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STATE OF OKLAHOMA
2nd Session of the 59th Legislature (2024)
SENATE BILL 1299 By: Rader
AS INTRODUCED
An Act relating to income tax credit; amending 68
O.S. 2021, Section 2357.104, as amended by Section 1,
Chapter 33, 1st Extraordinary Ses sion, O.S.L. 2023
(68 O.S. Supp. 2023, Section 2357.104), which relates
to credit for certain railroad e xpenditures; making
credit refundable for certain tax years ; requiring
submission of documentation to the Department of
Transportation for credit eligibility; and providing
an effective date.
BE IT ENACTED BY THE PEOPL E OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 2357.104, as
amended by Section 1, Chapter 33, 1st Extraordinary Session, O.S.L .
2023 (68 O.S. Supp. 2023, Section 2357.104), is amended to read as
follows:
Section 2357.104. A. Except as otherwise provided by this
section, for taxable y ears beginning after December 31, 2005, and
ending before January 1, 2030, there shall be allowed a credit
against the tax imposed by Section 2355 of this t itle equal to fifty
percent (50%) of an eligible taxpayer ’s qualified railroad
reconstruction or replacement expenditures.
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B. For tax years 2020 th rough 2029, the amount of the credit
shall be limited to the product of Five Thousand Dollars ($5,000. 00)
and the number of miles of railroad track owned or leased within
this state by the eligible taxpayer a s of the close of the taxable
year.
C. The For tax years 2006 through 202 4, the credit allowed
pursuant to subsection A of this sec tion but not used shall be
freely transferable, by written agreement, to subsequent transferees
at any time during the five (5) ye ars following the year of
qualification. An eligible transferee shall be any taxpayer subject
to the tax imposed by Section 2 355 of this title. The person
originally allowed the credit and the subsequent transferee shall
jointly file a copy of the written credit transfer agreement with
the Oklahoma Tax Commission within thirty (30) days of the transfer.
The written agreement s hall contain the name, address, and taxpayer
identification number of the parties to the transfer, the amount of
credit being transferred, the year the credit was originally allowed
to the transferring per son, and the tax year or years for which the
credit may be claimed. The Tax Commission shall promulgate ru les to
permit verification of the timeliness of a tax credit claimed upon a
tax return pursuant to this subsection but shall not promulgate any
rules which unduly restrict or hinder the transfers of suc h tax
credit. The Department of Transportation shall promulgate rules to
permit verification of the eligibility of an eligible ta xpayer’s
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expenditures for the purpose of claiming the credit. The rules
shall provide for the approval of qualified railroad reconstruction
or replacement expenditures prior to co mmencement of a project and
provide a certificate of verification up on completion of a project
that uses qualified railroad reconstruction or replacem ent
expenditures. The certificate of verification s hall satisfy all
requirements of the Tax Commission pertaining to the eligibility of
the person claiming the credit.
D. Any For tax years 2006 through 2024, credits allowed
pursuant to the provisions of subsection A o f this section but not
used in any tax year may be carried over in orde r to each of the
five (5) years following the year of qualification. For tax year
2025 and subsequent tax years, if the credit exceeds the tax imposed
by Section 2355 of this title, th e excess amount shall be refunded
to the taxpayer.
E. As used in this section:
1. “Class II and Class III rail road” means a railroad that is
classified by the United States Surface Tra nsportation Board as a
Class II or Class III railroa d;
2. “Eligible taxpayer” means any Class II or C lass III
railroad; and
3. “Qualified railroad reconstruction or replacement
expenditures” means expenditures for:
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a. track maintenance, natural disasters , and
reconstruction or replacement of railroad
infrastructure including track, roadbed, crossings,
bridges, industrial leads, and track-related
structures owned or leased by a Class II or Class III
railroad as of January 1, 2006, or
b. new construction of industrial leads, switches, spurs,
and sidings and extensions of existing sidings by a
Class II or Class III railroad.
F. The total amount of credits authorized by this section used
to offset tax shall be adjusted annually to li mit the annual amount
of credits to Two Million Dollars ($2,000,000.00) for tax years 2018
and 2019 and Five Million Dollars ($5,000,000.00) for tax year 2020
and all subsequent tax years. The Tax Commission s hall annually
calculate and publish a percentage by which the credits auth orized
by this section shall be reduced so the total amount of credits used
to offset tax does not exceed the applicable annual limit. The
formula to be used for the percentage adju stment shall be the
applicable annual limit di vided by the credits claimed in the second
preceding year.
G. Pursuant to subse ction F of this section, in the event the
total tax credits authorized by this section exceed the annual
applicable limit in any c alendar year, the Tax Commission shall
permit any excess over the annual a pplicable limit but shall factor
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such excess into the percentage adjustment formula for subsequent
years.
H. For tax year 2025 and subsequent tax years, to be eligible
to claim the credit provided in this section, the taxpayer shall
submit documentation to the Department of Transportation which shall
include the following :
1. The name of the entity;
2. Total project expenditures related to the rec onstruction or
replacement; and
3. Whether the construction project was completed as part of a
broader economic development project, including any partnership with
local government entities or economic development organizations.
SECTION 2. This act shall become effective November 1, 2024.
59-2-2470 QD 12/12/2023 5:51:05 PM