-
356	671		b. Income from intangible personal property, such as
357	672		interest, dividends, patent or copyright royalties,
358	673		and gains or losses from sales of such property, shall
359	674		be allocated in accordance with the domiciliary situs
360		-	of the taxpayer, except that: ENR. H. B. NO. 3388 Page 9
361		-
	675	+	of the taxpayer, except that:
362	676		(1) where such property has acquired a nonunitary
363	677		business or commercial situs apart from the
364	678		domicile of the taxpayer such income shall be
365	679		allocated in accordance with such business or
366	680		commercial situs; interest income from
367	681		investments held to generate working capital for
368	682		a unitary business enterprise shall be included
369	683		in apportionable income; a resident trust or
370	684		resident estate shall be treated as having a
	685	+
	686	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 14 1
	687	+	2
	688	+	3
	689	+	4
	690	+	5
	691	+	6
	692	+	7
	693	+	8
	694	+	9
	695	+	10
	696	+	11
	697	+	12
	698	+	13
	699	+	14
	700	+	15
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	704	+	19
	705	+	20
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	707	+	22
	708	+	23
	709	+	24
	710	+
371	711		separate commercial or business situs insofar as
372	712		undistributed income is concerned, but shall not
373	713		be treated as having a separate commercial or
374	714		business situs insofar as distributed income is
375	715		concerned,
376		-
377	716		(2) for taxable years beginning after December 31,
378	717		2003, capital or ordinary gains or losses from
379	718		the sale of an ownership interest in a publicly
380	719		traded partnership, as defined by Section 7704(b)
381	720		of the Internal Revenue Code, shall be allocated
382	721		to this state in the ratio of the original cost
383	722		of such partnership’s tangible property in this
384	723		state to the original cost of such partnership’s
385	724		tangible property everywhere, as determined at
386	725		the time of the sale; if more than fifty percent
387	726		(50%) of the value of the partnership’s assets
388	727		consists of intangible assets, capital or
389	728		ordinary gains or losses from the sale of an
390	729		ownership interest in the par tnership shall be
391	730		allocated to this state in accordance with the
392	731		sales factor of the partnership for its first
393	732		full tax period immediately preceding its tax
394	733		period during which the ownership interest in the
395	734		partnership was sold; the provisions of this
	735	+
	736	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 15 1
	737	+	2
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	760	+
396	761		division shall only apply if the capital or
397	762		ordinary gains or losses from the sale of an
398	763		ownership interest in a partnership do not
399	764		constitute qualifying gain receiving capital
400	765		treatment as defined in subparagraph a of
401	766		paragraph 2 of subsection F of this secti on,
402		-
403	767		(3) income from such property which is required to be
404		-	allocated pursuant to the provisions of paragraph ~~ENR. H. B. NO. 3388 Page 10~~
	768	+	allocated pursuant to the provisions of paragraph
405	769		5 of this subsection shall be allocated as herein
406	770		provided;
407		-
408	771		c. Net income or loss from a business activity which is
409	772		not a part of business carried o n within or without
410	773		the state of a unitary character shall be separately
411	774		allocated to the state in which such activity is
412	775		conducted;
413		-
414	776		d. In the case of a manufacturing or processing
415	777		enterprise the business of which in Oklahoma this
416	778		state consists solely of marketing its products by:
417		-
418	779		(1) sales having a situs without this state, shipped
419	780		directly to a point from without the state to a
420	781		purchaser within the state, commonly known as
421	782		interstate sales,
422		-
423	783		(2) sales of the product stored in public warehouses
424	784		within the state pursuant to “in transit”
	785	+
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	787	+	2
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	791	+	6
	792	+	7
	793	+	8
	794	+	9
	795	+	10
	796	+	11
	797	+	12
	798	+	13
	799	+	14
	800	+	15
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	810	+
425	811		tariffs, as prescribed and allowed by the
426	812		Interstate Commerce Commission, to a purchaser
427	813		within the state,
428		-
429	814		(3) sales of the product stored in public warehouses
430	815		within the state where the shipment to such
431	816		warehouses is not cov ered by “in transit”
432	817		tariffs, as prescribed and allowed by the
433	818		Interstate Commerce Commission, to a purchaser
434	819		within or without the state,
435		-
436	820		the Oklahoma net income shall, at the option of the
437	821		taxpayer, be that portion of the total net income of
438	822		the taxpayer for federal income tax purposes derived
439	823		from the manufacture and/or processing and sales
440	824		everywhere as determined by the ratio of the sales
441	825		defined in this section made to the purchaser within
442	826		the state to the total sales everywhere. The term
443	827		“public warehouse” as used in this subparagraph means
444	828		a licensed public warehouse, the principal business of
445	829		which is warehousing merchandise for the public;
446		-
447	830		e. In the case of insurance companies, Oklahoma taxable
448	831		income shall be taxable income of the taxpayer for
449		-	federal tax purposes, as adjusted for the adjustments ~~ENR. H. B. NO. 3388 Page 11~~
	832	+	federal tax purposes, as adjusted for the adjustments
450	833		provided pursuant to the provisions of paragraphs 1
451	834		and 2 of this subsection, apportioned as follows:
	835	+
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	847	+	12
	848	+	13
	849	+	14
	850	+	15
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	852	+	17
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	854	+	19
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	858	+	23
	859	+	24
452	860
453	861		(1) except as otherwise provided by division (2) of
454	862		this subparagraph, taxable income of an insurance
455	863		company for a taxable year shall be apportioned
456	864		to this state by multiplying such income by a
457	865		fraction, the numerator of which is the direct
458	866		premiums written for insurance on property or
459	867		risks in this state, and the denominator of which
460	868		is the direct premiums written for insurance on
461	869		property or risks everywhere. For purposes of
462	870		this subsection, the term “direct premiums
463	871		written” means the total amount of direct
464	872		premiums written, assessments and annuity
465	873		considerations as reported for the taxable year
466	874		on the annual statement filed by the company with
467	875		the Insurance Commissioner in the form approved
468	876		by the National Association of Insurance
469	877		Commissioners, or such other form as may be
470	878		prescribed in lieu thereof,
471		-
472	879		(2) if the principal source of premiums written by an
473	880		insurance company consists of premiums for
474	881		reinsurance accepted by it, the taxable income of
475	882		such company shall be apportioned to this state
476	883		by multiplying such income by a fraction, the
477	884		numerator of which is the sum of (a) direct
	885	+
	886	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 18 1
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	910	+
478	911		premiums written for insurance on property or
479	912		risks in this state, plus (b) premiums written
480	913		for reinsurance accepted in respect of property
481	914		or risks in this state, and the denominator of
482	915		which is the sum of (c) direct premiums written
483	916		for insurance on property or risks everyw here,
484	917		plus (d) premiums written for reinsurance
485	918		accepted in respect of property or risks
486	919		everywhere. For purposes of this paragraph,
487	920		premiums written for reinsurance accepted in
488	921		respect of property or risks in this state,
489	922		whether or not otherwise determin able, may at the
490	923		election of the company be determined on the
491	924		basis of the proportion which premiums written
492	925		for insurance accepted from companies
493	926		commercially domiciled in Oklahoma this state
494		-	bears to premiums written for reinsurance ~~ENR. H. B. NO. 3388 Page 12~~
	927	+	bears to premiums written for reinsurance
495	928		accepted from all sou rces, or alternatively in
496	929		the proportion which the sum of the direct
497	930		premiums written for insurance on property or
498	931		risks in this state by each ceding company from
499	932		which reinsurance is accepted bears to the sum of
500	933		the total direct premiums written by each s uch
501	934		ceding company for the taxable year.
	935	+
	936	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 19 1
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502	960
503	961		5. The net income or loss remaining after the separate
504	962		allocation in paragraph 4 of this subsection, being that which is
505	963		derived from a unitary business enterprise, shall be apportioned to
506	964		this state on the basis o f the arithmetical average of three factors
507	965		consisting of property, payroll and sales or gross revenue
508	966		enumerated as subparagraphs a, b and c of this paragraph. Net
509	967		income or loss as used in this paragraph includes that derived from
510	968		patent or copyright ro yalties, purchase discounts, and interest on
511	969		accounts receivable relating to or arising from a business activity,
512	970		the income from which is apportioned pursuant to this subsection,
513	971		including the sale or other disposition of such property and any
514	972		other property used in the unitary enterprise. Deductions used in
515	973		computing such net income or loss shall not include taxes based on
516	974		or measured by income. Provided, for corporations whose property
517	975		for purposes of the tax imposed by Section 2355 of this title has a n
518	976		initial investment cost equaling or exceeding Two Hundred Million
519	977		Dollars ($200,000,000.00) and such investment is made on or after
520	978		July 1, 1997, or for corporations which expand their property or
521	979		facilities in this state and such expansion has an invest ment cost
522	980		equaling or exceeding Two Hundred Million Dollars ($200,000,000.00)
523	981		over a period not to exceed three (3) years, and such expansion is
524	982		commenced on or after January 1, 2000, the three factors shall be
525	983		apportioned with property and payroll, each c omprising twenty-five
526	984		percent (25%) of the apportionment factor and sales comprising fifty
	985	+
	986	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 20 1
	987	+	2
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	1008	+	23
	1009	+	24
	1010	+
527	1011		percent (50%) of the apportionment factor. The apportionment
528	1012		factors shall be computed as follows:
529		-
530	1013		a. The property factor is a fraction, the numerator of
531	1014		which is the average value of the taxpayer’s real and
532	1015		tangible personal property owned or rented and used in
533	1016		this state during the tax period and the denominator
534	1017		of which is the average value of all the taxpayer’s
535	1018		real and tangible personal property everywhere owned
536	1019		or rented and used during the tax period.
537		-
538	1020		(1) Property, the income from which is separately
539		-	allocated in paragraph 4 of this subsection, ~~ENR. H. B. NO. 3388 Page 13~~
	1021	+	allocated in paragraph 4 of this subsection,
540	1022		shall not be included in determining this
541	1023		fraction. The numerator of the fraction shall
542	1024		include a portion of the inve stment in
543	1025		transportation and other equipment having no
544	1026		fixed situs, such as rolling stock, buses, trucks
545	1027		and trailers, including machinery and equipment
546	1028		carried thereon, airplanes, salespersons’
547	1029		automobiles and other similar equipment, in the
548	1030		proportion that miles traveled in Oklahoma this
549	1031		state by such equipment bears to total miles
550	1032		traveled,
551		-
552	1033		(2) Property owned by the taxpayer is valued at its
553	1034		original cost. Property rented by the taxpayer
	1035	+
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	1037	+	2
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	1060	+
554	1061		is valued at eight times the net annual rental
555	1062		rate. Net annual rental rate is the annual
556	1063		rental rate paid by the taxpayer, less any annual
557	1064		rental rate received by the taxpayer from
558	1065		subrentals,
559		-
560	1066		(3) The average value of property shall be determined
561	1067		by averaging the values at the beginning and
562	1068		ending of the tax period but the Oklahoma Tax
563	1069		Commission may require the averaging of monthly
564	1070		values during the tax period if reasonably
565	1071		required to reflect properly the average value of
566	1072		the taxpayer’s property;
567		-
568	1073		b. The payroll factor is a fraction, the numerator of
569	1074		which is the total compensation for services rendered
570	1075		in the state during the tax period, and the
571	1076		denominator of which is the total compensation for
572	1077		services rendered everywhere during the tax period.
573	1078		“Compensation”, as used in this subsection , means
574	1079		those paid-for services to the extent related to the
575	1080		unitary business but does not include officers’
576	1081		salaries, wages and other compensation.
577		-
578	1082		(1) In the case of a transportation enterprise, the
579	1083		numerator of the fraction shall include a portion
580	1084		of such expenditure in connection w ith employees
	1085	+
	1086	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 22 1
	1087	+	2
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	1110	+
581	1111		operating equipment over a fixed route, such as
582	1112		railroad employees, airline pilots, or bus
583	1113		drivers, in this state only a part of the time,
584		-	in the proportion that mileage traveled in ~~ENR. H. B. NO. 3388 Page 14~~
	1114	+	in the proportion that mileage traveled in
585	1115		Oklahoma this state bears to total mileage
586	1116		traveled by such employees,
587		-
588	1117		(2) In any case the numerator of the fraction shall
589	1118		include a portion of such expenditures in
590	1119		connection with itinerant employees, such as
591	1120		traveling salespersons, in this state only a part
592	1121		of the time, in the proportion that time spent in
593	1122		Oklahoma this state bears to total time spent in
594	1123		furtherance of the enterprise by such employees;
595		-
596	1124		c. The sales factor is a fraction, the numerator of which
597	1125		is the total sales or gross revenue of the taxpayer in
598	1126		this state during the tax period, and the denominat or
599	1127		of which is the total sales or gross revenue of the
600	1128		taxpayer everywhere during the tax period. “Sales”,
601	1129		as used in this subsection , does not include sales or
602	1130		gross revenue which are separately allocated in
603	1131		paragraph 4 of this subsection.
604		-
605	1132		(1) Sales of tangible personal property have a situs
606	1133		in this state if the property is delivered or
607	1134		shipped to a purchaser other than the United
	1135	+
	1136	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 23 1
	1137	+	2
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	1160	+
608	1161		States government, within this state regardless
609	1162		of the FOB point or other conditions of the sale;
610	1163		or the property is shipped f rom an office, store,
611	1164		warehouse, factory or other place of storage in
612	1165		this state and (a) the purchaser is the United
613	1166		States government or (b) the taxpayer is not
614	1167		doing business in the state of the destination of
615	1168		the shipment.
616		-
617	1169		(2) In the case of a railroad or interurban railway
618	1170		enterprise, the numerator of the fraction shall
619	1171		not be less than the allocation of revenues to
620	1172		this state as shown in its annual report to the
621	1173		Corporation Commission.
622		-
623	1174		(3) In the case of an airline, truck or bus
624	1175		enterprise or freight c ar, tank car, refrigerator
625	1176		car or other railroad equipment enterprise, the
626	1177		numerator of the fraction shall include a portion
627	1178		of revenue from interstate transportation in the
628		-	proportion that ~~inter state~~ mileage traveled in ~~ENR. H. B. NO. 3388 Page 15~~
	1179	+	proportion that interstate mileage traveled in
629	1180		Oklahoma this state bears to total interstate
630	1181		mileage traveled.
631		-
632	1182		(4) In the case of an oil, gasoline or gas pipeline
633	1183		enterprise, the numerator of the fraction shall
634	1184		be either the total of traffic units of the
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635	1211		enterprise within Oklahoma this state or the
636	1212		revenue allocated to Oklahoma this state based
637	1213		upon miles moved, at the option of the taxpayer,
638	1214		and the denominator of which shall be the total
639	1215		of traffic units of the enterprise or the revenue
640	1216		of the enterprise everywhere as appropriate to
641	1217		the numerator. A “traffic unit” is hereby
642	1218		defined as the transportation for a distance of
643	1219		one (1) mile of one (1) barrel of oil, one (1)
644	1220		gallon of gasoline or one thousand (1,000) cubic
645	1221		feet of natural or casinghead gas, as the case
646	1222		may be.
647		-
648	1223		(5) In the case of a telephone or telegraph or other
649	1224		communication enterprise, the numerator of the
650	1225		fraction shall include that portion of the
651	1226		interstate revenue as is allocated pursuant to
652	1227		the accounting procedures prescribed by the
653	1228		Federal Communications Commission; provided that
654	1229		in respect to each corporation or busine ss entity
655	1230		required by the Federal Communications Commission
656	1231		to keep its books and records in accordance with
657	1232		a uniform system of accounts prescribed by such
658	1233		Commission, the intrastate net income shall be
659	1234		determined separately in the manner provided by
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660	1261		such uniform system of accounts and only the
661	1262		interstate income shall be subject to allocation
662	1263		pursuant to the provisions of this subsection.
663	1264		Provided further, that the gross revenue factors
664	1265		shall be those as are determined pursuant to the
665	1266		accounting procedure s prescribed by the Federal
666	1267		Communications Commission.
667		-
668	1268		In any case where the apportionment of the three factors
669	1269		prescribed in this paragraph attributes to Oklahoma this state a
670	1270		portion of net income of the enterprise out of all appropriate
671	1271		proportion to the property owned and/or business transacted within
672	1272		this state, because of the fact that one or more of the factors so
673		-	prescribed are not employed to any appreciable ~~ext ent~~ in furtherance ~~ENR. H. B. NO. 3388 Page 16~~
	1273	+	prescribed are not employed to any appreciable extent in furtherance
674	1274		of the enterprise; or because one or more factors not so prescribed
675	1275		are employed to a considerable extent in furtherance of the
676	1276		enterprise; or because of other reasons, the Tax Commission is
677	1277		empowered to permit, after a showing by taxpayer that an excessive
678	1278		portion of net income has been attributed to Oklahoma this state, or
679	1279		require, when in its judgment an insufficient portion of net income
680	1280		has been attributed to Oklahoma this state, the elimination,
681	1281		substitution, or use of additional factors, or reduction or increase
682	1282		in the weight of such prescribed factors. Provided, how ever, that
683	1283		any such variance from such prescribed factors which has the effect
684	1284		of increasing the portion of net income attributable to Oklahoma
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685	1311		this state must not be inherently arbitrary, and application of the
686	1312		recomputed final apportionment to the net in come of the enterprise
687	1313		must attribute to Oklahoma this state only a reasonable portion
688	1314		thereof.
689		-
690	1315		6. For calendar years 1997 and 1998, the owner of a new or
691	1316		expanded agricultural commodity processing facility in this state
692	1317		may exclude from Oklahoma taxable income, or in the case of an
693	1318		individual, the Oklahoma adjusted gross income, fifteen percent
694	1319		(15%) of the investment by the owner in the new or expanded
695	1320		agricultural commodity processing facility. For calendar year 1999,
696	1321		and all subsequent years, the perc entage, not to exceed fifteen
697	1322		percent (15%), available to the owner of a new or expanded
698	1323		agricultural commodity processing facility in this state claiming
699	1324		the exemption shall be adjusted annually so that the total estimated
700	1325		reduction in tax liability does not exceed One Million Dollars
701	1326		($1,000,000.00) annually. The Tax Commission shall promulgate rules
702	1327		for determining the percentage of the investment which each eligible
703	1328		taxpayer may exclude. The exclusion provided by this paragraph
704	1329		shall be taken in the t axable year when the investment is made. In
705	1330		the event the total reduction in tax liability authorized by this
706	1331		paragraph exceeds One Million Dollars ($1,000,000.00) in any
707	1332		calendar year, the Tax Commission shall permit any excess over One
708	1333		Million Dollars ($1,000,000.00) and shall factor such excess into
709	1334		the percentage for subsequent years. Any amount of the exemption
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710	1361		permitted to be excluded pursuant to the provisions of this
711	1362		paragraph but not used in any year may be carried forward as an
712	1363		exemption from income pursuant to the provisions of this paragraph
713	1364		for a period not exceeding six (6) years following the year in which
714	1365		the investment was originally made.
715		-
716	1366		For purposes of this paragraph:
717		-	ENR. H. B. NO. 3388 Page 17
718	1367		a. “Agricultural commodity processing facility” means
719	1368		building buildings, structures, fixtures and
720	1369		improvements used or operated primarily for the
721	1370		processing or production of marketable products from
722	1371		agricultural commodities. The term shall also mean a
723	1372		dairy operation that requires a depreciable investment
724	1373		of at least Two Hundred Fifty Thousand Dollars
725	1374		($250,000.00) and which produces milk from dairy cows.
726	1375		The term does not include a facility that provides
727	1376		only, and nothing more than, storage, cleaning, drying
728	1377		or transportation of agricultural commodities, and
729		-
730	1378		b. “Facility” means each part of the facility which is
731	1379		used in a process primarily for:
732		-
733	1380		(1) the processing of agricultural commodities,
734	1381		including receiving or storing agricultural
735	1382		commodities, or the production of milk at a dairy
736	1383		operation,
737	1384
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738	1410		(2) transporting the agricu ltural commodities or
739	1411		product before, during or after the processing,
740	1412		or
741		-
742	1413		(3) packaging or otherwise preparing the product for
743	1414		sale or shipment.
744		-
745	1415		7. Despite any provision to the contrary in paragraph 3 of this
746	1416		subsection, for taxable years beginning after D ecember 31, 1999, in
747	1417		the case of a taxpayer which has a farming loss, such farming loss
748	1418		shall be considered a net operating loss carryback in accordance
749	1419		with and to the extent of the Internal Revenue Code, 26 U.S.C.,
750	1420		Section 172(b)(G). However, the amount of the net operating loss
751	1421		carryback shall not exceed the lesser of:
752		-
753	1422		a. Sixty Thousand Dollars ($60,000.00), or
754		-
755	1423		b. the loss properly shown on Schedule F of the Internal
756	1424		Revenue Service Form 1040 reduced by one -half (1/2) of
757	1425		the income from all other source s other than reflected
758	1426		on Schedule F.
759		-
760	1427		8. In taxable years beginning after December 31, 1995, all
761	1428		qualified wages equal to the federal income tax credit set forth in
762		-	26 U.S.C.A., Section 45A, shall be deducted from taxable income. ~~ENR. H. B. NO. 3388 Page 18~~
	1429	+	26 U.S.C.A., Section 45A, shall be deducted from taxable income.
763	1430		The deduction allowed pu rsuant to this paragraph shall only be
764	1431		permitted for the tax years in which the federal tax credit pursuant
765	1432		to 26 U.S.C.A., Section 45A, is allowed. For purposes of this
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766	1459		paragraph, “qualified wages” means those wages used to calculate the
767	1460		federal credit pursuant to 26 U.S.C.A., Section 45A.
768		-
769	1461		9. In taxable years beginning after December 31, 2005, an
770	1462		employer that is eligible for and utilizes the Safety Pays OSHA
771	1463		Consultation Service provided by the Oklahoma Department of Labor
772	1464		shall receive an exemption fro m taxable income in the amount of One
773	1465		Thousand Dollars ($1,000.00) for the tax year that the service is
774	1466		utilized.
775		-
776	1467		10. For taxable years beginning on or after January 1, 2010,
777	1468		there shall be added to Oklahoma taxable income an amount equal to
778	1469		the amount of deferred income not included in such taxable income
779	1470		pursuant to Section 108(i)(1) of the Internal Revenue Code of 1986
780	1471		as amended by Section 1231 of the American Recovery and Reinvestment
781	1472		Act of 2009 (P.L. No. 111 -5). There shall be subtracted from
782	1473		Oklahoma taxable income an amount equal to the amount of deferred
783	1474		income included in such taxable income pursuant to Section 108(i)(1)
784	1475		of the Internal Revenue Code by Section 1231 of the American
785	1476		Recovery and Reinvestment Act of 2009 (P.L. No. 111 -5).
786		-
787	1477		11. For taxable years beginning on or after January 1, 2019,
788	1478		there shall be subtracted from Oklahoma taxable income or adjusted
789	1479		gross income any item of income or gain, and there shall be added to
790	1480		Oklahoma taxable income or adjusted gross income any item of loss o r
791	1481		deduction that in the absence of an election pursuant to the
792	1482		provisions of the Pass -Through Entity Tax Equity Act of 2019 would
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793	1509		be allocated to a member or to an indirect member of an electing
794	1510		pass-through entity pursuant to Section 2351 et seq. of this title,
795	1511		if (i) the electing pass -through entity has accounted for such item
796	1512		in computing its Oklahoma net entity income or loss pursuant to the
797	1513		provisions of the Pass -Through Entity Tax Equity Act of 2019, and
798	1514		(ii) the total amount of tax attributable to an y resulting Oklahoma
799	1515		net entity income has been paid. The Oklahoma Tax Commission shall
800	1516		promulgate rules for the reporting of such exclusion to direct and
801	1517		indirect members of the electing pass -through entity. As used in
802	1518		this paragraph, “electing pass -through entity”, “indirect member”,
803	1519		and “member” shall be defined in the same manner as prescribed by
804	1520		Section 2355.1P-2 of this title. Notwithstanding the application of
805	1521		this paragraph, the adjusted tax basis of any ownership interest in
806		-	a pass-through entity for purposes of Section 2351 et seq. of this ~~ENR. H. B. NO. 3388 Page 19~~
	1522	+	a pass-through entity for purposes of Section 2351 et seq. of this
807	1523		title shall be equal to its adjusted tax basis for federal income
808	1524		tax purposes.
809		-
810	1525		B. 1. The taxable income of any corporation shall be further
811	1526		adjusted to arrive at Oklahoma taxable income, except those
812	1527		corporations electing treatment as provided in subchapter S of the
813	1528		Internal Revenue Code, 26 U.S.C., Section 1361 et seq., and Section
814	1529		2365 of this title, deductions pursuant to the provisions of the
815	1530		Accelerated Cost Recovery System as defined and allowed in the
816	1531		Economic Recovery Tax Act of 1981, Public Law 97 -34, 26 U.S.C.,
817	1532		Section 168, for depreciation of assets placed into service after
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818	1559		December 31, 1981, shall not be allowed in calculating Oklahoma
819	1560		taxable income. Such corporations shall be allowed a deducti on for
820	1561		depreciation of assets placed into service after December 31, 1981,
821	1562		in accordance with provisions of the Internal Revenue Code, 26
822	1563		U.S.C., Section 1 et seq., in effect immediately prior to the
823	1564		enactment of the Accelerated Cost Recovery System. The Oklahoma tax
824	1565		basis for all such assets placed into service after December 31,
825	1566		1981, calculated in this section shall be retained and utilized for
826	1567		all Oklahoma income tax purposes through the final disposition of
827	1568		such assets.
828		-
829	1569		Notwithstanding any other provi sions of the Oklahoma Income Tax
830	1570		Act, Section 2351 et seq. of this title, or of the Internal Revenue
831	1571		Code to the contrary, this subsection shall control calculation of
832	1572		depreciation of assets placed into service after December 31, 1981,
833	1573		and before January 1 , 1983.
834		-
835	1574		For assets placed in service and held by a corporation in which
836	1575		accelerated cost recovery system the Accelerated Cost Recovery
837	1576		System was previously disallowed, an adjustment to taxable income is
838	1577		required in the first taxable year beginning after D ecember 31,
839	1578		1982, to reconcile the basis of such assets to the basis allowed in
840	1579		the Internal Revenue Code. The purpose of this adjustment is to
841	1580		equalize the basis and allowance for depreciation accounts between
842	1581		that reported to the Internal Revenue Servic e and that reported to
843	1582		Oklahoma this state.
844	1583
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845	1609		2. For tax years beginning on or after January 1, 2009, and
846	1610		ending on or before December 31, 2009, there shall be added to
847	1611		Oklahoma taxable income any amount in excess of One Hundred Seventy -
848	1612		five Thousand Dollar s ($175,000.00) which has been deducted as a
849	1613		small business expense under Internal Revenue Code, Section 179 as
850	1614		provided in the American Recovery and Reinvestment Act of 2009.
851		-	ENR. H. B. NO. 3388 Page 20
852	1615		C. 1. For taxable years beginning after December 31, 1987, the
853	1616		taxable income of any corporation shall be further adjusted to
854	1617		arrive at Oklahoma taxable income for transfers of technology to
855	1618		qualified small businesses located in Oklahoma this state. Such
856	1619		transferor corporation shall be allowed an exemption from taxable
857	1620		income of an amount equal to the amount of royalty payment received
858	1621		as a result of such transfer; provided, however, such amount shall
859	1622		not exceed ten percent (10%) of the amount of gross proceeds
860	1623		received by such transferor corporation as a result of the
861	1624		technology transfer. Such exemption shall be allowed for a period
862	1625		not to exceed ten (10) years from the date of receipt of the first
863	1626		royalty payment accruing from such transfer. No exemption may be
864	1627		claimed for transfers of technology to qualified small businesses
865	1628		made prior to January 1, 1988.
866		-
867	1629		2. For purposes of this subsection:
868		-
869	1630		a. “Qualified small business” means an entity, whether
870	1631		organized as a corporation, partnership, or
871	1632		proprietorship, organized for profit with its
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872	1659		principal place of business located within thi s state
873	1660		and which meets the following criteria:
874		-
875	1661		(1) Capitalization of not more than Two Hundred Fifty
876	1662		Thousand Dollars ($250,000.00),
877		-
878	1663		(2) Having at least fifty percent (50%) of its
879	1664		employees and assets located in Oklahoma this
880	1665		state at the time of the tran sfer, and
881		-
882	1666		(3) Not a subsidiary or affiliate of the transferor
883	1667		corporation;
884		-
885	1668		b. “Technology” means a proprietary process, formula,
886	1669		pattern, device or compilation of scientific or
887	1670		technical information which is not in the public
888	1671		domain;
889		-
890	1672		c. “Transferor corporation” means a corporation which is
891	1673		the exclusive and undisputed owner of the technology
892	1674		at the time the transfer is made; and
893		-
894	1675		d. “Gross proceeds” means the total amount of
895	1676		consideration for the transfer of technology, whether
896		-	the consideration is in money or otherwise. ENR. H. B. NO. 3388 Page 21
897		-
	1677	+	the consideration is in money or otherwise.
898	1678		D. 1. For taxable years beginning after December 31, 2005, the
899	1679		taxable income of any corporation, estate or trust, shall be further
900	1680		adjusted for qualifying gains receiving capital treatment. Such
901	1681		corporations, estates or trusts shall be al lowed a deduction from
902	1682		Oklahoma taxable income for the amount of qualifying gains receiving
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903	1709		capital treatment earned by the corporation, estate or trust during
904	1710		the taxable year and included in the federal taxable income of such
905	1711		corporation, estate or trust .
906		-
907	1712		2. As used in this subsection:
908		-
909	1713		a. “qualifying gains receiving capital treatment” means
910	1714		the amount of net capital gains, as defined in Section
911	1715		1222(11) of the Internal Revenue Code, included in the
912	1716		federal income tax return of the corporation, estate
913	1717		or trust that result from:
914		-
915	1718		(1) the sale of real property or tangible personal
916	1719		property located within Oklahoma this state that
917	1720		has been directly or indirectly owned by the
918	1721		corporation, estate or trust for a holding period
919	1722		of at least five (5) years prior to t he date of
920	1723		the transaction from which such net capital gains
921	1724		arise,
922		-
923	1725		(2) the sale of stock or on the sale of an ownership
924	1726		interest in an Oklahoma company, limited
925	1727		liability company, or partnership where such
926	1728		stock or ownership interest has been directly or
927	1729		indirectly owned by the corporation, estate or
928	1730		trust for a holding period of at least three (3)
929	1731		years prior to the date of the transaction from
930	1732		which the net capital gains arise, or
931	1733
	1734	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 35 1
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	1743	+	10
	1744	+	11
	1745	+	12
	1746	+	13
	1747	+	14
	1748	+	15
	1749	+	16
	1750	+	17
	1751	+	18
	1752	+	19
	1753	+	20
	1754	+	21
	1755	+	22
	1756	+	23
	1757	+	24
	1758	+
932	1759		(3) the sale of real property, tangible personal
933	1760		property or intangible pe rsonal property located
934	1761		within Oklahoma this state as part of the sale of
935	1762		all or substantially all of the assets of an
936	1763		Oklahoma company, limited liability company, or
937	1764		partnership where such property has been directly
938	1765		or indirectly owned by such entity owne d by the
939	1766		owners of such entity, and used in or derived
940		-	from such entity for a period of at least three ~~ENR. H. B. NO. 3388 Page 22~~
	1767	+	from such entity for a period of at least three
941	1768		(3) years prior to the date of the transaction
942	1769		from which the net capital gains arise,
943		-
944	1770		b. “holding period” means an uninterrupted period of
945	1771		time. The holding period shall include any additional
946	1772		period when the property was held by another
947	1773		individual or entity, if such additional period is
948	1774		included in the taxpayer’s holding period for the
949	1775		asset pursuant to the Internal Revenue Code,
950		-
951	1776		c. “Oklahoma company”, “limited liability company”, or
952	1777		“partnership” means an entity whose primary
953	1778		headquarters have been located in Oklahoma this state
954	1779		for at least three (3) uninterrupted years prior to
955	1780		the date of the transaction from which the net capital
956	1781		gains arise,
957	1782
	1783	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 36 1
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	1791	+	9
	1792	+	10
	1793	+	11
	1794	+	12
	1795	+	13
	1796	+	14
	1797	+	15
	1798	+	16
	1799	+	17
	1800	+	18
	1801	+	19
	1802	+	20
	1803	+	21
	1804	+	22
	1805	+	23
	1806	+	24
	1807	+
958	1808		d. “direct” means the taxpayer directly owns the asset,
959	1809		and
960		-
961	1810		e. “indirect” means the taxpayer owns an interest in a
962	1811		pass-through entity (or chain of pass -through
963	1812		entities) that sells the asset that gives rise to the
964	1813		qualifying gains receiving capital treatment.
965		-
966	1814		(1) With respect to sales of real property or
967	1815		tangible personal property located within
968	1816		Oklahoma this state, the deduction described in
969	1817		this subsection shall not apply unless the pass -
970	1818		through entity that makes the sale has held the
971	1819		property for not less tha n five (5) uninterrupted
972	1820		years prior to the date of the transaction that
973	1821		created the capital gain, and each pass -through
974	1822		entity included in the chain of ownership has
975	1823		been a member, partner, or shareholder of the
976	1824		pass-through entity in the tier immediately below
977	1825		it for an uninterrupted period of not less than
978	1826		five (5) years.
979		-
980	1827		(2) With respect to sales of stock or ownership
981	1828		interest in or sales of all or substantially all
982	1829		of the assets of an Oklahoma company, limited
983	1830		liability company, or partnership, the ded uction
984	1831		described in this subsection shall not apply
985		-	unless the pass-through entity that makes the ENR. H. B. NO. 3388 Page 23
	1832	+
	1833	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 37 1
	1834	+	2
	1835	+	3
	1836	+	4
	1837	+	5
	1838	+	6
	1839	+	7
	1840	+	8
	1841	+	9
	1842	+	10
	1843	+	11
	1844	+	12
	1845	+	13
	1846	+	14
	1847	+	15
	1848	+	16
	1849	+	17
	1850	+	18
	1851	+	19
	1852	+	20
	1853	+	21
	1854	+	22
	1855	+	23
	1856	+	24
	1857	+
	1858	+	unless the pass-through entity that makes the
986	1859		sale has held the stock or ownership interest or
987	1860		the assets for not less than three (3)
988	1861		uninterrupted years prior to the date of the
989	1862		transaction that created the capital gain, and
990	1863		each pass-through entity included in the chain of
991	1864		ownership has been a member, partner or
992	1865		shareholder of the pass -through entity in the
993	1866		tier immediately below it for an uninterrupted
994	1867		period of not less than three (3) years.
995		-
996	1868		E. The Oklahoma adjusted gross income of any individual
997	1869		taxpayer shall be further adjusted as follows to arrive at Oklahoma
998	1870		taxable income:
999		-
1000	1871		1. a. In the case of individuals, there shall be added or
1001	1872		deducted, as the case may be, the difference necessary
1002	1873		to allow personal exemptions of One Thousand Dollars
1003	1874		($1,000.00) in lieu of the personal exemptions allowed
1004	1875		by the Internal Revenue Code.
1005		-
1006	1876		b. There shall be allowed an additional exemption of One
1007	1877		Thousand Dollars ($1,000.00) for each taxpayer or
1008	1878		spouse who is blind at the close of the tax year. For
1009	1879		purposes of this subparagraph, an individual is blind
1010	1880		only if the central visual acuity of the individual
1011	1881		does not exceed 20/200 in the better eye with
	1882	+
	1883	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 38 1
	1884	+	2
	1885	+	3
	1886	+	4
	1887	+	5
	1888	+	6
	1889	+	7
	1890	+	8
	1891	+	9
	1892	+	10
	1893	+	11
	1894	+	12
	1895	+	13
	1896	+	14
	1897	+	15
	1898	+	16
	1899	+	17
	1900	+	18
	1901	+	19
	1902	+	20
	1903	+	21
	1904	+	22
	1905	+	23
	1906	+	24
	1907	+
1012	1908		correcting lenses, or if the visual acuity of the
1013	1909		individual is greater than 20/200, but is accompanied
1014	1910		by a limitation in the fields of vision such that the
1015	1911		widest diameter of the visual field subtends an angle
1016	1912		no greater than twenty (20) degrees.
1017		-
1018	1913		c. There shall be allowed an additional exemption of One
1019	1914		Thousand Dollars ($1,0 00.00) for each taxpayer or
1020	1915		spouse who is sixty-five (65) years of age or older at
1021	1916		the close of the tax year based upon the filing status
1022	1917		and federal adjusted gross income of the taxpayer.
1023	1918		Taxpayers with the following filing status may claim
1024	1919		this exemption if the federal adjusted gross income
1025	1920		does not exceed:
1026		-
1027	1921		(1) Twenty-five Thousand Dollars ($25,000.00) if
1028	1922		married and filing jointly;
1029		-	ENR. H. B. NO. 3388 Page 24
1030	1923		(2) Twelve Thousand Five Hundred Dollars ($12,500.00)
1031	1924		if married and filing separately;
1032		-
1033	1925		(3) Fifteen Thousand Dollars ($15,0 00.00) if single;
1034	1926		and
1035		-
1036	1927		(4) Nineteen Thousand Dollars ($19,000.00) if a
1037	1928		qualifying head of household.
1038		-
1039	1929		Provided, for taxable years beginning after December
1040	1930		31, 1999, amounts included in the calculation of
1041	1931		federal adjusted gross income pursuant to the
	1932	+
	1933	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 39 1
	1934	+	2
	1935	+	3
	1936	+	4
	1937	+	5
	1938	+	6
	1939	+	7
	1940	+	8
	1941	+	9
	1942	+	10
	1943	+	11
	1944	+	12
	1945	+	13
	1946	+	14
	1947	+	15
	1948	+	16
	1949	+	17
	1950	+	18
	1951	+	19
	1952	+	20
	1953	+	21
	1954	+	22
	1955	+	23
	1956	+	24
	1957	+
1042	1958		conversion of a traditional individual retirement
1043	1959		account to a Roth individual retirement account shall
1044	1960		be excluded from federal adjusted gross income for
1045	1961		purposes of the income thresholds provided in this
1046	1962		subparagraph.
1047		-
1048	1963		2. a. For taxable years beginning on or befo re December 31,
1049	1964		2005, in the case of individuals who use the standard
1050	1965		deduction in determining taxable income, there shall
1051	1966		be added or deducted, as the case may be, the
1052	1967		difference necessary to allow a standard deduction in
1053	1968		lieu of the standard deduction al lowed by the Internal
1054	1969		Revenue Code, in an amount equal to the larger of
1055	1970		fifteen percent (15%) of the Oklahoma adjusted gross
1056	1971		income or One Thousand Dollars ($1,000.00), but not to
1057	1972		exceed Two Thousand Dollars ($2,000.00), except that
1058	1973		in the case of a marrie d individual filing a separate
1059	1974		return such deduction shall be the larger of fifteen
1060	1975		percent (15%) of such Oklahoma adjusted gross income
1061	1976		or Five Hundred Dollars ($500.00), but not to exceed
1062	1977		the maximum amount of One Thousand Dollars
1063	1978		($1,000.00).
1064		-
1065	1979		b. For taxable years beginning on or after January 1,
1066	1980		2006, and before January 1, 2007, in the case of
1067	1981		individuals who use the standard deduction in
	1982	+
	1983	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 40 1
	1984	+	2
	1985	+	3
	1986	+	4
	1987	+	5
	1988	+	6
	1989	+	7
	1990	+	8
	1991	+	9
	1992	+	10
	1993	+	11
	1994	+	12
	1995	+	13
	1996	+	14
	1997	+	15
	1998	+	16
	1999	+	17
	2000	+	18
	2001	+	19
	2002	+	20
	2003	+	21
	2004	+	22
	2005	+	23
	2006	+	24
	2007	+
1068	2008		determining taxable income, there shall be added or
1069	2009		deducted, as the case may be, the difference necessary
1070	2010		to allow a standard deduction in lieu of the standard
1071	2011		deduction allowed by the Internal Revenue Code, in an
1072	2012		amount equal to:
1073		-	ENR. H. B. NO. 3388 Page 25
1074	2013		(1) Three Thousand Dollars ($3,000.00), if the filing
1075	2014		status is married filing joint, head of household
1076	2015		or qualifying widow; or
1077		-
1078	2016		(2) Two Thousand Dollars ($2,000.00), if the filing
1079	2017		status is single or married filing separate.
1080		-
1081	2018		c. For the taxable year beginning on January 1, 2007, and
1082	2019		ending December 31, 2007, in the case of individuals
1083	2020		who use the standard deduction in determining taxable
1084	2021		income, there shall be added or deducted, as the case
1085	2022		may be, the difference necessary to allow a standard
1086	2023		deduction in lieu of the standard deduction allowed by
1087	2024		the Internal Revenue Code, in an amount equal to:
1088		-
1089	2025		(1) Five Thousand Five Hundred Dollars ($5,500.00),
1090	2026		if the filing status is married filing joint or
1091	2027		qualifying widow; or
1092		-
1093	2028		(2) Four Thousand One Hundred Twenty -five Dollars
1094	2029		($4,125.00) for a head of household; or
	2030	+
	2031	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 41 1
	2032	+	2
	2033	+	3
	2034	+	4
	2035	+	5
	2036	+	6
	2037	+	7
	2038	+	8
	2039	+	9
	2040	+	10
	2041	+	11
	2042	+	12
	2043	+	13
	2044	+	14
	2045	+	15
	2046	+	16
	2047	+	17
	2048	+	18
	2049	+	19
	2050	+	20
	2051	+	21
	2052	+	22
	2053	+	23
	2054	+	24
1095	2055
1096	2056		(3) Two Thousand Seven Hundred Fifty Dollars
1097	2057		($2,750.00), if the filing status is single or
1098	2058		married filing separate.
1099		-
1100	2059		d. For the taxable year beginning on January 1, 2008, and
1101	2060		ending December 31, 2008, in the case of individuals
1102	2061		who use the standard deduction in determining taxable
1103	2062		income, there shall be added or deducted, as the case
1104	2063		may be, the difference necessary to allow a standard
1105	2064		deduction in lieu of the standard deduction allowed by
1106	2065		the Internal Revenue Code, in an amount equal to:
1107		-
1108	2066		(1) Six Thousand Five Hundred Dollars ($6,500.00), if
1109	2067		the filing status is married filing joint or
1110	2068		qualifying widow, or
1111		-
1112	2069		(2) Four Thousand Eight Hundred Seventy -five Dollars
1113	2070		($4,875.00) for a head of household, or
1114		-
1115	2071		(3) Three Thousand Two Hundred Fifty Dollars
1116	2072		($3,250.00), if the filing status is single or
1117	2073		married filing separate.
1118		-	ENR. H. B. NO. 3388 Page 26
1119	2074		e. For the taxable year beginning on Jan uary 1, 2009, and
1120	2075		ending December 31, 2009, in the case of individuals
1121	2076		who use the standard deduction in determining taxable
1122	2077		income, there shall be added or deducted, as the case
1123	2078		may be, the difference necessary to allow a standard
	2079	+
	2080	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 42 1
	2081	+	2
	2082	+	3
	2083	+	4
	2084	+	5
	2085	+	6
	2086	+	7
	2087	+	8
	2088	+	9
	2089	+	10
	2090	+	11
	2091	+	12
	2092	+	13
	2093	+	14
	2094	+	15
	2095	+	16
	2096	+	17
	2097	+	18
	2098	+	19
	2099	+	20
	2100	+	21
	2101	+	22
	2102	+	23
	2103	+	24
	2104	+
1124	2105		deduction in lieu of the standard deduction allowed by
1125	2106		the Internal Revenue Code, in an amount equal to:
1126		-
1127	2107		(1) Eight Thousand Five Hundred Dollars ($8,500.00),
1128	2108		if the filing status is married filing joint or
1129	2109		qualifying widow, or
1130		-
1131	2110		(2) Six Thousand Three Hundred Seventy -five Dollars
1132	2111		($6,375.00) for a head of household, or
1133		-
1134	2112		(3) Four Thousand Two Hundred Fifty Dollars
1135	2113		($4,250.00), if the filing status is single or
1136	2114		married filing separate.
1137		-
1138	2115		Oklahoma adjusted gross income shall be increased by
1139	2116		any amounts paid for motor vehicle excise taxes which
1140	2117		were deducted as allowed by the Internal Revenue Code.
1141		-
1142	2118		f. For taxable years beginning on or after January 1,
1143	2119		2010, and ending on December 31, 2016, in the case of
1144	2120		individuals who use the standard deduction in
1145	2121		determining taxable income, there shall b e added or
1146	2122		deducted, as the case may be, the difference necessary
1147	2123		to allow a standard deduction equal to the standard
1148	2124		deduction allowed by the Internal Revenue Code, based
1149	2125		upon the amount and filing status prescribed by such
1150	2126		Code for purposes of filing fed eral individual income
1151	2127		tax returns.
1152	2128
	2129	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 43 1
	2130	+	2
	2131	+	3
	2132	+	4
	2133	+	5
	2134	+	6
	2135	+	7
	2136	+	8
	2137	+	9
	2138	+	10
	2139	+	11
	2140	+	12
	2141	+	13
	2142	+	14
	2143	+	15
	2144	+	16
	2145	+	17
	2146	+	18
	2147	+	19
	2148	+	20
	2149	+	21
	2150	+	22
	2151	+	23
	2152	+	24
	2153	+
1153	2154		g. For taxable years beginning on or after January 1,
1154	2155		2017, in the case of individuals who use the standard
1155	2156		deduction in determining taxable income, there shall
1156	2157		be added or deducted, as the case may be, the
1157	2158		difference necessary to allow a standard deduction in
1158	2159		lieu of the standard deduction allowed by the Internal
1159	2160		Revenue Code, as follows:
1160		-
1161	2161		(1) Six Thousand Three Hundred Fifty Dollars
1162	2162		($6,350.00) for single or married filing
1163		-	separately, ENR. H. B. NO. 3388 Page 27
1164		-
	2163	+	separately,
1165	2164		(2) Twelve Thousand Seven Hundred Do llars
1166	2165		($12,700.00) for married filing jointly or
1167	2166		qualifying widower with dependent child, and
1168		-
1169	2167		(3) Nine Thousand Three Hundred Fifty Dollars
1170	2168		($9,350.00) for head of household.
1171		-
1172	2169		3. a. In the case of resident and part -year resident
1173	2170		individuals having adjusted gross income from sources
1174	2171		both within and without the state, the itemized or
1175	2172		standard deductions and personal exemptions shall be
1176	2173		reduced to an amount which is the same portion of the
1177	2174		total thereof as Oklahoma adjusted gross income is of
1178	2175		adjusted gross income. To the extent itemized
1179	2176		deductions include allowable moving expense, proration
1180	2177		of moving expense shall not be required or permitted
	2178	+
	2179	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 44 1
	2180	+	2
	2181	+	3
	2182	+	4
	2183	+	5
	2184	+	6
	2185	+	7
	2186	+	8
	2187	+	9
	2188	+	10
	2189	+	11
	2190	+	12
	2191	+	13
	2192	+	14
	2193	+	15
	2194	+	16
	2195	+	17
	2196	+	18
	2197	+	19
	2198	+	20
	2199	+	21
	2200	+	22
	2201	+	23
	2202	+	24
	2203	+
1181	2204		but allowable moving expense shall be fully deductible
1182	2205		for those taxpayers moving within or into Oklahoma
1183	2206		this state and no part of moving expense shall be
1184	2207		deductible for those taxpayers moving without or out
1185	2208		of Oklahoma this state. All other itemized or
1186	2209		standard deductions and personal exemptions shall be
1187	2210		subject to proration as provided by law.
1188		-
1189	2211		b. For taxable years begi nning on or after January 1,
1190	2212		2018, the net amount of itemized deductions allowable
1191	2213		on an Oklahoma income tax return, subject to the
1192	2214		provisions of paragraph 24 of this subsection, shall
1193	2215		not exceed Seventeen Thousand Dollars ($17,000.00).
1194	2216		For purposes of this subparagraph, charitable
1195	2217		contributions and medical expenses deductible for
1196	2218		federal income tax purposes shall be excluded from the
1197	2219		amount of Seventeen Thousand Dollars ($17,000.00) as
1198	2220		specified by this subparagraph.
1199		-
1200	2221		4. A resident individual with a physi cal disability
1201	2222		constituting a substantial handicap to employment may deduct from
1202	2223		Oklahoma adjusted gross income such expenditures to modify a motor
1203	2224		vehicle, home or workplace as are necessary to compensate for his or
1204	2225		her handicap. A veteran certified by t he Department of Veterans
1205	2226		Affairs of the federal government as having a service -connected
1206	2227		disability shall be conclusively presumed to be an individual with a
	2228	+
	2229	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 45 1
	2230	+	2
	2231	+	3
	2232	+	4
	2233	+	5
	2234	+	6
	2235	+	7
	2236	+	8
	2237	+	9
	2238	+	10
	2239	+	11
	2240	+	12
	2241	+	13
	2242	+	14
	2243	+	15
	2244	+	16
	2245	+	17
	2246	+	18
	2247	+	19
	2248	+	20
	2249	+	21
	2250	+	22
	2251	+	23
	2252	+	24
	2253	+
1207	2254		physical disability constituting a substantial handicap to
1208		-	employment. The Tax Commission shall promulgate rules containing a ~~ENR. H. B. NO. 3388 Page 28~~
	2255	+	employment. The Tax Commission shall promulgate rules containing a
1209	2256		list of combinations of common disabilities and modifications which
1210	2257		may be presumed to qualify for this deduction. The Tax Commission
1211	2258		shall prescribe necessary requirements for verification.
1212		-
1213	2259		5. a. Before July 1, 2010, the fir st One Thousand Five
1214	2260		Hundred Dollars ($1,500.00) received by any person
1215	2261		from the United States as salary or compensation in
1216	2262		any form, other than retirement benefits, as a member
1217	2263		of any component of the Armed Forces of the United
1218	2264		States shall be deducted fr om taxable income.
1219		-
1220	2265		b. On or after July 1, 2010, one hundred percent (100%)
1221	2266		of the income received by any person from the United
1222	2267		States as salary or compensation in any form, other
1223	2268		than retirement benefits, as a member of any component
1224	2269		of the Armed Forces o f the United States shall be
1225	2270		deducted from taxable income.
1226		-
1227	2271		c. Whenever the filing of a timely income tax return by a
1228	2272		member of the Armed Forces of the United States is
1229	2273		made impracticable or impossible of accomplishment by
1230	2274		reason of:
1231		-
1232	2275		(1) absence from the United States, which term
1233	2276		includes only the states and the District of
1234	2277		Columbia;
1235	2278
	2279	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 46 1
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1236	2304		(2) absence from the State of Oklahoma this state
1237	2305		while on active duty; or
1238		-
1239	2306		(3) confinement in a hospital within the United
1240	2307		States for treatment of wounds, injuries or
1241	2308		disease,
1242		-
1243	2309		the time for filing a return and paying an income tax
1244	2310		shall be and is hereby extended without incurring
1245	2311		liability for interest or penalties, to the fifteenth
1246	2312		day of the third month following the month in which:
1247		-
1248	2313		(a) Such individual shall return to the United
1249	2314		States if the extension is granted pursuant
1250	2315		to subparagraph a of this paragraph, return
1251	2316		to the State of Oklahoma this state if the
1252	2317		extension is granted pursuant to
1253		-	subparagraph b of this paragraph or be ~~ENR. H. B. NO. 3388 Page 29~~
	2318	+	subparagraph b of this paragraph or be
1254	2319		discharged from such hospital if the
1255	2320		extension is granted pursuant to
1256	2321		subparagraph c of this paragraph; or
1257		-
1258	2322		(b) An executor, administrator, or conservator
1259	2323		of the estate of the taxpayer is appointed,
1260	2324		whichever event occurs the earliest.
1261		-
1262	2325		Provided, that the Tax Commission may, in its discretion, grant
1263	2326		any member of the Armed Forces of the United States an extension of
1264	2327		time for filing of income tax returns and payment of income tax
	2328	+
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1265	2354		without incurring liabilities for interest or penalties. Such
1266	2355		extension may be granted only when in the judgment of the Tax
1267	2356		Commission a good cause exists therefor and may be for a period in
1268	2357		excess of six (6) months. A record of every such extension granted,
1269	2358		and the reason therefor, shall be kept.
1270		-
1271	2359		6. Before July 1, 2010, the salary or any other form of
1272	2360		compensation, received from the United States by a member of any
1273	2361		component of the Armed Forces of the United States, shall be
1274	2362		deducted from taxable income during the time in which the person is
1275	2363		detained by the enemy in a conflict, is a prisoner of war or is
1276	2364		missing in action and not dec eased; provided, after July 1, 2010,
1277	2365		all such salary or compensation shall be subject to the deduction as
1278	2366		provided pursuant to paragraph 5 of this subsection.
1279		-
1280	2367		7. a. An individual taxpayer, whether resident or
1281	2368		nonresident, may deduct an amount equal to the federal
1282	2369		income taxes paid by the taxpayer during the taxable
1283	2370		year.
1284		-
1285	2371		b. Federal taxes as described in subparagraph a of this
1286	2372		paragraph shall be deductible by any individual
1287	2373		taxpayer, whether resident or nonresident, only to the
1288	2374		extent they relate to income s ubject to taxation
1289	2375		pursuant to the provisions of the Oklahoma Income Tax
1290	2376		Act. The maximum amount allowable in the preceding
1291	2377		paragraph shall be prorated on the ratio of the
	2378	+
	2379	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 48 1
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	2388	+	10
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	2403	+
1292	2404		Oklahoma adjusted gross income to federal adjusted
1293	2405		gross income.
1294		-
1295	2406		c. For the purpose of this paragraph, “federal income
1296	2407		taxes paid” shall mean federal income taxes, surtaxes
1297	2408		imposed on incomes or excess profits taxes, as though
1298		-	the taxpayer was on the accrual basis. In determining ~~ENR. H. B. NO. 3388 Page 30~~
	2409	+	the taxpayer was on the accrual basis. In determining
1299	2410		the amount of deduction for federal income taxes for
1300	2411		tax year 2001, the amount of the deduction shall not
1301	2412		be adjusted by the amount of any accelerated ten
1302	2413		percent (10%) tax rate bracket credit or advanced
1303	2414		refund of the credit received during the tax year
1304	2415		provided pursuant to the federal Economic Growth and
1305	2416		Tax Relief Reconciliation Act of 2001, P.L. No. 107 -
1306	2417		16, and the advanced refund of such credit shall not
1307	2418		be subject to taxation.
1308		-
1309	2419		d. The provisions of this paragraph shall apply to all
1310	2420		taxable years ending after December 31, 1978, and
1311	2421		beginning before January 1, 2006.
1312		-
1313	2422		8. Retirement benefits not to exceed Five Thousand Five Hundred
1314	2423		Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five
1315	2424		Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Thousand
1316	2425		Dollars ($10,000.00) for the 2006 tax year and all sub sequent tax
1317	2426		years, which are received by an individual from the civil service of
1318	2427		the United States, the Oklahoma Public Employees Retirement System,
	2428	+
	2429	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 49 1
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	2437	+	9
	2438	+	10
	2439	+	11
	2440	+	12
	2441	+	13
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1319	2454		the Teachers’ Retirement System of Oklahoma, the Oklahoma Law
1320	2455		Enforcement Retirement System, the Oklahoma F irefighters Pension and
1321	2456		Retirement System, the Oklahoma Police Pension and Retirement
1322	2457		System, the employee retirement systems created by counties pursuant
1323	2458		to Section 951 et seq. of Title 19 of the Oklahoma Statutes, the
1324	2459		Uniform Retirement System for Justic es and Judges, the Oklahoma
1325	2460		Wildlife Conservation Department Retirement Fund, the Oklahoma
1326	2461		Employment Security Commission Retirement Plan, or the employee
1327	2462		retirement systems created by municipalities pursuant to Section 48 -
1328	2463		101 et seq. of Title 11 of the Ok lahoma Statutes shall be exempt
1329	2464		from taxable income.
1330		-
1331	2465		9. In taxable years beginning after December 3l, 1984, Social
1332	2466		Security benefits received by an individual shall be exempt from
1333	2467		taxable income, to the extent such benefits are included in the
1334	2468		federal adjusted gross income pursuant to the provisions of Section
1335	2469		86 of the Internal Revenue Code, 26 U.S.C., Section 86.
1336		-
1337	2470		10. For taxable years beginning after December 31, 1994, lump -
1338	2471		sum distributions from employer plans of deferred compensation,
1339	2472		which are not qualified plans within the meaning of Section 401(a)
1340	2473		of the Internal Revenue Code, 26 U.S.C., Section 401(a), and which
1341	2474		are deposited in and accounted for within a separate bank account or
1342	2475		brokerage account in a financial institution within this state,
1343		-	shall be excluded from taxable income in the same manner as a ~~ENR. H. B. NO. 3388 Page 31~~
	2476	+	shall be excluded from taxable income in the same manner as a
1344	2477		qualifying rollover contribution to an individual retirement account
	2478	+
	2479	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 50 1
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1345	2504		within the meaning of Section 408 of the Internal Revenue Code, 26
1346	2505		U.S.C., Section 408. Amounts withdrawn from such bank or broke rage
1347	2506		account, including any earnings thereon, shall be included in
1348	2507		taxable income when withdrawn in the same manner as withdrawals from
1349	2508		individual retirement accounts within the meaning of Section 408 of
1350	2509		the Internal Revenue Code.
1351		-
1352	2510		11. In taxable years beg inning after December 31, 1995,
1353	2511		contributions made to and interest received from a medical savings
1354	2512		account established pursuant to Sections 2621 through 2623 of Title
1355	2513		63 of the Oklahoma Statutes shall be exempt from taxable income.
1356		-
1357	2514		12. For taxable years b eginning after December 31, 1996, the
1358	2515		Oklahoma adjusted gross income of any individual taxpayer who is a
1359	2516		swine or poultry producer may be further adjusted for the deduction
1360	2517		for depreciation allowed for new construction or expansion costs
1361	2518		which may be computed using the same depreciation method elected for
1362	2519		federal income tax purposes except that the useful life shall be
1363	2520		seven (7) years for purposes of this paragraph. If depreciation is
1364	2521		allowed as a deduction in determining the adjusted gross income of
1365	2522		an individual, any depreciation calculated and claimed pursuant to
1366	2523		this section shall in no event be a duplication of any depreciation
1367	2524		allowed or permitted on the federal income tax return of the
1368	2525		individual.
1369	2526
	2527	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 51 1
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	2551	+
1370	2552		13. a. In taxable years beginning after December 31, 2002,
1371	2553		nonrecurring adoption expenses paid by a resident
1372	2554		individual taxpayer in connection with:
1373		-
1374	2555		(1) the adoption of a minor, or
1375		-
1376	2556		(2) a proposed adoption of a minor which did not
1377	2557		result in a decreed adoption,
1378		-
1379	2558		may be deducted from the Oklahoma adjusted gross
1380	2559		income.
1381		-
1382	2560		b. The deductions for adoptions and proposed adoptions
1383	2561		authorized by this paragraph shall not exceed Twenty
1384	2562		Thousand Dollars ($20,000.00) per calendar year.
1385		-
1386	2563		c. The Tax Commission shall promulgate rules to implement
1387	2564		the provisions of this paragraph which shall contain a
1388		-	specific list of nonrecurring adoption expenses which ~~ENR. H. B. NO. 3388 Page 32~~
	2565	+	specific list of nonrecurring adoption expenses which
1389	2566		may be presumed to qualify for the deduction. The Tax
1390	2567		Commission shall prescribe necessary requirements for
1391	2568		verification.
1392		-
1393	2569		d. “Nonrecurring adoption expenses” means adoption fees,
1394	2570		court costs, medical expenses, attorney fees and
1395	2571		expenses which are directly related to the legal
1396	2572		process of adoption of a child including, but not
1397	2573		limited to, costs relating to the adoption study,
1398	2574		health and psychological examinations, transportation
1399	2575		and reasonable costs of lodging and food for the child
	2576	+
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	2601	+
1400	2602		or adoptive parents which are incurred to complete the
1401	2603		adoption process and are not reimbursed by other
1402	2604		sources. The term “nonrecurring adoption expenses”
1403	2605		nonrecurring adoption expenses shall not include
1404	2606		attorney fees incurred for the purpose of litigating a
1405	2607		contested adoption, from and after the point of the
1406	2608		initiation of the contest, costs associated with
1407	2609		physical remodeling, renovation and alteration of the
1408	2610		adoptive parents’ home or property, except for a
1409	2611		special needs child as authorized by the court.
1410		-
1411	2612		14. a. In taxable years beginning before January 1, 2005,
1412	2613		retirement benefits not to exceed the amounts
1413	2614		specified in this paragraph, which are received by an
1414	2615		individual sixty-five (65) years of age or olde r and
1415	2616		whose Oklahoma adjusted gross income is Twenty -five
1416	2617		Thousand Dollars ($25,000.00) or less if the filing
1417	2618		status is single, head of household, or married filing
1418	2619		separate, or Fifty Thousand Dollars ($50,000.00) or
1419	2620		less if the filing status is married fi ling joint or
1420	2621		qualifying widow, shall be exempt from taxable income.
1421	2622		In taxable years beginning after December 31, 2004,
1422	2623		retirement benefits not to exceed the amounts
1423	2624		specified in this paragraph, which are received by an
1424	2625		individual whose Oklahoma adjusted gross income is
	2626	+
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	2646	+	20
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	2648	+	22
	2649	+	23
	2650	+	24
	2651	+
1425	2652		less than the qualifying amount specified in this
1426	2653		paragraph, shall be exempt from taxable income.
1427		-
1428	2654		b. For purposes of this paragraph, the qualifying amount
1429	2655		shall be as follows:
1430		-
1431	2656		(1) in taxable years beginning after December 31,
1432	2657		2004, and prior to January 1, 2007, the
1433		-	qualifying amount shall be Thirty -seven Thousand ~~ENR. H. B. NO. 3388 Page 33~~
	2658	+	qualifying amount shall be Thirty -seven Thousand
1434	2659		Five Hundred Dollars ($37,500.00) or less if the
1435	2660		filing status is single, head of household, or
1436	2661		married filing separate, or Seventy -five Thousand
1437	2662		Dollars ($75,000.00) or less if th e filing status
1438	2663		is married filing jointly or qualifying widow,
1439		-
1440	2664		(2) in the taxable year beginning January 1, 2007,
1441	2665		the qualifying amount shall be Fifty Thousand
1442	2666		Dollars ($50,000.00) or less if the filing status
1443	2667		is single, head of household, or married filin g
1444	2668		separate, or One Hundred Thousand Dollars
1445	2669		($100,000.00) or less if the filing status is
1446	2670		married filing jointly or qualifying widow,
1447		-
1448	2671		(3) in the taxable year beginning January 1, 2008,
1449	2672		the qualifying amount shall be Sixty -two Thousand
1450	2673		Five Hundred Dollars ($62,500.00) or less if the
1451	2674		filing status is single, head of household, or
1452	2675		married filing separate, or One Hundred Twenty -
	2676	+
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	2701	+
1453	2702		five Thousand Dollars ($125,000.00) or less if
1454	2703		the filing status is married filing jointly or
1455	2704		qualifying widow,
1456		-
1457	2705		(4) in the taxable year beginning January 1, 2009,
1458	2706		the qualifying amount shall be One Hundred
1459	2707		Thousand Dollars ($100,000.00) or less if the
1460	2708		filing status is single, head of household, or
1461	2709		married filing separate, or Two Hundred Thousand
1462	2710		Dollars ($200,000.00) or less if the filin g
1463	2711		status is married filing jointly or qualifying
1464	2712		widow, and
1465		-
1466	2713		(5) in the taxable year beginning January 1, 2010,
1467	2714		and subsequent taxable years, there shall be no
1468	2715		limitation upon the qualifying amount.
1469		-
1470	2716		c. For purposes of this paragraph, “retirement benefits”
1471	2717		means the total distributions or withdrawals from the
1472	2718		following:
1473		-
1474	2719		(1) an employee pension benefit plan which satisfies
1475	2720		the requirements of Section 401 of the Internal
1476	2721		Revenue Code, 26 U.S.C., Section 401,
1477		-	ENR. H. B. NO. 3388 Page 34
1478	2722		(2) an eligible deferred compensation plan that
1479	2723		satisfies the requirements of Section 457 of the
1480	2724		Internal Revenue Code, 26 U.S.C., Section 457,
	2725	+
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	2738	+	13
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1481	2750
1482	2751		(3) an individual retirement account, annuity or
1483	2752		trust or simplified employee pension that
1484	2753		satisfies the requirements of Section 408 of the
1485	2754		Internal Revenue Code, 26 U.S.C., Section 408,
1486		-
1487	2755		(4) an employee annuity subject to the provisions of
1488	2756		Section 403(a) or (b) of the Internal Revenue
1489	2757		Code, 26 U.S.C., Section 403(a) or (b),
1490		-
1491	2758		(5) United States Retirement Bonds which satisfy the
1492	2759		requirements of Section 86 of the Internal
1493	2760		Revenue Code, 26 U.S.C., Section 86, or
1494		-
1495	2761		(6) lump-sum distributions from a retirement plan
1496	2762		which satisfies the requirements of Section
1497	2763		402(e) of the Internal Revenue Code, 26 U.S.C.,
1498	2764		Section 402(e).
1499		-
1500	2765		d. The amount of the exemption provided by this paragraph
1501	2766		shall be limited to Five Thousand Five Hundred Dollars
1502	2767		($5,500.00) for the 2004 tax year, Seven Thousand Five
1503	2768		Hundred Dollars ($7,500.00) for the 2005 tax year and
1504	2769		Ten Thousand Dollars ($10,000.00) for the tax year
1505	2770		2006 and for all subsequent tax years. Any individual
1506	2771		who claims the exemption provided for in paragraph 8
1507	2772		of this subsection shall not be permitted to claim a
1508	2773		combined total exemption pursuant to this paragraph
1509	2774		and paragraph 8 of this subsection in an amount
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	2793	+	18
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	2795	+	20
	2796	+	21
	2797	+	22
	2798	+	23
	2799	+	24
	2800	+
1510	2801		exceeding Five Thousand Five Hundre d Dollars
1511	2802		($5,500.00) for the 2004 tax year, Seven Thousand Five
1512	2803		Hundred Dollars ($7,500.00) for the 2005 tax year and
1513	2804		Ten Thousand Dollars ($10,000.00) for the 2006 tax
1514	2805		year and all subsequent tax years.
1515		-
1516	2806		15. In taxable years beginning after December 31, 1999, for an
1517	2807		individual engaged in production agriculture who has filed a
1518	2808		Schedule F form with the taxpayer’s federal income tax return for
1519	2809		such taxable year, there shall be excluded from taxable income any
1520	2810		amount which was included as federal taxable inco me or federal
1521		-	adjusted gross income and which ~~consis ts~~ of the discharge of ~~a n ENR. H. B. NO. 3388 Page 35~~
	2811	+	adjusted gross income and which consists of the discharge of an
1522	2812		obligation by a creditor of the taxpayer incurred to finance the
1523	2813		production of agricultural products.
1524		-
1525	2814		16. In taxable years beginning December 31, 2000, an amount
1526	2815		equal to one hundred percent (100%) of the amount of any scholarship
1527	2816		or stipend received from participation in the Oklahoma Police Corps
1528	2817		Program, as established in Section 2 -140.3 of Title 47 of the
1529	2818		Oklahoma Statutes shall be exempt from taxable income.
1530		-
1531	2819		17. a. In taxable years beginning after December 31, 2001,
1532	2820		and before January 1, 2005, there shall be allowed a
1533	2821		deduction in the amount of contributions to accounts
1534	2822		established pursuant to the Oklahoma College Savings
1535	2823		Plan Act. The deduction shall equal the amount of
1536	2824		contributions to accounts, but in no event shall the
	2825	+
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1537	2851		deduction for each contributor exceed Two Thousand
1538	2852		Five Hundred Dollars ($2,500.00) each taxable year for
1539	2853		each account.
1540		-
1541	2854		b. In taxable years beginning after December 31, 2004,
1542	2855		each taxpayer shall be allowed a deduction for
1543	2856		contributions to accounts established pursuant to the
1544	2857		Oklahoma College Savings Plan Act. The maximum annual
1545	2858		deduction shall equal the amount of contributions to
1546	2859		all such accounts plus any contributions to such
1547	2860		accounts by the taxpayer for p rior taxable years after
1548	2861		December 31, 2004, which were not deducted, but in no
1549	2862		event shall the deduction for each tax year exceed Ten
1550	2863		Thousand Dollars ($10,000.00) for each individual
1551	2864		taxpayer or Twenty Thousand Dollars ($20,000.00) for
1552	2865		taxpayers filing a joint return. Any amount of a
1553	2866		contribution that is not deducted by the taxpayer in
1554	2867		the year for which the contribution is made may be
1555	2868		carried forward as a deduction from income for the
1556	2869		succeeding five (5) years. For taxable years
1557	2870		beginning after December 31, 2005, deductions may be
1558	2871		taken for contributions and rollovers made during a
1559	2872		taxable year and up to April 15 of the succeeding
1560	2873		year, or the due date of a taxpayer’s state income tax
1561	2874		return, excluding extensions, whichever is later.
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1562	2901		Provided, a deduction for the same contribution may
1563	2902		not be taken for two (2) different taxable years.
1564		-
1565	2903		c. In taxable years beginning after December 31, 2006,
1566		-	deductions for contributions made pursuant to ~~ENR. H. B. NO. 3388 Page 36~~
	2904	+	deductions for contributions made pursuant to
1567	2905		subparagraph b of this paragraph shall be limited as
1568	2906		follows:
1569		-
1570	2907		(1) for a taxpayer who qualified for the five -year
1571	2908		carryforward election and who takes a rollover or
1572	2909		nonqualified withdrawal during that period, the
1573	2910		tax deduction otherwise available pursuant to
1574	2911		subparagraph b of this paragraph shall be reduced
1575	2912		by the amount which i s equal to the rollover or
1576	2913		nonqualified withdrawal, and
1577		-
1578	2914		(2) for a taxpayer who elects to take a rollover or
1579	2915		nonqualified withdrawal within the same tax year
1580	2916		in which a contribution was made to the
1581	2917		taxpayer’s account, the tax deduction otherwise
1582	2918		available pursuant to subparagraph b of this
1583	2919		paragraph shall be reduced by the amount of the
1584	2920		contribution which is equal to the rollover or
1585	2921		nonqualified withdrawal.
1586		-
1587	2922		d. If a taxpayer elects to take a rollover on a
1588	2923		contribution for which a deduction has been taken
1589	2924		pursuant to subparagraph b of this paragraph within
	2925	+
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1590	2951		one (1) year of the date of contribution, the amount
1591	2952		of such rollover shall be included in the adjusted
1592	2953		gross income of the taxpayer in the taxable year of
1593	2954		the rollover.
1594		-
1595	2955		e. If a taxpayer makes a nonqualified withdrawal of
1596	2956		contributions for which a deduction was taken pursuant
1597	2957		to subparagraph b of this paragraph, such nonqualified
1598	2958		withdrawal and any earnings thereon shall be included
1599	2959		in the adjusted gross income of the taxpayer in the
1600	2960		taxable year of the nonqua lified withdrawal.
1601		-
1602	2961		f. As used in this paragraph:
1603		-
1604	2962		(1) “non-qualified withdrawal” means a withdrawal
1605	2963		from an Oklahoma College Savings Plan account
1606	2964		other than one of the following:
1607		-
1608	2965		(a) a qualified withdrawal,
1609		-	ENR. H. B. NO. 3388 Page 37
1610	2966		(b) a withdrawal made as a result of the death
1611	2967		or disability of the designated beneficiary
1612	2968		of an account,
1613		-
1614	2969		(c) a withdrawal that is made on the account of
1615	2970		a scholarship or the allowance or payment
1616	2971		described in Section 135(d)(1)(B) or (C) or
1617	2972		by the Internal Revenue Code, received by
1618	2973		the designated beneficia ry to the extent the
1619	2974		amount of the refund does not exceed the
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	3000	+
1620	3001		amount of the scholarship, allowance, or
1621	3002		payment, or
1622		-
1623	3003		(d) a rollover or change of designated
1624	3004		beneficiary as permitted by subsection F of
1625	3005		Section 3970.7 of Title 70 of the Oklahoma
1626	3006		Statutes, and
1627		-
1628	3007		(2) “rollover” means the transfer of funds from the
1629	3008		Oklahoma College Savings Plan to any other plan
1630	3009		under Section 529 of the Internal Revenue Code.
1631		-
1632	3010		18. For tax years 2006 through 2021, retirement benefits
1633	3011		received by an individual from any component of the Armed Forces of
1634	3012		the United States in an amount not to exceed the greater of seventy -
1635	3013		five percent (75%) of such benefits or Ten Thousand Dollars
1636	3014		($10,000.00) shall be exempt from taxable income but in no case less
1637	3015		than the amount of the exemption provided by paragraph 14 of this
1638	3016		subsection. For tax year 2022 and subsequent tax years, retirement
1639	3017		benefits received by an individual from any component of the Armed
1640	3018		Forces of the United States shall be exempt from taxable income.
1641		-
1642	3019		19. For taxable years beginning after December 31, 2006,
1643	3020		retirement benefits received by federal civil service retirees,
1644	3021		including survivor annuities, paid in lieu of Social Security
1645	3022		benefits shall be exempt from taxable income to the extent such
1646	3023		benefits are included in the federal adj usted gross income pursuant
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	3049	+
1647	3050		to the provisions of Section 86 of the Internal Revenue Code, 26
1648	3051		U.S.C., Section 86, according to the following schedule:
1649		-
1650	3052		a. in the taxable year beginning January 1, 2007, twenty
1651	3053		percent (20%) of such benefits shall be exempt,
1652		-
1653	3054		b. in the taxable year beginning January 1, 2008, forty
1654		-	percent (40%) of such benefits shall be exempt, ENR. H. B. NO. 3388 Page 38
1655		-
	3055	+	percent (40%) of such benefits shall be exempt,
1656	3056		c. in the taxable year beginning January 1, 2009, sixty
1657	3057		percent (60%) of such benefits shall be exempt,
1658		-
1659	3058		d. in the taxable year beginning January 1, 2010, eighty
1660	3059		percent (80%) of such benefits shall be exempt, and
1661		-
1662	3060		e. in the taxable year beginning January 1, 2011, and
1663	3061		subsequent taxable years, one hundred percent (100%)
1664	3062		of such benefits shall be exempt.
1665		-
1666	3063		20. a. For taxable years beginning after December 31, 2 007, a
1667	3064		resident individual may deduct up to Ten Thousand
1668	3065		Dollars ($10,000.00) from Oklahoma adjusted gross
1669	3066		income if the individual, or the dependent of the
1670	3067		individual, while living, donates one or more human
1671	3068		organs of the individual to another human being for
1672	3069		human organ transplantation. As used in this
1673	3070		paragraph, “human organ” means all or part of a liver,
1674	3071		pancreas, kidney, intestine, lung, or bone marrow. A
1675	3072		deduction that is claimed under this paragraph may be
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	3098	+
1676	3099		claimed in the taxable year in which the h uman organ
1677	3100		transplantation occurs.
1678		-
1679	3101		b. An individual may claim this deduction only once, and
1680	3102		the deduction may be claimed only for unreimbursed
1681	3103		expenses that are incurred by the individual and
1682	3104		related to the organ donation of the individual.
1683		-
1684	3105		c. The Oklahoma Tax Commission shall promulgate rules to
1685	3106		implement the provisions of this paragraph which shall
1686	3107		contain a specific list of expenses which may be
1687	3108		presumed to qualify for the deduction. The Tax
1688	3109		Commission shall prescribe necessary requirements for
1689	3110		verification.
1690		-
1691	3111		21. For taxable years beginning after December 31, 2009, there
1692	3112		shall be exempt from taxable income any amount received by the
1693	3113		beneficiary of the death benefit for an emergency medical technician
1694	3114		or a registered emergency medical responder provided b y Section 1-
1695	3115		2505.1 of Title 63 of the Oklahoma Statutes.
1696		-
1697	3116		22. For taxable years beginning after December 31, 2008,
1698		-	taxable income shall be increased by any unemployment compensation ~~ENR. H. B. NO. 3388 Page 39~~
	3117	+	taxable income shall be increased by any unemployment compensation
1699	3118		exempted under Section 85(c) of the Internal Revenue Code, 26
1700	3119		U.S.C., Section 85(c)(2009).
1701		-
1702	3120		23. For taxable years beginning after December 31, 2008, there
1703	3121		shall be exempt from taxable income any payment in an amount less
1704	3122		than Six Hundred Dollars ($600.00) received by a person as an award
	3123	+
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	3148	+
1705	3149		for participation in a competitive livest ock show event. For
1706	3150		purposes of this paragraph, the payment shall be treated as a
1707	3151		scholarship amount paid by the entity sponsoring the event and the
1708	3152		sponsoring entity shall cause the payment to be categorized as a
1709	3153		scholarship in its books and records.
1710		-
1711	3154		24. For taxable years beginning on or after January 1, 2016,
1712	3155		taxable income shall be increased by any amount of state and local
1713	3156		sales or income taxes deducted under 26 U.S.C., Section 164 of the
1714	3157		Internal Revenue Code. If the amount of state and local taxes
1715	3158		deducted on the federal return is limited, taxable income on the
1716	3159		state return shall be increased only by the amount actually deducted
1717	3160		after any such limitations are applied.
1718		-
1719	3161		25. For taxable years beginning after December 31, 2020, each
1720	3162		taxpayer shall be allowed a deduction for contributions to accounts
1721	3163		established pursuant to the Achieving a Better Life Experience
1722	3164		(ABLE) Program as established in Section 4001.1 et seq. of Title 56
1723	3165		of the Oklahoma Statutes. For any tax year, the deduction provided
1724	3166		for in this paragraph shall not exceed Ten Thousand Dollars
1725	3167		($10,000.00) for an individual taxpayer or Twenty Thousand Dollars
1726	3168		($20,000.00) for taxpayers filing a joint return. Any amount of
1727	3169		contribution not deducted by the taxpayer in the tax year for which
1728	3170		the contribution is made may be carried forward as a deduction from
1729	3171		income for up to five (5) tax years. Deductions may be taken for
1730	3172		contributions made during the tax year and through April 15 of the
	3173	+
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	3196	+	23
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	3198	+
1731	3199		succeeding tax year, or through the due date of a taxpayer’ s state
1732	3200		income tax return excluding extensions, whichever is later.
1733	3201		Provided, a deduction for the same contribution may not be taken in
1734	3202		more than one (1) tax year.
1735		-
1736	3203		26. For tax year 2024 and subsequent tax years, tax credits
1737	3204		received pursuant to the Oklah oma Parental Choice Tax Credit Act in
1738	3205		Section 28-101 of Title 70 of the Oklahoma Statutes shall be exempt
1739	3206		from taxable income.
1740		-
1741	3207		F. 1. For taxable years beginning after December 31, 2004, a
1742	3208		deduction from the Oklahoma adjusted gross income of any individua l
1743		-	taxpayer shall be allowed for qualifying ~~g ains~~ receiving capital ~~ENR. H. B. NO. 3388 Page 40~~
	3209	+	taxpayer shall be allowed for qualifying gains receiving capital
1744	3210		treatment that are included in the federal adjusted gross income of
1745	3211		such individual taxpayer during the taxable year.
1746		-
1747	3212		2. As used in this subsection:
1748		-
1749	3213		a. “qualifying gains receiving capital treatment” means
1750	3214		the amount of net capital gains, as defined in Section
1751	3215		1222(11) of the Internal Revenue Code, included in an
1752	3216		individual taxpayer’s federal income tax return that
1753	3217		result from:
1754		-
1755	3218		(1) the sale of real property or tangible personal
1756	3219		property located within Oklahoma this state that
1757	3220		has been directly or indirectly owned by the
1758	3221		individual taxpayer for a holding period of at
1759	3222		least five (5) years prior to the date of the
	3223	+
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	3235	+	12
	3236	+	13
	3237	+	14
	3238	+	15
	3239	+	16
	3240	+	17
	3241	+	18
	3242	+	19
	3243	+	20
	3244	+	21
	3245	+	22
	3246	+	23
	3247	+	24
	3248	+
1760	3249		transaction from which such net capital gains
1761	3250		arise,
1762		-
1763	3251		(2) the sale of stock or the sale of a direct or
1764	3252		indirect ownership interest in an Oklahoma
1765	3253		company, limited liability company, or
1766	3254		partnership where such stock or ownership
1767	3255		interest has been directly or indirectly owned by
1768	3256		the individual taxpayer for a holding period of
1769	3257		at least two (2) years prior to the date of the
1770	3258		transaction from which the net capital gains
1771	3259		arise, or
1772		-
1773	3260		(3) the sale of real property, tangible personal
1774	3261		property or intangible personal property located
1775	3262		within Oklahoma this state as part of the sale of
1776	3263		all or substantially all of the assets of an
1777	3264		Oklahoma company, limited liability company, or
1778	3265		partnership or an Oklahoma proprietorship
1779	3266		business enterprise where such property has been
1780	3267		directly or indirectly owned by such entity or
1781	3268		business enterprise or owned by the owners o f
1782	3269		such entity or business enterprise for a period
1783	3270		of at least two (2) years prior to the date of
1784	3271		the transaction from which the net capital gains
1785	3272		arise,
1786	3273
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	3282	+	9
	3283	+	10
	3284	+	11
	3285	+	12
	3286	+	13
	3287	+	14
	3288	+	15
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	3290	+	17
	3291	+	18
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	3297	+	24
	3298	+
1787	3299		b. “holding period” means an uninterrupted period of
1788		-	time. The holding period shall include any additi onal ~~ENR. H. B. NO. 3388 Page 41~~
	3300	+	time. The holding period shall include any additi onal
1789	3301		period when the property was held by another
1790	3302		individual or entity, if such additional period is
1791	3303		included in the taxpayer’s holding period for the
1792	3304		asset pursuant to the Internal Revenue Code,
1793		-
1794	3305		c. “Oklahoma company,” “limited liability company,” or
1795	3306		“partnership” means an entity whose primary
1796	3307		headquarters have been located in Oklahoma this state
1797	3308		for at least three (3) uninterrupted years prior to
1798	3309		the date of the transaction from which the net capital
1799	3310		gains arise,
1800		-
1801	3311		d. “direct” means the individual taxpayer d irectly owns
1802	3312		the asset,
1803		-
1804	3313		e. “indirect” means the individual taxpayer owns an
1805	3314		interest in a pass-through entity (or chain of pass -
1806	3315		through entities) that sells the asset that gives rise
1807	3316		to the qualifying gains receiving capital treatment.
1808		-
1809	3317		(1) With respect to sales of real property or
1810	3318		tangible personal property located within
1811	3319		Oklahoma this state, the deduction described in
1812	3320		this subsection shall not apply unless the pass -
1813	3321		through entity that makes the sale has held the
1814	3322		property for not less than five (5) uninterr upted
	3323	+
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	3329	+	6
	3330	+	7
	3331	+	8
	3332	+	9
	3333	+	10
	3334	+	11
	3335	+	12
	3336	+	13
	3337	+	14
	3338	+	15
	3339	+	16
	3340	+	17
	3341	+	18
	3342	+	19
	3343	+	20
	3344	+	21
	3345	+	22
	3346	+	23
	3347	+	24
	3348	+
1815	3349		years prior to the date of the transaction that
1816	3350		created the capital gain, and each pass -through
1817	3351		entity included in the chain of ownership has
1818	3352		been a member, partner, or shareholder of the
1819	3353		pass-through entity in the tier immediately below
1820	3354		it for an uninterrupted period of not less than
1821	3355		five (5) years.
1822		-
1823	3356		(2) With respect to sales of stock or ownership
1824	3357		interest in or sales of all or substantially all
1825	3358		of the assets of an Oklahoma company, limited
1826	3359		liability company, partnership or Oklahoma
1827	3360		proprietorship business enterprise, the deduction
1828	3361		described in this subsection shall not apply
1829	3362		unless the pass-through entity that makes the
1830	3363		sale has held the stock or ownership interest for
1831	3364		not less than two (2) uninterrupted years prior
1832	3365		to the date of the transaction that created the
1833		-	capital gain, and ~~ea ch~~ pass-through entity ~~ENR. H. B. NO. 3388 Page 42~~
	3366	+	capital gain, and each pass -through entity
1834	3367		included in the chain of ownership has been a
1835	3368		member, partner or shareholder of the pass -
1836	3369		through entity in the tier immediately below it
1837	3370		for an uninterrupted period of not less than two
1838	3371		(2) years. For purposes of this division,
1839	3372		uninterrupted ownership prior to July 1, 2007,
	3373	+
	3374	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 68 1
	3375	+	2
	3376	+	3
	3377	+	4
	3378	+	5
	3379	+	6
	3380	+	7
	3381	+	8
	3382	+	9
	3383	+	10
	3384	+	11
	3385	+	12
	3386	+	13
	3387	+	14
	3388	+	15
	3389	+	16
	3390	+	17
	3391	+	18
	3392	+	19
	3393	+	20
	3394	+	21
	3395	+	22
	3396	+	23
	3397	+	24
	3398	+
1840	3399		shall be included in the determination of the
1841	3400		required holding period prescribed by this
1842	3401		division, and
1843		-
1844	3402		f. “Oklahoma proprietorship business enterprise” means a
1845	3403		business enterprise whose income and expenses have
1846	3404		been reported on Schedule C or F of an individual
1847	3405		taxpayer’s federal income tax return, or any similar
1848	3406		successor schedule published by the Internal Revenue
1849	3407		Service and whose primary headquarters have been
1850	3408		located in Oklahoma this state for at least three (3)
1851	3409		uninterrupted years prior to the date of the
1852	3410		transaction from which the net capital gains arise.
1853		-
1854	3411		G. 1. For purposes of computing its Oklahoma taxable income
1855	3412		under this section, the dividends -paid deduction otherwise allo wed
1856	3413		by federal law in computing net income of a real estate investment
1857	3414		trust that is subject to federal income tax shall be added back in
1858	3415		computing the tax imposed by this state under this title if the real
1859	3416		estate investment trust is a captive real estate investment trust.
1860		-
1861	3417		2. For purposes of computing its Oklahoma taxable income under
1862	3418		this section, a taxpayer shall add back otherwise deductible rents
1863	3419		and interest expenses paid to a captive real estate investment trust
1864	3420		that is not subject to the provisions of paragraph 1 of this
1865	3421		subsection. As used in this subsection:
1866	3422
	3423	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 69 1
	3424	+	2
	3425	+	3
	3426	+	4
	3427	+	5
	3428	+	6
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	3430	+	8
	3431	+	9
	3432	+	10
	3433	+	11
	3434	+	12
	3435	+	13
	3436	+	14
	3437	+	15
	3438	+	16
	3439	+	17
	3440	+	18
	3441	+	19
	3442	+	20
	3443	+	21
	3444	+	22
	3445	+	23
	3446	+	24
	3447	+
1867	3448		a. the term “real estate investment trust” or “REIT”
1868	3449		means the meaning ascribed to such term in Section 856
1869	3450		of the Internal Revenue Code,
1870		-
1871	3451		b. the term “captive real estate investment trust” mea ns
1872	3452		a real estate investment trust, the shares or
1873	3453		beneficial interests of which are not regularly traded
1874	3454		on an established securities market and more than
1875	3455		fifty percent (50%) of the voting power or value of
1876	3456		the beneficial interests or shares of which are ow ned
1877	3457		or controlled, directly or indirectly, or
1878		-	constructively, by a single entity that is: ENR. H. B. NO. 3388 Page 43
1879		-
	3458	+	constructively, by a single entity that is:
1880	3459		(1) treated as an association taxable as a
1881	3460		corporation under the Internal Revenue Code, and
1882		-
1883	3461		(2) not exempt from federal income tax pursuant to
1884	3462		the provisions of Secti on 501(a) of the Internal
1885	3463		Revenue Code.
1886		-
1887	3464		The term shall not include a real estate investment
1888	3465		trust that is intended to be regularly traded on an
1889	3466		established securities market, and that satisfies the
1890	3467		requirements of Section 856(a)(5) and (6) of the U.S.
1891	3468		Internal Revenue Code by reason of Section 856(h)(2)
1892	3469		of the Internal Revenue Code,
1893		-
1894	3470		c. the term “association taxable as a corporation” shall
1895	3471		not include the following entities:
	3472	+
	3473	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 70 1
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	3475	+	3
	3476	+	4
	3477	+	5
	3478	+	6
	3479	+	7
	3480	+	8
	3481	+	9
	3482	+	10
	3483	+	11
	3484	+	12
	3485	+	13
	3486	+	14
	3487	+	15
	3488	+	16
	3489	+	17
	3490	+	18
	3491	+	19
	3492	+	20
	3493	+	21
	3494	+	22
	3495	+	23
	3496	+	24
1896	3497
1897	3498		(1) any real estate investment trust as defined in
1898	3499		paragraph a of this subsection ot her than a
1899	3500		“captive real estate investment trust” captive
1900	3501		real estate investment trust , or
1901		-
1902	3502		(2) any qualified real estate investment trust
1903	3503		subsidiary under Section 856(i) of the Internal
1904	3504		Revenue Code, other than a qualified REIT
1905	3505		subsidiary of a “captive real estate investment
1906	3506		trust” captive real estate investment trust , or
1907		-
1908	3507		(3) any Listed Australian Property Trust listed
1909	3508		Australian property trust (meaning an Australian
1910	3509		unit trust registered as a “Managed Investment
1911	3510		Scheme” “managed investment scheme” under the
1912	3511		Australian Corporations Act 2001 in which the
1913	3512		principal class of units is listed on a
1914	3513		recognized stock exchange in Australia and is
1915	3514		regularly traded on an established securities
1916	3515		market), or an entity organized as a trust,
1917	3516		provided that a Listed Australian Property Trust
1918	3517		listed Australian property trust owns or
1919	3518		controls, directly or indirectly, seventy -five
1920	3519		percent (75%) or more of the voting power or
1921	3520		value of the beneficial interests or shares of
1922	3521		such trust, or
1923		-	ENR. H. B. NO. 3388 Page 44
	3522	+
	3523	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 71 1
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	3526	+	4
	3527	+	5
	3528	+	6
	3529	+	7
	3530	+	8
	3531	+	9
	3532	+	10
	3533	+	11
	3534	+	12
	3535	+	13
	3536	+	14
	3537	+	15
	3538	+	16
	3539	+	17
	3540	+	18
	3541	+	19
	3542	+	20
	3543	+	21
	3544	+	22
	3545	+	23
	3546	+	24
	3547	+
1924	3548		(4) any Qualified Foreign Entity qualified foreign
1925	3549		entity, meaning a corporation, trust, association
1926	3550		or partnership organized outside the laws of the
1927	3551		United States and which satisfies the following
1928	3552		criteria:
1929		-
1930	3553		(a) at least seventy-five percent (75%) of the
1931	3554		entity’s total asset value at the close of
1932	3555		its taxable year is represented by real
1933	3556		estate assets, as defined in Section
1934	3557		856(c)(5)(B) of the Internal Revenue Code,
1935	3558		thereby including shares or certificates of
1936	3559		beneficial interest in any real estate
1937	3560		investment trust, cash and cash equivalents,
1938	3561		and U.S. Government securities,
1939		-
1940	3562		(b) the entity receives a dividend -paid
1941	3563		deduction comparable to Section 561 of the
1942	3564		Internal Revenue Code, or is exempt from
1943	3565		entity level tax,
1944		-
1945	3566		(c) the entity is required to distribute at
1946	3567		least eighty-five percent (85%) of its
1947	3568		taxable income, as computed in the
1948	3569		jurisdiction in which it is organized, to
1949	3570		the holders of its shares or certificates of
1950	3571		beneficial interest on an annual basis,
	3572	+
	3573	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 72 1
	3574	+	2
	3575	+	3
	3576	+	4
	3577	+	5
	3578	+	6
	3579	+	7
	3580	+	8
	3581	+	9
	3582	+	10
	3583	+	11
	3584	+	12
	3585	+	13
	3586	+	14
	3587	+	15
	3588	+	16
	3589	+	17
	3590	+	18
	3591	+	19
	3592	+	20
	3593	+	21
	3594	+	22
	3595	+	23
	3596	+	24
1951	3597
1952	3598		(d) not more than ten percent (10%) of the
1953	3599		voting power or value in such entity is held
1954	3600		directly or indirectly or constructively by
1955	3601		a single entity or individual, or the shares
1956	3602		or beneficial interests of such entity are
1957	3603		regularly traded on an established
1958	3604		securities market, and
1959		-
1960	3605		(e) the entity is organized in a country which
1961	3606		has a tax treaty with the United S tates.
1962		-
1963	3607		3. For purposes of this subsection, the constructive ownership
1964	3608		rules of Section 318(a) of the Internal Revenue Code, as modified by
1965	3609		Section 856(d)(5) of the Internal Revenue Code, shall apply in
1966	3610		determining the ownership of stock, assets, or net pr ofits of any
1967	3611		person.
1968		-	ENR. H. B. NO. 3388 Page 45
1969	3612		4. A real estate investment trust that does not become
1970	3613		regularly traded on an established securities market within one (1)
1971	3614		year of the date on which it first becomes a real estate investment
1972	3615		trust shall be deemed not to have been regu larly traded on an
1973	3616		established securities market, retroactive to the date it first
1974	3617		became a real estate investment trust, and shall file an amended
1975	3618		return reflecting such retroactive designation for any tax year or
1976	3619		part year occurring during its initial ye ar of status as a real
1977	3620		estate investment trust. For purposes of this subsection, a real
1978	3621		estate investment trust becomes a real estate investment trust on
	3622	+
	3623	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 73 1
	3624	+	2
	3625	+	3
	3626	+	4
	3627	+	5
	3628	+	6
	3629	+	7
	3630	+	8
	3631	+	9
	3632	+	10
	3633	+	11
	3634	+	12
	3635	+	13
	3636	+	14
	3637	+	15
	3638	+	16
	3639	+	17
	3640	+	18
	3641	+	19
	3642	+	20
	3643	+	21
	3644	+	22
	3645	+	23
	3646	+	24
	3647	+
1979	3648		the first day it has both met the requirements of Section 856 of the
1980	3649		Internal Revenue Code and has el ected to be treated as a real estate
1981	3650		investment trust pursuant to Section 856(c)(1) of the Internal
1982	3651		Revenue Code.
1983		-
1984	3652		SECTION 3. AMENDATORY Section 2, Chapter 278, O.S.L.
1985	3653		2023 (70 O.S. Supp. 2023, Section 28 -101), is amended to read a s
1986	3654		follows:
1987		-
1988	3655		Section 28-101. A. As used in the Oklahoma Parental Choice Tax
1989	3656		Credit Act:
1990		-
1991	3657		1. “Commission” means the Oklahoma Tax Commission;
1992		-
1993	3658		2. “Curriculum” means a complete course of study for a
1994	3659		particular content area or grade level;
1995		-
1996	3660		3. “Department” mea ns the State Department of Education;
1997		-
1998	3661		4. “Education service provider” means a person, business,
1999	3662		public school district, public charter school, magnet school, or
2000	3663		organization that provides educational goods and/or services to
2001	3664		eligible students in this state;
2002		-
2003	3665		5. “Eligible student” means a resident of this state who is
2004	3666		eligible to enroll in a public school in this state. Eligible
2005	3667		student shall include a student who is enrolled in and attends or is
2006	3668		expected to enroll in a private school in this state accredited by
2007	3669		the State Board of Education or another accrediting association or a
2008	3670		student who is educated pursuant to the other means of education
	3671	+
	3672	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 74 1
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	3674	+	3
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	3677	+	6
	3678	+	7
	3679	+	8
	3680	+	9
	3681	+	10
	3682	+	11
	3683	+	12
	3684	+	13
	3685	+	14
	3686	+	15
	3687	+	16
	3688	+	17
	3689	+	18
	3690	+	19
	3691	+	20
	3692	+	21
	3693	+	22
	3694	+	23
	3695	+	24
	3696	+
2009	3697		exception provided for in subsection A of Section 10 -105 of Title 70
2010	3698		of the Oklahoma Statutes this title;
2011		-
2012	3699		6. “Qualified expense” for the purpose of claiming the credit
2013		-	authorized by subparagraph a of paragraph 1 of subsection C of this ~~ENR. H. B. NO. 3388 Page 46~~
	3700	+	authorized by subparagraph a of paragraph 1 of subsection C of this
2014	3701		section means tuition and fees at a private school in this state
2015	3702		accredited by the State Board of Education or another accrediting
2016	3703		association. Provided, the amount of tuition and fees considered a
2017	3704		qualified expense pursuant to this paragraph shall not include
2018	3705		tuition and fees paid with any scholarship or tuition and fees
2019	3706		discounted or otherwise reduced by the school ;
2020		-
2021	3707		7. “Qualified expense” for the purpose of claiming the credit
2022	3708		authorized by subparagraph b of paragraph 1 2 of subsection C of
2023	3709		this section means the following expenditures:
2024		-
2025	3710		a. tuition and fees for nonpublic online learning
2026	3711		programs, online or in person,
2027		-
2028	3712		b. academic tutoring services provided by an individual
2029	3713		or a private academic tutoring facility,
2030		-
2031	3714		c. textbooks, curriculum, or other instructional
2032	3715		materials including, but not limited to, supplemental
2033	3716		materials or associated online instruction required by
2034	3717		an education service provider, and
2035		-
2036	3718		d. fees for nationally standardized assessments
2037	3719		including, but not limited to, assessments used to
2038	3720		determine college admission and advanced placement
	3721	+
	3722	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 75 1
	3723	+	2
	3724	+	3
	3725	+	4
	3726	+	5
	3727	+	6
	3728	+	7
	3729	+	8
	3730	+	9
	3731	+	10
	3732	+	11
	3733	+	12
	3734	+	13
	3735	+	14
	3736	+	15
	3737	+	16
	3738	+	17
	3739	+	18
	3740	+	19
	3741	+	20
	3742	+	21
	3743	+	22
	3744	+	23
	3745	+	24
	3746	+
2039	3747		examinations as well as tuition and fees for tutoring
2040	3748		or preparatory courses for the asses sments; and
2041		-
2042	3749		8. “Taxpayer” means a biological or adoptive parent,
2043	3750		grandparent, aunt, uncle, legal guardian, custodian, or other person
2044	3751		with legal authority to act on behalf of an eligible student.
2045		-
2046	3752		B. There is hereby created the Oklahoma Parental Choice Ta x
2047	3753		Credit Program to provide an income tax credit to a taxpayer for
2048	3754		qualified expenses to support the education of eligible students in
2049	3755		this state.
2050		-
2051	3756		C. For the tax year 2024 and subsequent tax years, and fiscal
2052	3757		year 2026 and subsequent fiscal years, there shall be allowed
2053	3758		against the tax imposed by Section 2355 of Title 68 of the Oklahoma
2054	3759		Statutes a credit for any Oklahoma taxpayer who incurs a qualified
2055	3760		expense on behalf of an eligible student, to be administered subject
2056	3761		to the following amounts for each tax year:
2057		-	ENR. H. B. NO. 3388 Page 47
2058	3762		1. If the eligible student attends a private school in this
2059	3763		state accredited by the State Board of Education or another
2060	3764		accrediting association, the annual maximum credit amount for tax
2061	3765		year 2024, fiscal year 2026, and each subsequent fiscal year shall
2062	3766		be:
2063		-
2064		-	a. (1)
2065		-
2066		-	Seven Thousand Five Hundred Dollars ($7,500.00) or the
2067		-	amount of tuition and fees for the private school,
	3767	+	a. (1) Seven Thousand Five Hundred Dollars ($7,500.00) or
	3768	+	the amount of tuition and fees for the private school,
2068	3769		whichever is less, if the combined adjusted gross
2069	3770		income of the parents or legal guardians of the
	3771	+
	3772	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 76 1
	3773	+	2
	3774	+	3
	3775	+	4
	3776	+	5
	3777	+	6
	3778	+	7
	3779	+	8
	3780	+	9
	3781	+	10
	3782	+	11
	3783	+	12
	3784	+	13
	3785	+	14
	3786	+	15
	3787	+	16
	3788	+	17
	3789	+	18
	3790	+	19
	3791	+	20
	3792	+	21
	3793	+	22
	3794	+	23
	3795	+	24
	3796	+
2070	3797		eligible student is a member of a household in which
2071	3798		the total adjusted gross income during the second
2072	3799		preceding tax year does not exceed Seventy -five
2073	3800		Thousand Dollars ($75,000.00),
2074		-
2075		-	(2)
2076		-
2077		-	b. Seven Thousand Dollars ($7,000.00) or the amount of
	3801	+	(2) b. Seven Thousand Dollars ($7,000.00) or the amount of
2078	3802		tuition and fees for the private school, whichever is
2079	3803		less, if the combined adjusted gross income of the
2080	3804		parents or legal guardians of the eligible student is
2081	3805		a member of a household in which the total adjusted
2082	3806		gross income during the second preceding tax year is
2083	3807		more than Seventy-five Thousand Dollars ($ 75,000.00)
2084	3808		but does not exceed One Hundred Fifty Thousand Dollars
2085	3809		($150,000.00),
2086		-
2087		-	(3)
2088		-
2089		-	c. Six Thousand Five Hundred Dollars ($6,500.00) or the
	3810	+	(3) c. Six Thousand Five Hundred Dollars ($6,500.00) or the
2090	3811		amount of tuition and fees for the private school,
2091	3812		whichever is less, if the combined adjusted gross
2092	3813		income of the parents or legal guardians of the
2093	3814		eligible student is a member of a household in which
2094	3815		the total adjusted gross income during the second
2095	3816		preceding tax year is more than One Hundred Fifty
2096	3817		Thousand Dollars ($150,000.00) but does not exceed Two
2097	3818		Hundred Twenty-five Thousand Dollars ($225,000.00),
2098		-
2099		-	(4)
2100		-
2101		-	d. Six Thousand Dollars ($6,000.00) or the amount of
2102		-	tuition and fees for the private school, whichever is ENR. H. B. NO. 3388 Page 48
	3819	+	(4) d. Six Thousand Dollars ($6,000.00) or the amount of
	3820	+	tuition and fees for the private school, whichever is
	3821	+
	3822	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 77 1
	3823	+	2
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	3826	+	5
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	3829	+	8
	3830	+	9
	3831	+	10
	3832	+	11
	3833	+	12
	3834	+	13
	3835	+	14
	3836	+	15
	3837	+	16
	3838	+	17
	3839	+	18
	3840	+	19
	3841	+	20
	3842	+	21
	3843	+	22
	3844	+	23
	3845	+	24
	3846	+
2103	3847		less, if the combined adjusted gross income of the
2104	3848		parents or legal guardians of the eligible student is
2105	3849		a member of a household in which the total adjusted
2106	3850		gross income during the second preceding tax year is
2107	3851		more than Two Hundred Twenty -five Thousand Dollars
2108	3852		($225,000.00) but does not exceed Two Hundred Fifty
2109	3853		Thousand Dollars ($250,000.00), or
2110		-
2111		-	(5)
2112		-
2113		-	e. Five Thousand Dollars ($5,000.00) or the amount of
	3854	+	(5) e. Five Thousand Dollars ($5,000.00) or the amount of
2114	3855		tuition and fees for the private school, whichever is
2115	3856		less, if the combined adjusted gross income of the
2116	3857		parents or legal guardians of the eligible student is
2117	3858		a member of a household in which the total adjusted
2118	3859		gross income during the second preceding tax year is
2119	3860		more than Two Hundred Fifty Thousand Dollars
2120	3861		($250,000.00), and;
2121		-
2122		-	b.
2123		-
2124		-	2. For tax year 2024 and subsequent tax years, the maximum
	3862	+	b. 2. For tax year 2024 and subsequent tax years, the maximum
2125	3863		credit amount shall be One Thousand Dollars ($1,000.00) in qualified
2126	3864		expenses per eligible student in each tax year if the eligible
2127	3865		student is educated pursuant to the other means of education
2128	3866		exception provided for in subsection A of Section 10 -105 of Title 70
2129	3867		of the Oklahoma Statutes this title. To claim the credit, the
2130	3868		taxpayer shall submit to the Commission receipts for qualified
2131	3869		expenses as defined by paragraph 7 of subsection A of this section;
2132	3870
	3871	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 78 1
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2133	3896		3. If the eligible student attends a private school in this
2134	3897		state, accredited by the State Board of Education or another
2135	3898		accrediting association, that exclusively serves students
2136	3899		experiencing homelessness, the credit amount shall be Seven Thousand
2137	3900		Five Hundred Dollars ($7,500.00) or the amount of the cost to
2138	3901		educate the eligible student at the private school, whichever is
2139	3902		less;
2140		-
2141	3903		4. If the eligible student attends a private school in this
2142	3904		state, accredited by the State Board of Education or another
2143	3905		accrediting association, that primarily serves financially
2144	3906		disadvantaged students, the credit amount shall be the maximum
2145	3907		credit amount authorized by paragraph 1 of this subsection or the
2146	3908		amount of the cost to educate the eligible student at the private
2147		-	school, whichever is less. The cost to educate the eligible student ~~ENR. H. B. NO. 3388 Page 49~~
	3909	+	school, whichever is less. The cost to educate the eligible student
2148	3910		shall be equal to the average cost to educate all students attending
2149	3911		the private school, which shall be calculated by dividing the
2150	3912		private school’s total expenditures in the previous year by the
2151	3913		total enrollment in the previous school year. A private school
2152	3914		shall be deemed to be primarily serving financially disadvantaged
2153	3915		students if ninety percent (90%) of the private school’s admissions
2154	3916		are based on enrolling students whose gross family income is two
2155	3917		hundred fifty percent (250%) of the federal poverty threshold or
2156	3918		below;
2157	3919
	3920	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 79 1
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	3944	+
2158	3945		2. 5. The taxpayer shall retain all receipts of qualifi ed
2159	3946		expenses as proof of the amounts paid each tax year the credit is
2160	3947		claimed and shall submit them to the Commission upon request; and
2161		-
2162	3948		3. 6. If the credit exceeds the tax imposed by Section 2355 of
2163	3949		Title 68 of the Oklahoma Statutes, the excess amount shal l be
2164	3950		refunded to the taxpayer ; and
2165		-
2166	3951		7. Credits claimed by a taxpayer pursuant to the provisions of
2167	3952		this section shall not be used to offset or pay the following:
2168		-
2169	3953		a. delinquent tax liability,
2170		-
2171	3954		b. accrued penalty or interest from the failure to file a
2172	3955		report or return,
2173		-
2174	3956		c. accrued penalty or interest from the failure to pay a
2175	3957		state tax within the statutory period allowed for its
2176	3958		payment,
2177		-
2178	3959		d. tax liability of the taxpayer from any prior tax year,
2179	3960		or
2180		-
2181	3961		e. any debt, unpaid fine, final judgment, or claim filed
2182	3962		with the Commission by a qualified entity as defined
2183	3963		in Section 205.2 of Title 68 of the Oklahoma Statutes .
2184		-
2185	3964		D. 1. a. For tax year 2024, the total amount of credits
2186	3965		authorized by subparagraph a of paragraph 1 of
2187	3966		subsection C of this section shall not exceed One
2188	3967		Hundred Fifty Million Dollars ($150,000,000.00).
2189	3968
	3969	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 80 1
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	3993	+
2190	3994		b. For tax year 2025 the period of January 1, 2025,
2191	3995		through June 30, 2025 , the total amount of credits
2192		-	authorized by subparagraph a of paragraph 1 of ~~ENR. H. B. NO. 3388 Page 50~~
	3996	+	authorized by subparagraph a of paragraph 1 of
2193	3997		subsection C of this section shall not exceed Two
2194	3998		Hundred Million Dollars ($200,000,000.00) One Hundred
2195	3999		Million Dollars ($100,000,000.00) . The Commission
2196	4000		shall not require a taxpayer who received a credit
2197	4001		pursuant to paragraph 1 of subsection C of this
2198	4002		section in tax year 2024 to reapply for a credit
2199	4003		payable during the period described in this
2200	4004		subparagraph. The Commission shall base the credit
2201	4005		amount payable for the spring 2025 on the fall 2024
2202	4006		installment disbursement payment amount .
2203		-
2204	4007		c. For tax year 2026, and subsequent tax years fiscal
2205	4008		year 2026 and subsequent fiscal years, the total
2206	4009		amount of credits authorized by subparagraph a of
2207	4010		paragraph 1 of subsection C of this section shall not
2208	4011		exceed Two Hundred Fifty Million Dollars
2209	4012		($250,000,000.00).
2210		-
2211	4013		2. For tax year 2025 , and subsequent tax years, the total
2212	4014		amount of credits authorized by subparagraph b of paragraph 1 2 of
2213	4015		subsection C of this section shall not exceed Five Million Dollars
2214	4016		($5,000,000.00).
	4017	+
	4018	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 81 1
	4019	+	2
	4020	+	3
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2215	4042
2216	4043		E. The Commission shall prescribe applications for the purposes
2217	4044		of claiming the credits authorized by the Oklahom a Parental Choice
2218	4045		Tax Credit Act and a deadline by which applications shall be
2219	4046		submitted. A taxpayer claiming the credit authorized by
2220	4047		subparagraph a of paragraph 1 of subsection C of this section shall
2221	4048		submit an application prescribed by the Commission t o receive the
2222	4049		credit in two installments, each of which shall be half of the
2223	4050		expected amount of tuition and fees for the private school based on
2224	4051		the affidavit enrollment verification form submitted pursuant to
2225	4052		this subsection, but in no event shall an inst allment payment exceed
2226	4053		half the amount of the credit authorized by subparagraph a of
2227	4054		paragraph 1 of subsection C of this section. If an eligible
2228	4055		taxpayer provides documentation on the application that he or she is
2229	4056		a recipient of income -based government benefits including the
2230	4057		Supplemental Nutrition Assistance Program (SNAP), Temporary
2231	4058		Assistance for Needy Families (TANF), or SoonerCare, the eligible
2232	4059		taxpayer shall not be required to provide additional income
2233	4060		verification. A taxpayer claiming the credit aut horized by
2234	4061		subparagraph a of paragraph 1 of subsection C of this section shall
2235	4062		submit to the Commission an affidavit enrollment verification form
2236	4063		from the private school in which the eligible student is enrolled or
2237		-	is expected to enroll with the tuition an d fees to be charged the ~~ENR. H. B. NO. 3388 Page 51~~
	4064	+	is expected to enroll with the tuition an d fees to be charged the
2238	4065		taxpayer for the applicable school year. In reviewing applications
2239	4066		submitted by eligible taxpayers to determine whether they qualify
	4067	+
	4068	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 82 1
	4069	+	2
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	4088	+	21
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	4090	+	23
	4091	+	24
	4092	+
2240	4093		for a credit authorized by subparagraph a of paragraph 1 of
2241	4094		subsection C of this section, the Com mission shall give first
2242	4095		preference in making installments to taxpayers who qualify pursuant
2243	4096		to divisions (1) and (2) of subparagraph a subparagraphs a and b of
2244	4097		paragraph 1 of subsection C of this section. The Commission shall
2245	4098		make the installments based on the expected amount of tuition and
2246	4099		fee amounts on the affidavit submitted pursuant to this subsection.
2247	4100		For credits issued in the 2025 -2026 school year and subsequent
2248	4101		school years, the application period shall open on February 15 prior
2249	4102		to the beginning of each school year. For any eligible student
2250	4103		whose parents or legal guardians have a combined adjusted gross
2251	4104		income that does not exceed One Hundred Fifty Thousand Dollars
2252	4105		($150,000.00), applications shall be submitted to the Commission
2253	4106		within the first sixty (60) days of the opening of the application
2254	4107		period to receive priority consideration. For students enrolled in
2255	4108		the full school year, the credit shall be paid in two installments,
2256	4109		one per school semester, to be paid no later than August 30 and
2257	4110		January 15, each of which shall be half of the total expected amount
2258	4111		of tuition and fees on the enrollment verification form submitted
2259	4112		pursuant to this subsection.
2260		-
2261	4113		F. In the event there are more applications submitted by
2262	4114		eligible taxpayers for a credit authoriz ed by paragraph 1 of
2263	4115		subsection C of this section than available credits pursuant to
2264	4116		subsection D of this section, then the Commission shall give first
	4117	+
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	4119	+	2
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	4127	+	10
	4128	+	11
	4129	+	12
	4130	+	13
	4131	+	14
	4132	+	15
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	4134	+	17
	4135	+	18
	4136	+	19
	4137	+	20
	4138	+	21
	4139	+	22
	4140	+	23
	4141	+	24
	4142	+
2265	4143		preference in authorizing credits for eligible students of taxpayers
2266	4144		who qualify pursuant to subparagrap hs a and b of paragraph 1 of
2267	4145		subsection C of this section and have received the credit in the
2268	4146		prior year.
2269		-
2270	4147		F. G. Taxpayers claiming the credit shall:
2271		-
2272	4148		1. Only claim the credit for qualified expenses as defined in
2273	4149		paragraphs 6 and 7 of subsection A of this section to provide an
2274	4150		education for an eligible student;
2275		-
2276	4151		2. Ensure no other person is claiming a credit for the eligible
2277	4152		student;
2278		-
2279	4153		3. Not claim the credit for an eligible student who enrolls as
2280	4154		a full-time student in a public school district, public chart er
2281	4155		school, public virtual charter school, or magnet school; and
2282		-	ENR. H. B. NO. 3388 Page 52
2283	4156		4. Comply with rules and requirements established by the
2284	4157		Commission for administration of the Oklahoma Parental Choice Tax
2285	4158		Credit Program; and
2286		-
2287	4159		5. Notify the Commission not later than thirty (30) days after
2288	4160		the date on which the eligible student:
2289		-
2290	4161		a. enrolls in a public school, including an open -
2291	4162		enrollment charter school,
2292		-
2293	4163		b. enrolls in a nonaccredited private school,
2294		-
2295	4164		c. graduates from high school, or
2296		-
2297	4165		d. is no longer utilizing credits authorized by paragraph
2298	4166		1 of subsection C of this section for any reason .
	4167	+
	4168	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 84 1
	4169	+	2
	4170	+	3
	4171	+	4
	4172	+	5
	4173	+	6
	4174	+	7
	4175	+	8
	4176	+	9
	4177	+	10
	4178	+	11
	4179	+	12
	4180	+	13
	4181	+	14
	4182	+	15
	4183	+	16
	4184	+	17
	4185	+	18
	4186	+	19
	4187	+	20
	4188	+	21
	4189	+	22
	4190	+	23
	4191	+	24
2299	4192
2300	4193		G. H. Eligible students may accept a scholarship from the
2301	4194		Lindsey Nicole Henry Scholarships for Students with Disabilities
2302	4195		Program created by Section 13 -101.2 of Title 70 of the Oklahoma
2303	4196		Statutes this title while participating in the Oklahoma Parental
2304	4197		Choice Tax Credit Program.
2305		-
2306	4198		H. I. 1. The Commission shall have the authority to conduct an
2307	4199		audit or contract for the auditing of receipts for qualified
2308	4200		expenses submitted pursuant to subparagraph b of paragraph 1 2 of
2309	4201		subsection C of this section.
2310		-
2311	4202		2. The Commission shall be authorized to recapture the credits
2312	4203		otherwise authorized by the provisions of this act the Oklahoma
2313	4204		Parental Choice Tax Credit Act on a prorated basis if an audit
2314	4205		conducted pursuant to this subsection shows that the credit was
2315	4206		claimed for expenditures that were not qualified expenses or it
2316	4207		finds that the taxpayer has claimed an eligible student who no
2317	4208		longer attends a private school or has enrolled in a public school
2318	4209		in the state.
2319		-
2320	4210		3. The Commission shall be authorized to reallocate credits to
2321	4211		the next eligible taxpayer in line when a taxpayer, on behalf of an
2322	4212		eligible student in the program, chooses not to participate, is no
2323	4213		longer eligible to participate, or chooses to forgo participation in
2324	4214		the program for any reason.
2325		-
2326	4215		4. The Commission shall provide notification of approval status
2327		-	to applicants within thirty (30) days of closure of the application ENR. H. B. NO. 3388 Page 53
2328		-	window. Notice to applica nts with an eligible student, whose
2329		-	parents or legal guardians have a combined adjusted gross income of
2330		-	more than One Hundred Fifty Thousand Dollars ($150,000.00) , shall be
2331		-	sent within thirty (30) days or no later than thirty (30) days after
2332		-	the last day of the priority consideration period.
2333		-
	4216	+	to applicants within thirty (30) days of closure of the application
	4217	+
	4218	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 85 1
	4219	+	2
	4220	+	3
	4221	+	4
	4222	+	5
	4223	+	6
	4224	+	7
	4225	+	8
	4226	+	9
	4227	+	10
	4228	+	11
	4229	+	12
	4230	+	13
	4231	+	14
	4232	+	15
	4233	+	16
	4234	+	17
	4235	+	18
	4236	+	19
	4237	+	20
	4238	+	21
	4239	+	22
	4240	+	23
	4241	+	24
	4242	+
	4243	+	window. Notice to applicants with an eligible student whose parents
	4244	+	or legal guardians have a combined adjusted gross income of more
	4245	+	than One Hundred Fifty Thousand Dollars ($150,000.00) shall be sent
	4246	+	within thirty (30) days or no later than thirty (30) days after the
	4247	+	last day of the priority consideration period.
2334	4248		I. J. In the event of a failure of revenue pursuant to the
2335	4249		Oklahoma State Finance Act, the tax credits otherwise authorized in
2336	4250		subsection C of this section shall be reduced proportionately to the
2337	4251		reduction in the amount of money appropriated to the State Board of
2338	4252		Education for the financial support of public schools for the fiscal
2339	4253		year in which the failure of revenue occurs.
2340		-
2341	4254		J. K. The Commission shall make available on its website the to
2342	4255		be updated monthly:
2343		-
2344	4256		1. The total amount of credits claimed each tax year pursuant
2345	4257		to subparagraphs a and b of paragraph 1 paragraphs 1 through 4 of
2346	4258		subsection C of this section ;
2347		-
2348	4259		2. The amount of credits claimed and number of students awarded
2349	4260		each fiscal year pursuant to paragraph 1 of subsection C of this
2350	4261		section disaggregated by income categories;
2351		-
2352	4262		3. The total amount of credits claimed and number of students
2353	4263		awarded who attended a public school in the semester immediately
2354	4264		preceding the school year for which the application is made each
2355	4265		year; and
2356	4266
	4267	+	ENGR. S. A. TO ENGR. H. B. NO. 3388 Page 86 1
	4268	+	2
	4269	+	3
	4270	+	4
	4271	+	5
	4272	+	6
	4273	+	7
	4274	+	8
	4275	+	9
	4276	+	10
	4277	+	11
	4278	+	12
	4279	+	13
	4280	+	14
	4281	+	15
	4282	+	16
	4283	+	17
	4284	+	18
	4285	+	19
	4286	+	20
	4287	+	21
	4288	+	22
	4289	+	23
	4290	+	24
	4291	+
2357	4292		4. The total number of applications deni ed and total amount of
2358	4293		credits the denied applications represent for each fiscal year.
2359		-
2360	4294		L. Credits received pursuant to the Oklahoma Parental Choice
2361	4295		Tax Credit Act shall not constitute taxable income to a taxpayer who
2362	4296		received the credit on behalf of an el igible student.
2363		-
2364	4297		SECTION 4. It being immediately necessary for the preservation
2365	4298		of the public peace, health, or safety, an emergency is hereby
2366	4299		declared to exist, by reason whereof this act shall take effect and
2367		-	be in full force from and aft er its passage and approval.
2368		-
2369		-
2370		-
2371		-
2372		-	ENR. H. B. NO. 3388 Page 54
2373		-	Passed the House of Representatives the 1st day of May, 2024.
	4300	+	be in full force from and aft er its passage and approval. ”
	4301	+
	4302	+
	4303	+	Passed the Senate the 2 5th day of April, 2024.
	4304	+
	4305	+
	4306	+
	4307	+	Presiding Officer of the Senate
	4308	+
	4309	+
	4310	+	Passed the House of Representatives the ____ day of __________,
	4311	+	2024.
2374	4312
2375	4313
2376	4314
2377	4315		Presiding Officer of the House
2378	4316		of Representatives
2379	4317
2380		-	Passed the Senate the 25th day of April, 2024.
	4318	+	ENGR. H. B. NO. 3388 Page 1 1
	4319	+	2
	4320	+	3
	4321	+	4
	4322	+	5
	4323	+	6
	4324	+	7
	4325	+	8
	4326	+	9
	4327	+	10
	4328	+	11
	4329	+	12
	4330	+	13
	4331	+	14
	4332	+	15
	4333	+	16
	4334	+	17
	4335	+	18
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	4338	+	21
	4339	+	22
	4340	+	23
	4341	+	24
	4342	+
	4343	+	ENGROSSED HOUSE
	4344	+	BILL NO. 3388 By: McCall of the House
	4345	+
	4346	+	and
	4347	+
	4348	+	Treat of the Senate
	4349	+
	4350	+
	4351	+
	4352	+
	4353	+
	4354	+
	4355	+	An Act relating to schools; amending Section 2,
	4356	+	Chapter 278, O.S.L. 2023 (70 O.S. Supp. 2023,
	4357	+	Section 28-101), which relates to the Oklahoma
	4358	+	Parental Choice Tax Credit Act; modifying
	4359	+	definitions; establishing credit amount for private
	4360	+	schools serving certain student populations;
	4361	+	prohibiting offset of credit for certain liabilities;
	4362	+	modifying application of caps from a tax year to a
	4363	+	fiscal year; providing fo r carryover of certain
	4364	+	unused credits; exempting certain eligible taxpayers
	4365	+	from providing additional income verification;
	4366	+	modifying timing and procedures for application
	4367	+	process; requiring authorization of certain credits;
	4368	+	providing dates for installments ; modifying priority
	4369	+	of tax credit recipients in certain cases; directing
	4370	+	taxpayers to provide notice related to a change in
	4371	+	enrollment status; providing for reallocation of
	4372	+	certain credits; excluding credits from taxable
	4373	+	income; prohibiting issuance of Fo rm 1099s; and
	4374	+	declaring an emergency.
	4375	+
	4376	+
	4377	+
	4378	+
	4379	+
	4380	+
	4381	+	BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
	4382	+	SECTION 5. AMENDATORY Section 2, Chapter 278, O.S.L.
	4383	+	2023 (70 O.S. Supp. 2023, Section 28 -101), is amended to read as
	4384	+	follows:
	4385	+
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	4410	+
	4411	+	Section 28-101. A. As used in the Oklahoma Parental Choice Tax
	4412	+	Credit Act:
	4413	+	1. "Commission" means the Oklahoma Tax Commission;
	4414	+	2. "Curriculum" means a complete course of study for a
	4415	+	particular content area or grade level;
	4416	+	3. "Department" means the St ate Department of Education;
	4417	+	4. "Education service provider" means a person, business,
	4418	+	public school district, public charter school, magnet school, or
	4419	+	organization that provides educational goods and/or services to
	4420	+	eligible students;
	4421	+	5. "Eligible student" means a resident of this state who is
	4422	+	eligible to enroll in a public school in this state. Eligible
	4423	+	student shall include a student who is enrolled in and attends or is
	4424	+	expected to enroll in a private school accredited by the State Board
	4425	+	of Education or another accrediting association or a student who is
	4426	+	educated pursuant to the other means of education exception provided
	4427	+	for in subsection A of Section 10 -105 of Title 70 of the Oklahoma
	4428	+	Statutes this title;
	4429	+	6. "Qualified expense" for the purpose of claiming the credit
	4430	+	authorized by subparagraph a of paragraph 1 of subsection C of this
	4431	+	section means tuition and fees at a private school accredited by the
	4432	+	State Board of Education or another accrediting association;
	4433	+
	4434	+	ENGR. H. B. NO. 3388 Page 3 1
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	4458	+
	4459	+	7. "Qualified expense" fo r the purpose of claiming the credit
	4460	+	authorized by subparagraph b of paragraph 1 of subsection C of this
	4461	+	section means the following expenditures:
	4462	+	a. tuition and fees for nonpublic online or in-person
	4463	+	learning programs,
	4464	+	b. academic tutoring services provid ed by an individual
	4465	+	or a private academic tutoring facility,
	4466	+	c. textbooks, curriculum, or other instructional
	4467	+	materials including, but not limited to, supplemental
	4468	+	materials or associated online instruction required by
	4469	+	an education service provider, and
	4470	+	d. fees for nationally standardized assessments
	4471	+	including, but not limited to, assessments used to
	4472	+	determine college admission and advanced placement
	4473	+	examinations as well as tuition and fees for tutoring
	4474	+	or preparatory courses for the assessments; and
	4475	+	8. "Taxpayer" means a biological or adoptive parent,
	4476	+	grandparent, aunt, uncle, legal guardian, custodian, or other person
	4477	+	with legal authority to act on behalf of an eligible student.
	4478	+	B. There is hereby created the Oklahoma Parental Choice Tax
	4479	+	Credit Program to provide an income tax credit to a taxpayer for
	4480	+	qualified expenses to support the education of eligible students in
	4481	+	this state.
	4482	+
	4483	+	ENGR. H. B. NO. 3388 Page 4 1
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	4507	+
	4508	+	C. For the tax year 2024 and subsequent tax years, there shall
	4509	+	be allowed against the tax imposed by Section 2355 of Title 68 of
	4510	+	the Oklahoma Statutes a credit for any Oklahoma taxpayer who incurs
	4511	+	a qualified expense on behalf of an eligible student, to be
	4512	+	administered subject to the following amounts for each tax year:
	4513	+	1. If the eligible student attends a private school in
	4514	+	Oklahoma, accredited by the State Board of Education or another
	4515	+	accrediting association, the maximum credit amount shall be:
	4516	+	a. (1) Seven Thousand Five Hundred Dollars ($7,500.00)
	4517	+	or the amount of tuition and fees for the private
	4518	+	school, whichever is less, if the eligible
	4519	+	student is a member of a household in which the
	4520	+	total adjusted gross income during the second
	4521	+	preceding tax year does not exceed Seventy -five
	4522	+	Thousand Dollars ($75,000.00),
	4523	+	(2) Seven Thousand Dollars ($7,000.00) or the amount
	4524	+	of tuition and fees for the private school,
	4525	+	whichever is less, if the eligible student is a
	4526	+	member of a household in which the total adjusted
	4527	+	gross income during the second preceding tax year
	4528	+	is more than Seventy -five Thousand Dollars
	4529	+	($75,000.00) but does not exceed One H undred
	4530	+	Fifty Thousand Dollars ($150,000.00),
	4531	+
	4532	+	ENGR. H. B. NO. 3388 Page 5 1
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	4556	+
	4557	+	(3) Six Thousand Five Hundred Dollars ($6,500.00) or
	4558	+	the amount of tuition and fees for the private
	4559	+	school, whichever is less, if the eligible
	4560	+	student is a member of a household in which the
	4561	+	total adjusted gross income during the second
	4562	+	preceding tax year is more than One Hundred Fifty
	4563	+	Thousand Dollars ($150,000.00) but does not
	4564	+	exceed Two Hundred Twenty -five Thousand Dollars
	4565	+	($225,000.00),
	4566	+	(4) Six Thousand Dollars ($6,000.00) or the amount of
	4567	+	tuition and fees for the private school,
	4568	+	whichever is less, if the eligible student is a
	4569	+	member of a household in which the total adjusted
	4570	+	gross income during the second preceding tax year
	4571	+	is more than Two Hundred Twenty -five Thousand
	4572	+	Dollars ($225,000.00) but does not excee d Two
	4573	+	Hundred Fifty Thousand Dollars ($250,000.00), or
	4574	+	(5) Five Thousand Dollars ($5,000.00) or the amount
	4575	+	of tuition and fees for the private school,
	4576	+	whichever is less, if the eligible student is a
	4577	+	member of a household in which the total adjusted
	4578	+	gross income during the second preceding tax year
	4579	+	is more than Two Hundred Fifty Thousand Dollars
	4580	+	($250,000.00), and
	4581	+
	4582	+	ENGR. H. B. NO. 3388 Page 6 1
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	4606	+
	4607	+	b. One Thousand Dollars ($1,000.00) in qualified expenses
	4608	+	per eligible student in each tax year if the eligible
	4609	+	student is educated pursuant to th e other means of
	4610	+	education exception provided for in subsection A of
	4611	+	Section 10-105 of Title 70 of the Oklahoma Statutes
	4612	+	this title. To claim the credit, the taxpayer shall
	4613	+	submit to the Commission receipts for qualified
	4614	+	expenses as defined by paragraph 7 of subsection A of
	4615	+	this section;
	4616	+	2. If the eligible student attends a private school in
	4617	+	Oklahoma, accredited by the State Board of Education or another
	4618	+	accrediting association, that exclusively serves students
	4619	+	experiencing homelessness, the credit amount shall be Seven Thousand
	4620	+	Five Hundred Dollars ($7,500.00) or the amount of the cost to
	4621	+	educate the eligible student at the private school, whichever is
	4622	+	less;
	4623	+	3. If the eligible student attends a private school in
	4624	+	Oklahoma, accredited by the State Board of Education or another
	4625	+	accrediting association, that primarily serves financially
	4626	+	disadvantaged students, the credit amount shall be the maximum
	4627	+	credit amount authorized by subparagraph a of paragraph 1 of this
	4628	+	subsection or the amount of the cost to educat e the eligible student
	4629	+	at the private school, whichever is less. The cost to educate the
	4630	+	eligible student shall be equal to the average cost to educate all
	4631	+
	4632	+	ENGR. H. B. NO. 3388 Page 7 1
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	4657	+	students attending the private school, which shall be calculated by
	4658	+	dividing the private school’s t otal expenditures in the previous
	4659	+	year by the total enrollment in the previous school year. A private
	4660	+	school shall be deemed to be primarily serving financially
	4661	+	disadvantaged students if the private school’s admissions are based
	4662	+	on enrolling students whos e gross family income is two hundred fifty
	4663	+	percent (250%) of the federal poverty threshold or below;
	4664	+	4. The taxpayer shall retain all receipts of qualified expenses
	4665	+	as proof of the amounts paid each tax year the credit is claimed and
	4666	+	shall submit them to the Commission upon request; and
	4667	+	3. 5. If the credit exceeds the tax imposed by Section 2355 of
	4668	+	Title 68 of the Oklahoma Statutes, the excess amount shall be
	4669	+	refunded to the taxpayer ; and
	4670	+	6. Credits claimed by a taxpayer pursuant to the provisions of
	4671	+	this section shall not be used to offset or pay the following:
	4672	+	a. delinquent tax liability,
	4673	+	b. accrued penalty or interest from the failure to file a
	4674	+	report or return,
	4675	+	c. accrued penalty or intere st from the failure to pay a
	4676	+	state tax within the statutory period allowed for its
	4677	+	payment,
	4678	+	d. liability of the taxpayer from any prior tax year, or
	4679	+
	4680	+	ENGR. H. B. NO. 3388 Page 8 1
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	4704	+
	4705	+	e. any debt, unpaid fine, final judgement, or claim filed
	4706	+	with the Commission by a qualified entity as defi ned
	4707	+	in Section 205.2 of Title 68 of the Oklahoma Statutes .
	4708	+	D. 1. a. For tax fiscal year 2024, the total amount of credits
	4709	+	authorized by subparagraph a of paragraph 1 of
	4710	+	subsection C of this section shall not exceed One
	4711	+	Hundred Fifty Million Dollars ($150, 000,000.00). Any
	4712	+	unused credits from fiscal year 2024 shall be carried
	4713	+	over to fiscal year 2025.
	4714	+	b. For tax fiscal year 2025, the total amount of credits
	4715	+	authorized by subparagraph a of paragraph 1 of
	4716	+	subsection C of this section shall not exceed Two
	4717	+	Hundred Million Dollars ($200,000,000.00 ), except for
	4718	+	unused credits carried over from fiscal year 2024
	4719	+	pursuant to subparagraph a of this paragraph .
	4720	+	c. For tax fiscal year 2026, and subsequent tax fiscal
	4721	+	years, the total amount of credits authorized by
	4722	+	subparagraph a of paragraph 1 of subsection C of this
	4723	+	section shall not exceed Two H undred Fifty Million
	4724	+	Dollars ($250,000,000.00).
	4725	+	d. Credits authorized by subparagraph a of paragraph 1 of
	4726	+	subsection C of this section shall be applied to the
	4727	+	fiscal year in which the installment payment provided
	4728	+	in subsection E of this section is made.
	4729	+
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	4755	+	2. For tax fiscal year 2025, and subsequent tax fiscal years,
	4756	+	the total amount of credits authorized by subparagraph b of
	4757	+	paragraph 1 of subsection C of this section shall not exc eed Five
	4758	+	Million Dollars ($5,000,000.00).
	4759	+	E. 1. The Commission shall prescri be applications for the
	4760	+	purposes of claiming the credits authorized by the Oklahoma Parental
	4761	+	Choice Tax Credit Act and a deadline by which applications shall be
	4762	+	submitted. A taxpayer claiming the credit authorized by
	4763	+	subparagraph a of paragraph 1 of subse ction C of this section shall
	4764	+	submit an application prescribed by the Commission to receive the
	4765	+	credit. If an eligible taxpayer provides documentation on the
	4766	+	application that he or she is a recipient of income -based government
	4767	+	benefits including the Suppl emental Nutrition Assistance Program
	4768	+	(SNAP), Temporary Assistance for Needy Families (TANF), or
	4769	+	SoonerCare, the eligible taxpayer shall not be required to provide
	4770	+	additional income verification.
	4771	+	2. To ensure educational continuity for students, the
	4772	+	application process shall be administered based on the school year.
	4773	+	The first application aligned to the school year shall open on May
	4774	+	1, 2024, for the 2024 -2025 school year. Prior to authorizing any
	4775	+	credits for the 2024 -2025 school year to taxpayers who did not
	4776	+	receive an allocation of credits for the fall semester of 2024, the
	4777	+	Commission shall first automatically authorize the same amount of
	4778	+	credits to taxpayers who were authorize d credits prior to May 1,
	4779	+
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	4805	+	2024, for the fall semester of 2024. Beginning in t he 2025-2026
	4806	+	school year and subsequent years, the application period shall open
	4807	+	on January 15 prior to the beginning of each school year. For any
	4808	+	eligible student who is a memb er of a household in which the total
	4809	+	federal adjusted gross income does not ex ceed One Hundred Fifty
	4810	+	Thousand Dollars ($150,000.00), applications shall be submitted to
	4811	+	the Commission within the first sixty (60) days of the opening of
	4812	+	the application period to receive priority consideration. Any
	4813	+	taxpayer who receives an allocation o f tax credits shall also have
	4814	+	priority consideration in any subsequent period; provided, that an
	4815	+	application is submitted within the first sixty (60) days of the
	4816	+	application period. For students enrolled in the full school year,
	4817	+	the credit shall be paid in two installments, one per school
	4818	+	semester, to be paid no later than August 30 and January 15, each of
	4819	+	which shall be half of the total expected amount of tuition and fees
	4820	+	for the private school based on the affidavit enrollment
	4821	+	verification form submitted pursuant to this subsection, but in no
	4822	+	event shall an installment payment exceed half the amount of the
	4823	+	credit authorized by subparagraph a of paragraph 1 of subsection C
	4824	+	of this section.
	4825	+	3. For students enrolled in less than the full school year, the
	4826	+	credit shall be prorated by semester and issued no later than thirty
	4827	+	(30) days after the application is approved or during the first
	4828	+	thirty (30) days of the semester in which the student is enrolled,
	4829	+
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	4855	+	whichever is later. The prorated installment payment sha ll not be
	4856	+	less than fifty percent (50%) of the total expected amount of
	4857	+	tuition and fees for the private school based on the enrollment
	4858	+	verification form submitted pursuant to th is subsection, but in no
	4859	+	event shall an installment payment exceed the amount of the credit
	4860	+	authorized by subparagraph a of paragraph 1 of subsection C of this
	4861	+	section.
	4862	+	4. A taxpayer claiming the credit authorized by subparagraph a
	4863	+	of paragraph 1 of subse ction C of this section shall submit to the
	4864	+	Commission an affidavit enrollment verification form from the
	4865	+	private school in which the eligible student is enrolled or is
	4866	+	expected to enroll with the tuition and fees to be charged the
	4867	+	taxpayer for the applica ble school year. The Commission shall make
	4868	+	installment payments based on the expected tuition and fee amounts
	4869	+	provided on the enrollment verification form and submitted pursuant
	4870	+	to this subsection.
	4871	+	F. In reviewing the event there are more applications submitted
	4872	+	by eligible taxpayers to determine whether they qualify for a credit
	4873	+	authorized by subparagraph a of paragraph 1 of subsection C of this
	4874	+	section, than available credits pursuant to subsection D of this
	4875	+	section, then the Commission shall give first preference in making
	4876	+	installments authorizing credits to eligible students of taxpayers
	4877	+	who qualify pursuant to divisions (1) and (2) of subparagraph a of
	4878	+	paragraph 1 of subsection C of this section. The Commission shall
	4879	+
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	4905	+	make the installments based on the expected amount of tuition and
	4906	+	fee amounts on the affidavit submitted pursuan t to this subsection:
	4907	+	1. First, received the credit the prior year;
	4908	+	2. Second, qualify pursuant to divisions (1) and (2) of
	4909	+	subparagraph a of paragraph 1 of subsection C of thi s section; and
	4910	+	3. Third, are siblings of eligible students of taxpayers who
	4911	+	received the credit in the prior year.
	4912	+	F. G. Taxpayers claiming the credit shall:
	4913	+	1. Only claim the credit for qualified expenses as defined in
	4914	+	paragraphs 6 and 7 of subsection A of this section to provide an
	4915	+	education for an eligible student;
	4916	+	2. Ensure no other person is claiming a credit for the eligible
	4917	+	student;
	4918	+	3. Not claim the credit for an eligible student who enrolls as
	4919	+	a full-time student in a public school district, public charter
	4920	+	school, public virtual charter school, or magnet school; and
	4921	+	4. Comply with rules and requirements established by the
	4922	+	Commission for administration of the Oklahoma Parental Choice Tax
	4923	+	Credit Program; and
	4924	+	5. Notify the Commission no later than the thirtieth day after
	4925	+	the date on which the eligible student:
	4926	+	a. enrolls in a public school, including an open-
	4927	+	enrollment charter school,
	4928	+	b. enrolls in a nonaccredited private school,
	4929	+
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	4955	+	c. graduates from high school, or
	4956	+	d. is no longer utilizing credits authorized by
	4957	+	subparagraph a of paragraph 1 of subsection C of this
	4958	+	section for any reason.
	4959	+	G. H. Eligible students may accept a scholarship fro m the
	4960	+	Lindsey Nicole Henry Scholarships for Students with Disabilities
	4961	+	Program created by Section 13 -101.2 of Title 70 of the Oklahoma
	4962	+	Statutes this title while participating in the Oklahom a Parental
	4963	+	Choice Tax Credit Program.
	4964	+	H. 1. I. The Commission shall have:
	4965	+	1. Have the authority to conduct an audit or contract for the
	4966	+	auditing of receipts for qualified expenses submitted pursuant to
	4967	+	subparagraph b of paragraph 1 of subsection C of th is section.;
	4968	+	2. The Commission shall be Be authorized to recapture the
	4969	+	credits otherwise authorized by the provisions of this act on a
	4970	+	prorated by semester basis if an audit conducted pursuant to this
	4971	+	subsection shows that the credit was claimed for expen ditures that
	4972	+	were not qualified expenses or it finds that the taxpa yer has
	4973	+	claimed an eligible student who no longer attends a private school
	4974	+	or has enrolled in a public school in the state ; and
	4975	+	3. Reallocate credits within thirty (30) days of receipt of
	4976	+	notice from a taxpayer pursuant to paragraph 5 of subsection G of
	4977	+	this section to the next eligible taxpayer in line when a taxpayer,
	4978	+	on behalf of an eligible student in the program, chooses not to
	4979	+
	4980	+	ENGR. H. B. NO. 3388 Page 14 1
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	5004	+
	5005	+	participate, is no longer eligible to participate, or choo ses to
	5006	+	forgo participation in the program for any reason .
	5007	+	I. J. In the event of a failure of revenue pursuant to the
	5008	+	Oklahoma State Finance Act, the tax credits otherwise authorized in
	5009	+	subsection C of this section shall be reduced proportionately to the
	5010	+	reduction in the amount of money appropriated to the State Board of
	5011	+	Education for the financial support of public schools for the fiscal
	5012	+	year in which the failure of revenue occurs.
	5013	+	J. K. The Commission shall make available on its website the
	5014	+	amount of credits claimed each tax year pursuant to subparagraphs a
	5015	+	and b of paragraph 1 of subsection C of this section.
	5016	+	L. Credits received pursuant to this act shall not constitute
	5017	+	taxable income to a taxpayer who received the credit on behalf of an
	5018	+	eligible student. The Commission shall not issue any Form 1099s to
	5019	+	taxpayers.
	5020	+	SECTION 6. It being immediately necessary for the preservation
	5021	+	of the public peace, health or safety, an emergency is hereby
	5022	+	declared to exist, by reason whereof this act shal l take effect and
	5023	+	be in full force from and after its passage and a pproval.
	5024	+
	5025	+	ENGR. H. B. NO. 3388 Page 15 1
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	5049	+
	5050	+	Passed the House of Representatives the 13th day of March, 2024.
	5051	+
	5052	+
	5053	+
	5054	+
	5055	+	Presiding Officer of the House
	5056	+	of Representatives
	5057	+
	5058	+
	5059	+
	5060	+	Passed the Senate the ___ day of __________, 2024.
	5061	+
2381	5062
2382	5063
2383	5064
2384	5065		Presiding Officer of the Senate
2385	5066
2386	5067
2387		-	OFFICE OF THE GOVERNOR
2388		-	Received by the Office of the Governor this ____________________
2389		-	day of ___________________, 20_______, at _______ o'clock _______ M.
2390		-	By: _________________________________
2391		-	Approved by the Governor of the State of Oklahoma this _____ ____
2392		-	day of ___________________, 20_______, at _______ o'clock _______ M.
2393		-
2394		-
2395		-	_________________________________
2396		-	Governor of the State of Oklahoma
2397		-
2398		-	OFFICE OF THE SECRETARY OF STATE
2399		-	Received by the Office of the Sec retary of State this __________
2400		-	day of ___________________, 20_______, at _______ o'clock _______ M.
2401		-	By: _________________________________
	5068	+