OK
Oklahoma House Bill HB1248

Oklahoma 2025 Regular Session

Oklahoma House Bill HB1248 Compare Versions

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2828 STATE OF OKLAHOMA
2929
3030 1st Session of the 60th Legislature (2025)
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3232 HOUSE BILL 1248 By: Strom
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3838 AS INTRODUCED
3939
4040 An Act relating to revenue and taxation; enacting the
4141 Senior Service Corps Act of 202 5; amending 68 O.S.
4242 2021, Section 2358, as last amend ed by Section 155,
4343 Chapter 452, O.S.L. 2024 (68 O.S. Supp. 2024, Section
4444 2358), which relates to Oklahoma taxable income and
4545 adjusted gross income; providing income tax exemption
4646 for wages paid to certain persons performing support
4747 services for public scho ols; defining term; providing
4848 for noncodification; and providing an effective date.
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5454 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
5555 SECTION 1. NEW LAW A new section of law not to be
5656 codified in the Oklahoma Statute s reads as follows:
5757 This act shall be known and may be cited as the "Senior Service
5858 Corps Act of 2025".
5959 SECTION 2. AMENDATORY 68 O.S. 2021, Section 2358, as
6060 last amended by Section 155, Chapter 452, O.S.L. 2024 (68 O.S. Supp.
6161 2024, Section 2358), is amended to read as follows:
6262 Section 2358. For all tax years beginning after December 31,
6363 1981, taxable income and adjusted gross income shall be adjusted to
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9090 arrive at Oklahoma taxable income and Oklahoma adjusted gross income
9191 as required by this section.
9292 A. The taxable income of any taxpayer shall be adjusted to
9393 arrive at Oklahoma taxable income for corporations and Oklahoma
9494 adjusted gross income for individuals, as follows:
9595 1. There shall be added interest income on obligations of an y
9696 state or political subdivision thereto which is not otherwise
9797 exempted pursuant to other laws of this state, to the extent that
9898 such interest is not included in taxable income and adjusted gross
9999 income.
100100 2. There shall be deducted amounts included in suc h income that
101101 the state is prohibited from taxing because of the provisions of the
102102 Federal Constitution, the State Constitution, federal laws or laws
103103 of Oklahoma.
104104 3. The amount of any federal net operating loss deduction shall
105105 be adjusted as follows:
106106 a. For carryovers and carrybacks to taxable years
107107 beginning before January 1, 1981 , the amount of any
108108 net operating loss deduction allowed to a taxpayer for
109109 federal income tax purposes shall be reduced to an
110110 amount which is the same portion thereof as the loss
111111 from sources within this state, as determined pursuant
112112 to this section and Section 2362 of this title, for
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139139 the taxable year in which such loss is sustained is of
140140 the total loss for such year;
141141 b. For carryovers and carrybacks to taxable years
142142 beginning after December 31, 1980, the amount of any
143143 net operating loss deduction allowed f or the taxable
144144 year shall be an amount equal to the aggregate of the
145145 Oklahoma net operating loss carryovers and carrybacks
146146 to such year. Oklahoma net operating losses shall be
147147 separately determined by reference to Section 172 of
148148 the Internal Revenue Code, 26 U.S.C., Section 172, as
149149 modified by the Oklahoma Income Tax Act, Section 2351
150150 et seq. of this title, and shall be allowed without
151151 regard to the existence of a federal net ope rating
152152 loss. For tax years beginning after December 31,
153153 2000, and ending befo re January 1, 2008, the years to
154154 which such losses may be carried shall be determined
155155 solely by reference to Section 172 of the Internal
156156 Revenue Code, 26 U.S.C., Section 172, wit h the
157157 exception that the terms "net operating loss" and
158158 "taxable income" shall be replaced with "Oklahoma net
159159 operating loss" and "Oklahoma taxable income ". For
160160 tax years beginning after December 31, 2007, and
161161 ending before January 1, 2009, years to which such
162162 losses may be carried back shall be limited to two (2)
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189189 years. For tax years beginning after December 31,
190190 2008, the years to which such losses may be carried
191191 back shall be determined solely by reference to
192192 Section 172 of the Internal Revenue Code, 26 U.S.C.,
193193 Section 172, with the exception that the terms "net
194194 operating loss" and "taxable income" shall be replaced
195195 with "Oklahoma net operating loss " and "Oklahoma
196196 taxable income".
197197 4. Items of the following nature shall be allocated as
198198 indicated. Allowable deductions attributable to items separately
199199 allocable in subparagraphs a, b and c of this paragraph, whether or
200200 not such items of income were actually received, shall be allocated
201201 on the same basis as those items:
202202 a. Income from real and tangible perso nal property, such
203203 as rents, oil and mining production or royalties, and
204204 gains or losses from sales of such property, shall be
205205 allocated in accordance with the situs of such
206206 property;
207207 b. Income from intangible personal property, such as
208208 interest, dividends, patent or copyright royalties,
209209 and gains or losses from sales of such proper ty, shall
210210 be allocated in accordance with the domiciliary situs
211211 of the taxpayer, except that:
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238238 (1) where such property has acquired a nonunitary
239239 business or commercial situs apart from the
240240 domicile of the taxpayer such income shall be
241241 allocated in accordance with such business or
242242 commercial situs; interest income from
243243 investments held to generate working capital for
244244 a unitary business enterprise shall be included
245245 in apportionable income; a resident trust or
246246 resident estate shall be treated as having a
247247 separate commercial or business situs insofar as
248248 undistributed income is concerned, but shall not
249249 be treated as having a separate commercial or
250250 business situs insofar as distributed in come is
251251 concerned,
252252 (2) for taxable years beginning after December 31,
253253 2003, capital or ordinary gains or losses from
254254 the sale of an ownership interest in a publicly
255255 traded partnership, as defined by Section 7704(b)
256256 of the Internal Revenue Code, shall be al located
257257 to this state in the ratio of the original cost
258258 of such partnership's tangible property in this
259259 state to the original cost of such partnership 's
260260 tangible property everywhere, as determined at
261261 the time of the sale; if more than fifty percent
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288288 (50%) of the value of the partnership 's assets
289289 consists of intangible assets, capital or
290290 ordinary gains or losses from the sale of an
291291 ownership interest in the partnership shall be
292292 allocated to this state in accordance with the
293293 sales factor of the partnership for its first
294294 full tax period immediately preceding its tax
295295 period during which t he ownership interest in the
296296 partnership was sold; the provisions of this
297297 division shall only apply if the capital or
298298 ordinary gains or losses from the sale of an
299299 ownership interest in a partnership do not
300300 constitute qualifying gain receiving capital
301301 treatment as defined in subparagraph a of
302302 paragraph 2 of subsection F of this section,
303303 (3) income from such property which is required to be
304304 allocated pursuant to the provisions of pa ragraph
305305 5 of this subsection shall be allocated as herein
306306 provided;
307307 c. Net income or loss from a business activity which is
308308 not a part of business carried on within or without
309309 the state of a unitary character shall be separately
310310 allocated to the state in w hich such activity is
311311 conducted;
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338338 d. In the case of a manufacturing or processing
339339 enterprise the business of which in Oklahoma consists
340340 solely of marketing its products by:
341341 (1) sales having a situs without this state, shipped
342342 directly to a point from withou t the state to a
343343 purchaser within the state, commonly known as
344344 interstate sales,
345345 (2) sales of the product stored in public warehouses
346346 within the state pursuant to "in transit"
347347 tariffs, as prescribed and allowed by the
348348 Interstate Commerce Commission, to a p urchaser
349349 within the state,
350350 (3) sales of the product stored in public warehouses
351351 within the state where the shipment to such
352352 warehouses is not covered by "in transit"
353353 tariffs, as prescribed and allowed by the
354354 Interstate Commerce Commission, to a purchaser
355355 within or without the state,
356356 the Oklahoma net income shall, at the option of th e
357357 taxpayer, be that portion of the total net income of
358358 the taxpayer for federal income tax purposes derived
359359 from the manufacture and/or processing and sales
360360 everywhere as determi ned by the ratio of the sales
361361 defined in this section made to the purchaser within
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388388 the state to the total sales everywhere. The term
389389 "public warehouse" as used in this subparagraph means
390390 a licensed public warehouse, the principal business of
391391 which is warehousing merchandise for the public;
392392 e. In the case of insurance companies, Okl ahoma taxable
393393 income shall be taxable income of the taxpayer for
394394 federal tax purposes, as adjusted for the adjustments
395395 provided pursuant to the provisions of paragraphs 1
396396 and 2 of this subsection, apportioned as follows:
397397 (1) except as otherwise provided by division (2) of
398398 this subparagraph, taxable income of an insurance
399399 company for a taxable year shall be apportioned
400400 to this state by multiplying such income by a
401401 fraction, the numerator of which is the direct
402402 premiums written for insurance on property or
403403 risks in this state, and the denominator of which
404404 is the direct premiums written for insurance on
405405 property or risks everywhere. For purposes of
406406 this subsection, the term "direct premiums
407407 written" means the total amount of direct
408408 premiums written, assessments and annuity
409409 considerations as reported for the taxable year
410410 on the annual statement filed by the company with
411411 the Insurance Commissioner in the form approved
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438438 by the National Association of Insurance
439439 Commissioners, or such other form as may be
440440 prescribed in lieu thereof,
441441 (2) if the principal source of premiums written by an
442442 insurance company consists of premiums for
443443 reinsurance accepted by it, the taxable income of
444444 such company shall be apportioned to this state
445445 by multiplying such income by a fraction, the
446446 numerator of which is the sum of (a) direct
447447 premiums written for insurance on property or
448448 risks in this state, plus (b) premiums written
449449 for reinsurance accepted in respect of property
450450 or risks in this state, and the denominator of
451451 which is the sum of (c ) direct premiums written
452452 for insurance on property or risks everywhere,
453453 plus (d) premiums written for reinsurance
454454 accepted in respect of property or risks
455455 everywhere. For purpo ses of this paragraph,
456456 premiums written for reinsurance accepted in
457457 respect of property or risks in this state,
458458 whether or not otherwise determinable, may at the
459459 election of the company be determined on the
460460 basis of the proportion which premiums written
461461 for insurance accepted from companies
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488488 commercially domiciled in Oklahoma bears t o
489489 premiums written for reinsurance accepted from
490490 all sources, or alternatively in the proportion
491491 which the sum of the direct premiums written for
492492 insurance on property or risks i n this state by
493493 each ceding company from which reinsurance is
494494 accepted bears to the sum of the total direct
495495 premiums written by each such ceding company for
496496 the taxable year.
497497 5. The net income or loss remaining after the separate
498498 allocation in paragraph 4 of this subsection, being that which is
499499 derived from a unitary business enter prise, shall be apportioned to
500500 this state on the basis of the arithmetical average of three factors
501501 consisting of property, payroll and sales or gross revenue
502502 enumerated as subparagraphs a, b and c of this paragraph. Net
503503 income or loss as used in this paragraph includes that derived from
504504 patent or copyright royalties, purchase discounts, and interest on
505505 accounts receivable relating to or arising from a business activity,
506506 the income from which is apportioned pursuant to this subsection,
507507 including the sale o r other disposition of such property and any
508508 other property used in the unitary enterprise. Deductions used in
509509 computing such net income or loss shall not include taxes based on
510510 or measured by income. Provided, for corporations whose property
511511 for purposes of the tax imposed by Section 2355 of this title has an
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538538 initial investment cost equaling or exceeding Two Hundred Million
539539 Dollars ($200,000,000.00) and such investment is made on or after
540540 July 1, 1997, or for corporations which expand their property or
541541 facilities in this state and such expansion has an investment cost
542542 equaling or exceeding Two Hundred Million Dollars ($200,000,000.00)
543543 over a period not to exceed three (3) years, and such expansion is
544544 commenced on or after January 1, 2000, the three factors shall be
545545 apportioned with property and payroll, each comprising twenty -five
546546 percent (25%) of the apportionment factor and sales comprising fifty
547547 percent (50%) of the apportionm ent factor. The apportionment
548548 factors shall be computed as follows:
549549 a. The property factor is a fraction, the numerator of
550550 which is the average value of the taxpayer 's real and
551551 tangible personal property owned or rented and used in
552552 this state during the t ax period and the denominator
553553 of which is the average value of all the taxpayer 's
554554 real and tangible personal property everywhere owned
555555 or rented and used during the tax period.
556556 (1) Property, the income from which is separately
557557 allocated in paragraph 4 of t his subsection,
558558 shall not be included in determining this
559559 fraction. The numer ator of the fraction shall
560560 include a portion of the investment in
561561 transportation and other equipment having no
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588588 fixed situs, such as rolling stock, buses, trucks
589589 and trailers, including machinery and equipment
590590 carried thereon, airplanes, salespersons '
591591 automobiles and other similar equipment, in the
592592 proportion that miles traveled in Oklahoma by
593593 such equipment bears to total miles traveled,
594594 (2) Property owned by the taxpayer is value d at its
595595 original cost. Property rented by the taxpayer
596596 is valued at eight ti mes the net annual rental
597597 rate. Net annual rental rate is the annual
598598 rental rate paid by the taxpayer, less any annual
599599 rental rate received by the taxpayer from
600600 subrentals,
601601 (3) The average value of property shall be determined
602602 by averaging the values at the beginning and
603603 ending of the tax period but the Oklahoma Tax
604604 Commission may require the averaging of monthly
605605 values during the tax period if reasonably
606606 required to reflect prop erly the average value of
607607 the taxpayer's property;
608608 b. The payroll factor is a fraction, the numerator of
609609 which is the total compensation for services rendered
610610 in the state during the tax period, and the
611611 denominator of which is the total compensation for
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638638 services rendered everywhere during the tax period.
639639 "Compensation", as used in this subsection means those
640640 paid-for services to the extent related to the unitary
641641 business but does not include officers ' salaries,
642642 wages and other compensation.
643643 (1) In the case of a transportation enterprise, the
644644 numerator of the fraction shall include a portion
645645 of such expenditure in connection with employees
646646 operating equipment over a fixed route, such as
647647 railroad employees, airline pilots, or bus
648648 drivers, in this state only a part of the time,
649649 in the proportion that mileage traveled in
650650 Oklahoma bears to total mileage traveled by such
651651 employees,
652652 (2) In any case the numerator of the fraction shall
653653 include a portion of such expenditures in
654654 connection with itinerant employees, suc h as
655655 traveling salespersons, in this state only a part
656656 of the time, in the pro portion that time spent in
657657 Oklahoma bears to total time spent in furtherance
658658 of the enterprise by such employees;
659659 c. The sales factor is a fraction, the numerator of which
660660 is the total sales or gross revenue of the taxpayer in
661661 this state during the tax period, and the denominator
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688688 of which is the total sales or gross revenue of the
689689 taxpayer everywhere during the tax period. "Sales",
690690 as used in this subsection does not include sale s or
691691 gross revenue which are separately allocated in
692692 paragraph 4 of this subse ction.
693693 (1) Sales of tangible personal property have a situs
694694 in this state if the property is delivered or
695695 shipped to a purchaser other than the United
696696 States government, within t his state regardless
697697 of the FOB point or other conditions of the sale;
698698 or the property is shipped from an office, store,
699699 warehouse, factory or other place of storage in
700700 this state and (a) the purchaser is the United
701701 States government or (b) the taxpayer is not
702702 doing business in the state of the destination of
703703 the shipment.
704704 (2) In the case of a railroad or interurban railway
705705 enterprise, the numerator of the fraction shall
706706 not be less than the allocation of revenues to
707707 this state as shown in its annual report to the
708708 Corporation Commission.
709709 (3) In the case of an airline, truck or bus
710710 enterprise or freight car, tank car, refrigerator
711711 car or other railroad equipment enterprise, the
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738738 numerator of the fraction shall include a portion
739739 of revenue from interstate trans portation in the
740740 proportion that interstate mileage traveled in
741741 Oklahoma bears to total interstate mileage
742742 traveled.
743743 (4) In the case of an oil, gasoline or gas pipeline
744744 enterprise, the numerator of the fraction shall
745745 be either the total of traffic units of the
746746 enterprise within Oklahoma or the revenue
747747 allocated to Oklahoma based upon miles moved, at
748748 the option of the taxpayer, and the denominator
749749 of which shall be the total of traffic units of
750750 the enterprise or the revenue of the enterprise
751751 everywhere as appropriate to the numerator. A
752752 "traffic unit" is hereby defined as the
753753 transportation for a distance of one (1) mile of
754754 one (1) barrel of oil, one (1) gallon of gasoline
755755 or one thousand (1,000) cubic feet of natural or
756756 casinghead gas, as the case may be.
757757 (5) In the case of a telephone or telegraph or other
758758 communication enterprise, the numerator of the
759759 fraction shall include that portion of the
760760 interstate revenue as is allocated pursuant to
761761 the accounting procedures prescribed by the
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788788 Federal Communications Commission; provided that
789789 in respect to each corporation or business entity
790790 required by the Federal Communications Commission
791791 to keep its books and records in accordance with
792792 a uniform system of accounts prescribed by such
793793 Commission, the intrastate net in come shall be
794794 determined separately in the manner provided by
795795 such uniform system of accounts and only the
796796 interstate income shall be subject to allocation
797797 pursuant to the provisions of this subsection.
798798 Provided further, that the gross revenue factors
799799 shall be those as are determined pursuant to the
800800 accounting procedures prescribed by the Federal
801801 Communications Commission.
802802 In any case where the apportionment of the three factors
803803 prescribed in this paragraph attributes to Oklahoma a portion of net
804804 income of the enterprise out of all appropriate proportion to the
805805 property owned and/or business transacted within this state, because
806806 of the fact that one or more of the factors so prescribed are not
807807 employed to any appreciable extent in furtherance of the enterpr ise;
808808 or because one or more factors not so prescribed are employed to a
809809 considerable extent in furtherance of the enterprise; or because of
810810 other reasons, the Tax Commission is empowered to permit, after a
811811 showing by taxpayer that an excessive portion of n et income has been
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838838 attributed to Oklahoma, or require, when in its judgment an
839839 insufficient portion of net income has been attributed to Oklahoma,
840840 the elimination, substitution, or use of additional factors, or
841841 reduction or increase in the weight of such p rescribed factors.
842842 Provided, however, that any such variance from such prescr ibed
843843 factors which has the effect of increasing the portion of net income
844844 attributable to Oklahoma must not be inherently arbitrary, and
845845 application of the recomputed final appor tionment to the net income
846846 of the enterprise must attribute to Oklahoma only a reasonable
847847 portion thereof.
848848 6. For calendar years 1997 and 1998, the owner of a new or
849849 expanded agricultural commodity processing facility in this state
850850 may exclude from Oklaho ma taxable income, or in the case of an
851851 individual, the Oklahoma adjusted gros s income, fifteen percent
852852 (15%) of the investment by the owner in the new or expanded
853853 agricultural commodity processing facility. For calendar year 1999,
854854 and all subsequent year s, the percentage, not to exceed fifteen
855855 percent (15%), available to the owner of a new or expanded
856856 agricultural commodity processing facility in this state claiming
857857 the exemption shall be adjusted annually so that the total estimated
858858 reduction in tax liab ility does not exceed One Million Dollars
859859 ($1,000,000.00) annually. The Tax C ommission shall promulgate rules
860860 for determining the percentage of the investment which each eligible
861861 taxpayer may exclude. The exclusion provided by this paragraph
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888888 shall be taken in the taxable year when the investment is made. In
889889 the event the total reduction in tax liability authorized by this
890890 paragraph exceeds One Million Dollars ($1,000,000.00) in any
891891 calendar year, the Tax Commission shall permit any excess over One
892892 Million Dollars ($1,000,000.00) and shall factor such excess into
893893 the percentage for subsequent years. Any amount of the exemption
894894 permitted to be excluded pursuant to the provisions of this
895895 paragraph but not used in any year may be carried forward as an
896896 exemption from income pursuant to the provisions of this paragraph
897897 for a period not exceeding six (6) years following the year in which
898898 the investment was originally made.
899899 For purposes of this paragraph:
900900 a. "Agricultural commodity processing facility " means
901901 building, structures, fixtures and improvements used
902902 or operated primarily for the processing or production
903903 of marketable products from agricultural commodities.
904904 The term shall also mean a dairy operation that
905905 requires a depreciable investment of at least Two
906906 Hundred Fifty Thousand Dollars ($250,000.00) and which
907907 produces milk from dairy cows. The term does not
908908 include a facility that provides only, and nothing
909909 more than, storage, cleaning, drying or transportation
910910 of agricultural commodities, and
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937937 b. "Facility" means each part of the facility which is
938938 used in a process primarily for:
939939 (1) the processing of agricultural commodities,
940940 including receiving or storing agricultural
941941 commodities, or the production of milk at a dairy
942942 operation,
943943 (2) transporting the agric ultural commodities or
944944 product before, during or after the processing,
945945 or
946946 (3) packaging or otherwise preparing the product for
947947 sale or shipment.
948948 7. Despite any provision to the contrary in paragraph 3 of this
949949 subsection, for taxable years beginning after December 31, 1999, in
950950 the case of a taxpayer which has a farming loss, such fa rming loss
951951 shall be considered a net operating loss carryback in accordance
952952 with and to the extent of the Internal Revenue Code, 26 U.S.C.,
953953 Section 172(b)(G). However, the amoun t of the net operating loss
954954 carryback shall not exceed the lesser of:
955955 a. Sixty Thousand Dollars ($60,000.00), or
956956 b. the loss properly shown on Schedule F of the Internal
957957 Revenue Service Form 1040 reduced by one -half (1/2) of
958958 the income from all other sourc es other than reflected
959959 on Schedule F.
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986986 8. In taxable years beginning after De cember 31, 1995, all
987987 qualified wages equal to the federal income tax credit set forth in
988988 26 U.S.C.A., Section 45A, shall be deducted from taxable income.
989989 The deduction allowed p ursuant to this paragraph shall only be
990990 permitted for the tax years in which the federal tax credit pursuant
991991 to 26 U.S.C.A., Section 45A, is allowed. For purposes of this
992992 paragraph, "qualified wages" means those wages used to calculate the
993993 federal credit pursuant to 26 U.S.C.A., Section 45A.
994994 9. In taxable years beginning after Dec ember 31, 2005, an
995995 employer that is eligible for and utilizes the Safety Pays OSHA
996996 Consultation Service provided by the Oklahoma Department of Labor
997997 shall receive an exemption fr om taxable income in the amount of One
998998 Thousand Dollars ($1,000.00) for the tax year that the service is
999999 utilized.
10001000 10. For taxable years beginning on or after January 1, 2010,
10011001 there shall be added to Oklahoma taxable income an amount equal to
10021002 the amount of deferred income not included in such taxable income
10031003 pursuant to Section 108( i)(1) of the Internal Revenue Code of 1986
10041004 as amended by Section 1231 of the American Recovery and Reinvestment
10051005 Act of 2009 (P.L. No. 111 -5). There shall be subtracted from
10061006 Oklahoma taxable income an amount equal to the amount of deferred
10071007 income included in such taxable income pursuant to Section 108(i)(1)
10081008 of the Internal Revenue Code by Section 1231 of the American
10091009 Recovery and Reinvestment Act of 2009 (P.L. No. 111 -5).
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10361036 11. For taxable years beginning on or after January 1, 2019,
10371037 there shall be subtracte d from Oklahoma taxable income or adjusted
10381038 gross income any item of income or gain, and there shall be added to
10391039 Oklahoma taxable income or adjusted gross income any item of loss or
10401040 deduction that in the absence of an election pursuant to the
10411041 provisions of the Pass -Through Entity Tax Equity Act of 2019 would
10421042 be allocated to a member or to an indirect member of an electing
10431043 pass-through entity pursuant to Section 2351 et seq. of this title,
10441044 if (i) the electing pass -through entity has accounted for such item
10451045 in computing its Oklahoma net entity income or loss pursuant to the
10461046 provisions of the Pass -Through Entity Tax Equity Act of 2019, and
10471047 (ii) the total amount of tax attributable to a ny resulting Oklahoma
10481048 net entity income has been paid. The Oklahoma Tax Commission shall
10491049 promulgate rules for the reporting of such exclusion to direct and
10501050 indirect members of the electing pass -through entity. As used in
10511051 this paragraph, "electing pass-through entity", "indirect member",
10521052 and "member" shall be defined in the same ma nner as prescribed by
10531053 Section 2355.1P-2 of this title. Notwithstanding the application of
10541054 this paragraph, the adjusted tax basis of any ownership interest in
10551055 a pass-through entity for purposes of Section 2351 et seq. of this
10561056 title shall be equal to its adjusted tax basis for federal income
10571057 tax purposes.
10581058 12. For taxable years beginning on or after January 1, 2026,
10591059 there shall be exempt from Oklahoma adjusted gross income any wage s
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10861086 received by a person who, as of the date the first support service
10871087 described by this paragraph is performed, is fifty -nine (59) years
10881088 of age or older, who is in receipt of or eligible to receive
10891089 distributions from any form of employer sponsored retiremen t plan, a
10901090 pension plan, a defined contribution plan, Social Security benefits
10911091 or any combination of such sources of benefits, who is not
10921092 performing full-time employment for any other person or entity, and
10931093 who is hired on a part -time basis by a public schoo l of this state
10941094 to perform services, other than teaching or other service whic h
10951095 requires a certificate pursuant to law, to support education and
10961096 related functions of the school. As used in this paragraph,
10971097 "support service" means assistance during customar y arrival or
10981098 departure times for the students each school day and associated with
10991099 such arrivals or departures or both, assistance during any meal
11001100 period at the school, assistance during a recess whether indoors or
11011101 outdoors, assistance with extracurricular activities such as
11021102 athletic events, academic competitions and similar function s, any
11031103 form of lawful and authorized assistance as requested by the persons
11041104 with supervisory responsibilities over employees at the school, and
11051105 assistance provided to certified o r noncertified personnel employed
11061106 by the school or school district in the performance of duties or
11071107 authorized functions of such personnel.
11081108 B. 1. The taxable income of any corporation shall be further
11091109 adjusted to arrive at Oklahoma taxable income, except those
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11361136 corporations electing treatment as provided in subchapter S of the
11371137 Internal Revenue Code, 26 U.S.C., Section 1361 et seq., and Section
11381138 2365 of this title, deductions pursuant to the provisions of the
11391139 Accelerated Cost Recovery System as defined and al lowed in the
11401140 Economic Recovery Tax Act of 1981, Public Law 97 -34, 26 U.S.C.,
11411141 Section 168, for depreciation of assets placed into service after
11421142 December 31, 1981, shall not be allowed in calculating Oklahoma
11431143 taxable income. Such corporations shall be allow ed a deduction for
11441144 depreciation of assets placed into service after December 3 1, 1981,
11451145 in accordance with provisions of the Internal Revenue Code, 26
11461146 U.S.C., Section 1 et seq., in effect immediately prior to the
11471147 enactment of the Accelerated Cost Recovery S ystem. The Oklahoma tax
11481148 basis for all such assets placed into service after December 31,
11491149 1981, calculated in this section shall be retained and utilized for
11501150 all Oklahoma income tax purposes through the final disposition of
11511151 such assets.
11521152 Notwithstanding any other provisions of the Oklahoma Income Tax
11531153 Act, Section 2351 et seq. of this title, or of the Internal Revenue
11541154 Code to the contrary, this subsection shall control calculation of
11551155 depreciation of assets placed into service after December 31, 1981,
11561156 and before January 1, 1983.
11571157 For assets placed in service and held by a corporation in which
11581158 accelerated cost recovery system was previously disallowed, an
11591159 adjustment to taxable income is required in the first taxable year
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11861186 beginning after December 31, 1982, to reco ncile the basis of such
11871187 assets to the basis allowed in the Internal Revenue Co de. The
11881188 purpose of this adjustment is to equalize the basis and allowance
11891189 for depreciation accounts between that reported to the Internal
11901190 Revenue Service and that reported to Ok lahoma.
11911191 2. For tax years beginning on or after January 1, 2009, and
11921192 ending on or before December 31, 2009, there shall be added to
11931193 Oklahoma taxable income any amount in excess of One Hundred Seventy -
11941194 five Thousand Dollars ($175,000.00) which has been deduc ted as a
11951195 small business expense under Internal Revenue Code, Section 179 as
11961196 provided in the American Recovery and Reinvestment Act of 2009.
11971197 C. 1. For taxable years beginning after December 31, 1987, the
11981198 taxable income of any corporation shall be further adjusted to
11991199 arrive at Oklahoma taxable income for transfers of technology to
12001200 qualified small businesses located in Oklahoma. Such transferor
12011201 corporation shall be allowed an exemption from taxable income of an
12021202 amount equal to the amount of royalty payment received as a result
12031203 of such transfer; provided, however, such amount shall no t exceed
12041204 ten percent (10%) of the amount of gross proceeds received by such
12051205 transferor corporation as a result of the technology transfer. Such
12061206 exemption shall be allowed for a period not to exceed ten (10) years
12071207 from the date of receipt of the first royalty payment accruing from
12081208 such transfer. No exemption may be claimed for transfers of
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12351235 technology to qualified small businesses made prior to January 1,
12361236 1988.
12371237 2. For purposes of this subsection:
12381238 a. "Qualified small business " means an entity, whether
12391239 organized as a corporation, partnership, or
12401240 proprietorship, organized for profit with its
12411241 principal place of business located within this state
12421242 and which meets the following criteria:
12431243 (1) Capitalization of not more than Two Hundred Fifty
12441244 Thousand Dollars ($250,000.00),
12451245 (2) Having at least fifty percent (50%) of its
12461246 employees and assets located in Oklahoma at the
12471247 time of the transfer, and
12481248 (3) Not a subsidiary or affiliate of the transfe ror
12491249 corporation;
12501250 b. "Technology" means a proprietary process, formula,
12511251 pattern, device or compilation of scientific or
12521252 technical information which is not in the public
12531253 domain;
12541254 c. "Transferor corporation " means a corporation which is
12551255 the exclusive and undis puted owner of the technology
12561256 at the time the transfer is made; and
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12831283 d. "Gross proceeds" means the total amount of
12841284 consideration for the transfer of technology, whether
12851285 the consideration is in money or otherwise.
12861286 D. 1. For taxable years beginning after De cember 31, 2005, the
12871287 taxable income of any corporation, estate or trust, shall be further
12881288 adjusted for qualifying gains receiving capital treatment. Such
12891289 corporations, estates or trusts shall be allowed a deduction from
12901290 Oklahoma taxable income for the amo unt of qualifying gains receiving
12911291 capital treatment earned by the corporation, estate or trust during
12921292 the taxable year and included in the federal taxable income of such
12931293 corporation, estate or trust.
12941294 2. As used in this subsection:
12951295 a. "qualifying gains rec eiving capital treatment " means
12961296 the amount of net capital gains, as defined in Section
12971297 1222(11) of the Internal Revenue Code, included in the
12981298 federal income tax return of the corporation, estate
12991299 or trust that result from:
13001300 (1) the sale of real property or t angible personal
13011301 property located within Oklahoma that has been
13021302 directly or indirectly owned by the corporation,
13031303 estate or trust for a holding period of at least
13041304 five (5) years prior to the date of the
13051305 transaction from which such net capital gains
13061306 arise,
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13331333 (2) the sale of stock or on the sale of an ownership
13341334 interest in an Oklahoma co mpany, limited
13351335 liability company, or partnership where such
13361336 stock or ownership interest has been directly or
13371337 indirectly owned by the corporation, estate or
13381338 trust for a holding pe riod of at least three (3)
13391339 years prior to the date of the transaction from
13401340 which the net capital gains arise, or
13411341 (3) the sale of real property, tangible personal
13421342 property or intangible personal property located
13431343 within Oklahoma as part of the sale of all or
13441344 substantially all of the assets of an Oklahoma
13451345 company, limited liability com pany, or
13461346 partnership where such property has been directly
13471347 or indirectly owned by such entity owned by the
13481348 owners of such entity, and used in or derived
13491349 from such entity for a pe riod of at least three
13501350 (3) years prior to the date of the transaction
13511351 from which the net capital gains arise,
13521352 b. "holding period" means an uninterrupted period of
13531353 time. The holding period shall include any additional
13541354 period when the property was held by a nother
13551355 individual or entity, if such additional period is
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13821382 included in the taxp ayer's holding period for the
13831383 asset pursuant to the Internal Revenue Code,
13841384 c. "Oklahoma company", "limited liability company ", or
13851385 "partnership" means an entity whose primary
13861386 headquarters have been located in Oklahoma for at
13871387 least three (3) uninterrupted years prior to the date
13881388 of the transaction from which the net capital gains
13891389 arise,
13901390 d. "direct" means the taxpayer directly owns the asset,
13911391 and
13921392 e. "indirect" means the taxpayer owns an interest in a
13931393 pass-through entity (or chain of pass -through
13941394 entities) that sells the asset that gives rise to the
13951395 qualifying gains receiving capital treatment.
13961396 (1) With respect to sales of real property or
13971397 tangible personal property located within
13981398 Oklahoma, the deduction described in this
13991399 subsection shall not apply unless the pass -
14001400 through entity that makes the sale has held the
14011401 property for not less than five (5) uninterrupted
14021402 years prior to the date of the transaction that
14031403 created the capital gain, and each pass-through
14041404 entity included in the chain of ownership has
14051405 been a member, partner, or shareholder of the
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14321432 pass-through entity in the tier immediately below
14331433 it for an uninterrupted period of not less than
14341434 five (5) years.
14351435 (2) With respect to sales of st ock or ownership
14361436 interest in or sales of all or substantially all
14371437 of the assets of an Oklahoma company, limited
14381438 liability company, or partnership, the deduction
14391439 described in this subsection shall not apply
14401440 unless the pass-through entity that makes the
14411441 sale has held the stock or ownership interest or
14421442 the assets for not less than thre e (3)
14431443 uninterrupted years prior to the date of the
14441444 transaction that created the capital gain, and
14451445 each pass-through entity included in the chain of
14461446 ownership has been a member, p artner or
14471447 shareholder of the pass -through entity in the
14481448 tier immediately below it for an uninterrupted
14491449 period of not less than three (3) years.
14501450 E. The Oklahoma adjusted gross income of any individual
14511451 taxpayer shall be further adjusted as follows to arrive at Oklahoma
14521452 taxable income:
14531453 1. a. In the case of individuals, there shall be added or
14541454 deducted, as the case may be, the difference necessary
14551455 to allow personal exemptions of One Thousand Dollars
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14821482 ($1,000.00) in lieu of the personal exemptions allowed
14831483 by the Internal Revenue Code.
14841484 b. There shall be allowed an additional exemption of One
14851485 Thousand Dollars ($1,000.00) for each taxpayer or
14861486 spouse who is blind at the close of the tax year. For
14871487 purposes of this subparagraph, an individual is blind
14881488 only if the central visual acuity of the individual
14891489 does not exceed 20/200 in the better eye w ith
14901490 correcting lenses, or if the visual acuity of the
14911491 individual is greater than 20/200, but is accompanied
14921492 by a limitation in the fields of vision such that the
14931493 widest diameter of the visual field subtends an angle
14941494 no greater than twenty (20) degrees.
14951495 c. There shall be allowed an additional exemption of One
14961496 Thousand Dollars ($1,000.00) for each taxpayer or
14971497 spouse who is sixty-five (65) years of age or older at
14981498 the close of the tax year based upon the filing status
14991499 and federal adjusted gross income of the t axpayer.
15001500 Taxpayers with the following filing status may claim
15011501 this exemption if the federal adjusted gross income
15021502 does not exceed:
15031503 (1) Twenty-five Thousand Dollars ($25,000.00) if
15041504 married and filing jointly,
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15311531 (2) Twelve Thousand Five Hundred Dollars ($12,500.00)
15321532 if married and filing separately,
15331533 (3) Fifteen Thousand Dollars ($15,000.00) if single,
15341534 and
15351535 (4) Nineteen Thousand Dollars ($19,000.00) if a
15361536 qualifying head of household.
15371537 Provided, for taxable years beginning after December
15381538 31, 1999, amounts included in the calculation of
15391539 federal adjusted gross income pursuant to the
15401540 conversion of a traditional individual retirement
15411541 account to a Roth individual retirement account shall
15421542 be excluded from federal adjusted gross income for
15431543 purposes of the income thresholds provided in this
15441544 subparagraph.
15451545 2. a. For taxable years beginning on or before December 31,
15461546 2005, in the case of individuals who use the standard
15471547 deduction in determining taxable income, there shall
15481548 be added or deducted, as the case may be, the
15491549 difference necessary to allow a standard deduction in
15501550 lieu of the standard deduction allowed by the Internal
15511551 Revenue Code, in an amount equal to the larger of
15521552 fifteen percent (15%) of the O klahoma adjusted gross
15531553 income or One Thousand Dollars ($1,000.00), but not to
15541554 exceed Two Thousand Dollars ($2,000.00), except that
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15811581 in the case of a married individual filing a separate
15821582 return such deduction shall be the larger of fifteen
15831583 percent (15%) of such Oklahoma adjusted gross income
15841584 or Five Hundred Dollars ($500.00), but not to exceed
15851585 the maximum amount of One Thousand Dollars
15861586 ($1,000.00).
15871587 b. For taxable years beginning on or after January 1,
15881588 2006, and before January 1, 2007, in the case of
15891589 individuals who use the standard deduction in
15901590 determining taxable income, there shall be added or
15911591 deducted, as the case may be, the difference necessary
15921592 to allow a standard deduction in lieu of the standard
15931593 deduction allowed by the Internal Revenue Code, in an
15941594 amount equal to:
15951595 (1) Three Thousand Dollars ($3,000.00), if the filing
15961596 status is married filing joint, head of household
15971597 or qualifying widow, or
15981598 (2) Two Thousand Dollars ($2,000.00), if the filing
15991599 status is single or married filing separate.
16001600 c. For the taxable year beginning on January 1, 2007, and
16011601 ending December 31, 2007, in the case of individuals
16021602 who use the standard deduction in determining taxable
16031603 income, there shall be added or deducted, as the case
16041604 may be, the difference necessary to allow a standard
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16311631 deduction in lieu of the standard deduction allowed by
16321632 the Internal Revenue Code , in an amount equal to:
16331633 (1) Five Thousand Five Hundred Dollars ($5,500.00),
16341634 if the filing status is married filing joint or
16351635 qualifying widow, or
16361636 (2) Four Thousand One Hundred Tw enty-five Dollars
16371637 ($4,125.00) for a head of household, or
16381638 (3) Two Thousand Seven Hundred Fifty Dollars
16391639 ($2,750.00), if the filing status is single or
16401640 married filing separate.
16411641 d. For the taxable year beginning on January 1, 2008, and
16421642 ending December 31, 200 8, in the case of individuals
16431643 who use the standard deduction in determining ta xable
16441644 income, there shall be added or deducted, as the case
16451645 may be, the difference necessary to allow a standard
16461646 deduction in lieu of the standard deduction allowed by
16471647 the Internal Revenue Code, in an amount equal to:
16481648 (1) Six Thousand Five Hundred Dollars ($6,500.00), if
16491649 the filing status is married filing joint or
16501650 qualifying widow,
16511651 (2) Four Thousand Eight Hundred Seventy -five Dollars
16521652 ($4,875.00) for a head of household, or
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16791679 (3) Three Thousand Two Hundred Fifty Dollars
16801680 ($3,250.00), if the filing status is si ngle or
16811681 married filing separate.
16821682 e. For the taxable year beginning on January 1, 2009, and
16831683 ending December 31, 2009, in the case of individuals
16841684 who use the standard deduction in determining taxable
16851685 income, there shall be added or deducted, as the case
16861686 may be, the difference necessary to allow a standard
16871687 deduction in lieu of the standard deduction allowed by
16881688 the Internal Revenue Code, in an amount equal to:
16891689 (1) Eight Thousand Five Hundred Dollars ($8,500.00),
16901690 if the filing status is married filing joint or
16911691 qualifying widow,
16921692 (2) Six Thousand Three Hundred Seventy -five Dollars
16931693 ($6,375.00) for a head of household, or
16941694 (3) Four Thousand Two Hundred Fifty Dollars
16951695 ($4,250.00), if the filin g status is single or
16961696 married filing separate.
16971697 Oklahoma adjusted gross income shall be increased by
16981698 any amounts paid for motor vehicle excise taxes which
16991699 were deducted as allowed by the Internal Revenue Code.
17001700 f. For taxable years beginning on or after Janu ary 1,
17011701 2010, and ending on December 31, 2016, in the case of
17021702 individuals who use the standard deduction in
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17291729 determining taxable income, there shall be added or
17301730 deducted, as the case may be, the difference necessary
17311731 to allow a standard deduction equal to the standard
17321732 deduction allowed by the Internal Revenue Code, based
17331733 upon the amount and filing status prescribed by such
17341734 Code for purposes of filing federal individual income
17351735 tax returns.
17361736 g. For taxable years beginning on or after January 1,
17371737 2017, in the case of individuals who use the standard
17381738 deduction in determining taxable income, t here shall
17391739 be added or deducted, as the case may be, the
17401740 difference necessary to allow a standard deduction in
17411741 lieu of the standard deduction allowed by the Internal
17421742 Revenue Code, as follows:
17431743 (1) Six Thousand Three Hundred Fifty Dollars
17441744 ($6,350.00) for single or married filing
17451745 separately,
17461746 (2) Twelve Thousand Seven Hundred Dollars
17471747 ($12,700.00) for married filing jointly or
17481748 qualifying widower with dependent child, and
17491749 (3) Nine Thousand Three Hundred Fifty Dollars
17501750 ($9,350.00) for head of household.
17511751 3. a. In the case of resident and part -year resident
17521752 individuals having adjusted gross income from sources
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17791779 both within and without the state, the itemized or
17801780 standard deductions and persona l exemptions shall be
17811781 reduced to an amount which is the same portion of the
17821782 total thereof as Oklahoma adjusted gross income is of
17831783 adjusted gross income. To the extent itemized
17841784 deductions include allowable moving expense, proration
17851785 of moving expense shall not be required or permitted
17861786 but allowable moving expense shall be fully deduc tible
17871787 for those taxpayers moving within or into Oklahoma and
17881788 no part of moving expense shall be deductible for
17891789 those taxpayers moving without or out of Oklahoma.
17901790 All other itemized or standard deductions and personal
17911791 exemptions shall be subject to proration as provided
17921792 by law.
17931793 b. For taxable years beginning on or after January 1,
17941794 2018, the net amount of itemized deductions allowable
17951795 on an Oklahoma income tax return, subject to th e
17961796 provisions of paragraph 24 of this subsection, shall
17971797 not exceed Seventeen Th ousand Dollars ($17,000.00).
17981798 For purposes of this subparagraph, charitable
17991799 contributions and medical expenses deductible for
18001800 federal income tax purposes shall be excluded from t he
18011801 amount of Seventeen Thousand Dollars ($17,000.00) as
18021802 specified by this subparagraph.
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18291829 4. A resident individual with a physical disability
18301830 constituting a substantial handicap to employment may deduct from
18311831 Oklahoma adjusted gross income such expenditures to modify a motor
18321832 vehicle, home or workplace as are necessary to compensate fo r his or
18331833 her handicap. A veteran certified by the Department of Veterans
18341834 Affairs of the federal government as having a service -connected
18351835 disability shall be conclusively presume d to be an individual with a
18361836 physical disability constituting a substantial handicap to
18371837 employment. The Tax Commission shall promulgate rules containing a
18381838 list of combinations of common disabilities and modifications which
18391839 may be presumed to qualify for t his deduction. The Tax Commission
18401840 shall prescribe necessary requirements for verification.
18411841 5. a. Before July 1, 2010, the first One Thousand Five
18421842 Hundred Dollars ($1,500.00) received by any person
18431843 from the United States as salary or compensation in
18441844 any form, other than retirement benefits, as a member
18451845 of any component of the Armed Forces of the United
18461846 States shall be deducted from taxable income.
18471847 b. On or after July 1, 2010, one hundred percent (100%)
18481848 of the income received by any person from the United
18491849 States as salary or compensation in any form, other
18501850 than retirement benefits, as a member of any component
18511851 of the Armed Forces of the United States shall be
18521852 deducted from taxable income.
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18791879 c. Whenever the filing of a timely income tax return by a
18801880 member of the Armed Forces of the United States is
18811881 made impracticable or impossible of accomplishment by
18821882 reason of:
18831883 (1) absence from the United States, which term
18841884 includes only the states and the District of
18851885 Columbia,
18861886 (2) absence from the State of Oklahoma while on
18871887 active duty, or
18881888 (3) confinement in a hospital within the United
18891889 States for treatment of wounds, injuries or
18901890 disease,
18911891 the time for filing a return and paying an income tax
18921892 shall be and is hereby extended without incurring
18931893 liability for interest or penalties, t o the fifteenth
18941894 day of the third month following the month in which:
18951895 (a) Such individual shall return to the United
18961896 States if the extension is granted pursuant
18971897 to subparagraph a of this paragraph, return
18981898 to the State of Oklahoma if the extension is
18991899 granted pursuant to subparagraph b of this
19001900 paragraph or be discharged from such
19011901 hospital if the extension is granted
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19281928 pursuant to subparagraph c of this
19291929 paragraph, or
19301930 (b) An executor, administrator, or conservator
19311931 of the estate of the taxpayer is appointed,
19321932 whichever event occurs the earliest.
19331933 Provided, that the Tax Commission may, in its discretion, grant
19341934 any member of the Armed Forces of the United States an extension of
19351935 time for filing of income tax returns and payment of income tax
19361936 without incurring liabilities for interest or penalties. Such
19371937 extension may be granted only when in the ju dgment of the Tax
19381938 Commission a good cause exists therefor and may be for a period in
19391939 excess of six (6) months. A record of every such extension granted,
19401940 and the reason therefor, shall be kept.
19411941 6. Before July 1, 2010, the salary or any other form of
19421942 compensation, received from the United States by a member of any
19431943 component of the Armed Forces of the United States, shall be
19441944 deducted from taxable income during the time in which the person is
19451945 detained by the enemy in a conflict, is a prisoner of war or is
19461946 missing in action and not deceased; provided, after July 1, 2010,
19471947 all such salary or compensation shall be subject to the deduction as
19481948 provided pursuant to paragraph 5 of this subse ction.
19491949 7. a. An individual taxpayer, whether resident or
19501950 nonresident, may deduct an amount equal to the federal
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19761976
19771977 income taxes paid by the taxpayer during the taxable
19781978 year.
19791979 b. Federal taxes as described in subparagraph a of this
19801980 paragraph shall be deductible by any individual
19811981 taxpayer, whether resident or nonresident, only to the
19821982 extent they relate to income subject to taxation
19831983 pursuant to the provisions of the Oklahoma Income Tax
19841984 Act. The maximum amount allowable in the preceding
19851985 paragraph shall be prorated on the ratio of the
19861986 Oklahoma adjusted gross income to federal adjusted
19871987 gross income.
19881988 c. For the purpose of this paragraph, "federal income
19891989 taxes paid" shall mean federal income taxes, surtaxes
19901990 imposed on incomes or excess profits taxes, as though
19911991 the taxpayer was on the accrual basis. In determining
19921992 the amount of deduction for fed eral income taxes for
19931993 tax year 2001, the amount of the deduction shall not
19941994 be adjusted by the amount of any accelerated ten
19951995 percent (10%) tax rate bracket credit or advanced
19961996 refund of the credit received during the tax year
19971997 provided pursuant to the federal Economic Growth and
19981998 Tax Relief Reconciliation Act of 2001, P.L. No. 107 -
19991999 16, and the advanced refund of such credit shall not
20002000 be subject to taxation.
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20272027 d. The provisions of this pa ragraph shall apply to all
20282028 taxable years ending after December 31, 1978, and
20292029 beginning before January 1, 2006.
20302030 8. Retirement benefits not to exceed Five Thousand Five Hundred
20312031 Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five
20322032 Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Thousand
20332033 Dollars ($10,000.00) for the 2006 tax year and all subsequent tax
20342034 years, which are received by an individual from the civil service of
20352035 the United States, the Oklahoma Public Employees Retirement System,
20362036 the Teachers' Retirement System of Oklahoma, the Oklahoma Law
20372037 Enforcement Retirement System, the Oklahoma Firefighters Pension and
20382038 Retirement System, the Oklahoma Police Pension and Retirement
20392039 System, the employee retirement systems created by counties pursua nt
20402040 to Section 951 et seq. of Title 19 of the Oklahoma Statutes, the
20412041 Uniform Retirement System for Justices and Judges, the Oklahoma
20422042 Wildlife Conservation Department Retirement Fund, the Oklahoma
20432043 Employment Security Commission Retirement Plan, or the employ ee
20442044 retirement systems created by municipalities pursuant to Section 48 -
20452045 101 et seq. of Title 11 of the Oklahoma Statutes shall be exempt
20462046 from taxable income.
20472047 9. In taxable years beginning after December 3l, 1984, Social
20482048 Security benefits received by an ind ividual shall be exempt from
20492049 taxable income, to the extent such benefits are included in the
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20762076 federal adjusted gross income pursuant to the provisions of Section
20772077 86 of the Internal Revenue Code, 26 U.S.C., Section 86.
20782078 10. For taxable years beginning after December 31, 1994, lump -
20792079 sum distributions from employer plans of deferred comp ensation,
20802080 which are not qualified plans within the meaning of Section 401(a)
20812081 of the Internal Revenue Code, 26 U.S.C., Section 401(a), and which
20822082 are deposited in and accounted for within a separate bank account or
20832083 brokerage account in a financial institution within this state,
20842084 shall be excluded from taxable income in the same manner as a
20852085 qualifying rollover contribution to an individual retirement account
20862086 within the meaning of Sect ion 408 of the Internal Revenue Code, 26
20872087 U.S.C., Section 408. Amounts withdra wn from such bank or brokerage
20882088 account, including any earnings thereon, shall be included in
20892089 taxable income when withdrawn in the same manner as withdrawals from
20902090 individual retirement accounts within the meaning of Section 408 of
20912091 the Internal Revenue Code.
20922092 11. In taxable years beginning after December 31, 1995,
20932093 contributions made to and interest received from a medical savings
20942094 account established pursuant to Sections 2621 through 2623 of Title
20952095 63 of the Oklahoma Statutes shall be exempt from taxable income .
20962096 12. For taxable years beginning after December 31, 1996, the
20972097 Oklahoma adjusted gross income of any individual taxpayer who is a
20982098 swine or poultry producer may be further adjust ed for the deduction
20992099 for depreciation allowed for new construction or expansion costs
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21262126 which may be computed using the same depreciation method elected for
21272127 federal income tax purposes except that the useful life shall be
21282128 seven (7) years for purposes of this paragraph. If depreciation is
21292129 allowed as a deduction in determining the adju sted gross income of
21302130 an individual, any depreciation calculated and claimed pursuant to
21312131 this section shall in no event be a duplication of any depreciation
21322132 allowed or permitted o n the federal income tax return of the
21332133 individual.
21342134 13. a. In taxable years beginning before January 1, 2005,
21352135 retirement benefits not to exceed the amounts
21362136 specified in this paragraph, which are received by an
21372137 individual sixty-five (65) years of age or olde r and
21382138 whose Oklahoma adjusted gross income is Twenty -five
21392139 Thousand Dollars ($2 5,000.00) or less if the filing
21402140 status is single, head of household, or married filing
21412141 separate, or Fifty Thousand Dollars ($50,000.00) or
21422142 less if the filing status is married fi ling joint or
21432143 qualifying widow, shall be exempt from taxable income.
21442144 In taxable years beginning after December 31, 2004,
21452145 retirement benefits not to exceed the amounts
21462146 specified in this paragraph, which are received by an
21472147 individual whose Oklahoma adjusted gross income is
21482148 less than the qualifying amount specified in this
21492149 paragraph, shall be exempt from taxable income.
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21762176 b. For purposes of this paragraph, the qualifying amount
21772177 shall be as follows:
21782178 (1) in taxable years beginning after December 31,
21792179 2004, and prior to January 1, 2007, the
21802180 qualifying amount shall be Thirty -seven Thousand
21812181 Five Hundred Dollars ($37,500.00) or less if the
21822182 filing status is single, head of household, or
21832183 married filing separate, or Seventy -five Thousand
21842184 Dollars ($75,000.00) or less if th e filing status
21852185 is married filing jointly or qualifying widow,
21862186 (2) in the taxable year beginning January 1, 2007,
21872187 the qualifying amount shall be Fifty Thousand
21882188 Dollars ($50,000.00) or less if the filing status
21892189 is single, head of household, or married filin g
21902190 separate, or One Hundred Thousand Dollars
21912191 ($100,000.00) or less if the filing status is
21922192 married filing jointly or qualifying widow,
21932193 (3) in the taxable year beginning January 1, 2008,
21942194 the qualifying amount shall be Sixty -two Thousand
21952195 Five Hundred Dollars ($62,500.00) or less if the
21962196 filing status is single, head of household, or
21972197 married filing separate, or One Hundred Twenty -
21982198 five Thousand Dollars ($125,000.00) or less if
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22252225 the filing status is married filing jointly or
22262226 qualifying widow,
22272227 (4) in the taxable year beginning January 1, 2009,
22282228 the qualifying amount shall be One Hundred
22292229 Thousand Dollars ($100,000.00) or less if the
22302230 filing status is single, head of household, or
22312231 married filing separate, or Two Hundred Thousand
22322232 Dollars ($200,000.00) or less if the filin g
22332233 status is married filing jointly or qualifying
22342234 widow, and
22352235 (5) in the taxable year beginning January 1, 2010,
22362236 and subsequent taxable years, there shall be no
22372237 limitation upon the qualifying amount.
22382238 c. For purposes of this paragraph, "retirement benefits"
22392239 means the total distributions or withdrawals from the
22402240 following:
22412241 (1) an employee pension benefit plan which satisfies
22422242 the requirements of Section 401 of the Internal
22432243 Revenue Code, 26 U.S.C., Section 401,
22442244 (2) an eligible deferred compensation plan that
22452245 satisfies the requirements of Section 457 of the
22462246 Internal Revenue Code, 26 U.S.C., Section 457,
22472247 (3) an individual retirement account, annuity or
22482248 trust or simplified employee pension that
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22752275 satisfies the requirements of Section 408 of the
22762276 Internal Revenue Code, 26 U.S.C., Section 408,
22772277 (4) an employee annuity subject to the provisions of
22782278 Section 403(a) or (b) of the Internal Revenue
22792279 Code, 26 U.S.C., Section 403(a) or (b),
22802280 (5) United States Retirement Bonds which satisfy the
22812281 requirements of Section 86 of the Internal
22822282 Revenue Code, 26 U.S.C., Section 86, or
22832283 (6) lump-sum distributions from a ret irement plan
22842284 which satisfies the requirements of Section
22852285 402(e) of the Internal Revenue Code, 26 U.S.C.,
22862286 Section 402(e).
22872287 d. The amount of the exemption provided by this paragraph
22882288 shall be limited to Five Thousand Five Hundred Dollars
22892289 ($5,500.00) for the 2004 tax year, Seven Thousand Five
22902290 Hundred Dollars ($7,500.00) for the 2005 tax year and
22912291 Ten Thousand Dollars ($10,000.00) for the tax year
22922292 2006 and for all subsequent tax years. Any individual
22932293 who claims the exemption provided for in paragraph 8
22942294 of this subsection shall not be permitted to claim a
22952295 combined total exemption pursuant to this paragraph
22962296 and paragraph 8 of this subsection in an amount
22972297 exceeding Five Thousand Five Hundre d Dollars
22982298 ($5,500.00) for the 2004 tax year, Seven Thousand Five
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23252325 Hundred Dollars ($7,500.00) for the 2005 tax year and
23262326 Ten Thousand Dollars ($10,000.00) for the 2006 tax
23272327 year and all subsequent tax years.
23282328 14. In taxable years beginning after December 31, 1999, for an
23292329 individual engaged in production agriculture who has filed a
23302330 Schedule F form with the taxpayer 's federal income tax return for
23312331 such taxable year, there shall be excluded from taxable income any
23322332 amount which was included as federal taxable inco me or federal
23332333 adjusted gross income and which consists of the discharge of an
23342334 obligation by a creditor of the taxpayer incurred to finance the
23352335 production of agricultural products.
23362336 15. In taxable years beginning December 31, 2000, an amount
23372337 equal to one hundred percent (100%) of the amount of any scholarship
23382338 or stipend received from participation in the Oklahoma Police Corps
23392339 Program, as established in Section 2 -140.3 of Title 47 of the
23402340 Oklahoma Statutes shall be exempt from taxable income.
23412341 16. a. In taxable years beginning after December 31, 2001,
23422342 and before January 1, 2005, there shall be allowed a
23432343 deduction in the amount of contributions to accounts
23442344 established pursuant to the Oklahoma College Savings
23452345 Plan Act. The deduction shall equal the amount of
23462346 contributions to accounts, but in no event shall the
23472347 deduction for each contributo r exceed Two Thousand
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23742374 Five Hundred Dollars ($2,500.00) each taxable year for
23752375 each account.
23762376 b. In taxable years beginning after December 31, 2004,
23772377 each taxpayer shall be allowed a deduction for
23782378 contributions to accounts established pursuant to the
23792379 Oklahoma College Savings Plan Act. The maximum annual
23802380 deduction shall equal the amount of contributions to
23812381 all such accounts plus any contributions to such
23822382 accounts by the taxpayer for p rior taxable years after
23832383 December 31, 2004, which were not deducted, but in no
23842384 event shall the deduction for each tax year exceed Ten
23852385 Thousand Dollars ($10,000.00) for each individual
23862386 taxpayer or Twenty Thousand Dollars ($20,000.00) for
23872387 taxpayers filing a joint return. Any amount of a
23882388 contribution that is not deducted by the taxpayer in
23892389 the year for which the contribution is made may be
23902390 carried forward as a deduction from income for the
23912391 succeeding five (5) years. For taxable years
23922392 beginning after December 31, 2005, deductions may be
23932393 taken for contributions and rollovers made during a
23942394 taxable year and up to April 15 of the succeeding
23952395 year, or the due date of a taxpayer 's state income tax
23962396 return, excluding extensions, whichever is later.
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24232423 Provided, a deduction for the same contribution may
24242424 not be taken for two (2) different taxable years.
24252425 c. In taxable years beginning after December 31, 2006,
24262426 deductions for contributions made pursuant to
24272427 subparagraph b of this paragraph shall be limited as
24282428 follows:
24292429 (1) for a taxpayer who qualified for the five -year
24302430 carryforward election and who takes a rollover or
24312431 nonqualified withdrawal during that period, the
24322432 tax deduction otherwise available pursuant to
24332433 subparagraph b of this paragraph shall be reduced
24342434 by the amount which i s equal to the rollover or
24352435 nonqualified withdrawal, and
24362436 (2) for a taxpayer who elects to take a rollover or
24372437 nonqualified withdrawal within the same tax year
24382438 in which a contribution was made to the
24392439 taxpayer's account, the tax deduction otherwise
24402440 available pursuant to subparagraph b of this
24412441 paragraph shall be reduced by the amount of the
24422442 contribution which is equal to the rollover or
24432443 nonqualified withdrawal.
24442444 d. If a taxpayer elects to take a rollover on a
24452445 contribution for which a deduction has been taken
24462446 pursuant to subparagraph b of this paragraph within
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24732473 one (1) year of the date of contribution, the amount
24742474 of such rollover shall be included in the adjusted
24752475 gross income of the taxpayer in the taxable year of
24762476 the rollover.
24772477 e. If a taxpayer makes a nonqualified withdrawal of
24782478 contributions for which a deduction was taken pursuant
24792479 to subparagraph b of this paragraph, such nonqualified
24802480 withdrawal and any earnings thereon shall be included
24812481 in the adjusted gross income of the taxpayer in the
24822482 taxable year of the nonqua lified withdrawal.
24832483 f. As used in this paragraph:
24842484 (1) "non-qualified withdrawal " means a withdrawal
24852485 from an Oklahoma College Savings Plan account
24862486 other than one of the following:
24872487 (a) a qualified withdrawal,
24882488 (b) a withdrawal made as a result of the death
24892489 or disability of the designated beneficiary
24902490 of an account,
24912491 (c) a withdrawal that is made on the account of
24922492 a scholarship or the allowance or payment
24932493 described in Section 135(d)(1)(B) or (C) or
24942494 by the Internal Revenue Code, received by
24952495 the designated beneficia ry to the extent the
24962496 amount of the refund does not exceed the
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25232523 amount of the scholarship, allowance, or
25242524 payment, or
25252525 (d) a rollover or change of designated
25262526 beneficiary as permitted by subsection F of
25272527 Section 3970.7 of Title 70 of Oklahoma
25282528 Statutes, and
25292529 (2) "rollover" means the transfer of funds from the
25302530 Oklahoma College Savings Plan t o any other plan
25312531 under Section 529 of the Internal Revenue Code.
25322532 17. For tax years 2006 through 2021, retirement benefits
25332533 received by an individual from any component of the Arm ed Forces of
25342534 the United States in an amount not to exceed the greater of seventy -
25352535 five percent (75%) of such benefits or Ten Thousand Dollars
25362536 ($10,000.00) shall be exempt from taxable income but in no case less
25372537 than the amount of the exemption provided by p aragraph 13 of this
25382538 subsection. For tax year 2022 and subsequent tax years, r etirement
25392539 benefits received by an individual from any component of the Armed
25402540 Forces of the United States shall be exempt from taxable income.
25412541 18. For taxable years beginning aft er December 31, 2006,
25422542 retirement benefits received by federal civil service retirees,
25432543 including survivor annuities, paid in lieu of Social Security
25442544 benefits shall be exempt from taxable income to the extent such
25452545 benefits are included in the federal adjuste d gross income pursuant
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25722572 to the provisions of Section 86 of the Internal Revenu e Code, 26
25732573 U.S.C., Section 86, according to the following schedule:
25742574 a. in the taxable year beginning January 1, 2007, twenty
25752575 percent (20%) of such benefits shall be exempt,
25762576 b. in the taxable year beginning January 1, 2008, forty
25772577 percent (40%) of such benefits shall be exempt,
25782578 c. in the taxable year beginning January 1, 2009, sixty
25792579 percent (60%) of such benefits shall be exempt,
25802580 d. in the taxable year beginning January 1, 2010, eig hty
25812581 percent (80%) of such benefits shall be exempt, and
25822582 e. in the taxable year beginning January 1, 2011, and
25832583 subsequent taxable years, one hundred percent (100%)
25842584 of such benefits shall be exempt.
25852585 19. a. For taxable years beginning after December 31, 2007, a
25862586 resident individual may deduct up to Ten Thousand
25872587 Dollars ($10,000.00) from Oklahoma adjusted gross
25882588 income if the individual, or the dependent of the
25892589 individual, while living, donates one or more human
25902590 organs of the individual to another human being for
25912591 human organ transplantation. As used in this
25922592 paragraph, "human organ" means all or part of a liver,
25932593 pancreas, kidney, intestine, lung, or bone marrow. A
25942594 deduction that is claimed under this paragraph may be
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26212621 claimed in the taxable year in which the human organ
26222622 transplantation occurs.
26232623 b. An individual may claim this deduction only once, and
26242624 the deduction may be claimed only for unreimbursed
26252625 expenses that are incurred by the individual and
26262626 related to the organ donation of the individual.
26272627 c. The Oklahoma Tax Commission shall promulgate rules to
26282628 implement the provisions of this paragra ph which shall
26292629 contain a specific list of expenses which may be
26302630 presumed to qualify for the deduction. The Tax
26312631 Commission shall prescribe necessary requirements for
26322632 verification.
26332633 20. For taxable years beginning after December 31, 2009, there
26342634 shall be exempt from taxable income any amount received by the
26352635 beneficiary of the death benefit for an emergency medical technician
26362636 or a registered emergency medical responder provided by Se ction 1-
26372637 2505.1 of Title 63 of the Oklahoma Statutes.
26382638 21. For taxable years be ginning after December 31, 2008,
26392639 taxable income shall be increased by any unemployment compensation
26402640 exempted under Section 85(c) of the Internal Revenue Code, 26
26412641 U.S.C., Section 85(c)(2009).
26422642 22. For taxable years beginning after December 31, 2008, there
26432643 shall be exempt from taxable income any payment in an amount less
26442644 than Six Hundred Dollars ($600.00) received by a person as an award
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26712671 for participation in a competitive livestock show event. For
26722672 purposes of this paragraph, the payment shall be treated as a
26732673 scholarship amount paid by the entity sponsoring the event and the
26742674 sponsoring entity shall cause the payment to be categorized as a
26752675 scholarship in its books and records.
26762676 23. For taxable years beginning on or after January 1, 2016,
26772677 taxable income shall be increased by any amount of state and local
26782678 sales or income taxes deducted under 26 U.S.C., Section 164 of the
26792679 Internal Revenue Code. If the amount of state and local taxes
26802680 deducted on the federal return is limited, taxable income on the
26812681 state return shall be increased only by the amount actually deducted
26822682 after any such limitations are applied.
26832683 24. For taxable years beginning after December 31, 2020, each
26842684 taxpayer shall be allow ed a deduction for contributions to accounts
26852685 established pursuant to the Achieving a Better Life Experience
26862686 (ABLE) Program as established in Section 4001.1 et seq. of Title 56
26872687 of the Oklahoma Statutes. For any tax year, the deduction provided
26882688 for in this paragraph shall not exceed Ten Thousand Dollars
26892689 ($10,000.00) for an individual taxpayer or Twenty Thousand Dollars
26902690 ($20,000.00) for taxpayers filing a joint return. Any amount of
26912691 contribution not deducted by the taxpayer in the tax year for which
26922692 the contribution is made may be carried forward as a deduction from
26932693 income for up to five (5) tax years. Deductions may be taken for
26942694 contributions made during the tax year and through April 15 of the
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27212721 succeeding tax year, or through the due date of a taxpayer 's state
27222722 income tax return excluding extensions, whichever is later.
27232723 Provided, a deduction for the same contribution may not be taken in
27242724 more than one (1) tax year.
27252725 F. 1. For taxable years beginning after December 31, 2004, a
27262726 deduction from the Oklahoma adju sted gross income of any individual
27272727 taxpayer shall be allowed for qualifying gains receiving capital
27282728 treatment that are included in the federal adjusted gross income of
27292729 such individual taxpayer during the taxable year.
27302730 2. As used in this subsection:
27312731 a. "qualifying gains receiving capital treatment " means
27322732 the amount of net capital g ains, as defined in Section
27332733 1222(11) of the Internal Revenue Code, included in an
27342734 individual taxpayer's federal income tax return that
27352735 result from:
27362736 (1) the sale of real property or tangible personal
27372737 property located within Oklahoma that has been
27382738 directly or indirectly owned by the individual
27392739 taxpayer for a holding period of at least five
27402740 (5) years prior to the date of the transaction
27412741 from which such net capital gains arise,
27422742 (2) the sale of stock or the sale of a direct or
27432743 indirect ownership interest in an O klahoma
27442744 company, limited liability company, or
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27712771 partnership where such stock or ownership
27722772 interest has been directly or indirectly owned by
27732773 the individual taxpayer for a holding p eriod of
27742774 at least two (2) years prior to the date of the
27752775 transaction from which the net capital gains
27762776 arise, or
27772777 (3) the sale of real property, tangible personal
27782778 property or intangible personal property located
27792779 within Oklahoma as part of the sale of all or
27802780 substantially all of the assets of an Oklahoma
27812781 company, limited liability comp any, or
27822782 partnership or an Oklahoma proprietorship
27832783 business enterprise where such property has been
27842784 directly or indirectly owned by such entity or
27852785 business enterprise or owned by the owners of
27862786 such entity or business enterprise for a period
27872787 of at least two (2) years prior to the date of
27882788 the transaction from which the net capital gains
27892789 arise,
27902790 b. "holding period" means an uninterrupted period of
27912791 time. The holding period shall includ e any additional
27922792 period when the property was held by another
27932793 individual or entity, if such additional period is
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28202820 included in the taxpayer 's holding period for the
28212821 asset pursuant to the Internal Revenue Code,
28222822 c. "Oklahoma company," "limited liability compan y," or
28232823 "partnership" means an entity whose primary
28242824 headquarters have been located in Oklahoma for at
28252825 least three (3) uninterrupted years prior to the date
28262826 of the transaction from which the net capital gains
28272827 arise,
28282828 d. "direct" means the individual taxpayer directly owns
28292829 the asset,
28302830 e. "indirect" means the individual taxpayer owns an
28312831 interest in a pass-through entity (or chain of pass -
28322832 through entities) that sells the asset that gives rise
28332833 to the qualifying gains receiving capital treatment.
28342834 (1) With respect to sales of real property or
28352835 tangible personal property located within
28362836 Oklahoma, the deduction described in this
28372837 subsection shall not apply unless the pass -
28382838 through entity that makes the sale has held the
28392839 property for not less than five (5) uninterrupted
28402840 years prior to the date of the transaction that
28412841 created the capital gain, and each pass-through
28422842 entity included in the chain of ownership has
28432843 been a member, partner, or shareholder of the
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28702870 pass-through entity in the tier immediately below
28712871 it for an uninterrupte d period of not less than
28722872 five (5) years.
28732873 (2) With respect to sales of stock or ownership
28742874 interest in or sales of all or substantially all
28752875 of the assets of an Oklahoma company, limited
28762876 liability company, partnership or Oklahoma
28772877 proprietorship business ente rprise, the deduction
28782878 described in this subsection shall not apply
28792879 unless the pass-through entity that makes the
28802880 sale has held the stock or ownership interest for
28812881 not less than two (2) uninterrupted years prior
28822882 to the date of the transaction that created t he
28832883 capital gain, and each pass -through entity
28842884 included in the chain of ownership has been a
28852885 member, partner or shareholder of the pass -
28862886 through entity in the tier immediately below it
28872887 for an uninterrupted period of not less than two
28882888 (2) years. For purposes of this division,
28892889 uninterrupted ownership prior to July 1, 2007,
28902890 shall be included in the determination of the
28912891 required holding period prescribed by this
28922892 division, and
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29192919 f. "Oklahoma proprietorship business enterprise " means a
29202920 business enterprise whose inco me and expenses have
29212921 been reported on Schedule C or F of an individual
29222922 taxpayer's federal income tax return, or any similar
29232923 successor schedule published by the Internal Revenue
29242924 Service and whose primary headquarters have been
29252925 located in Oklahoma for at lea st three (3)
29262926 uninterrupted years prior to the date of the
29272927 transaction from whi ch the net capital gains arise.
29282928 G. 1. For purposes of computing its Oklahoma taxable income
29292929 under this section, the dividends -paid deduction otherwise allowed
29302930 by federal law in computing net income of a real estate investment
29312931 trust that is subject to federal income tax shall be added back in
29322932 computing the tax imposed by this state under this title if the real
29332933 estate investment trust is a captive real estate investment trust.
29342934 2. For purposes of computing its Oklahoma taxable income under
29352935 this section, a taxpayer shall add back otherwise deductible rents
29362936 and interest expenses paid to a captive real estate investment trust
29372937 that is not subject to the provisions of paragraph 1 of thi s
29382938 subsection. As used in this subsection:
29392939 a. the term "real estate investment trust " or "REIT"
29402940 means the meaning ascribed to such term in Section 856
29412941 of the Internal Revenue Code,
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29682968 b. the term "captive real estate investment trust " means
29692969 a real estate investment trust, the shares or
29702970 beneficial interests of which are not regularly tr aded
29712971 on an established securities market and more than
29722972 fifty percent (50%) of the voting power or value of
29732973 the beneficial interests or shares of which are owned
29742974 or controlled, directly or indirectly, or
29752975 constructively, by a single entity that is:
29762976 (1) treated as an association taxable as a
29772977 corporation under the Internal Revenue Code, and
29782978 (2) not exempt from federal income tax pursuant to
29792979 the provisions of Section 501(a) of the Inte rnal
29802980 Revenue Code.
29812981 The term shall not include a real estate investment
29822982 trust that is intended to be regularly traded on an
29832983 established securities market, and that satisfies the
29842984 requirements of Section 856(a)(5) and (6) of the U.S.
29852985 Internal Revenue Code by reason of Section 856(h)(2)
29862986 of the Internal Revenue Code,
29872987 c. the term "association taxable as a corporation " shall
29882988 not include the following entities:
29892989 (1) any real estate investment trust as defined in
29902990 paragraph a of this subsection other than a
29912991 "captive real estate investment trust ",
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30183018 (2) any qualified real estate investment trust
30193019 subsidiary under Section 856(i) of the Internal
30203020 Revenue Code, other than a qualified REIT
30213021 subsidiary of a "captive real estate investment
30223022 trust",
30233023 (3) any Listed Australian Propert y Trust (meaning an
30243024 Australian unit trust registered as a "Managed
30253025 Investment Scheme" under the Australian
30263026 Corporations Act in which the principal class of
30273027 units is listed on a recognized stock exchange in
30283028 Australia and is regularly traded on an
30293029 established securities market), or an entity
30303030 organized as a trust, provided that a Liste d
30313031 Australian Property Trust owns or controls,
30323032 directly or indirectly, seventy -five percent
30333033 (75%) or more of the voting power or value of the
30343034 beneficial interests or shares of suc h trust, or
30353035 (4) any Qualified Foreign Entity, meaning a
30363036 corporation, trust, association or partnership
30373037 organized outside the laws of the United States
30383038 and which satisfies the following criteria:
30393039 (a) at least seventy-five percent (75%) of the
30403040 entity's total asset value at the close of
30413041 its taxable year is represented by real
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30683068 estate assets, as defined in Section
30693069 856(c)(5)(B) of the Internal Revenue Code,
30703070 thereby including shares or certificates of
30713071 beneficial interest in any real estate
30723072 investment trust, cash a nd cash equivalents,
30733073 and U.S. Government securities,
30743074 (b) the entity receives a dividend -paid
30753075 deduction comparable to Section 561 of the
30763076 Internal Revenue Code, or is exempt from
30773077 entity level tax,
30783078 (c) the entity is required to distribute at
30793079 least eighty-five percent (85%) of its
30803080 taxable income, as computed in the
30813081 jurisdiction in which it is organized, to
30823082 the holders of its shares or certificates of
30833083 beneficial interest on an annual basis,
30843084 (d) not more than ten percent (10%) of the
30853085 voting power or value in such entity is held
30863086 directly or indirectly or constructively by
30873087 a single entity or individual, or the shares
30883088 or beneficial interests of such entity are
30893089 regularly traded on an established
30903090 securities market, and
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31173117 (e) the entity is organized in a country which
31183118 has a tax treaty with the United States.
31193119 3. For purposes of this subsection, the constructive ownership
31203120 rules of Section 318(a) of the Internal Revenue Code, as modified by
31213121 Section 856(d)(5) of the Internal Revenue Code, shall apply in
31223122 determining the owners hip of stock, assets, or net profits of any
31233123 person.
31243124 4. A real estate investment trust that does not become
31253125 regularly traded on an established securities market within one (1)
31263126 year of the date on which it first becomes a real estate investment
31273127 trust shall be deemed not to have been regularly traded on an
31283128 established securities marke t, retroactive to the date it first
31293129 became a real estate investment trust, and shall file an amended
31303130 return reflecting such retroactive designation for any tax year or
31313131 part year occurring during its initial year of status as a real
31323132 estate investment trust. For purposes of this subsection, a real
31333133 estate investment trust becomes a real estate investment trust on
31343134 the first day it has both met the requirements of Section 856 of the
31353135 Internal Revenue Code and has elected to be treated as a real estate
31363136 investment trust pursuant to Section 856(c)(1) of the Internal
31373137 Revenue Code.
31383138 SECTION 3. This act shall become effective November 1, 2025.
31393139
31403140 60-1-11253 MAH 01/04/25