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ENGROSSED HOUSE AMENDME NT
TO
ENGROSSED SENATE BILL NO . 602 By: Rader of the Senate
and
Fetgatter of the House
An Act relating to tax returns; amending 68 O.S.
2021, Sections 2373 and 2375, which relate to payment
of refunds, extensions, and delinquency and
deficiency of payments; requiring certain claims be
made in the form prescribed by the Oklahoma Tax
Commission; limiting claims made to within a period
of certain date; prohibiting refund for clai ms made
after certain period; p roviding exception; modifying
limitation on certain amount of refund to taxes pa id
in certain preceding period; deleting requirement
that certain informati on filed constitutes a claim;
prohibiting application of limitation to certain
claims filed; modifyin g date requiring taxpayer to
remit income tax due; excluding extensions from dat e
taxes become delinquent; updating statutory language;
and providing an effective date.
AMENDMENT NO. 1. Strike the title, enacting clause, and entire bill
and insert:
"An Act relating to revenue and taxation ; amending
Section 1, Chapter 343, O.S.L. 2022 (68 O.S . Supp.
2022, Section 2358.6a), which relates to bonus
depreciation; clarifying application of depreciation;
clarifying procedure for claiming depreciatio n;
authorizing filing of amended tax return under
certain conditions; prohibiting Oklahoma Tax
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Commission from assessing penalties or interes t under
certain conditions; and providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY Section 1, Chapter 343, O.S.L.
2022 (68 O.S. Supp. 2022, Section 2358.6a), is amended to read as
follows:
Section 2358.6a A. As used in this section:
1. "Internal Revenue Code " means Title 26 of the U nited States
Code also known as the federal Inte rnal Revenue Code of 1986, as
amended;
2. "Tax Cuts and Jobs Act" means Public Law No. 115-97 (115th
Congress Public Law 97);
3. "Qualified property" shall have the same meaning as in
Internal Revenue Code Section 168(k) as the Code existed on January
1, 2021, and shall apply to property placed in service after
December 31, 2021;
4. "Qualified improvement pro perty" shall have the same meaning
as in Internal Revenue Code Section 168(e)(6 ) as the Code existed on
January 1, 2021, and shall apply to prope rty placed in service after
December 31, 2021; and
5. "Full expensing" or "one hundred percent (100%) bonus
depreciation" means a method for taxpayers to recover costs for
certain expenditures in research and e xperimentation and depreciable
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business assets by immediately deducting the full cost of suc h
expenditures in the tax year in which the cost is incurred or the
property is placed in service.
B. Taxpayers shall have the option for immediate and full
expensing for qualified property and qualified improvement property
as follows:
1. For purposes of computing income tax for taxable years
beginning after Decembe r 31, 2021, the cost of expenditures for
business assets that are qualified property or qualified im provement
property covered under Section 168 of the Internal Revenue Code
shall be eligible for one hundred percent (100%) bonus depreciation
and may be deducted as an expense incurred by the taxpayer during
the taxable year during which the property is pl aced in service,
notwithstanding any changes to federal law related to amortization
of cost recovery beginning on or after January 1, 2023, and shall
permanently remain fully and immediately deductible as an expense in
the tax year in which the property is placed in service for purposes
of calculating the taxpayer's income; and
2. If a taxpayer elects imm ediate and full expensing of
qualified property or qualified improvement property, any
depreciation calculated and claimed pursuant to this section shall
in no event be a duplication of any depreciation or bonus
depreciation allowed or permitted on the fed eral income tax return
of the taxpayer. For income tax returns filed on or after January
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1, 2023, federal taxable income shall be increased by the amount of
depreciation received under the Internal Reve nue Code for the
qualified property or qualified impr ovement property for which the
election has been made to imm ediately and fully expense the asset on
the Oklahoma income tax return for the year in which t he property
was placed in service. A taxpayer filing a return for which federal
taxable income is not increased as provided for in this section
prior to October 1, 2023, shall file an amended return ref lecting
such increase not later than June 30, 2024. The Tax Commission
shall not assess penalties or interest with respect to the failure
to reflect such increase if a correct amended return is filed as
required herein; and
3. The taxpayer's decision to recover investment costs through
immediate expensing in the year the investment cost is incurred, or
amortized over an amortization schedule, is irrevocabl e unless
specifically allowed for by the Oklahoma Tax Commission.
C. 1. To conform to Section 179 of the Internal Revenue Code,
taxpayers shall be allowed to immediately deduct as an expense the
cost of certain depreciable business assets in the tax year in which
the property is placed in service.
2. For purposes of computing income tax fo r taxable years
beginning after December 31, 2021, taxpayers may elect to treat the
cost of any Section 179 of the Internal Revenue Code property as an
expense which is not chargeable to the capital account. Any cost so
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treated shall be allowed as a deduc tion for the taxable year in
which the Section 179 Internal Revenue Code property is placed in
service.
D. The Oklahoma Tax Commission shall, within sixty (60) days of
the effective date of this act, promulgate rules for implementation
of this act which shall conform to the Internal Revenue Code of 1986
and must be consistent with the Internal Revenue Service's rules.
The provisions of this section shall supersede to t he extent of any
inconsistency with any administrative rule.
SECTION 2. This act shall become effective November 1, 2023."
Passed the House of Representatives the 25th day of April, 2023.
Presiding Officer of the House of
Representatives
Passed the Senate the ____ day of _______ ___, 2023.
Presiding Officer of the Senate
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ENGROSSED SENATE
BILL NO. 602 By: Rader of the Senate
and
Pfeiffer of the House
An Act relating to tax returns; amending 68 O.S.
2021, Sections 2373 and 2375, which relate to payment
of refunds, extensions, and delinquency and
deficiency of payments; requiring certain claims be
made in the form prescribed by the Oklah oma Tax
Commission; limiting claims made to within a period
of certain date; prohibiting refund for clai ms made
after certain period; providi ng exception; modifying
limitation on certain amount of refund to taxes paid
in certain preceding period; deleting requirement
that certain informati on filed constitutes a claim;
prohibiting application of limitation to certain
claims filed; modifying date requiring taxpayer to
remit income tax due; excluding extensions from date
taxes become delinquent; updating statu tory language;
and providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 3. AMENDATORY 68 O.S. 202 1, Section 2373, is
amended to read as follows:
Section 2373. A. Any claim for refund fil ed pursuant to this
section must be made on a return, in t he form prescribed by the
Oklahoma Tax Commission.
B. Any claim for refund of an overpayment of any tax im posed by
Section 2355 of this title must be made within three (3) years from
the due date of the return, including the period of any extension of
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time for filing a return, or two (2) year s from the payment of the
tax liability, whichever period expires later, or, if no return was
filed by the taxpayer, within two (2) years from the time the tax
was paid.
C. Except as provided in subsection H of Sectio n 2375 of this
title, no refund shall be allowed or made after the expirati on of
the period of limitation prescribed in subsection B of this section
for the filing of a claim for refund . If a claim for refund is
filed during the period prescribed in subse ction B of this section,
the amount of the refund, if any, shall not exceed the amount of tax
paid within the period, immediately preceding the filing of the
claim, equal to three (3) y ears plus the period of any extension of
time for filing a return. If the claim was not filed within the
three-year period prescribed in subsecti on B of this section, the
refund shall not exceed the portion of the tax paid during the two
(2) years immediately preceding the filing of the claim.
D. If, upon any revision or adjustment, including overpayment
or illegal payment on account of income der ived from tax-exempt
Indian land, any refund is found to be due any taxpayer, it shall be
paid out of the “Income Tax Withholding Refund Account ”, created by
Section 2385.16 of t his title, in the same manner as refunds are
paid pursuant to such section. The information filed, reflecting
the revision or adjustment, shall constitute the claim for refund.
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E. Except as provided in subsection H of Section 2375 of this
title, the amount of the refund shall not exceed the po rtion of the
tax paid during the three (3) years immediately preceding the filing
of the claim, or, if no claim was filed, then during the three (3)
years immediately preceding the allowance of the refund. However,
this The three-year limitation set forth in subsection C of t his
section shall not apply to the amount of refu nds payable upon claims
filed by members of federally recognized Indian tri bes or the United
States on behalf of its Ind ian wards or former Indian wards, to
recover taxes illegally colle cted from tax-exempt lands. In the
case of any refund to a member of a federally recognized Indian
tribe or to the United States on behalf of it s Indian wards or
former Indian wards, to rec over taxes illegally colle cted on bonus
payments from oil and gas leases located on tax -exempt Indian lands
pursuant to this section, th e Tax Commission shall pay interest on
all refunds issued after January 1, 1996, at the rate of six percent
(6%) per annum from the date of paymen t by the taxpayer to the date
of the refund.
F. In cases where the Tax Commis sion and the taxpayer have
signed a consent, as provided by law, extending the period during
which the tax may be assessed, the period during which the taxp ayer
may file a claim for refund or during which an allowance for a
refund may be made shall be auto matically extended to the final date
fixed by such consent plus thirty (30) days.
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G. The Oklahoma Tax Comm ission may authorize the use of direct
deposit in lieu of refund checks for electronically filed income tax
returns.
SECTION 4. AMENDATORY 68 O.S. 2021, Se ction 2375, is
amended to read as follows:
Section 2375. A. At the time of transmitting the return
required hereunder to the Oklahoma Tax Commis sion On the original
due date of the return, not including any extensions , the taxpayer
shall remit therewith to the Tax Commission the amount of tax due
under the applicable provisions of Section 2351 et seq. of this
title. Failure to pay such tax on or before the date the return is
due, not including any extensions, shall cause the tax to become
delinquent. If the return is filed electronically, the amount of
the tax due pursuant to the provisions of this article shall be due
on or before the twentieth day of April following the close of the
taxable year regardless of when the re turn is electronically filed.
The tax shall be deemed delinquent if unpaid aft er the twentieth day
of April if the return is electronically filed. Provided, if the
Internal Revenue Code provides for a later due date for returns of
individuals, the Tax Co mmission shall accept payments m ade with
returns filed by individuals by such d ate and such payments shall be
considered as timely paid.
B. If any tax due under Section 2351 et seq. of this title,
except a deficiency determined under Section 221 of this t itle, is
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not paid on or before t he date such tax becomes delinquent, a
penalty of five percent (5%) of the total amount of the tax due
shall be added thereto, collected , and paid. However, the Tax
Commission shall not collect the penalty assessed if the t axpayer
remits the tax and inter est within sixty (60) days of the mailing of
a proposed assessment or volun tarily pays the tax upon the filing of
an amended return.
C. If any part of deficiency, arbitrary , or jeopardy assessment
made by the Tax Commission is based upon or occasioned by the
refusal of any taxpayer to file with the Tax Commission any return
as required by Section 2351 et seq. of this title, within ten (10)
days after a written demand for such report or r eturn has been
served upon any taxpaye r by the Tax Commission by regis tered letter
with a return receipt attached, the Tax Commission may assess and
collect, as a penalty, twenty-five percent (25%) of the amount of
the assessment. In the exercise of the a uthority granted by
subsection C of Section 223 and Section 224 of thi s title, the Tax
Commission shall assess the tax as an estimated tax on the basis of
its own determination of the Oklahoma taxable income of the
taxpayer, to be adjusted if and when Okla homa taxable income is
ascertained under the provisions of Section 235 1 et seq. of this
title.
D. If any part of any d eficiency was due to negli gence or
intentional disregard, without the intent to defraud, then ten
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percent (10%) of the total amount of th e deficiency, in addition to
such deficiency, including interest as au thorized by law, shall be
added, collected, and paid.
E. If any part of an y deficiency was due to fraud with intent
to evade tax, then fifty perc ent (50%) of the total amount of the
deficiency, in addition to such deficienc y, including interest as
herein provided, shall be added, collected, and paid.
F. The provisions in this s ection for penalties shall supersede
all other provisions for penalties on income taxes. The provisions
in this section for penalties shall supersed e the provisions in the
Uniform Tax Procedure Code, Section 201 et seq. of this tit le, only
to the extent of conflict between such provisions and the penalty
provisions in this s ection.
G. All taxes, penalties , and interest levied under Section 2351
et seq. of this title must be paid to the Tax Commission at Oklahoma
City, in the form or remittance required by and payable to it.
H. 1. The period of time prescribed in Section 22 3 of this
title, in which the procedures for the assessment of income tax may
be commenced by the Tax Commissi on, shall be tolled and extended
until the amount of taxable income for any year of a taxpayer under
the Internal Revenue Code has been finally de termined under
applicable federal law an d for the additional period of time
hereinafter provided in this subse ction.
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2. If, in such final determination, the amou nt of taxable
income for any year of a taxpayer under the Internal Revenue Code is
changed or corrected from the amounts included in t he federal return
of the taxpayer for such year and such change or cor rection affects
the Oklahoma taxable income of the t axpayer for such year, the
taxpayer, within one (1) year after such final determination of the
corrected taxable income, shall file an amended return under Section
2351 et seq. of this title reporting the corrected Oklahoma taxable
income, and the Tax Comm ission shall make asses sment or refund
within two (2) years from the date the return required by this
paragraph is filed and not there after, unless a waiver is agreed to
and signed by the Tax Commission a nd the taxpayer.
3. In the event of failure by a ta xpayer to comply with t he
provisions of paragraph 2 of this subsection, the statute of
limitations shall be tolled for a period of tim e equal to the time
between the date the amended return under this sub section is
required until such return is actually fu rnished.
4. In administering the provisions of this subsection, the Tax
Commission shall have the authority to audit each and every i tem of
income, deduction, credit , or any other matter related to the r eturn
where such items or matters relate to allocatio n or apportionment
between the State of Oklahoma this state and some other state or the
federal government even if such items or matt ers were not affected
by revisions made in such final determination. Where such items or
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matters do not relate to allocation or appor tionment between the
State of Oklahoma this state and some other state or the fede ral
government, the Tax Commission shall be bound by the revisions made
in such final determination.
5. The provisions of this subsection shall be effective on
September 1, 1993, and e xcept in the case of tax years which are the
subject of closing, settle ment, or resolution agreements entered
into by taxpayers and the Tax Commissio n, keep open all tax years
beginning after June 30, 1988, and all tax years beginning on or
before June 30, 1988, for which extensions of the statute of
limitations have been exe cuted by the taxpayer, but only to the
extent such extensions remain open on t he date of enactment hereof.
SECTION 5. This act shall become effective November 1, 2023.
Passed the Senate the 2nd day of March, 2023.
Presiding Officer of the Senate
Passed the House of Representatives the ____ day of __________,
2023.
Presiding Officer of the House
of Representatives