OK
Oklahoma House Bill HB1200

Oklahoma 2025 Regular Session

Oklahoma House Bill HB1200 Compare Versions

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28-STATE OF OKLAHOMA
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30-1st Session of the 60th Legislature (2025)
31-
32-COMMITTEE SUBSTITUTE
33-FOR ENGROSSED
34-HOUSE BILL 1200 By: Maynard, Kendrix, Lepak,
35-Burns, Hill, Fetgatter,
36-Townley, Boles, and
37-Cantrell of the House
3+ENGR. H. B. NO. 1200 Page 1 1
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28+ENGROSSED HOUSE
29+BILL NO. 1200 By: Maynard, Kendrix, Lepak,
30+and Burns of the House
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3932 and
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4134 Rader of the Senate
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50-COMMITTEE SUBSTITUTE
51-
52-[ revenue – taxation – rates – tax – income –
53-exemptions – deductions - effective date ]
54-
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40+[ revenue and taxation - Oklahoma taxable income -
41+adjusted gross income - apportionment factors -
42+effective date ]
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6447 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
65-SECTION 1. AMENDATORY 68 O.S. 2021, Sectio n 2355, as
66-last amended by Section 1, Chapter 27, 1st Extraordinary Session,
67-O.S.L. 2023 (68 O.S. Supp. 2024, Section 2355), is amended to read
68-as follows:
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95-Section 2355. A. Individuals. For all taxable years beginning
96-after December 31, 1998, and before Jan uary 1, 2006, a tax is hereby
97-imposed upon the Oklahoma taxable income of every resident or
98-nonresident individual, which tax shall be computed at the option of
99-the taxpayer under one of the two following methods:
100-1. METHOD 1.
101-a. Single individuals an d married individuals filing
102-separately not deducting federal income tax:
103-(1) 1/2% tax on first $1,000.00 or part ther eof,
104-(2) 1% tax on next $1,500.00 or part thereof,
105-(3) 2% tax on next $1,250.00 or part thereof,
106-(4) 3% tax on next $1,150.00 or part thereof,
107-(5) 4% tax on next $1,300.00 or part thereof,
108-(6) 5% tax on next $1,500.00 or part thereof,
109-(7) 6% tax on next $2,300.00 or part thereof, and
110-(8) (a) for taxable years beginning after December
111-31, 1998, and before January 1, 2002, 6.75%
112-tax on the remainder,
113-(b) for taxable years beginning on or after
114-January 1, 2002, and before January 1, 2004,
115-7% tax on the remaind er, and
116-(c) for taxable years beginning on or after
117-January 1, 2004, 6.65% tax on the remainder.
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144-b. Married individuals filing jointly and sur viving
145-spouse to the extent and in the manner that a
146-surviving spouse is permitted to file a joint return
147-under the provisions of the Internal Revenue Code of
148-1986, as amended, and heads of households as defined
149-in the Internal Revenue Code of 1986, as amended, not
150-deducting federal income tax:
151-(1) 1/2% tax on first $2,000.00 or part thereof,
152-(2) 1% tax on next $3,000 .00 or part thereof,
153-(3) 2% tax on next $2,500.00 or part thereof,
154-(4) 3% tax on next $2,300.00 or part thereof,
155-(5) 4% tax on next $2,400.00 or part thereof,
156-(6) 5% tax on next $2,800.00 or part thereof,
157-(7) 6% tax on next $6,000.00 or part thereof, and
158-(8) (a) for taxable years beginning after December
159-31, 1998, and before January 1, 2002, 6.75%
160-tax on the remainder,
161-(b) for taxable years beginning on or after
162-January 1, 2002, and before January 1, 2004,
163-7% tax on the remainder, and
164-(c) for taxable years beginning on or after
165-January 1, 2004, 6.65% tax on the remainder.
166-2. METHOD 2.
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193-a. Single individuals and married individuals filing
194-separately deducting federal income tax:
195-(1) 1/2% tax on first $1,000.00 or part thereof,
196-(2) 1% tax on next $1,500.00 or part thereof,
197-(3) 2% tax on next $1,250.00 or part thereof,
198-(4) 3% tax on next $1,150.00 or part thereof,
199-(5) 4% tax on next $1,200.00 or part thereof,
200-(6) 5% tax on next $1,400.00 or part thereof,
201-(7) 6% tax on next $1,500.00 or part thereof,
202-(8) 7% tax on next $1,500.00 or part thereof,
203-(9) 8% tax on next $2,000.00 or part thereof,
204-(10) 9% tax on next $3,500.00 or part thereof, and
205-(11) 10% tax on the remainder.
206-b. Married individuals filing jointly and surviving
207-spouse to the extent and in the manner that a
208-surviving spouse is permitted to file a joint return
209-under the provisions of the Internal Revenue Code of
210-1986, as amended, and heads of households as defined
211-in the Internal Revenue Code of 1986, as amended,
212-deducting federal income tax:
213-(1) 1/2% tax on the first $2,000.00 or part thereof,
214-(2) 1% tax on the next $3,000.00 or part thereof,
215-(3) 2% tax on the next $2,500.00 or part thereof,
216-(4) 3% tax on the next $1,400.00 or part thereof,
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243-(5) 4% tax on the next $1,500.00 or part thereof,
244-(6) 5% tax on the next $1,600.00 or part thereof,
245-(7) 6% tax on the next $1,250.00 or part thereof,
246-(8) 7% tax on the next $1,750.00 or part thereof,
247-(9) 8% tax on the next $3,000.00 or part thereof,
248-(10) 9% tax on the next $6,000.00 or part thereof, and
249-(11) 10% tax on the remainder.
250-B. Individuals. For all taxable years beginning on or after
251-January 1, 2008, and ending any tax year which begins after Decemb er
252-31, 2015, for which the determination required pursuant to Sections
253-4 2355.1F and 5 2355.1G of this act title is made by the State Board
254-of Equalization, a tax is hereby imposed upon the Oklahoma taxable
255-income of every resident or nonresident indiv idual, which tax shall
256-be computed as follows:
257-1. Single individuals and married individuals filing
258-separately:
259-(a) 1/2% tax on first $1,000.00 or part thereof,
260-(b) 1% tax on next $1,500.00 or part thereof,
261-(c) 2% tax on next $1,250.00 or part thereof,
262-(d) 3% tax on next $1,150.00 or part thereof,
263-(e) 4% tax on next $2,300.00 or part thereof,
264-(f) 5% tax on next $1,500.00 or part thereof,
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291-(g) 5.50% tax on the remainder for the 2008 tax year and
292-any subsequent tax year unless the rate prescribed by
293-subparagraph (h) of this paragraph is in effect, and
294-(h) 5.25% tax on the remainder for the 2009 and subsequent
295-tax years. The decrease in the top marginal
296-individual income tax rate otherwise authorized by
297-this subparagraph shall be contingent upon the
298-determination required to be made by the State Board
299-of Equalization pursuant to Section 2355.1A of this
300-title.
301-2. Married individuals filing jointly and surviving spouse to
302-the extent and in the manner that a surviving spouse is permitted to
303-file a joint return un der the provisions of the Internal Revenue
304-Code of 1986, as amended, and heads of households as defined in the
305-Internal Revenue Code of 1986, as amended:
306-(a) 1/2% tax on first $2,000.00 or part thereof,
307-(b) 1% tax on next $3,000.00 or part thereof,
308-(c) 2% tax on next $2,500.00 or part thereof,
309-(d) 3% tax on next $2,300.00 or part thereof,
310-(e) 4% tax on next $2,400.00 or part thereof,
311-(f) 5% tax on next $2,800.00 or part thereof,
312-(g) 5.50% tax on the remainder for the 2008 tax year and
313-any subsequent tax yea r unless the rate prescribed by
314-subparagraph (h) of this paragraph is in effect, and
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341-(h) 5.25% tax on the remainder fo r the 2009 and subsequent
342-tax years. The decrease in the top marginal
343-individual income tax rate otherwise authorized by
344-this subparagraph sh all be contingent upon the
345-determination required to be made by the State Board
346-of Equalization pursuant to Section 2355.1A of this
347-title.
348-C. Individuals. For all taxable years beginning on or after
349-January 1, 2024 tax years 2024 and 2025, a tax is hereby imposed
350-upon the Oklahoma taxable income of every resident or nonresident
351-individual, which tax shall be compute d as follows:
352-1. Single individuals and married individuals filing
353-separately:
354-(a) 0.25% tax on first $1,000.00 or part thereof,
355-(b) 0.75% tax on next $1,500.00 or part thereof,
356-(c) 1.75% tax on next $1,250.00 or part thereof,
357-(d) 2.75% tax on next $1,150.00 or part thereof,
358-(e) 3.75% tax on next $2,300.00 or part thereof, and
359-(f) 4.75% tax on the remainder.
360-2. Married individuals filing j ointly and surviving spouse to
361-the extent and in the manner that a surviving spouse is permitted to
362-file a joint return under the provisions of the Internal Revenue
363-Code of 1986, as amended, and heads of households as defined in the
364-Internal Revenue Code of 1986, as amended:
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391-(a) 0.25% tax on first $2,000.00 or part thereof,
392-(b) 0.75% tax on next $3,000.00 or part thereof,
393-(c) 1.75% tax on next $2,500.00 or part thereof,
394-(d) 2.75% tax on next $2,300.00 or part thereof,
395-(e) 3.75% tax on next $4,600.00 or part thereof, and
396-(f) 4.75% tax on the remainder.
397-No deduction for federal income taxes paid shall be allowed to
398-any taxpayer to arrive at taxable income.
399-D. For tax year 2026 and subsequent tax years, a tax is hereby
400-imposed upon the Oklahoma taxable income of e very resident or
401-nonresident individual, which tax shall be four and seventy one -
402-hundredths percent (4.70%). No deduction for federal income taxes
403-paid shall be allowed to any taxpayer to arrive at taxable income.
404-E. Nonresident aliens. In lieu of the r ates set forth in
405-subsection A above, there shall be imposed on nonresident aliens, as
406-defined in the Internal Rev enue Code of 1986, as amended, a tax of
407-eight percent (8%) instead of thirty percent (30%) as used in the
408-Internal Revenue Code of 1986, as amended, with respect to the
409-Oklahoma taxable income of such nonresident aliens as determined
410-under the provision of the Oklahoma Income Tax Act.
411-Every payer of amounts covered by this subsection shall deduct
412-and withhold from such amounts paid each payee an amount equal to
413-eight percent (8%) thereof. Every payer required to deduct and
414-withhold taxes under this subsect ion shall for each quarterly period
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441-on or before the last day of the month following the close of each
442-such quarterly period, pay over the amo unt so withheld as taxes to
443-the Oklahoma Tax Commission, and shall file a return with each such
444-payment. Such return shall be in such form as the Tax Commission
445-shall prescribe. Every payer required under this subsection to
446-deduct and withhold a tax from a payee shall, as to the total
447-amounts paid to each payee during the calendar year, furnish to such
448-payee, on or before January 31, of the succeeding year, a written
449-statement showing the name of the payer, the name of the payee and
450-the payee’s Social Security account number, if any, the total amount
451-paid subject to taxation, and the total amount deducted and withheld
452-as tax and such other information as the Tax Commission may require.
453-Any payer who fails to withhold or pay to the Tax Commission any
454-sums herein required to be withheld or paid shall be personally and
455-individually liable therefor to the State of Oklaho ma.
456-E. F. Corporations. For all taxable years beginning after
457-December 31, 2021, a tax is hereby imposed upon the Oklahoma taxable
458-income of every corporation doing business within this state or
459-deriving income from sourc es within this state in an amount equal to
460-four percent (4%) thereof.
461-There shall be no additional Oklahoma income tax imposed on
462-accumulated taxable income or on undistribute d personal holding
463-company income as those terms are defined in the Internal Revenue
464-Code of 1986, as amended.
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491-F. G. Certain foreign corporations. In lieu of the tax imposed
492-in the first paragraph of subsection D F of this section, for all
493-taxable years beginning after December 31, 2021, there shall be
494-imposed on foreign corporations , as defined in the Internal Revenue
495-Code of 1986, as amended, a tax of four percent (4%) instead of
496-thirty percent (30%) as used in the Internal Revenue Code of 1986,
497-as amended, where such income is received from sources within
498-Oklahoma this state, in accordance with the provisions of t he
499-Internal Revenue Code of 1986, as amended, and the Oklahoma Income
500-Tax Act.
501-Every payer of amounts covered by this subsection shall deduct
502-and withhold from such amounts paid each payee an amount equal to
503-four percent (4%) thereof. Every payer required to deduct and
504-withhold taxes under this subsection shall for each quarterly period
505-on or before the last day of the month following the close of each
506-such quarterly period, pay over the amount so withheld as taxes to
507-the Tax Commission, and shall file a r eturn with each such payment.
508-Such return shall be in such form as the Tax Commission shall
509-prescribe. Every payer required under this subse ction to deduct and
510-withhold a tax from a payee shall, as to the total amounts pa id to
511-each payee during the calendar year, furnish to such payee, on or
512-before January 31, of the succeeding year, a written statement
513-showing the name of the payer, the name of the payee and the payee ’s
514-Social Security account number, if any, the total amounts paid
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541-subject to taxation, t he total amount deducted and withheld as tax ,
542-and such other information as the Tax Commission may require. Any
543-payer who fails to withhold o r pay to the Tax Commission any sums
544-herein required to be withheld or paid shall be personally and
545-individually liable therefor to the State of Oklahoma.
546-G. H. Fiduciaries. A tax is hereby imposed upon the Oklahoma
547-taxable income of every trust and esta te at the same rates as are
548-provided in subsection B or C subsections B through D of this
549-section for single indiv iduals. Fiduciaries are not allowed a
550-deduction for any federal income tax paid.
551-H. I. Tax rate tables. For all taxable years beginning aft er
552-December 31, 1991, in lieu of the tax imposed by subsection A, B or
553-C subsections A through D of this section, as applicable there is
554-hereby imposed for each taxable year on the taxable income of every
555-individual, whose taxable income for such taxable y ear does not
556-exceed the ceiling amount, a tax determined under tables, applicable
557-to such taxable year which shall be prescribed by the Tax Commission
558-and which shall be in such form as it determines appropriate. In
559-the table so prescribed, the amounts of the tax shall be computed on
560-the basis of the rates prescribed by subsection A, B or C
561-subsections A through D of this section. For purposes of this
562-subsection, the term “ceiling amount” means, with respect to any
563-taxpayer, the amount determined by the T ax Commission for the tax
564-rate category in which such taxpayer falls.
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591-SECTION 2. AMENDATORY 68 O.S. 2021, Section 2358, as
48+SECTION 1. AMENDATORY 68 O.S. 2021, Section 2358, as
59249 last amended by Section 155, Chapter 452, O.S.L. 2024 (68 O.S. Supp.
59350 2024, Section 2358), is amended to read as follows:
59451 Section 2358. For all tax years beginning after December 31,
59552 1981, taxable income and adjusted gross income shall be adjusted to
59653 arrive at Oklahoma taxable income and Oklahoma adjusted gross income
59754 as required by this section.
59855 A. The taxable income of any taxpayer shall be adjusted to
59956 arrive at Oklahoma taxable income for corporations and Oklahoma
60057 adjusted gross income for individuals, as follows:
60158 1. There shall be added interest income on obligations of any
60259 state or political subdivision thereto which is not otherwise
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60386 exempted pursuant to other laws of this state, to the extent that
60487 such interest is not included in taxable income and adjusted gross
60588 income.
60689 2. There shall be deducted amounts included in such income that
60790 the state is prohibited from taxing because of the pr ovisions of the
608-Federal United States Constitution, the State Oklahoma Constitution,
609-federal laws or laws of Oklahoma.
91+Federal Constitution, the State Constitution, federal laws or laws
92+of Oklahoma.
61093 3. The amount of any federal net operating loss deduction shall
61194 be adjusted as follows:
61295 a. For carryovers and carrybacks to taxable years
61396 beginning before Janu ary 1, 1981, the amount of any
61497 net operating loss deduction allowed to a taxpayer for
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64198 federal income tax purposes shall be reduced to an
64299 amount which is the same portion thereof as the loss
643100 from sources within this state, as determined pursuant
644101 to this section and Section 2362 of this title, for
645102 the taxable year in which such loss is sustained is of
646103 the total loss for such year;
647104 b. For carryovers and carrybacks to taxable years
648105 beginning after December 31, 1980, the amount of any
649106 net operating loss deductio n allowed for the taxable
650107 year shall be an amount equal to the aggregate of the
651108 Oklahoma net operating loss carryovers and carrybacks
652109 to such year. Oklahoma net operating losses shall be
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653136 separately determined by reference to Section 172 of
654-the Internal Revenue Code of 1986, as amended, 26
655-U.S.C., Section 172, as modified by the Oklahoma
656-Income Tax Act, Section 2351 et seq. of this title,
657-and shall be allowed without regard to the existence
658-of a federal net operating loss. For tax years
659-beginning after December 31, 2000, and endin g before
660-January 1, 2008, the years to which such losses may be
661-carried shall be determined solely by reference to
662-Section 172 of the Internal Revenue Code of 1986, as
663-amended, 26 U.S.C., Section 172, with the exception
664-that the terms “net operating loss” and “taxable
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691-income” shall be replaced with “Oklahoma net operating
692-loss” and “Oklahoma taxable income ”. For tax years
693-beginning after December 31, 2007, and ending before
694-January 1, 2009, years to which such losses may be
695-carried back shall be limited to two (2) years. For
696-tax years beginning after December 31, 2008, the years
697-to which such losses may be carried back shall be
698-determined solely by reference to Section 172 of the
699-Internal Revenue Code of 1986, as amended, 26 U.S.C.,
700-Section 172, with the exception that the terms “net
701-operating loss” and “taxable income” shall be replaced
702-with “Oklahoma net operating loss ” and “Oklahoma
703-taxable income”.
137+the Internal Revenue Code, 26 U.S.C., Section 172, as
138+modified by the Oklahoma Income Tax Act, Section 2351
139+et seq. of this title, and shall be allowed without
140+regard to the existence of a federal net operating
141+loss. For tax years beginning after December 31,
142+2000, and ending before January 1, 2008, the years to
143+which such losses may be carried shall be determined
144+solely by reference to Section 172 of the Internal
145+Revenue Code, 26 U.S.C., Section 172, with the
146+exception that the terms "net operating loss" and
147+"taxable income" shall be replaced with "Oklahoma net
148+operating loss" and "Oklahoma taxable income ". For
149+tax years beginning after December 31, 2007, and
150+ending before January 1, 2009, years to which such
151+losses may be carried back shall be limited to two (2)
152+years. For tax years beginning after December 31,
153+2008, the years to which such losses may be carried
154+back shall be determined solely by reference to
155+Section 172 of the Internal Revenue Code, 26 U.S.C.,
156+Section 172, with the exception that the terms "net
157+operating loss" and "taxable income" shall be replaced
158+with "Oklahoma net operating loss " and "Oklahoma
159+taxable income".
160+
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704186 4. Items of the following nature shall be allocated as
705187 indicated. Allowable deductions attributable to items separately
706188 allocable in subparagraphs a, b and c of this paragraph, whether or
707189 not such items of income were actually received, shall be allocated
708190 on the same basis as those items:
709191 a. Income from real and tangible personal property, such
710192 as rents, oil and mining production or royalties , and
711193 gains or losses from sales of such property, shall be
712194 allocated in accordance with the situs of such
713195 property;
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740196 b. Income from intangible personal property, such as
741197 interest, dividends, patent or copyright royalties,
742198 and gains or losses from sales of such property, shall
743199 be allocated in accordance with the domiciliary situs
744200 of the taxpayer, except that:
745201 (1) where such property has acquired a nonunitary
746202 business or commercial situs apart from the
747203 domicile of the taxpayer such income shall be
748204 allocated in accordance with such business or
749205 commercial situs; interest income from
750206 investments held to generate working capital for
751207 a unitary business enterprise shall be included
752208 in apportionable income; a resident trust or
753209 resident estate shall be treated as havi ng a
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754236 separate commercial or business situs insofar as
755237 undistributed income is concerned, but shall not
756238 be treated as having a separate commercial or
757239 business situs insofar as distributed income is
758240 concerned,
759241 (2) for taxable years beginning after December 3 1,
760242 2003, capital or ordinary gains or losses from
761243 the sale of an ownership interest in a publicly
762244 traded partnership, as defined by Section 7704(b)
763-of the Internal Revenue Code of 1986, as amended,
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790-shall be allocated to t his state in the ratio of
791-the original cost of such partnership ’s tangible
792-property in this state to the original cost of
793-such partnership’s tangible property everywhere,
794-as determined at the time of the sale; if more
795-than fifty percent (50%) of the value of the
796-partnership’s assets consists of intangible
797-assets, capital or ordinary gains or losses from
798-the sale of an ownership interest in the
799-partnership shall be allocated to this state in
800-accordance with the sales factor of the
801-partnership for its first f ull tax period
802-immediately preceding its tax period during which
803-the ownership interest in the partnership was
804-sold; the provisions of this division shall only
805-apply if the capital or ordinary gains or losses
806-from the sale of an ownership interest in a
807-partnership do not constitute qualif ying gain
808-receiving capital treatment as defined in
809-subparagraph a of paragraph 2 of subsection F of
810-this section,
245+of the Internal Revenue Code, shall be allocated
246+to this state in the ratio of the original cost
247+of such partnership's tangible property in this
248+state to the original cost of such partnership 's
249+tangible property everywhere, as determined at
250+the time of the sale; if more than fifty percent
251+(50%) of the value of the partnership 's assets
252+consists of intangible asse ts, capital or
253+ordinary gains or losses from the sale of an
254+ownership interest in the partnership shall be
255+allocated to this state in accordance with the
256+sales factor of the partnership for its first
257+full tax period immediately preceding its tax
258+period during which the ownership interest in the
259+partnership was sold; the provisions of this
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286+division shall only apply if the capital or
287+ordinary gains or losses from the sale of an
288+ownership interest in a partnership do not
289+constitute qualifying gain receiving ca pital
290+treatment as defined in subparagraph a of
291+paragraph 2 of subsection F of this section,
811292 (3) income from such property which is required to be
812293 allocated pursuant to the provisions of paragraph
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839294 5 of this subsection shall be allocated as herein
840295 provided;
841296 c. Net income or loss from a business activity which is
842297 not a part of business carried on within or without
843298 the state of a unitary character shall be separately
844299 allocated to the state in which such activity is
845300 conducted;
846301 d. In the case of a manufacturing or processing
847-enterprise the business of which in Oklahoma this
848-state consists solely of marketing its products by:
302+enterprise the business of which in Oklahoma consists
303+solely of marketing its products by:
849304 (1) sales having a situs without this state, shipped
850305 directly to a point from without the state to a
851306 purchaser within the state, commonly known as
852307 interstate sales,
853308 (2) sales of the product stored in public warehouses
854-within the state pursuant to “in transit”
309+within the state pursuant to "in transit"
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855336 tariffs, as prescribed and allowed by the
856337 Interstate Commerce Commission, to a purchaser
857338 within the state,
858339 (3) sales of the product stored in publi c warehouses
859340 within the state where the shipment to such
860-warehouses is not covered by “in transit”
341+warehouses is not covered by "in transit"
861342 tariffs, as prescribed and allowed by the
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888343 Interstate Commerce Commission, to a purchaser
889344 within or without the state,
890345 the Oklahoma net income shall, at the o ption of the
891346 taxpayer, be that portion of the total net income of
892347 the taxpayer for federal income tax purposes derived
893348 from the manufacture and/or processing and sales
894349 everywhere as determined by the ratio of the sales
895350 defined in this section made to the p urchaser within
896351 the state to the total sales everywhere. The term
897-“public warehouse” as used in this subpara graph means
352+"public warehouse" as used in this subparagraph means
898353 a licensed public warehouse, the principal business of
899354 which is warehousing merchandise for the public;
900355 e. In the case of insurance com panies, Oklahoma taxable
901356 income shall be taxable income of the taxpayer for
902357 federal tax purposes, as adjusted for the adjustments
903358 provided pursuant to the provisions of paragraphs 1
904359 and 2 of this subsection, apportioned as follows:
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905386 (1) except as otherwise provided by division (2) of
906387 this subparagraph, taxable income of an insurance
907388 company for a taxable year shall be apportioned
908389 to this state by multiplying such income by a
909390 fraction, the numerator of which is the direct
910391 premiums written for insurance on pro perty or
911392 risks in this state, and the denominator of which
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938393 is the direct premiums written for insurance on
939394 property or risks everywhere. For purposes of
940-this subsection, the term “direct premiums
941-written” means the total amount of direct
395+this subsection, the term "direct premiums
396+written" means the total amount of direct
942397 premiums written, assessments and annuity
943398 considerations as reported for the taxable year
944399 on the annual statement filed by the company with
945400 the Insurance Commissioner in the form approved
946401 by the National Association of Insurance
947402 Commissioners, or such other form as may be
948403 prescribed in lieu thereof,
949404 (2) if the principal source of premiums written by an
950405 insurance company consists of premiums for
951406 reinsurance accepted by it, the taxable income of
952407 such company shall be apportioned to this state
953408 by multiplying such income by a f raction, the
954409 numerator of which is the sum of (a) direct
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955436 premiums written for insurance on property or
956437 risks in this state, plus (b) premiums written
957438 for reinsurance accepted in respect of property
958439 or risks in this state, and the denominator of
959440 which is the sum of (c) direct premiums written
960441 for insurance on property or risks everywhere,
961442 plus (d) premiums written for reinsurance
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988443 accepted in respect of property or risks
989444 everywhere. For purposes of this paragraph,
990445 premiums written for reinsurance accepted in
991446 respect of property or risks in this state,
992447 whether or not otherwise determinable, may at the
993448 election of the company be determined on the
994449 basis of the proportion which premiums written
995450 for insurance accepted from companies
996-commercially domiciled in Oklahoma this state
997-bears to premiums written for reinsurance
998-accepted from all sources, or alternatively in
999-the proportion which the sum of the direct
1000-premiums written for insurance on property or
1001-risks in this state by each ce ding company from
1002-which reinsurance is accepted bears to the sum of
1003-the total direct premiums written by each such
1004-ceding company for the taxa ble year.
1005-5. The net income or loss remaining after the separate
1006-allocation in paragraph 4 of this subsection, being that which is
1007-derived from a unitary business enterprise, shall be apportioned to
1008-this state on the basis of the arithmetical average of t hree factors
1009-consisting of property, payroll and sales or gross revenue
1010-enumerated as subparagraphs a, b and c of this paragraph. Net
1011-income or loss as used in this paragraph includes that derived from
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1038-patent or copyright royalties, purchase discounts, an d interest on
1039-accounts receivable relating to or arising from a business activity ,
1040-the income from which is apportioned pursuant to this subsection,
1041-including the sale or other disposition of such property and any
1042-other property used in the unitary enterpr ise. Deductions used in
1043-computing such net income or loss shall not include taxes based on
1044-or measured by income. Provided, for corporations whose property
1045-for purposes of the tax imposed by Section 2355 of this title has an
1046-initial investment cost equal ing or exceeding Two Hundred Million
1047-Dollars ($200,000,000.00) and such investmen t is made on or after
1048-July 1, 1997, or for corporations which expand their property or
1049-facilities in this state and such expansion has an investment cost
1050-equaling or exceeding Two Hundred Million Dollars ($200,000,000.00)
1051-over a period not to exceed three (3) years, and such expansion is
1052-commenced on or after January 1, 2000, the three factors shall be
1053-apportioned with property and payroll, each comprising twenty -five
1054-percent (25%) of the apportionment factor and sales comprising fifty
1055-percent (50%) of the apportionment factor. The apportionment
1056-factors shall be computed as follows:
1057-a. The property factor is a fraction, the numerator of
1058-which is the average value of the taxpaye r’s real and
1059-tangible personal property owned or rented and used in
1060-this state during the tax period and the denom inator
1061-of which is the average value of all the taxpayer ’s
1062-
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1088-real and tangible personal property everywhere owned
1089-or rented and used during the tax period.
1090-(1) Property, the income from which is separately
1091-allocated in paragraph 4 of this subsection,
1092-shall not be included in determining this
1093-fraction. The numerator of the fraction shall
1094-include a portion of the investment in
1095-transportation and ot her equipment having no
1096-fixed situs, such as rolling stock, buses, trucks
1097-and trailers, including machinery and eq uipment
1098-carried thereon, airplanes, salespersons ’
1099-automobiles and other similar equipment, in the
1100-proportion that miles traveled in Oklahoma this
1101-state by such equipment bears to total miles
1102-traveled,
1103-(2) Property owned by the taxpayer is valued at its
1104-original cost. Property rented by the taxpayer
1105-is valued at eight times the net annual rental
1106-rate. Net annual rental rate is the annual
1107-rental rate paid by the taxpayer, less any annual
1108-rental rate received by the taxpayer from
1109-subrentals,
1110-(3) The average value of property shall be determined
1111-by averaging the values at the beginning and
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1138-ending of the tax period but the Oklahoma Tax
1139-Commission may require the averaging of monthly
1140-values during the tax period if reasonably
1141-required to reflect properly the average value of
1142-the taxpayer’s property;
1143-b. The payroll factor is a fraction, the numerator of
1144-which is the total compensation for services rend ered
1145-in the state during the tax period, and the
1146-denominator of which is the total compensation for
1147-services rendered everywhere during the tax period.
1148-“Compensation”, as used in this subsection , means
1149-those paid-for services to the extent related to the
1150-unitary business but does not include officers ’
1151-salaries, wages and other compens ation.
1152-(1) In the case of a transportation enterprise, the
1153-numerator of the fraction shall include a portion
1154-of such expenditure in connection with employees
1155-operating equipment over a fixed route, such as
1156-railroad employees, airline pilots, or bus
1157-drivers, in this state only a part of th e time,
1158-in the proportion that mileage traveled in
1159-Oklahoma this state bears to total mileage
1160-traveled by such employees,
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1187-(2) In any case the numerator of the fraction shall
1188-include a portion of such expenditures in
1189-connection with itinerant employees, such as
1190-traveling salespersons, in this state only a part
1191-of the time, in the proportion that time spent in
1192-Oklahoma this state bears to total time spent in
1193-furtherance of the enterprise by such employees;
1194-c. The sales factor is a fraction, the numerator of w hich
1195-is the total sales or gross revenue of the taxpayer in
1196-this state during the tax period, and the denominator
1197-of which is the total sales or gross revenue of the
1198-taxpayer everywhere during the tax period. “Sales”,
1199-as used in this subsection , does not include sales or
451+commercially domiciled in Oklah oma bears to
452+premiums written for reinsurance accepted from
453+all sources, or alternatively in the proportion
454+which the sum of the direct premiums written for
455+insurance on property or risks in this state by
456+each ceding company from which reinsurance is
457+accepted bears to the sum of the total direct
458+premiums written by each such ceding company for
459+the taxable year.
460+
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486+5. The a. Except as otherwise provided by subparagraph b or c
487+of this paragraph, for taxable years beginning not
488+later than December 31, 2025, the net income or loss
489+remaining after the separate allocation in paragraph 4
490+of this subsection, being that which is derived from a
491+unitary business enterprise, shall be apportioned to
492+this state on the basis of the arithmetical average of
493+three factors consisting of property, payroll and
494+sales or gross revenue enumerated as subparagraphs a,
495+b and c of this paragraph divisions (1), (2), and (3)
496+of subparagraph d of this paragraph . Net income or
497+loss as used in this paragraph includes that derived
498+from patent or copyright royalties, purchase
499+discounts, and interest on accounts receivable
500+relating to or arising from a business activity, the
501+income from which is apportioned pursuant to this
502+subsection, including the sale or other disposition of
503+such property and any other property used in the
504+unitary enterprise. Deductions used in computing such
505+net income or loss shall not include taxes based on or
506+measured by income. Provided, for
507+b. For all taxable years beginning on or after January 1,
508+2026, qualifying corporations may elect to use a
509+single sales factor apportionment comprising sales as
510+
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536+one hundred percent (100%) of the apportionment or the
537+corporation may elect to compute Oklahoma taxable
538+income using the apportionment methodology in which
539+each of the three factors in subparagraph d of this
540+paragraph is equally weighted and an arithmetical
541+average of the three factors is determined as
542+otherwise provided by this paragraph. A qualifying
543+corporation is one whose property for purposes of the
544+tax imposed by Secti on 2355 of this title has an
545+initial cumulative investment cost equaling or
546+exceeding Two Hundred Million Dollars
547+($200,000,000.00) One Hundred Million Dollars
548+($100,000,000.00) over three (3) years and such
549+investment is made on or after July 1, 1997 January 1,
550+2018, or for corporations a corporation which expand
551+expands their property or facilities or which makes
552+improvements or upgrades or any combination of such
553+expenditures which shall be valued at the original
554+costs, prior to federal adjustments, at t he time of
555+acquisition by the corporation and adjusted by
556+subsequent capital additions or improvements thereto
557+and partial disposition thereof, by reason of sale,
558+exchange, or abandonment, in this state and such
559+expansion has, improvements, upgrades, or ex penditures
560+
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586+have an investment cost equaling or exceeding Two
587+Hundred Million Dollars ($200,000,000.00) One Hundred
588+Million Dollars ($100,000,000.00) over a period not to
589+exceed three (3) years, and such expansion ,
590+improvements, upgrades, or any combination of such
591+expenditures is commenced on or after January 1, 2000,
592+the three factors shall be apportioned with property
593+and payroll, each comprising twenty -five percent (25%)
594+of the apportionment factor and sales comprising fifty
595+percent (50%) of the apportio nment factor January 1,
596+2018. The As used in this subparagraph, investments,
597+improvements, or expenditures shall include but not be
598+limited to:
599+(1) expenditures for intangible drilling costs, as
600+defined in Internal Revenue Code Section 263(c),
601+without regard to whether such intangible
602+drilling costs are capitalized or expensed for
603+federal income tax purposes,
604+(2) track structure expenditures, as defined in
605+Internal Revenue Procedure 2001 -46, without
606+regard to whether such track costs are
607+capitalized or expensed for federal income tax
608+purposes, and
609+
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635+(3) property received in a transaction that qualifies
636+as an Internal Revenue Code Section 332
637+liquidation; the investment period for such
638+property shall be the original investment period
639+of the liquidating corpora tion.
640+c. For any other corporation, for taxable years beginning
641+on or after January 1, 2026, Oklahoma taxable income
642+shall be computed using a single sales factor
643+comprising one hundred percent (100%) of the
644+apportionment and the corporation shall not use an
645+arithmetic average of the three factors consisting of
646+property, payroll, and sales. For the applicable tax
647+years, the apportionment factors shall be computed as
648+follows and for corporations required to use the
649+single sales factor the provisions of subp aragraph d
650+of this paragraph shall be used to determine Oklahoma
651+taxable income as provided therein.
652+d. For corporations required or electing to use a single
653+sales factor apportionment, the provisions of division
654+(3) of this subparagraph shall be used to d etermine
655+Oklahoma taxable income as provided therein. For the
656+applicable tax years, or for qualifying corporations
657+electing the three-factor apportionment, the
658+apportionment factors shall be computed as follows:
659+
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685+a.
686+(1) The property factor is a fraction, t he numerator
687+of which is the average value of the taxpayer 's
688+real and tangible personal property owned or
689+rented and used in this state during the tax
690+period and the denominator of which is the
691+average value of all the taxpayer 's real and
692+tangible personal property everywhere owned or
693+rented and used during the tax period.
694+(1)
695+(a) Property, the income from which is
696+separately allocated in paragraph 4 of this
697+subsection, shall not be included in
698+determining this fraction. The numerator of
699+the fraction shall include a portion of the
700+investment in transportation and other
701+equipment having no fixed situs, such as
702+rolling stock, buses, trucks and trailers,
703+including machinery and equipment carried
704+thereon, airplanes, salespersons '
705+automobiles and other similar e quipment, in
706+the proportion that miles traveled in
707+Oklahoma by such equipment bears to total
708+miles traveled,
709+
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735+(2)
736+(b) Property owned by the taxpayer is valued at
737+its original cost. Property rented by the
738+taxpayer is valued at eight times the net
739+annual rental rate. Net annual rental rate
740+is the annual rental rate paid by the
741+taxpayer, less any annual rental rate
742+received by the taxpayer from subrentals,
743+(3)
744+(c) The average value of property shall be
745+determined by averaging the values at the
746+beginning and ending of the tax period but
747+the Oklahoma Tax Commission may require the
748+averaging of monthly values during the tax
749+period if reasonably required to reflect
750+properly the average value of the taxpayer 's
751+property;
752+b.
753+(2) The payroll factor is a fraction, the numerator
754+of which is the total compensation for services
755+rendered in the state during the tax period, and
756+the denominator of which is the total
757+compensation for services rendered everywhere
758+during the tax period. "Compensation", as used
759+
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784+
785+in this subsection division means those paid-for
786+services to the extent related to the unitary
787+business but does not include officers ' salaries,
788+wages and other compensation.
789+(1)
790+(a) In the case of a transportation enterprise,
791+the numerator of the fraction shall include
792+a portion of such expenditure in connection
793+with employees operating equipment over a
794+fixed route, such as railroad employees,
795+airline pilots, or bus drivers, in this
796+state only a part of the time, in the
797+proportion that mileage traveled in Oklahoma
798+bears to total mileage traveled by such
799+employees,
800+(2)
801+(b) In any case the numerator of the fraction
802+shall include a portion of such expenditures
803+in connection with itinerant employees, such
804+as traveling salespersons, in this state
805+only a part of the time, in the proportion
806+that time spent in Oklahoma bears to total
807+time spent in furtherance of the enterprise
808+by such employees;
809+
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835+c.
836+(3) The sales factor is a fraction, the numerator of
837+which is the total sales or gross revenue of the
838+taxpayer in this state during the tax period, and
839+the denominator of which is the total sales or
840+gross revenue of the taxpayer everywhere during
841+the tax period. "Sales", as used in this
842+subsection division does not include sales or
1200843 gross revenue which are separately allocated in
1201844 paragraph 4 of this subsection.
1202-(1) Sales of tangible personal property have a situs
1203-in this state if the property is delivered or
1204-shipped to a purchaser other than the United
1205-States government, within this state regardless
1206-of the FOB Freight on Board (FOB) point or other
1207-conditions of the sale; or the property is
1208-shipped from an office, store, warehouse, factory
1209-or other place of storage in this state and (a)
1210-the purchaser is the United States government or
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1237-(b) the taxpayer is not doing business in the
1238-state of the destination of the shipment.
1239-(2) In the case of a railroad or inter urban railway
1240-enterprise, the numerator of the fraction shall
1241-not be less than the allocation of revenues to
1242-this state as shown in its annual report to the
845+(1)
846+(a) Sales of tangible personal property have a
847+situs in this state if the property is
848+delivered or shipped to a purchaser other
849+than the United States government, within
850+this state regardless of the FOB point or
851+other conditions of the sale; or the
852+property is shipped from an office, store,
853+warehouse, factory or other place of storage
854+in this state and (a) the purchaser is the
855+United States government or (b) the taxpayer
856+is not doing business in the state of the
857+destination of the shipment.
858+(2)
859+
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885+(b) In the case of a railroad or interurban
886+railway enterprise, the numerator of the
887+fraction shall not be less than the
888+allocation of revenues to this state as
889+shown in its annual report to the
1243890 Corporation Commission.
1244-(3) In the case of an airline, truck or bus
1245-enterprise or freight car, tank car, refrigerator
1246-car or other railroad equipment enterprise, the
1247-numerator of the fraction shall include a portion
1248-of revenue from interstate transportation in the
1249-proportion that interstate mileage traveled in
1250-Oklahoma this state bears to total intersta te
1251-mileage traveled.
1252-(4) In the case of an oil, gasoline or gas pipeline
1253-enterprise, the numerator of the fraction shall
1254-be either the total of traffic units of the
1255-enterprise within Oklahoma this state or the
1256-revenue allocated to Oklahoma this state based
1257-upon miles moved, at the option of the taxpayer,
1258-and the denominator of which sh all be the total
1259-of traffic units of the enterprise or the revenue
1260-of the enterprise everywhere as appropriate to
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1287-the numerator. A “traffic unit” is hereby
1288-defined as the transportation for a distance of
1289-one (1) mile of one (1) barrel of oil, one (1)
1290-gallon of gasoline or one thousand (1 ,000) cubic
1291-feet of natural or casinghead gas, as the case
1292-may be.
1293-(5) In the case of a telephone or telegraph or other
1294-communication enterpri se, the numerator of the
1295-fraction shall include that portion of the
1296-interstate revenue as is allocated pursuant to
1297-the accounting procedures prescribed by the
1298-Federal Communications Commission; provided that
1299-in respect to each corporation or business entit y
1300-required by the Federal Communications Commission
1301-to keep its books and records in accordance with
1302-a uniform system of accounts prescribed by such
1303-Commission, the intrastate net income shall be
1304-determined separately in the manner provided by
1305-such uniform system of accounts and only the
1306-interstate income shall be subject to allocation
1307-pursuant to the provisions of this subsection.
1308-Provided further, that the gross revenue factors
1309-shall be those as are determined pursuant to the
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1336-accounting procedures prescr ibed by the Federal
891+(3)
892+(c) In the case of an airline, truck or bus
893+enterprise or freight car, tank car,
894+refrigerator car or other railroad equipment
895+enterprise, the numerator of the fraction
896+shall include a portion of revenue from
897+interstate transportation in the proportion
898+that interstate mileag e traveled in Oklahoma
899+bears to total interstate mileage traveled.
900+(4)
901+(d) In the case of an oil, gasoline or gas
902+pipeline enterprise, the numerator of the
903+fraction shall be either the total of
904+traffic units of the enterprise within
905+Oklahoma or the revenue allocated to
906+Oklahoma based upon miles moved, at the
907+option of the taxpayer, and the denominator
908+of which shall be the total of traffic units
909+
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935+of the enterprise or the revenue of the
936+enterprise everywhere as appropriate to the
937+numerator. A "traffic unit" is hereby
938+defined as the transportation for a distance
939+of one (1) mile of one (1) barrel of oil,
940+one (1) gallon of gasoline or one thousand
941+(1,000) cubic feet of natural or casinghead
942+gas, as the case may be.
943+(5)
944+(e) In the case of a telephone or telegraph or
945+other communication enterprise, the
946+numerator of the fraction shall include that
947+portion of the interstate revenue as is
948+allocated pursuant to the accounting
949+procedures prescribed by the Federal
950+Communications Commission; provided that in
951+respect to each corporation or business
952+entity required by the Federal
953+Communications Commission to keep its books
954+and records in accordance with a uniform
955+system of accounts prescribed by such
956+Commission, the intrastate net income shall
957+be determined separately in the manner
958+provided by such uniform system of accounts
959+
960+ENGR. H. B. NO. 1200 Page 20 1
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985+and only the interstate income shall be
986+subject to allocation pursuant to the
987+provisions of this paragraph 4 of this
988+subsection. Provided further, that the
989+gross revenue factors shall be those as are
990+determined pursuant to the accounting
991+procedures prescribed by the Federal
1337992 Communications Commission.
1338993 In any case where the apportionment of the three factors
1339-prescribed in this paragraph attributes to Oklahoma this state a
1340-portion of net income of the enterprise out of all appropriate
1341-proportion to the proper ty owned and/or business transacted within
1342-this state, because of the fact that o ne or more of the factors so
1343-prescribed are not employed to any appreciable extent in furtherance
1344-of the enterprise; or because one or more factors not so prescribed
1345-are employed to a considerable extent in furtherance of the
1346-enterprise; or because of other reasons, the Tax Commission is
1347-empowered to permit, after a showing by taxpayer that an excessive
1348-portion of net income has been attributed to Oklahoma this state, or
1349-require, when in its judgment an insufficient portion of net income
1350-has been attributed to Oklahoma this state, the elimination,
1351-substitution, or use of additional factors, or reduction or increase
1352-in the weight of such prescribed factors. Provided, however, th at
1353-any such variance from such prescribed factors which has the effect
1354-of increasing the portion of net income att ributable to Oklahoma
1355-this state must not be inherently arbitrary, and application of the
1356-recomputed final apportionment to the net income of the enterprise
1357-must attribute to Oklahoma this state only a reasonable portion
1358-thereof.
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994+prescribed in this paragraph division (1), (2), or (3) of this
995+subparagraph attributes to Oklahoma a portion of net income of the
996+enterprise out of all appropriate proportion to the property owned
997+and/or business transacted within this state, because of the fact
998+that one or more of the factors so prescribed are not employed to
999+any appreciable extent in f urtherance of the enterprise; or because
1000+one or more factors not so prescribed are employed to a considerable
1001+extent in furtherance of the enterprise; or because of other
1002+reasons, the Tax Commission is empowered to permit, after a showing
1003+by taxpayer that an excessive portion of net income has been
1004+attributed to Oklahoma, or require, when in its judgment an
1005+insufficient portion of net income has been attributed to Oklahoma,
1006+the elimination, substitution, or use of additional factors, or
1007+reduction or increas e in the weight of such prescribed factors.
1008+Provided, however, that any such variance from such prescribed
1009+
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1035+factors which has the effect of increasing the portion of net income
1036+attributable to Oklahoma must not be inherently arbitrary, and
1037+application of the recomputed final apportionment to the net income
1038+of the enterprise must attribute to Oklahoma only a reasonable
1039+portion thereof.
13851040 6. For calendar years 1997 and 1998, the owner of a new or
13861041 expanded agricultural commodity processing facility in this stat e
13871042 may exclude from Oklahoma taxable income, or in the case of an
13881043 individual, the Oklahoma adjusted gross income, fifteen percent
13891044 (15%) of the investment by the owner in the new or expanded
13901045 agricultural commodity processing facility. For calendar year 1999 ,
13911046 and all subsequent years, the percentage, not to exceed fifteen
13921047 percent (15%), available to the owner of a new or expanded
13931048 agricultural commodity processing facility in this state claiming
13941049 the exemption shall be adjusted annually so that the total estima ted
13951050 reduction in tax liability does not exceed One Million Dollars
13961051 ($1,000,000.00) annually. The Tax Commission shall promulgate rules
13971052 for determining the percentage of the investment which each eligible
13981053 taxpayer may exclude. The exclusion provided by th is paragraph
13991054 shall be taken in the taxable year when the investment is made. In
14001055 the event the total reduction in tax liability authorized by this
14011056 paragraph exceeds One Million Dollars ($1,000,000.00) in any
14021057 calendar year, the Tax Commission shall permit a ny excess over One
14031058 Million Dollars ($1,000,000.00) and shall factor such excess into
1059+
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14041085 the percentage for subsequent years. Any amount of the exemption
14051086 permitted to be excluded pursuant to the provisions of this
14061087 paragraph but not used in any year may be car ried forward as an
14071088 exemption from income pursuant to the provisions of this paragraph
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14341089 for a period not exceeding six (6) years following the year in which
14351090 the investment was originally made.
14361091 For purposes of this paragraph:
1437-a. “Agricultural commodity processing facility ” means
1438-building buildings, structures, fixtures and
1439-improvements used or operated primarily for the
1440-processing or production of marketable produ cts from
1441-agricultural commodities. The term shall also mean a
1442-dairy operation that requires a depreciable investment
1443-of at least Two Hundred Fifty Thousand Dollars
1444-($250,000.00) and which produces milk from dairy cows.
1445-The term does not include a facility that provides
1446-only, and nothing more than, storage, cleaning, drying
1447-or transportation of agricultural commodities, and
1448-b. “Facility” means each part of the facility which is
1092+a. "Agricultural commodity proces sing facility" means
1093+building, structures, fixtures and improvements used
1094+or operated primarily for the processing or production
1095+of marketable products from agricultural commodities.
1096+The term shall also mean a dairy operation that
1097+requires a depreciable i nvestment of at least Two
1098+Hundred Fifty Thousand Dollars ($250,000.00) and which
1099+produces milk from dairy cows. The term does not
1100+include a facility that provides only, and nothing
1101+more than, storage, cleaning, drying or transportation
1102+of agricultural commodities, and
1103+b. "Facility" means each part of the facility which is
14491104 used in a process primarily for:
14501105 (1) the processing of agricultural commodities,
14511106 including receiving or storing agricultural
14521107 commodities, or the production of milk at a dairy
14531108 operation,
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14541135 (2) transporting the agricultural commodities or
14551136 product before, during or after the processing,
14561137 or
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14831138 (3) packaging or otherwise preparing the product for
14841139 sale or shipment.
14851140 7. Despite any provision to the contrary in paragraph 3 of this
14861141 subsection, for taxab le years beginning after December 31, 1999, in
14871142 the case of a taxpayer which has a farming loss, such farming loss
14881143 shall be considered a net operating loss carryback in accordance
1489-with and to the extent of the Internal Revenue Code of 1986, as
1490-amended, 26 U.S.C., Section 172(b)(G) 172(b)(1)(B). However, the
1491-amount of the net operating loss carryback shall not exceed th e
1492-lesser of:
1144+with and to the extent of the Internal Revenue Code, 26 U.S.C.,
1145+Section 172(b)(G). However, the amount of the net operating loss
1146+carryback shall not exceed the lesser of:
14931147 a. Sixty Thousand Dollars ($60,000.00), or
14941148 b. the loss properly shown on Schedule F of the Internal
14951149 Revenue Service Form 1040 reduced by one -half (1/2) of
14961150 the income from all other sources other than reflected
14971151 on Schedule F.
14981152 8. In taxable years beginning after December 31, 1995, all
14991153 qualified wages equal to the federal income tax credit set forth in
15001154 26 U.S.C.A., Section 45A, shall be deducted from taxable income.
15011155 The deduction allowed pursuant to this paragraph shall only be
15021156 permitted for the tax years in which the federal tax credit pursuant
15031157 to 26 U.S.C.A., Section 45A, is allowed. For purposes of this
1504-paragraph, “qualified wages” means those wages used to calcu late the
1158+
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1184+paragraph, "qualified wages" means those wages used to calc ulate the
15051185 federal credit pursuant to 26 U.S.C.A., Section 45A.
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15321186 9. In taxable years beginning after December 31, 2005, an
15331187 employer that is eligible for and utilizes the Safety Pays OSHA
15341188 Consultation Service provided by the Oklahoma Department of Labor
15351189 shall receive an exemption from taxable income in the amount of One
15361190 Thousand Dollars ($1,000.00) for the tax year that the service is
15371191 utilized.
15381192 10. For taxable years beginning on or after January 1, 2010,
15391193 there shall be added to Oklahoma taxable income an amo unt equal to
15401194 the amount of deferred income not included in such taxable income
15411195 pursuant to Section 108(i)(1) of the Internal Revenue Code of 1986
15421196 as amended by Section 1231 of the American Recovery and Reinvestment
15431197 Act of 2009 (P.L. No. 111 -5). There shall be subtracted from
15441198 Oklahoma taxable income an amount equal to the amount of deferred
15451199 income included in such taxable income pursuant to Section 108(i)(1)
1546-of the Internal Revenue Code of 1986 as amended by Section 1231 of
1547-the American Recovery and Reinvest ment Act of 2009 (P.L. No. 111 -5).
1200+of the Internal Revenue Code by Section 1231 of the American
1201+Recovery and Reinvestment Act of 2009 ( P.L. No. 111-5).
15481202 11. For taxable years beginning on or after January 1, 2019,
15491203 there shall be subtracted from Oklahoma taxable income or adjusted
15501204 gross income any item of income or gain, and there shall be added to
15511205 Oklahoma taxable income or adjusted gross income any item of loss or
15521206 deduction that in the absence of an election pursuant to the
15531207 provisions of the Pass -Through Entity Tax Equity Act of 2019 would
1208+
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15541234 be allocated to a member or to an indirect member of an electing
15551235 pass-through entity pursuant to Sec tion 2351 et seq. of this title,
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15821236 if (i) the electing pass -through entity has accounted for such item
15831237 in computing its Oklahoma net entity income or loss pursuant to the
15841238 provisions of the Pass -Through Entity Tax Equity Act of 2019, and
15851239 (ii) the total amount of tax attributable to any resulting Oklahoma
15861240 net entity income has been paid. The Oklahoma Tax Commission shall
15871241 promulgate rules for the reporting of such exclusion to direct and
15881242 indirect members of the electing pass -through entity. As used in
1589-this paragraph, “electing pass-through entity”, “indirect member”,
1590-and “member” shall be defined in the same manner as prescribed by
1243+this paragraph, "electing pass-through entity", "indirect member",
1244+and "member" shall be defined in the same manner as prescribed by
15911245 Section 2355.1P-2 of this title. Notwithstanding the application of
15921246 this paragraph, the adjusted tax basis of any ownership intere st in
15931247 a pass-through entity for purposes of Section 2351 et seq. of this
15941248 title shall be equal to its adjusted tax basis for federal income
15951249 tax purposes.
15961250 B. 1. The taxable income of any corporation shall be further
15971251 adjusted to arrive at Oklahoma taxable i ncome, except those
15981252 corporations electing treatment as provided in subchapter S of the
1599-Internal Revenue Code of 1986, as amended, 26 U.S.C., Section 1361
1600-et seq., and Section 2365 of this title, deductions pursuant to the
1601-provisions of the Accelerated Cost Recovery System as defined
1602-provided and allowed in the Economi c Recovery Tax Act of 1981,
1603-Public Law 97-34, 26 U.S.C., Section 168, for depreciation of assets
1604-placed into service after December 31, 1981, shall not be allowed in
1605-calculating Oklahoma taxable income. Such corporations shall be
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1632-allowed a deduction for depreciation of assets placed into service
1633-after December 31, 1981, in accordance with provisions of the
1634-Internal Revenue Code of 1986, as amended, 26 U.S.C., Section 1 et
1635-seq., in effect immediately prior to the enactment of the
1636-Accelerated Cost Recovery S ystem. The Oklahoma tax basis for all
1637-such assets placed into service after December 31, 1981, calculated
1638-in this section shall be retained and utilized for all Oklahoma
1639-income tax purposes through the final disposition of such assets.
1253+Internal Revenue Code, 26 U.S.C., Section 1361 et seq., and Section
1254+2365 of this title, deductions pursuant to the provisions of the
1255+Accelerated Cost Recovery System as defined and allowed in the
1256+Economic Recovery Tax Act of 1981, Public Law 97 -34, 26 U.S.C.,
1257+Section 168, for depreciation of assets placed into service after
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1284+December 31, 1981, shall not be allowed in calculating Oklahoma
1285+taxable income. Such corporations shall be allowed a deduction for
1286+depreciation of assets placed into service after December 31, 1981,
1287+in accordance with provisions of the Internal Revenue Code, 26
1288+U.S.C., Section 1 et seq., in effect immediately prior to the
1289+enactment of the Accelerated C ost Recovery System. The Oklahoma tax
1290+basis for all such assets placed into service after December 31,
1291+1981, calculated in this section shall be retained and utilized for
1292+all Oklahoma income tax purposes through the final disposition of
1293+such assets.
16401294 Notwithstanding any other provisions of the Oklahoma Income Tax
16411295 Act, Section 2351 et seq. of this title, or of the Internal Revenue
1642-Code of 1986, as amended, to the contrary, this subsection sha ll
1643-control calculation of depreciation of assets placed into service
1644-after December 31, 1981, and before January 1, 1983.
1296+Code to the contrary, this subsection shall control calculation of
1297+depreciation of assets placed into service after December 31, 1981,
1298+and before January 1, 1983.
16451299 For assets placed in service and held by a corporation in which
1646-accelerated cost recovery system the Accelerated Cost Recovery
1647-System was previously disallowed, an adjustment to taxable income is
1648-required in the first taxable year beginning after D ecember 31,
1649-1982, to reconcile the basis of such assets to the basis allowed in
1650-the Internal Revenue Code of 1986, as amended. The purpose of this
1651-adjustment is to equalize the basis and allowance for depreciation
1652-accounts between that reported to the Internal Revenue Service and
1653-that reported to Oklahoma this state.
1300+accelerated cost recovery system was previously disallowed, an
1301+adjustment to taxable income is required in the first taxable year
1302+beginning after December 31, 1982, to reconcile the basis of such
1303+assets to the basis allowed in the Internal Revenue Code. The
1304+purpose of this adjustment is to equalize the basis and allowance
1305+for depreciation accounts between that reported to the Internal
1306+Revenue Service and that reported to Oklahoma.
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16541333 2. For tax years beginning on or after January 1, 2009, and
16551334 ending on or before December 31, 2009, there shall be added to
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16821335 Oklahoma taxable income any amount in excess of One Hundred Seventy -
16831336 five Thousand Dollars ($175,000.00) which has been deducted as a
1684-small business expense under Internal Revenue Code of 1986, as
1685-amended, Section 179 as provided in the American Recovery and
1686-Reinvestment Act of 2009.
1337+small business expense under Internal Revenue Code, Section 179 as
1338+provided in the American Recovery and Reinvestment Act of 2009.
16871339 C. 1. For taxable years beginning after December 31, 1987, the
16881340 taxable income of any corporation sha ll be further adjusted to
16891341 arrive at Oklahoma taxable income for transfers of technology to
1690-qualified small businesses located in Oklahoma this state. Such
1691-transferor corporation shall be allowe d an exemption from taxable
1692-income of an amount equal to the amount of royalty payment received
1693-as a result of such transfer; provided, howeve r, such amount shall
1694-not exceed ten percent (10%) of the amount of gross proceeds
1695-received by such transferor corporation as a result of the
1696-technology transfer. Such exemption shall be allowed for a period
1697-not to exceed ten (10) years from the date of re ceipt of the first
1698-royalty payment accruing from such transfer. No exemption may be
1699-claimed for transfers of tech nology to qualified small businesses
1700-made prior to January 1, 1988.
1342+qualified small businesses located in Oklahoma. Such transferor
1343+corporation shall be allowed an exemption from taxable income of an
1344+amount equal to the amount of ro yalty payment received as a result
1345+of such transfer; provided, however, such amount shall not exceed
1346+ten percent (10%) of the amount of gross proceeds received by such
1347+transferor corporation as a result of the technology transfer. Such
1348+exemption shall be allowed for a period not to exceed ten (10) years
1349+from the date of receipt of the first royalty payment accruing from
1350+such transfer. No exemption may be claimed for transfers of
1351+technology to qualified small businesses made prior to January 1,
1352+1988.
17011353 2. For purposes of this subsection:
1702-a. “Qualified small business ” means an entity, whether
1354+a. "Qualified small business " means an entity, whether
17031355 organized as a corporation, partnership, or
17041356 proprietorship, organized for profit with its
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17301382
17311383 principal place of business located within this state
17321384 and which meets the follo wing criteria:
17331385 (1) Capitalization of not more than Two Hundred Fifty
17341386 Thousand Dollars ($250,000.00),
17351387 (2) Having at least fifty percent (50%) of its
1736-employees and assets located in Oklahoma this
1737-state at the time of the transfer, and
1388+employees and assets located in Oklahoma at the
1389+time of the transfer, and
17381390 (3) Not a subsidiary or affiliate of the transferor
17391391 corporation;
1740-b. “Technology” means a proprietary process, formula,
1392+b. "Technology" means a proprietary process, formula,
17411393 pattern, device or compilation of scientific or
17421394 technical information which is not in the public
17431395 domain;
1744-c. “Transferor corporation ” means a corporation which is
1396+c. "Transferor corporation " means a corporation which is
17451397 the exclusive and undisputed owner of the technology
17461398 at the time the transfer is made; and
1747-d. “Gross proceeds” means the total amount of
1399+d. "Gross proceeds" means the total amount of
17481400 consideration for the transfer of technology, whether
17491401 the consideration is in money or otherwise.
17501402 D. 1. For taxable years begi nning after December 31, 2005, the
17511403 taxable income of any corporation, estate or trust, shall be further
17521404 adjusted for qualifying gains receiving capital treatment. Such
17531405 corporations, estates or trusts shall be allowed a deduction from
17541406 Oklahoma taxable inco me for the amount of qualifying gains receiving
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17811433 capital treatment earned by the corporation, estate or trust during
17821434 the taxable year and included in the federal taxable income of such
17831435 corporation, estate or trust.
17841436 2. As used in this subsection:
1785-a. “qualifying gains receiving capital treatment ” means
1437+a. "qualifying gains receiving capital treatment " means
17861438 the amount of net capital gains, as defined in Section
1787-1222(11) of the Internal Revenue Code of 1986, as
1788-amended, included in the federal income tax return of
1789-the corporation, estate or trust that result from:
1439+1222(11) of the Internal Revenue Code, included in the
1440+federal income tax return of the corporation, estate
1441+or trust that result from:
17901442 (1) the sale of real property or tangible personal
1791-property located within Oklahoma this state that
1792-has been directly or indirectly owned by the
1793-corporation, estate or trus t for a holding period
1794-of at least five (5) years prior to the date of
1795-the transaction from which such net capital gains
1443+property located within Oklahoma that has been
1444+directly or indirectly owned by the corporation,
1445+estate or trust for a holding period of at least
1446+five (5) years prior to the date of the
1447+transaction from which such net capital gains
17961448 arise,
17971449 (2) the sale of stock or on the sale of an ownership
17981450 interest in an Oklahoma company, limited
17991451 liability company, or partnership where such
18001452 stock or ownership interest has been directly or
18011453 indirectly owned by the corporation, estate or
18021454 trust for a holding period of at least three (3)
18031455 years prior to the date of the transaction from
18041456 which the net capital gains arise, or
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18301482
18311483 (3) the sale of real property, tangible personal
18321484 property or intangible personal property located
1833-within Oklahoma this state as part of the sale of
1834-all or substantially all of the assets of an
1835-Oklahoma company, limited liability company, or
1485+within Oklahoma as part of the sale of all or
1486+substantially all of the assets of an Oklahoma
1487+company, limited liability company, or
18361488 partnership where such property has been directly
18371489 or indirectly owned by such entity owned by the
18381490 owners of such entity, and used in or derived
18391491 from such entity for a period of at least three
18401492 (3) years prior to the date of the transaction
18411493 from which the net capital gains arise,
1842-b. “holding period” means an uninterrupted period of
1494+b. "holding period" means an uninterrupted period of
18431495 time. The holding period shall include any additional
18441496 period when the property was held by another
18451497 individual or entity, if such additional period is
1846-included in the taxpayer ’s holding period for the
1847-asset pursuant to the Internal Revenue Code of 1986,
1848-as amended,
1849-c. “Oklahoma company”, “limited liability company ”, or
1850-“partnership” means an entity whose primary
1851-headquarters have been located in Oklahoma this state
1852-for at least three (3) uninterrupted years pri or to
1853-the date of the transaction from which the net capital
1854-gains arise,
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1881-d. “direct” means the taxpayer directly owns the asset,
1498+included in the taxpayer 's holding period for the
1499+asset pursuant to the Internal Revenue Code,
1500+c. "Oklahoma company", "limited liability company ", or
1501+"partnership" means an entity whos e primary
1502+headquarters have been located in Oklahoma for at
1503+least three (3) uninterrupted years prior to the date
1504+of the transaction from which the net capital gains
1505+arise,
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1532+d. "direct" means the taxpayer directly owns the asset,
18821533 and
1883-e. “indirect” means the taxpayer owns an interest in a
1534+e. "indirect" means the taxpayer owns an interest in a
18841535 pass-through entity (or chain of pass -through
18851536 entities) that sells the asset that gives rise to the
18861537 qualifying gains receiving capital treatment.
18871538 (1) With respect to sales of real property or
18881539 tangible personal property locat ed within
1889-Oklahoma this state, the deduction described in
1890-this subsection shall not apply unless th e pass-
1540+Oklahoma, the deduction described in this
1541+subsection shall not apply unless the pass -
18911542 through entity that makes the sale has held the
18921543 property for not less than five (5) uninterrupted
18931544 years prior to the date of the transaction that
18941545 created the capital gain, and each pass -through
18951546 entity included in the chain of ownership has
18961547 been a member, partner, or shareholder of the
18971548 pass-through entity in the tier immediately below
18981549 it for an uninterrupted period of not less than
18991550 five (5) years.
19001551 (2) With respect to sales of stock or ownership
19011552 interest in or sales of all or substantially all
19021553 of the assets of an Oklahoma company, limited
19031554 liability company, or partnership, the deduction
19041555 described in this subsection shall not apply
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19311582 unless the pass-through entity that makes the
19321583 sale has held the stock or ownership interest or
19331584 the assets for not less than three (3)
19341585 uninterrupted years prior to the date of the
19351586 transaction that created the capital gain, and
19361587 each pass-through entity included in the chain of
19371588 ownership has been a member, partner or
19381589 shareholder of the pass -through entity in the
19391590 tier immediately below it for an uninterrupted
19401591 period of not less than three (3) years.
19411592 E. The Oklahoma adjusted gross income of any individual
19421593 taxpayer shall be further adjusted as fol lows to arrive at Oklahoma
19431594 taxable income:
1944-1. a. In For tax year 2025 and preceding tax years, in the
1945-case of individuals, there shall be added or deducted,
1946-as the case may be, the difference necessary to allow
1947-personal exemptions of One Thousand Dollars
1595+1. a. In the case of individuals, there shall be added or
1596+deducted, as the case may be, the difference necessary
1597+to allow personal exemptions of One Thousand Dollars
19481598 ($1,000.00) in lieu of the personal exemptions allowed
1949-by the Internal Revenue Code of 1986, as amended.
1950-b. There For tax year 2025 and preceding tax years, there
1951-shall be allowed an additional exemption of One
1599+by the Internal Revenue Code.
1600+b. There shall be allowed an additional exemption of One
19521601 Thousand Dollars ($1,000.00) for each taxpayer or
19531602 spouse who is blind at the close of the tax year. For
19541603 purposes of this subparagraph, an individual is blind
1955-
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19811604 only if the central visual acuity of the individual
19821605 does not exceed 20/200 in the better eye with
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19831632 correcting lenses, or if the visual acuity of the
19841633 individual is greater than 20/200, but is accompanied
19851634 by a limitation in the fields of vision such that the
19861635 widest diameter of the visual field subtends an angle
19871636 no greater than twenty (20) degrees.
1988-c. There For tax year 2025 and preceding tax years, there
1989-shall be allowed an additional exemption of One
1637+c. There shall be allowed an additional exemption of One
19901638 Thousand Dollars ($1,000.00) for each taxpayer or
19911639 spouse who is sixty-five (65) years of age or older at
19921640 the close of the tax year based upon the filing status
19931641 and federal adjusted gross income of the taxpayer.
19941642 Taxpayers with the following filing status may claim
19951643 this exemption if the federal adjusted gross income
19961644 does not exceed:
19971645 (1) Twenty-five Thousand Dollars ($25,000.00) if
19981646 married and filing jointly,
19991647 (2) Twelve Thousand Five Hundred Dollars ($12,500.00)
20001648 if married and filing separately,
20011649 (3) Fifteen Thousand Dollars ($15,000.00) if single,
20021650 and
20031651 (4) Nineteen Thousand Dollars ($19,000.00) if a
20041652 qualifying head of household.
2005-
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20311653 Provided, for taxable years beginning after December
20321654 31, 1999, amounts included in the calculation of
20331655 federal adjusted gross income pursuant to the
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20341682 conversion of a traditional individual retirement
20351683 account to a Roth individual retirement accoun t shall
20361684 be excluded from federal adjusted gross income for
20371685 purposes of the income thresholds provided in this
20381686 subparagraph.
20391687 2. a. For taxable years beginning on or before December 31,
20401688 2005, in the case of individuals who use the standard
20411689 deduction in determining taxable income, there shall
20421690 be added or deducted, as the case may be, the
20431691 difference necessary to allow a standard deduction in
20441692 lieu of the standard deduction allowed by the Internal
2045-Revenue Code of 1986, as amended, in an amount equal
2046-to the larger of fifteen percent (15%) of the Oklahoma
2047-adjusted gross income or One Thousand Dollars
2048-($1,000.00), but not to exceed Two Thousand Dollars
2049-($2,000.00), except that in the case of a married
2050-individual filing a separate return such deduction
2051-shall be the larger of fifteen percent (15%) of such
2052-Oklahoma adjusted gross inco me or Five Hundred Dollars
2053-($500.00), but not to exceed the maximum amount of One
2054-Thousand Dollars ($1,000.00).
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1693+Revenue Code, in an amount equal to the larger of
1694+fifteen percent (15%) of the Oklahoma adjusted gross
1695+income or One Thousand Dollars ($1,000.00), but not to
1696+exceed Two Thousand Dollars ($2,000.00), except that
1697+in the case of a married individual filing a separate
1698+return such deduction shall be the larger of fifteen
1699+percent (15%) of such Oklahoma adjusted gross income
1700+or Five Hundred Dollars ($500.00), but not to exceed
1701+the maximum amount of One Thousand Dollars
1702+($1,000.00).
20811703 b. For taxable years beginning on or after January 1,
20821704 2006, and before January 1, 2007, in the cas e of
20831705 individuals who use the standard deduction in
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20841732 determining taxable income, there shall be added or
20851733 deducted, as the case may be, the difference necessary
20861734 to allow a standard deduction in lieu of the standard
2087-deduction allowed by the Internal Revenue Code of
2088-1986, as amended, in an amount equal to:
1735+deduction allowed by the Internal Revenue Co de, in an
1736+amount equal to:
20891737 (1) Three Thousand Dollars ($3,000.00), if the filing
20901738 status is married filing joint, head of household
20911739 or qualifying widow, or
20921740 (2) Two Thousand Dollars ($2,000.00), if the filing
20931741 status is single or married filing separate.
20941742 c. For the taxable year beginning on January 1, 2007, and
20951743 ending December 31, 2007, in the case of individuals
20961744 who use the standard deduction in determining taxable
20971745 income, there shall be added or deducted, as the case
20981746 may be, the difference necessary to allow a standard
20991747 deduction in lieu of the standard deduction allowed by
2100-the Internal Revenue Code of 1986, as amended, in an
2101-amount equal to:
1748+the Internal Revenue Code, in an amount equal to:
21021749 (1) Five Thousand Five Hundred Dollars ($5,500.00),
21031750 if the filing status is married filing joint or
21041751 qualifying widow, or
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21311752 (2) Four Thousand One Hundred Twenty-five Dollars
21321753 ($4,125.00) for a head of household, or
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21331780 (3) Two Thousand Seven Hundred Fifty Dollars
21341781 ($2,750.00), if the filing status is single or
21351782 married filing separate.
21361783 d. For the taxable year beginning on January 1, 2008, and
21371784 ending December 31, 2008, in the case of individuals
21381785 who use the standard deduction in determining taxable
21391786 income, there shall be added or deducted, as the case
21401787 may be, the difference necessary to allow a standard
21411788 deduction in lieu of the standard deduction allowed by
2142-the Internal Revenue Code of 1986, as amended, in an
2143-amount equal to:
1789+the Internal Revenue Code, in an amount equal to:
21441790 (1) Six Thousand Five Hundred Dollars ($6,500.00), if
21451791 the filing status is married filing joint or
21461792 qualifying widow,
21471793 (2) Four Thousand Eight Hundred Seventy -five Dollars
21481794 ($4,875.00) for a head of househ old, or
21491795 (3) Three Thousand Two Hundred Fifty Dollars
21501796 ($3,250.00), if the filing status is single or
21511797 married filing separate.
21521798 e. For the taxable year beginning on January 1, 2009, and
21531799 ending December 31, 2009, in the case of individuals
21541800 who use the standard deduction in determining taxable
2155-
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21811801 income, there shall be added or deducted, as the case
21821802 may be, the difference necessary to allow a standard
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21831829 deduction in lieu of the standard deduction allowed by
2184-the Internal Revenue Code of 1986, as amended, in an
2185-amount equal to:
1830+the Internal Revenue Code, in an amount equal to:
21861831 (1) Eight Thousand Five Hundred Dollars ($8,500.00),
21871832 if the filing status is married filing joint or
21881833 qualifying widow,
21891834 (2) Six Thousand Three Hundred Seventy -five Dollars
21901835 ($6,375.00) for a head of household, or
21911836 (3) Four Thousand Two Hundred Fifty Dollars
21921837 ($4,250.00), if the filing status is single or
21931838 married filing separate.
21941839 Oklahoma adjusted gross income shall be increased by
21951840 any amounts paid for motor vehicle excise taxes which
2196-were deducted as allowed by the Internal Revenue Code
2197-of 1986, as amended.
1841+were deducted as allowed by the Internal Revenue Code.
21981842 f. For taxable years beginning on or after January 1,
21991843 2010, and ending on December 31, 2016, in the case of
22001844 individuals who use the standard deduction in
22011845 determining taxable income, there shall be added or
22021846 deducted, as the case may be, the difference necessary
22031847 to allow a standard deductio n equal to the standard
2204-deduction allowed by the Internal Revenue Code of
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2231-1986, as amended, based upon the amount and filing
2232-status prescribed by such Code for purposes of filing
2233-federal individual inco me tax returns.
1848+deduction allowed by the Internal Revenue Code, based
1849+upon the amount and filing status prescribed by such
1850+Code for purposes of filing federal individual income
1851+tax returns.
1852+
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22341878 g. For taxable years beginning on or after January 1,
2235-2017 tax years 2017 through 202 5, in the case of
2236-individuals who use the standard deduction in
2237-determining taxable income, there shall be added or
2238-deducted, as the case may be, the diffe rence necessary
2239-to allow a standard deduction in lieu of the standard
2240-deduction allowed by the Internal Revenue Code of
2241-1986, as amended, as follows:
1879+2017, in the case of individuals who use the standard
1880+deduction in determining taxable income, there shall
1881+be added or deducted, as the case may be, the
1882+difference necessary to allow a standard deduction in
1883+lieu of the standard deduction allowed by the Interna l
1884+Revenue Code, as follows:
22421885 (1) Six Thousand Three Hundred Fifty Dollars
22431886 ($6,350.00) for single or married filing
22441887 separately,
22451888 (2) Twelve Thousand Seven Hundred Dollars
22461889 ($12,700.00) for married filing jointly or
22471890 qualifying widower with dependent child, and
22481891 (3) Nine Thousand Three Hundred Fifty Dollars
22491892 ($9,350.00) for head of household.
2250-h. For tax year 2026 and subsequent tax years, in the
2251-case of individuals who use the standard deduction in
2252-determining taxable income , there shall be added or
2253-deducted, as the case may be, the difference necessary
2254-to allow a standard deduction in lieu of the standard
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2281-deduction allowed by the Internal Revenu e Code of
2282-1986, as amended, as follows:
2283-(1) Thirteen Thousand Five Hundred Fifty Dollars
2284-($13,550.00) for single o r married filing
2285-separately,
2286-(2) Twenty-seven Thousand One Hundred Dollars
2287-($27,100.00) for married filing jointly or
2288-qualifying widower with dependent child, and
2289-(3) Twenty Thousand Three Hundred Twenty -five Dollars
2290-($20,325.00) for head of household.
22911893 3. a. In the case of resident and part -year resident
22921894 individuals having adjusted gross income from sources
22931895 both within and without the state, the itemized or
22941896 standard deductions and personal exemptions shall be
22951897 reduced to an amount which is the same portion of the
22961898 total thereof as Oklahoma adjusted gross income is of
22971899 adjusted gross income. To the extent itemized
22981900 deductions include allowable moving expense, proration
22991901 of moving expense shall not be required or permitted
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23001928 but allowable moving expense shall be fully deductible
2301-for those taxpayers moving within or into Oklahoma
2302-this state and no part of moving expense shall be
2303-deductible for those taxpay ers moving without or out
2304-of Oklahoma this state. All other itemized or
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2331-standard deductions and personal exemptio ns shall be
2332-subject to proration as provided by law.
1929+for those taxpayers moving within or into Oklahoma and
1930+no part of moving expense shall be deductible for
1931+those taxpayers moving without or out of Oklahoma.
1932+All other itemized or standard deductions and personal
1933+exemptions shall be subject to proration as provided
1934+by law.
23331935 b. For taxable years beginning on or after January 1,
23341936 2018, the net amount of itemized deductions allowable
23351937 on an Oklahoma income tax return, subject to the
23361938 provisions of paragraph 24 of this subsection, shall
23371939 not exceed Seventeen Thousand Dollars ($17,000.00).
23381940 For purposes of this subparagraph, charitable
23391941 contributions and medical expenses deductible for
23401942 federal income tax purposes shall be e xcluded from the
23411943 amount of Seventeen Thousand Dollars ($17,000.00) as
23421944 specified by this subparagraph.
23431945 4. A resident individual with a physical disability
23441946 constituting a substantial handicap to employment may deduct from
23451947 Oklahoma adjusted gross income such expenditures to modify a motor
23461948 vehicle, home or workplace as are necessary to compensate for his or
2347-her handicap. A veteran certified by the United States Department
2348-of Veterans Affairs of the federal g overnment as having a service -
2349-connected disability shall be conclusively presumed to be an
2350-individual with a physi cal disability constituting a substantial
2351-handicap to employment. The Tax Commission shall promulgate rules
2352-containing a list of combinations of common disabilities and
2353-modifications which may be presumed to qualify for th is deduction.
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2380-The Tax Commission shall prescribe necessary requirements for
2381-verification.
1949+her handicap. A veteran certified by the Department of Veterans
1950+Affairs of the federal government as having a service -connected
1951+disability shall be conclu sively presumed to be an individual with a
1952+
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1978+physical disability constituting a substantial handicap to
1979+employment. The Tax Commission shall promulgate rules containing a
1980+list of combinations of common disabilities and modifications which
1981+may be presumed to qualify for this deduction. The Tax Commission
1982+shall prescribe necessary requirements for verification.
23821983 5. a. Before July 1, 2010, the first One Thousand Five
23831984 Hundred Dollars ($1,500.00) received by any person
23841985 from the United States as salary or compensa tion in
23851986 any form, other than retirement benefits, as a member
23861987 of any component of the Armed Forces of the United
23871988 States shall be deducted from taxable income.
23881989 b. On or after July 1, 2010, one hundred percent (100%)
23891990 of the income received by any person from the United
23901991 States as salary or compensation in any form, other
23911992 than retirement benefits, as a member of any component
23921993 of the Armed Forces of the United States shall be
23931994 deducted from taxable income.
23941995 c. Whenever the filing of a timely income tax return by a
23951996 member of the Armed Forces of the United States is
23961997 made impracticable or impossible of accomplishment by
23971998 reason of:
23981999 (1) absence from the United States, which term
23992000 includes only the states and the District of
24002001 Columbia,
2401-(2) absence from the State of Oklahoma this state
2402-while on active duty, or
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2028+(2) absence from the State of Oklahom a while on
2029+active duty, or
24292030 (3) confinement in a hospital within the United
24302031 States for treatment of wounds, injuries or
24312032 disease,
24322033 the time for filing a return and paying an income tax
24332034 shall be and is hereby extended without incurring
24342035 liability for interest o r penalties, to the fifteenth
24352036 day of the third month following the month in which:
24362037 (a) Such individual shall return to the United
24372038 States if the extension is granted pursuant
2438-to subparagraph a division 1 of this
2439-paragraph subparagraph, return to the State
2440-of Oklahoma this state if the extension is
2441-granted pursuant to subparagraph b division
2442-2 of this paragraph subparagraph or be
2443-discharged from such hospital if the
2444-extension is granted pursuant to
2445-subparagraph c division 3 of this paragraph
2446-subparagraph, or
2039+to subparagraph a of this paragraph, return
2040+to the State of Oklahoma if the extens ion is
2041+granted pursuant to subparagraph b of this
2042+paragraph or be discharged from such
2043+hospital if the extension is granted
2044+pursuant to subparagraph c of this
2045+paragraph, or
24472046 (b) An executor, administrator, or conservator
24482047 of the estate of the taxpayer is app ointed,
24492048 whichever event occurs the earliest.
24502049 Provided, that the Tax Commission may, in its discretion, grant
24512050 any member of the Armed Forces of the United States an extension of
24522051 time for filing of income tax returns and payment of income tax
24532052
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24792078 without incurring liabilities for interest or penalties. Such
24802079 extension may be granted only when in the judgment of the Tax
24812080 Commission a good cause exists therefor and may be for a period in
24822081 excess of six (6) months. A record of every such extension granted,
24832082 and the reason therefor, shall be kept.
24842083 6. Before July 1, 2010, the salary or any other form of
24852084 compensation, received from the United States by a member of any
24862085 component of the Armed Forces of the United States, shall be
24872086 deducted from taxable income during the tim e in which the person is
24882087 detained by the enemy in a conflict, is a prisoner of war or is
24892088 missing in action and not deceased; provided, after July 1, 2010,
24902089 all such salary or compensation shall be subject to the deduction as
24912090 provided pursuant to paragraph 5 of this subsection.
24922091 7. a. An individual taxpayer, whether resident or
24932092 nonresident, may deduct an amount equal to the federal
24942093 income taxes paid by the taxpayer during the taxable
24952094 year.
24962095 b. Federal taxes as described in subparagraph a of this
24972096 paragraph shall be deductible by any individual
24982097 taxpayer, whether resident or nonresident, only to the
24992098 extent they relate to income subject to taxation
25002099 pursuant to the provisions of the Oklahoma Income Tax
25012100 Act. The maximum amount allowable in the preceding
2502-paragraph 5 of this subsection shall be prorated on
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2529-the ratio of the Oklahoma adjusted gross income to
2530-federal adjusted gross income.
2531-c. For the purpose of this paragraph, “federal income
2532-taxes paid” shall mean federal income taxes, surtaxes
2101+paragraph shall be prorated on the ratio of the
2102+
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2128+Oklahoma adjusted gross income to federal adjusted
2129+gross income.
2130+c. For the purpose of this paragraph, "federal income
2131+taxes paid" shall mean federal income taxes, surtaxes
25332132 imposed on incomes or excess profits taxes, as t hough
25342133 the taxpayer was on the accrual basis. In determining
25352134 the amount of deduction for federal income taxes for
25362135 tax year 2001, the amount of the deduction shall not
25372136 be adjusted by the amount of any accelerated ten
25382137 percent (10%) tax rate bracket credit or advanced
25392138 refund of the credit received during the tax year
25402139 provided pursuant to the federal Economic Growth and
25412140 Tax Relief Reconciliation Act of 2001, P.L. No. 107 -
25422141 16, and the advanced refund of such credit shall not
25432142 be subject to taxation.
25442143 d. The provisions of this paragraph shall apply to all
25452144 taxable years ending after December 31, 1978, and
25462145 beginning before January 1, 2006.
25472146 8. Retirement benefits not to exceed Five Thousand Five Hundred
25482147 Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five
25492148 Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Thousand
25502149 Dollars ($10,000.00) for the 2006 tax year and all subsequent tax
25512150 years, which are received by an individual from the civil service of
25522151 the United States, the Oklahoma Public Employees Retireme nt System,
25532152
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2579-the Teachers’ Retirement System of Oklahoma, the Oklahoma Law
2153+ENGR. H. B. NO. 1200 Page 44 1
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2178+the Teachers' Retirement System of Oklahoma, the Oklahoma Law
25802179 Enforcement Retirement System, the Oklahoma Firefighters Pension and
25812180 Retirement System, the Oklahoma Police Pension and Retirement
25822181 System, the employee retirement systems created by c ounties pursuant
2583-to Section 951 et seq. of Title 19 of the Oklahoma Statute s, the The
2182+to Section 951 et seq. of Title 19 of the Oklahoma Statutes, the
25842183 Uniform Retirement System for Justices and Judges, the Oklahoma
25852184 Wildlife Conservation Department Retirement Fund, the Oklahoma
25862185 Employment Security Commission Retirement Plan, or the employee
25872186 retirement systems created by municipalities pursuant to Section 48 -
25882187 101 et seq. of Title 11 of the Oklahoma Statutes shall be exempt
25892188 from taxable income.
25902189 9. In taxable years beginning after December 3l, 1984, Social
25912190 Security benefits rece ived by an individual shall be exempt from
25922191 taxable income, to the extent such benefits are included in the
25932192 federal adjusted gross income pursuant to the provisions of Section
2594-86 of the Internal Revenue Code of 1986, as amended, 26 U.S.C.,
2595-Section 86.
2193+86 of the Internal Revenue Code, 26 U.S.C., Section 86.
25962194 10. For taxable years be ginning after December 31, 1994, lump -
25972195 sum distributions from employer plans of deferred compensation,
25982196 which are not qualified plans within the meaning of Section 401(a)
2599-of the Internal Revenue Code of 1986, as amended, 26 U.S.C., Section
2600-401(a), and which are deposited in and accounted for within a
2601-separate bank account or brokerage account in a financial
2602-institution within this state, shall be excluded from taxable income
2603-
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2629-in the same manner as a qualifying rollover contribution to an
2630-individual retirement account within the meaning of Section 408 of
2631-the Internal Revenue Code of 1986, as amended, 26 U.S.C., Section
2632-408. Amounts withdrawn from such bank or brokerage ac count,
2633-including any earnings thereon, shall be included in taxable income
2634-when withdrawn in the same manner as withdrawals from individual
2635-retirement accounts within the meaning of Section 408 of the
2636-Internal Revenue Code of 1986, as amended.
2197+of the Internal Revenue Code, 26 U.S.C., Section 401(a), and which
2198+are deposited in and accounted for within a separate bank account or
2199+brokerage account in a financial institution within this state,
2200+shall be excluded from taxable income in the same manner as a
2201+qualifying rollover contribution to an individual retirement account
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2228+within the meaning of Section 408 of the Internal Revenue Code, 26
2229+U.S.C., Section 408. Amounts withdrawn from such bank or brokerage
2230+account, including any earnings thereon, shall be included in
2231+taxable income when withdrawn in the same manner as withdrawals from
2232+individual retirement accounts within the meaning of Section 408 of
2233+the Internal Revenue Code.
26372234 11. In taxable years beginning after December 31, 1995,
26382235 contributions made to and interest received from a medical savings
26392236 account established pursuant to Section s 2621 through 2623 of Title
26402237 63 of the Oklahoma Statutes shall be exempt from taxable income.
26412238 12. For taxable years beginning after December 31, 1996, the
26422239 Oklahoma adjusted gross income of any individual taxpayer who is a
26432240 swine or poultry producer may be further adjusted for the deduction
26442241 for depreciation allowed for new construction or expansion costs
26452242 which may be computed using the same depreciation method elected for
26462243 federal income tax purposes except that the useful life shall be
26472244 seven (7) years for pu rposes of this paragraph. If depreciation is
26482245 allowed as a deduction in determining the adjusted gross income of
26492246 an individual, any depreciation calculated and claimed pursuant to
26502247 this section shall in no event be a duplication of any depreciation
26512248 allowed or permitted on the federal income tax return of the
26522249 individual.
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26792250 13. a. In taxable years beginning before January 1, 2005,
26802251 retirement benefits not to exceed the amounts
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26812278 specified in this paragraph, which are received by an
26822279 individual sixty-five (65) years of age or older and
26832280 whose Oklahoma adjusted gross income is Twenty -five
26842281 Thousand Dollars ($25,000.00) or less if the filing
26852282 status is single, head of household, or married filing
26862283 separate, or Fifty Thousand Dollars ($50,000.00) or
26872284 less if the filing status is married filing joint or
26882285 qualifying widow, shall be exempt from taxable income.
26892286 In taxable years beginning after December 31, 2004,
26902287 retirement benefits not to exceed the amounts
26912288 specified in this paragraph, which are received by an
26922289 individual whose Okl ahoma adjusted gross income is
26932290 less than the qualifying amount specified in this
26942291 paragraph, shall be exempt from taxable income.
26952292 b. For purposes of this paragraph, the qualifying amount
26962293 shall be as follows:
26972294 (1) in taxable years beginning after December 31,
26982295 2004, and prior to January 1, 2007, the
26992296 qualifying amount shall be Thirty -seven Thousand
27002297 Five Hundred Dollars ($37,500.00) or less if the
27012298 filing status is single, head of household, or
27022299 married filing separate, or Seventy -five Thousand
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27292300 Dollars ($75,000.00) or less if the filing status
27302301 is married filing jointly or qualifying widow,
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27312328 (2) in the taxable year beginning January 1, 2007,
27322329 the qualifying amount shall be Fifty Thousand
27332330 Dollars ($50,000.00) or less if the filing status
27342331 is single, head of household, or married filing
27352332 separate, or One Hundred Thousand Dollars
27362333 ($100,000.00) or less if the filing status is
27372334 married filing jointly or qualifying widow,
27382335 (3) in the taxable year beginning January 1, 2008,
27392336 the qualifying amount shall be Sixty -two Thousand
27402337 Five Hundred Dollars ($62,500.00) or less if the
27412338 filing status is single, head of household, or
27422339 married filing separate, or One Hundred Twenty -
27432340 five Thousand Dollars ($125,000.00) or less if
27442341 the filing status is married filing jointly or
27452342 qualifying widow,
27462343 (4) in the taxable year beginning January 1, 2009,
27472344 the qualifying amount shall be One Hundred
27482345 Thousand Dollars ($100,000.00) or less if the
27492346 filing status is single, head of household, or
27502347 married filing separate, or Two Hundred Thousand
27512348 Dollars ($200,000.00) or les s if the filing
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27782349 status is married filing jointly or qualifying
27792350 widow, and
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27802377 (5) in the taxable year beginning January 1, 2010,
27812378 and subsequent taxable years, there shall be no
27822379 limitation upon the qualifying amount.
2783-c. For purposes of this paragraph, “retirement benefits”
2380+c. For purposes of this paragraph, "retirement benefits"
27842381 means the total distributions or withdrawals from the
27852382 following:
27862383 (1) an employee pension benefit plan which satisfies
27872384 the requirements of Section 401 of the Internal
2788-Revenue Code of 1986, as amended, 26 U.S.C.,
2789-Section 401,
2385+Revenue Code, 26 U.S.C., Section 401,
27902386 (2) an eligible deferred compensation p lan that
27912387 satisfies the requirements of Section 457 of the
2792-Internal Revenue Code of 1986, as amended, 26
2793-U.S.C., Section 457,
2388+Internal Revenue Code, 26 U.S.C., Section 457,
27942389 (3) an individual retirement account, annuity or
27952390 trust or simplified employee pension that
27962391 satisfies the requirements of Section 408 of the
2797-Internal Revenue Code of 1986, as amended, 26
2798-U.S.C., Section 408,
2392+Internal Revenue Code, 26 U.S.C., Section 408,
27992393 (4) an employee annuity subject to the provisions of
28002394 Section 403(a) or (b) of the Internal Revenue
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2827-Code of 1986, as amended, 26 U.S.C., Section
2828-403(a) or (b),
2395+Code, 26 U.S.C., Section 403(a) or (b),
28292396 (5) United States Retirement Bonds which satisfy the
28302397 requirements of Section 86 o f the Internal
2831-Revenue Code of 1986, as amended, 26 U.S.C.,
2832-Section 86, or
2398+Revenue Code, 26 U.S.C., Section 86, or
28332399 (6) lump-sum distributions from a retirement plan
28342400 which satisfies the requirements of Section
2835-402(e) of the Internal Revenue Code of 1986, as
2836-amended, 26 U.S.C., Section 402 (e).
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2427+402(e) of the Internal Revenue Code, 26 U.S.C.,
2428+Section 402(e).
28372429 d. The amount of the exemption provided by this paragraph
28382430 shall be limited to Five Thousand Five Hundred Dollars
28392431 ($5,500.00) for the 2004 tax year, Seven Thousand Five
28402432 Hundred Dollars ($7,500.00) for the 2005 tax year and
28412433 Ten Thousand Dollars ($10,000.00) for the tax year
28422434 2006 and for all subsequen t tax years. Any individual
28432435 who claims the exemption provided for in paragraph 8
28442436 of this subsection shall not be permitted to claim a
28452437 combined total exemption pursuant to this paragraph
28462438 and paragraph 8 of this subsection in an amount
28472439 exceeding Five Thousa nd Five Hundred Dollars
28482440 ($5,500.00) for the 2004 tax year, Seven Thousand Five
28492441 Hundred Dollars ($7,500.00) for the 2005 tax year and
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28762442 Ten Thousand Dollars ($10,000.00) for the 2006 tax
28772443 year and all subsequent tax years.
28782444 14. In taxable years beginning after December 31, 1999, for an
28792445 individual engaged in production agriculture who has filed a
2880-Schedule F form with the taxpayer ’s federal income tax return for
2446+Schedule F form with the taxpayer 's federal income tax return for
28812447 such taxable year, there shall be excluded from taxable income any
28822448 amount which was included as federa l taxable income or federal
28832449 adjusted gross income and which consists of the discharge of an
2450+
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28842476 obligation by a creditor of the taxpayer incurred to finance the
28852477 production of agricultural products.
28862478 15. In taxable years beginning December 31, 2000, an amount
28872479 equal to one hundred percent (100%) of the amount of any scholarship
28882480 or stipend received from participation in the Oklahoma Police Corps
28892481 Program, as established in Section 2 -140.3 of Title 47 of the
28902482 Oklahoma Statutes shall be exempt from taxable income.
28912483 16. a. In taxable years beginning after December 31, 2001,
28922484 and before January 1, 2005, there shall be allowed a
28932485 deduction in the amount of contributions to accounts
28942486 established pursuant to the Oklahoma College Savings
28952487 Plan Act. The deduction shall equal the amount of
28962488 contributions to accounts, but in no event shall the
28972489 deduction for each contributor exceed Two Thousand
28982490 Five Hundred Dollars ($2,500.00) each taxable year for
28992491 each account.
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29262492 b. In taxable years beginning after December 31, 2004,
29272493 each taxpayer shall be allowed a deduction for
29282494 contributions to accounts established pursuant to the
29292495 Oklahoma College Savings Plan Act. The maximum annual
29302496 deduction shall equal the amount of contributions to
29312497 all such accounts plus any contributions to such
29322498 accounts by the taxpayer for prior taxable years after
29332499 December 31, 2004, which were not deducted, but in no
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29342526 event shall the deduction for each tax year exceed Ten
29352527 Thousand Dollars ($10,000.00) for each individual
29362528 taxpayer or Twenty Thousand Dollars ($20,000.00) for
29372529 taxpayers filing a joint return. Any amount of a
29382530 contribution that is not deducted by the taxpayer in
29392531 the year for which the contribution is made may be
29402532 carried forward as a deduction from income for the
29412533 succeeding five (5) years. For taxable years
29422534 beginning after December 31, 2005, deductions may be
29432535 taken for contributions and rollovers made during a
29442536 taxable year and up to April 15 of the succeeding
2945-year, or the due date of a taxpayer ’s state income tax
2537+year, or the due date of a taxpayer 's state income tax
29462538 return, excluding extensions, whichever is later.
29472539 Provided, a deduction for the same contribution may
29482540 not be taken for two (2) different taxable years.
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29752541 c. In taxable years beginning after December 31, 2006,
29762542 deductions for contributions made pursuant to
29772543 subparagraph b of this paragraph shall be limited as
29782544 follows:
29792545 (1) for a taxpayer who qualified for the five -year
29802546 carryforward election and who takes a rollover or
29812547 nonqualified withdrawal during that period, the
29822548 tax deduction otherwise available pursuant to
29832549 subparagraph b of this paragraph shall be reduced
2550+
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29842576 by the amount which is equal to the rollover or
29852577 nonqualified withdrawal, and
29862578 (2) for a taxpayer who elects to take a rollover or
29872579 nonqualified withdrawal within the same tax year
29882580 in which a contribution was made to the
2989-taxpayer’s account, the tax de duction otherwise
2581+taxpayer's account, the tax deduction otherwi se
29902582 available pursuant to subparagraph b of this
29912583 paragraph shall be reduced by the amount of the
29922584 contribution which is equal to the rollover or
29932585 nonqualified withdrawal.
29942586 d. If a taxpayer elects to take a rollover on a
29952587 contribution for which a deduction has b een taken
29962588 pursuant to subparagraph b of this paragraph within
29972589 one (1) year of the date of contribution, the amount
29982590 of such rollover shall be included in the adjusted
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30252591 gross income of the taxpayer in the taxable year of
30262592 the rollover.
30272593 e. If a taxpayer makes a nonqualified withdrawal of
30282594 contributions for which a deduction was taken pursuant
30292595 to subparagraph b of this paragraph, such nonqualified
30302596 withdrawal and any earnings thereon shall be included
30312597 in the adjusted gross income of the taxpayer in the
30322598 taxable year of the nonqualified withdrawal.
30332599 f. As used in this paragraph:
3034-(1) “non-qualified withdrawal” means a withdrawal
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2626+(1) "non-qualified withdrawal " means a withdrawal
30352627 from an Oklahoma College Savings Plan account
30362628 other than one of the following:
30372629 (a) a qualified withdrawal,
30382630 (b) a withdrawal made as a result of the death
30392631 or disability of the designated beneficiary
30402632 of an account,
30412633 (c) a withdrawal that is made on the account of
30422634 a scholarship or the allowance or payment
30432635 described in Section 135(d)(1)(B) or (C) or
3044-by the Internal Revenue Code of 1986, as
3045-amended, received by the designated
3046-beneficiary to the extent the amount of the
3047-refund does not exceed the amount of the
3048-scholarship, allowance, or payment, or
3049-
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2636+by the Internal Revenue Code, received by
2637+the designated beneficiary to the extent the
2638+amount of the refund does not exceed the
2639+amount of the scholarship, allowance, or
2640+payment, or
30752641 (d) a rollover or change of designated
30762642 beneficiary as permitted by subsection F of
3077-Section 3970.7 of Title 70 of the Oklahoma
2643+Section 3970.7 of Title 70 of Oklahoma
30782644 Statutes, and
3079-(2) “rollover” means the transfer of funds from the
2645+(2) "rollover" means the transfer of funds from the
30802646 Oklahoma College Savings Plan to any other plan
3081-under Section 529 of the Internal Revenue Code of
3082-1986, as amended.
2647+under Section 529 of the Internal Revenue Code.
30832648 17. For tax years 2006 through 2021, retirement benefits
30842649 received by an individual from any compon ent of the Armed Forces of
2650+
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30852676 the United States in an amount not to exceed the greater of seventy -
30862677 five percent (75%) of such benefits or Ten Thousand Dollars
30872678 ($10,000.00) shall be exempt from taxable income but in no case less
30882679 than the amount of the exemption provided by paragraph 13 of this
30892680 subsection. For tax year 2022 and subsequent tax years, retirement
30902681 benefits received by an individual from any component of the Armed
30912682 Forces of the United States shall be exempt from taxable income.
30922683 18. For taxable years beginning after December 31, 2006,
30932684 retirement benefits received by federal civil service retirees,
30942685 including survivor annuities, paid in lieu of Social Security
30952686 benefits shall be exempt from taxable income to the extent such
30962687 benefits are included in the f ederal adjusted gross income pursuant
3097-to the provisions of Section 86 of the Intern al Revenue Code of
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3123-
3124-1986, as amended, 26 U.S.C., Section 86, according to the foll owing
3125-schedule:
2688+to the provisions of Section 86 of the Internal Revenue Code, 26
2689+U.S.C., Section 86, according to the following schedule:
31262690 a. in the taxable year beginning January 1, 2007, twenty
31272691 percent (20%) of such benefits shall be exempt,
31282692 b. in the taxable year beginning January 1, 2008, forty
31292693 percent (40%) of such benefits shall be exempt,
31302694 c. in the taxable year beginning January 1, 2009, sixty
31312695 percent (60%) of such benefits shall be exempt,
31322696 d. in the taxable year beginning Januar y 1, 2010, eighty
31332697 percent (80%) of such benefits shall be exempt, and
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31342724 e. in the taxable year beginning January 1, 2011, and
31352725 subsequent taxable years, one hundred percent (100%)
31362726 of such benefits shall be exempt.
31372727 19. a. For taxable years beginning after Dece mber 31, 2007, a
31382728 resident individual may deduct up to Ten Thousand
31392729 Dollars ($10,000.00) from Oklahoma adjusted gross
31402730 income if the individual, or the dependent of the
31412731 individual, while living, donates one or more human
31422732 organs of the individual to another h uman being for
31432733 human organ transplantation. As used in this
3144-paragraph, “human organ” means all or part of a liver,
2734+paragraph, "human organ" means all or part of a liver,
31452735 pancreas, kidney, intestine, lung, or bone marrow. A
31462736 deduction that is claimed under this paragraph may be
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3169-22
3170-23
3171-24
3172-
31732737 claimed in the taxable year in w hich the human organ
31742738 transplantation occurs.
31752739 b. An individual may claim this deduction only once, and
31762740 the deduction may be claimed only for unreimbursed
31772741 expenses that are incurred by the individual and
31782742 related to the organ donation of the individual.
31792743 c. The Oklahoma Tax Commission shall promulgate rules to
31802744 implement the provisions of this paragraph which shall
31812745 contain a specific list of expenses which may be
31822746 presumed to qualify for the deduction. The Tax
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31832773 Commission shall prescribe necessary requirements fo r
31842774 verification.
31852775 20. For taxable years beginning after December 31, 2009, there
31862776 shall be exempt from taxable income any amount received by the
31872777 beneficiary of the death benefit for an emergency medical technician
31882778 or a registered emergency medical responder provided by Section 1 -
31892779 2505.1 of Title 63 of the Oklahoma Statutes.
31902780 21. For taxable years beginning after December 31, 2008,
31912781 taxable income shall be increased by any unemployment compensation
3192-exempted under Section 85(c) of the Internal Revenue Code of 1986,
3193-as amended, 26 U.S.C., Section 85(c) (2009).
2782+exempted under Section 85(c) of the Internal Revenue Code, 26
2783+U.S.C., Section 85(c)(2009).
31942784 22. For taxable years beginning after December 31, 2008, there
31952785 shall be exempt from taxable income any payment in an amount less
31962786 than Six Hundred Dollars ($600.00) received by a person as an award
3197-
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32232787 for participation in a competit ive livestock show event. For
32242788 purposes of this paragraph, the payment shall be treated as a
32252789 scholarship amount paid by the entity sponsoring the event and the
32262790 sponsoring entity shall cause the payment to be categorized as a
32272791 scholarship in its books and re cords.
32282792 23. For taxable years beginning on or after January 1, 2016,
32292793 taxable income shall be increased by any amount of state and local
32302794 sales or income taxes deducted under 26 U.S.C., Section 164 of the
3231-Internal Revenue Code of 1986, as amended. If the amount of state
3232-and local taxes deducted on t he federal return is limited, taxable
3233-income on the state return shall be increas ed only by the amount
3234-actually deducted after any such limitations are applied.
2795+Internal Revenue Code. If the amount of state and lo cal taxes
2796+deducted on the federal return is limited, taxable income on the
2797+
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2823+state return shall be increased only by the amount actually deducted
2824+after any such limitations are applied.
32352825 24. For taxable years beginning after December 31, 2020, each
32362826 taxpayer shall be allowed a deduction for contributions to accounts
32372827 established pursuant to the Achieving a Better Life Experience
3238-(ABLE) Program program as established in Section 4001.1 et seq. of
3239-Title 56 of the Oklahoma Statutes. For any tax year, the deduction
3240-provided for in this p aragraph shall not exceed Ten Thousand Dollars
2828+(ABLE) Program as established in Section 4001.1 et seq. of Title 56
2829+of the Oklahoma Statutes. For any tax year, the deduction provide d
2830+for in this paragraph shall not exceed Ten Thousand Dollars
32412831 ($10,000.00) for an individual taxpayer or Twenty Thousand Dollars
32422832 ($20,000.00) for taxpayers filing a joint return. Any amount of
32432833 contribution not deducted by the taxpayer in the tax year for which
32442834 the contribution is made may be carried forward as a deduction from
32452835 income for up to five (5) tax years. Deductions may be taken for
32462836 contributions made during the tax year and through April 15 of the
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3272-
3273-succeeding tax year, or through the due date of a taxpayer ’s state
2837+succeeding tax year, or through the due date of a taxpayer's state
32742838 income tax return excluding extensions, whichever is later.
32752839 Provided, a deduction for the same contribution may not be taken in
32762840 more than one (1) tax year.
32772841 F. 1. For taxable years beginning after December 31, 2004, a
32782842 deduction from the Oklahoma adjusted gross income of any individual
32792843 taxpayer shall be allowed for qualifying gains receiving capital
32802844 treatment that are included in the federal adjusted gross income of
32812845 such individual taxpayer during the taxable year.
32822846 2. As used in this sub section:
3283-a. “qualifying gains receiving capital treatment ” means
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2872+
2873+a. "qualifying gains receiving capital treatment " means
32842874 the amount of net capital gains, as defined in Section
3285-1222(11) of the Internal Revenue Code of 1986, as
3286-amended, included in an individual taxpayer ’s federal
3287-income tax return that result from:
2875+1222(11) of the Internal Revenue Code, included in an
2876+individual taxpayer's federal income tax return that
2877+result from:
32882878 (1) the sale of real property or tangible personal
3289-property located within Oklahoma this state that
3290-has been directly or indi rectly owned by the
3291-individual taxpayer for a holding period of at
3292-least five (5) years prior to the date of the
3293-transaction from which such n et capital gains
3294-arise,
2879+property located within Oklahoma that has been
2880+directly or indirectly owned by the individual
2881+taxpayer for a holding period of at least five
2882+(5) years prior to the date of the transaction
2883+from which such net capital gains arise,
32952884 (2) the sale of stock or the sale of a direct or
32962885 indirect ownership interest in an Oklahoma
3297-
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3322-
33232886 company, limited liability company, or
33242887 partnership where such stock or ownership
33252888 interest has been directly or indirectly owned by
33262889 the individual taxpayer f or a holding period of
33272890 at least two (2) years prior to the date of the
33282891 transaction from which the net capital gains
33292892 arise, or
33302893 (3) the sale of real property, tangible personal
33312894 property or intangible personal property located
3332-within Oklahoma this state as part of the sale of
3333-all or substantially all of the assets of an
3334-Oklahoma company, limited liability company, or
2895+within Oklahoma as part of the s ale of all or
2896+substantially all of the assets of an Oklahoma
2897+
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2923+company, limited liability company, or
33352924 partnership or an Oklahoma proprietorship
33362925 business enterprise where such property has been
33372926 directly or indirectly owned by such entity or
33382927 business enterprise or owned by the owners of
33392928 such entity or business enterprise for a period
33402929 of at least two (2) years prior to the date of
33412930 the transaction from which the net capital gains
33422931 arise,
3343-b. “holding period” means an uninterrupted period of
2932+b. "holding period" means an uninterrupted period of
33442933 time. The holding perio d shall include any additional
33452934 period when the property was held by another
33462935 individual or entity, if such additional period is
3347-
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3373-included in the taxpayer ’s holding period for the
3374-asset pursuant to the Internal Revenue Code of 1986,
3375-as amended,
3376-c. “Oklahoma company,” “limited liability company, ” or
3377-“partnership” means an entity whose primary
3378-headquarters have been located in Oklahoma this state
3379-for at least three (3) uninterrupted years prior to
3380-the date of the transaction from which the net capital
3381-gains arise,
3382-d. “direct” means the individual taxpayer directly owns
2936+included in the taxpayer 's holding period for the
2937+asset pursuant to the Internal Revenue Code,
2938+c. "Oklahoma company," "limited liability company," or
2939+"partnership" means an entity whose primary
2940+headquarters have been located in Oklahoma for at
2941+least three (3) uninterrupted years prior to the date
2942+of the transaction from which the net capital gains
2943+arise,
2944+d. "direct" means the individual taxpayer directly owns
33832945 the asset,
3384-e. “indirect” means the individual taxpayer owns an
2946+
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2972+e. "indirect" means the individual taxpayer owns an
33852973 interest in a pass-through entity (or chain of pass -
33862974 through entities) that sells the asset that gives rise
33872975 to the qualifying gains receiving capital treatment.
33882976 (1) With respect to sales of real property or
33892977 tangible personal property located within
3390-Oklahoma this state, the deduction described in
3391-this subsection shall not apply unless the pass -
2978+Oklahoma, the deduction described in this
2979+subsection shall not apply unless the pass -
33922980 through entity that makes the sale has held the
33932981 property for not less than five (5) unin terrupted
33942982 years prior to the date of the transaction that
33952983 created the capital gain, and each pass -through
33962984 entity included in the chain of ownership has
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34232985 been a member, partner, or shareholder of the
34242986 pass-through entity in the tier immediately below
34252987 it for an uninterrupted period of not less than
34262988 five (5) years.
34272989 (2) With respect to sales of stock or ownership
34282990 interest in or sales of all or substantially all
34292991 of the assets of an Oklahoma company, limited
34302992 liability company, partnership or Oklahoma
34312993 proprietorship business enterprise, the deduction
34322994 described in this subsection shall not apply
34332995 unless the pass-through entity that makes the
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34343022 sale has held the stock or ownership interest for
34353023 not less than two (2) uninterrupted years prior
34363024 to the date of the transaction that created the
34373025 capital gain, and each pass -through entity
34383026 included in the chain of ownership has been a
34393027 member, partner or shareholder of the pass -
34403028 through entity in the tier immediately below it
34413029 for an uninterrupted period of not less than two
34423030 (2) years. For purposes of this division,
34433031 uninterrupted ownership prior to July 1, 2007,
34443032 shall be included in the determination of the
34453033 required holding period prescribed by this
34463034 division, and
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3472-
3473-f. “Oklahoma proprietorship business enterprise ” means a
3035+f. "Oklahoma proprietorship business enterprise " means a
34743036 business enterprise whose income and expenses have
34753037 been reported on Schedule C or F of an individual
3476-taxpayer’s federal income tax return, or any similar
3038+taxpayer's federal income tax return, or any similar
34773039 successor schedule published by the Internal Revenue
34783040 Service and whose primary headquarters have been
3479-located in Oklahoma this state for at least three (3)
3041+located in Oklahoma for at least three (3)
34803042 uninterrupted years prior to the date of the
34813043 transaction from which the net capital gains arise.
34823044 G. 1. For purposes of computing its Oklahoma taxable income
34833045 under this section, the dividends -paid deduction otherwise allowed
3046+
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34843072 by federal law in computing net income of a real estate investment
34853073 trust that is subject to federal income tax shall be added back in
34863074 computing the tax imposed by this state under this title if the real
34873075 estate investment trust is a captive real estate investm ent trust.
34883076 2. For purposes of computing its Oklahoma taxable income under
34893077 this section, a taxpayer shall add back otherwise deductible rents
34903078 and interest expenses paid to a captive real estate investment trust
34913079 that is not subject to the provisions of para graph 1 of this
34923080 subsection. As used in this subsection:
3493-a. the term “real estate investment trust ” or “REIT”
3081+a. the term "real estate investment trust " or "REIT"
34943082 means the meaning ascribed to such term in Section 856
3495-of the Internal Revenue Code of 1986, as amended,
3496-
3497-Req. No. 2024 Page 71 1
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3521-
3522-b. the term “captive real estate investmen t trust” means
3083+of the Internal Revenue Code,
3084+b. the term "captive real estate investment trust " means
35233085 a real estate investment trust, the shares or
35243086 beneficial interests of which are not regularly traded
35253087 on an established securities market and more than
35263088 fifty percent (50%) of the voting power or value of
35273089 the beneficial interests or shares of which are owned
35283090 or controlled, directly or indirectly, or
35293091 constructively, by a single entity that is:
35303092 (1) treated as an association taxable as a
3531-corporation under the Internal Revenue Code of
3532-1986, as amended, and
3093+corporation under the Internal Revenue Code, and
3094+
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35333120 (2) not exempt from federal income tax pursuant to
35343121 the provisions of Section 501( a) of the Internal
3535-Revenue Code of 1986, as amended.
3122+Revenue Code.
35363123 The term shall not include a real estate investment
35373124 trust that is intended to be regularly traded on an
35383125 established securities market, and that satisfies the
35393126 requirements of Section 856(a)(5) and (6) of the U.S.
3540-Internal Revenue Code of 1986, as amended, by reason
3541-of Section 856(h)(2) of the Internal Revenue Code of
3542-1986, as amended,
3543-c. the term “association taxable as a corporation ” shall
3127+Internal Revenue Code by reason of Section 856(h)(2)
3128+of the Internal Revenue Code,
3129+c. the term "association taxable as a corporation " shall
35443130 not include the following entities:
3545-
3546-Req. No. 2024 Page 72 1
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3570-
35713131 (1) any real estate investment trust as defined in
35723132 paragraph a of this subsection other tha n a
3573-“captive real estate investment trust ” captive
3574-real estate investment t rust,
3133+"captive real estate investment trust ",
35753134 (2) any qualified real estate investment trust
35763135 subsidiary under Section 856(i) of the Internal
3577-Revenue Code of 1986, as amended, other than a
3578-qualified REIT subsidiary of a “captive real
3579-estate investment trust ” captive real estate
3580-investment trust,
3581-(3) any Listed Australian Property Trust listed
3582-Australian property trust (meaning an Australian
3583-unit trust registered as a “Managed Investment
3584-Scheme” “managed investment scheme ” under the
3585-Australian Corporations Act 2001 in which the
3586-principal class of u nits is listed on a
3587-recognized stock exchange in Australia and is
3588-regularly traded on an established securities
3589-market), or an entity organized as a trust,
3590-provided that a Listed Australian Property Trust
3591-listed Australian property trust owns or
3592-controls, directly or indirectly, seventy -five
3593-percent (75%) or more of the voting power or
3594-
3595-Req. No. 2024 Page 73 1
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3620-value of the beneficial interests or shares of
3621-such trust, or
3622-(4) any Qualified Foreign Entity qualified foreign
3623-entity, meaning a corporation, trust, association
3624-or partnership organized outside the laws of the
3625-United States and which satisfies the following
3626-criteria:
3136+Revenue Code, other than a qualified REIT
3137+subsidiary of a "captive real estate investment
3138+trust",
3139+(3) any Listed Australian Property Trust (meaning an
3140+Australian unit trust registered as a "Managed
3141+Investment Scheme" under the Australian
3142+Corporations Act in which the principal class of
3143+units is listed on a recognized stock exchange in
3144+
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3170+Australia and is regularly traded on an
3171+established securities market), or an entity
3172+organized as a trust, provided that a Listed
3173+Australian Property Trust owns or controls,
3174+directly or indirectly, seventy -five percent
3175+(75%) or more of the voting power or value of the
3176+beneficial interests or shares of such trust, or
3177+(4) any Qualified Foreign Entity, meaning a
3178+corporation, trust, association or partnership
3179+organized outside the laws of the United States
3180+and which satisfies the following criteria:
36273181 (a) at least seventy-five percent (75%) of the
3628-entity’s total asset value at the close of
3182+entity's total asset value at the close of
36293183 its taxable year is represented by real
36303184 estate assets, as defined in Section
3631-856(c)(5)(B) of the Internal Revenue Code of
3632-1986, as amended, thereby including shares
3633-or certificates of beneficial interest in
3634-any real estate investment trust, cash and
3635-cash equivalents, and U.S. Government
3636-securities,
3185+856(c)(5)(B) of the Internal Revenue Code,
3186+thereby including shares or certificates of
3187+beneficial interest in any real estate
3188+investment trust, cash and cash equivalents,
3189+and U.S. Government securities,
36373190 (b) the entity receives a dividend -paid
36383191 deduction comparable to Section 561 of the
3639-Internal Revenue Code of 1986, as amended,
3640-or is exempt from entity level tax,
3192+Internal Revenue Code, or is exempt from
3193+entity level tax,
3194+
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36413220 (c) the entity is required to distribute at
36423221 least eighty-five percent (85%) of its
36433222 taxable income, as computed in the
3644-
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36703223 jurisdiction in which it is organized, to
36713224 the holders of its shares or certificates of
36723225 beneficial interest on an annual basis,
36733226 (d) not more than ten percent (10%) of the
36743227 voting power or value in such entity is held
36753228 directly or indirectly or constructively by
36763229 a single entity or individual, or the shares
36773230 or beneficial interests of such entity are
36783231 regularly traded on an established
36793232 securities market, and
36803233 (e) the entity is organized in a cou ntry which
36813234 has a tax treaty with the United States.
36823235 3. For purposes of this subsection, the constructive ownership
36833236 rules of Section 318(a) of the Internal Revenue Code, as modified by
3684-Section 856(d)(5) of the Internal Revenue Code of 1986, as amended,
3685-shall apply in determining the ownership of stock, assets, or net
3686-profits of any person.
3237+Section 856(d)(5) of the Internal Revenue Code, shall apply in
3238+determining the ownership of stock, assets, or net profits of any
3239+person.
36873240 4. A real estate investment trust that does not become
36883241 regularly traded on an established securities market within one (1)
36893242 year of the date on which it first becomes a real estate investmen t
36903243 trust shall be deemed not to have been regularly traded on an
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3245+ENGR. H. B. NO. 1200 Page 66 1
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36913270 established securities market, retroactive to the date it first
36923271 became a real estate investment trust, and shall file an amended
36933272 return reflecting such retroactive designation for any tax year or
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37203273 part year occurring during its initial year of status as a real
37213274 estate investment trust. For purposes of this subsection, a real
37223275 estate investment trust becomes a real estate investment trust on
37233276 the first day it has both met the requirements of Sectio n 856 of the
3724-Internal Revenue Code of 1986, as amended, and has elected to be
3725-treated as a real estate investment trust pursuant to Se ction
3726-856(c)(1) of the Internal Revenue Code of 1986, as amended.
3727-SECTION 3. This act shall become effective January 1, 2026.
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3729-60-1-2024 QD 4/14/2025 5:42:43 PM
3277+Internal Revenue Code and has elected to be treated as a real estate
3278+investment trust pursuant to Section 856(c)(1) of the Internal
3279+Revenue Code.
3280+SECTION 2. This act shall become effective November 1, 2025.
3281+Passed the House of Representatives the 3rd day of March, 2025.
3282+
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3286+ Presiding Officer of the House
3287+ of Representatives
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3291+Passed the Senate the ___ day of __________, 2025.
3292+
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3296+ Presiding Officer of the Senate