OK
Oklahoma House Bill HB1599

Oklahoma 2025 Regular Session

Oklahoma House Bill HB1599 Compare Versions

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2727 STATE OF OKLAHOMA
2828
2929 1st Session of the 60th Legislature (2025)
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3131 HOUSE BILL 1599 By: George
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3737 AS INTRODUCED
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3939 An Act relating to revenue and taxation; amending 68
4040 O.S. 2021, Section 2358, as last amended by Section
4141 155, Chapter 452, O.S.L. 2024 (6 8 O.S. Supp. 2024,
4242 Section 2358), which relates to adjustments to arrive
4343 at Oklahoma taxable income and Oklahoma adjusted
4444 gross income; removing monetary cap placed on certain
4545 pension benefits exempted from taxable income; and
4646 providing an effective date .
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5555 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
5656 SECTION 1. AMENDATORY 68 O.S. 2021, Section 2358, as
5757 last amended by Section 155, Chapter 452, O.S.L. 2024 (68 O.S. Supp.
5858 2024, Section 2358), is amended to read as follows:
5959 Section 2358. For all tax years beginning after December 31,
6060 1981, taxable income and adjusted gross income shall be adjusted to
6161 arrive at Oklahoma taxable income and Oklahoma adjusted gross income
6262 as required by this section.
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8888 A. The taxable income of any taxpayer shall be adjusted to
8989 arrive at Oklahoma taxable income for corporations and Oklahoma
9090 adjusted gross income for individuals, as follows:
9191 1. There shall be added interest income on obligations of any
9292 state or political subdivision th ereto which is not otherwise
9393 exempted pursuant to other laws of this state, to the extent that
9494 such interest is not included in taxable income and adjusted gross
9595 income.
9696 2. There shall be deducted amounts included in such income that
9797 the state is prohibit ed from taxing because of the provisions of the
9898 Federal Constitution, the Stat e Constitution, federal laws or laws
9999 of Oklahoma.
100100 3. The amount of any federal net operating loss deduction shall
101101 be adjusted as follows:
102102 a. For carryovers and carrybacks to tax able years
103103 beginning before January 1, 1981, the amount of any
104104 net operating loss deduction allowed to a taxpayer for
105105 federal income tax purposes shall be reduced to an
106106 amount which is the same portion thereof as the loss
107107 from sources within this state, as determined pursuant
108108 to this section and Section 2362 of this title, for
109109 the taxable year in which such loss is sustained is of
110110 the total loss for such year;
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136136 b. For carryovers and carrybacks to taxable years
137137 beginning after December 31, 1980, the amount of any
138138 net operating loss deduction allowed for the taxable
139139 year shall be an amount equal to the aggregate of the
140140 Oklahoma net operating loss carryovers and carrybacks
141141 to such year. Oklahoma net operating losses shall be
142142 separately determined by reference t o Section 172 of
143143 the Internal Revenue Code, 26 U.S.C., Section 172, as
144144 modified by the Oklahoma Income Tax Act, Section 2351
145145 et seq. of this title, and shall be allowed without
146146 regard to the existence of a federal net operating
147147 loss. For tax years beginni ng after December 31,
148148 2000, and ending before January 1, 2008, the years to
149149 which such losses may be carried shall be determined
150150 solely by reference to Section 172 of the Internal
151151 Revenue Code, 26 U.S.C., Section 172, with the
152152 exception that the terms "net operating loss" and
153153 "taxable income" shall be replaced with "Oklahoma net
154154 operating loss" and "Oklahoma taxable income ". For
155155 tax years beginning after December 31, 2007, and
156156 ending before January 1, 2009, years to which such
157157 losses may be carried back sh all be limited to two (2)
158158 years. For tax years beginning after December 31,
159159 2008, the years to which such losses may be carried
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185185 back shall be determined solely by reference to
186186 Section 172 of the Internal Revenue Code, 26 U.S.C.,
187187 Section 172, with the exce ption that the terms "net
188188 operating loss" and "taxable income" shall be replaced
189189 with "Oklahoma net operating loss " and "Oklahoma
190190 taxable income".
191191 4. Items of the following nature shall be allocated as
192192 indicated. Allowable deductions attributable to item s separately
193193 allocable in subparagraphs a, b and c of this paragraph, whether or
194194 not such items of income were actually received, shall be allocated
195195 on the same basis as those items:
196196 a. Income from real and tangible personal property, such
197197 as rents, oil and mining production or royalties, and
198198 gains or losses from sales of such prope rty, shall be
199199 allocated in accordance with the situs of such
200200 property;
201201 b. Income from intangible personal property, such as
202202 interest, dividends, patent or copyright royalties,
203203 and gains or losses from sales of such property, shall
204204 be allocated in accordance with the domiciliary situs
205205 of the taxpayer, except that:
206206 (1) where such property has acquired a nonunitary
207207 business or commercial situs apart from the
208208 domicile of the taxpayer such income shall be
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234234 allocated in accordance with such business or
235235 commercial situs; interest income from
236236 investments held to generate working capital for
237237 a unitary business enterprise shall be included
238238 in apportionable income; a resident trust or
239239 resident estate shall be treated as having a
240240 separate commercial or business situs insofar as
241241 undistributed income is concerned, but shall not
242242 be treated as having a separate commercial or
243243 business situs insofar as distributed income is
244244 concerned,
245245 (2) for taxable years beginning after December 31,
246246 2003, capital or ordinary gains or losses f rom
247247 the sale of an ownership interest in a publicly
248248 traded partnership, as defined by Section 7704(b)
249249 of the Internal Revenue Code, shall be allocated
250250 to this state in the ratio of the original cost
251251 of such partnership's tangible property in this
252252 state to the original cost of such partnership 's
253253 tangible property everywhere, as determined at
254254 the time of the sale; if more than fifty percent
255255 (50%) of the value of the partnership 's assets
256256 consists of intangible assets, capital or
257257 ordinary gains or losses from t he sale of an
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283283 ownership interest in the partnership shall be
284284 allocated to this state in accordance with the
285285 sales factor of the partnership for its first
286286 full tax period immediat ely preceding its tax
287287 period during which the ownership interest in the
288288 partnership was sold; the provisions of this
289289 division shall only apply if the capital or
290290 ordinary gains or losses from the sale of an
291291 ownership interest in a partnership do not
292292 constitute qualifying gain receiving capital
293293 treatment as defined in subparagraph a o f
294294 paragraph 2 of subsection F of this section,
295295 (3) income from such property which is required to be
296296 allocated pursuant to the provisions of paragraph
297297 5 of this subsection shall be allocated as herein
298298 provided;
299299 c. Net income or loss from a business activity which is
300300 not a part of business carried on within or without
301301 the state of a unitary character shall be separately
302302 allocated to the state in which such activity is
303303 conducted;
304304 d. In the case of a manufacturing or processing
305305 enterprise the business of which in Oklahoma consists
306306 solely of marketing its products by:
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332332 (1) sales having a situs without this state, shipped
333333 directly to a point from without the state to a
334334 purchaser within the state, commonly known as
335335 interstate sales,
336336 (2) sales of the product stored in public warehouses
337337 within the state pursuant to "in transit"
338338 tariffs, as prescribed and allowed by the
339339 Interstate Commerce Commission, to a purchaser
340340 within the state,
341341 (3) sales of the product stored in public warehouses
342342 within the state where the shipme nt to such
343343 warehouses is not covered by "in transit"
344344 tariffs, as prescribed and allowed by the
345345 Interstate Commerce Commission, to a purchaser
346346 within or without the state,
347347 the Oklahoma net income shall, at the option of the
348348 taxpayer, be that portion of the total net income of
349349 the taxpayer for federal income tax purposes derived
350350 from the manufacture and/or processing and sales
351351 everywhere as determined by the ratio of the sales
352352 defined in this section made to the purchaser within
353353 the state to the total sales e verywhere. The term
354354 "public warehouse" as used in this subparagraph means
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380380 a licensed public warehouse, the principal business of
381381 which is warehousing merchandise for the public;
382382 e. In the case of insurance companies, Oklahoma taxable
383383 income shall be taxable income of the taxpayer for
384384 federal tax purposes, as adjusted for the adjustments
385385 provided pursuant to the provisions of paragraphs 1
386386 and 2 of this subsection, apportioned as f ollows:
387387 (1) except as otherwise provided by division (2) of
388388 this subparagraph, taxable income of an insurance
389389 company for a taxable year shall be apportioned
390390 to this state by multiplying such income by a
391391 fraction, the numerator of which is the direct
392392 premiums written for insurance on property or
393393 risks in this state, and the denominator of which
394394 is the direct premiums written for insurance on
395395 property or risks everywhere. For purposes of
396396 this subsection, the term "direct premiums
397397 written" means the total amount of direct
398398 premiums written, assessments and annuity
399399 considerations as rep orted for the taxable year
400400 on the annual statement filed by the company with
401401 the Insurance Commissioner in the form approved
402402 by the National Association of Insurance
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428428 Commissioners, or such other form as may be
429429 prescribed in lieu thereof,
430430 (2) if the principal source of premiums written by an
431431 insurance company consists of premiums for
432432 reinsurance accepted by it, the taxable income of
433433 such company shall be apportioned to this state
434434 by multiplying such income by a fraction, the
435435 numerator of which is the sum of (a) direct
436436 premiums written for insurance on property or
437437 risks in this state, plus (b) premiums written
438438 for reinsurance accepted in respect of property
439439 or risks in this state, an d the denominator of
440440 which is the sum of (c) direct premiums written
441441 for insurance on property or risks everywhere,
442442 plus (d) premiums written for reinsurance
443443 accepted in respect of property or risks
444444 everywhere. For purposes of this paragraph,
445445 premiums written for reinsurance accepted in
446446 respect of property or risks in this state,
447447 whether or not otherwise determinable, may at the
448448 election of the company be determined on the
449449 basis of the proportion which premiums written
450450 for insurance accepted from companies
451451 commercially domiciled in Oklahoma bears to
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477477 premiums written for reinsurance accepted from
478478 all sources, or alternatively in the proportion
479479 which the sum of the direct premiums written for
480480 insurance on property or risks in this state by
481481 each ceding company from which reinsurance is
482482 accepted bears to the sum of the total direct
483483 premiums written by each such ceding company for
484484 the taxable year.
485485 5. The net income or loss remaining after the separate
486486 allocation in paragraph 4 of this subsection, being that whi ch is
487487 derived from a unitary business enterprise, shall be apportioned to
488488 this state on the basis of the arithmetical average of three factors
489489 consisting of property, payroll and sales or gross revenue
490490 enumerated as subparagraphs a, b and c of this paragra ph. Net
491491 income or loss as used in this paragraph includes that derived from
492492 patent or copyright royalties, purchase discounts, and interest on
493493 accounts receivable relating to or arising from a business activity,
494494 the income from which is apportioned pursua nt to this subsection,
495495 including the sale or other disposition of such property and any
496496 other property used in the unitary enterprise. Deductions used in
497497 computing such net income or loss shall not include taxes based on
498498 or measured by income. Provided, for corporations whose property
499499 for purposes of the tax imposed by Section 235 5 of this title has an
500500 initial investment cost equaling or exceeding Two Hundred Million
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526526 Dollars ($200,000,000.00) and such investment is made on or after
527527 July 1, 1997, or for co rporations which expand their property or
528528 facilities in this state and such expansion has an investment cost
529529 equaling or exceeding Two Hundred Million Dollars ($200,000,000.00)
530530 over a period not to exceed three (3) years, and such expansion is
531531 commenced on or after January 1, 2000, the three factors shall be
532532 apportioned with propert y and payroll, each comprising twenty -five
533533 percent (25%) of the apportionment factor and sales comprising fifty
534534 percent (50%) of the apportionment factor. The apportionment
535535 factors shall be computed as follows:
536536 a. The property factor is a fraction, the numerator of
537537 which is the average value of the taxpayer 's real and
538538 tangible personal property owned or rented and used in
539539 this state during the tax period and the denominator
540540 of which is the average value of all the taxpayer 's
541541 real and tangible personal prop erty everywhere owned
542542 or rented and used during the tax period.
543543 (1) Property, the income from which is separately
544544 allocated in paragraph 4 of this subsection,
545545 shall not be included in determining this
546546 fraction. The numerator of the fraction shall
547547 include a portion of the investment in
548548 transportation and other equipment having no
549549 fixed situs, such as rolling stock, buses, trucks
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575575 and trailers, including machinery and equipment
576576 carried thereon, airplanes, salespersons '
577577 automobiles and other similar equipment, in the
578578 proportion that miles traveled in Oklahoma by
579579 such equipment bears to total miles traveled,
580580 (2) Property owned by the taxpayer is valued at its
581581 original cost. Property r ented by the taxpayer
582582 is valued at eight times the net annual rental
583583 rate. Net annual rental rate is the annual
584584 rental rate paid by the taxpayer, less any annual
585585 rental rate received by the taxpayer from
586586 subrentals,
587587 (3) The average value of property shall be determined
588588 by averaging the values at the beginning and
589589 ending of the tax period but the Oklahoma Tax
590590 Commission may require the averaging of monthly
591591 values during the tax period if reasonably
592592 required to reflect properly the average value of
593593 the taxpayer's property;
594594 b. The payroll factor is a fraction, the numerator of
595595 which is the total compensation for services rendered
596596 in the state during the tax period, and the
597597 denominator of which is the total compensation for
598598 services rendered everywhere during t he tax period.
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624624 "Compensation", as used in this subsection means those
625625 paid-for services to the extent related to the unitary
626626 business but does not include officers ' salaries,
627627 wages and other compensation.
628628 (1) In the case of a transportation enterprise, th e
629629 numerator of the fraction shall include a portion
630630 of such expenditure in connection with employees
631631 operating equipment over a fixed route, such as
632632 railroad employees, airline pilots, or bus
633633 drivers, in this state only a part of the time,
634634 in the proportion that mileage traveled in
635635 Oklahoma bears to total mileage traveled by such
636636 employees,
637637 (2) In any case the numerator of the fraction shall
638638 include a portion of such expenditures in
639639 connection with itinerant employees, such as
640640 traveling salespersons, in thi s state only a part
641641 of the time, in the proportion that time spent in
642642 Oklahoma bears to total time spent in furtherance
643643 of the enterprise by such employees;
644644 c. The sales factor is a fraction, the numerator of which
645645 is the total sales or gross revenue of th e taxpayer in
646646 this state during the tax period, and the denominator
647647 of which is the total sales or gross revenue of the
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673673 taxpayer everywhere during the tax period. "Sales",
674674 as used in this subsection does not include sales or
675675 gross revenue which are separa tely allocated in
676676 paragraph 4 of this subsection.
677677 (1) Sales of tangible personal property have a situs
678678 in this state if the property is delivered or
679679 shipped to a purchaser other than the United
680680 States government, within this state regardless
681681 of the FOB point or other conditions of the sale;
682682 or the property is shipped from an office, store,
683683 warehouse, factory or other place of storage in
684684 this state and (a) the purchaser is the United
685685 States government or (b) the taxpayer is not
686686 doing business in the state of the destination of
687687 the shipment.
688688 (2) In the case of a railroad or interurban railway
689689 enterprise, the numerator of the fraction shall
690690 not be less than the allocation of revenues to
691691 this state as shown in its annual report to the
692692 Corporation Commission.
693693 (3) In the case of an airline, truck or bus
694694 enterprise or freight car, tank car, refrigerator
695695 car or other railroad equipment enterprise, the
696696 numerator of the fraction shall include a portion
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722722 of revenue from interstate transportation in the
723723 proportion that interstate mileage traveled in
724724 Oklahoma bears to total interstate mileage
725725 traveled.
726726 (4) In the case of an oil, gasoline or gas pipeline
727727 enterprise, the numerator of the fraction shall
728728 be either the total of traffic units of the
729729 enterprise within Oklahoma or the revenue
730730 allocated to Oklahoma based upon miles moved, at
731731 the option of the taxpayer, and the denominator
732732 of which shall be the total of traffic units of
733733 the enterprise or the revenue of the enterprise
734734 everywhere as appropriate to the numerator. A
735735 "traffic unit" is hereby defined as the
736736 transportation for a distance of one (1) mile of
737737 one (1) barrel of oil, one (1) gallon of gasoline
738738 or one thousand (1,000) cubic feet of natural or
739739 casinghead gas, as the case may be.
740740 (5) In the case of a telephone or te legraph or other
741741 communication enterprise, the numerator of the
742742 fraction shall include that portion of the
743743 interstate revenue as is allocated pursuant to
744744 the accounting procedures prescribed by the
745745 Federal Communications Commission; provided that
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771771 in respect to each corporation or business entity
772772 required by the Federal Communications Commission
773773 to keep its books and records in accordance with
774774 a uniform system of accounts prescribed by such
775775 Commission, the intrastate net income shall be
776776 determined separately in the manner provided by
777777 such uniform system of accounts and only the
778778 interstate income shall be subject to allocation
779779 pursuant to the provisions of this subsection.
780780 Provided further, that the gross revenue factors
781781 shall be those as are determined pursu ant to the
782782 accounting procedures prescribed by the Federal
783783 Communications Commission.
784784 In any case where the apportionment of the three factors
785785 prescribed in this paragraph attributes to Oklahoma a portion of net
786786 income of the enterprise out of all appropri ate proportion to the
787787 property owned and/or business transacted within this st ate, because
788788 of the fact that one or more of the factors so prescribed are not
789789 employed to any appreciable extent in furtherance of the enterprise;
790790 or because one or more factors not so prescribed are employed to a
791791 considerable extent in furtherance of the enterprise; or because of
792792 other reasons, the Tax Commission is empowered to permit, after a
793793 showing by taxpayer that an excessive portion of net income has been
794794 attributed to Oklahoma, or require, when in its judgment an
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820820 insufficient portion of net income has been attributed to Oklahoma,
821821 the elimination, substitution, or use of additional factors, or
822822 reduction or increase in the weight of such prescribed factors.
823823 Provided, however, that any such variance from such prescribed
824824 factors which has the effect of increasing the portion of net income
825825 attributable to Oklahoma must not be inherently arbitrary, and
826826 application of the recomputed final apportionment to the net income
827827 of the enterprise must attribute to Oklahoma only a reasonable
828828 portion thereof.
829829 6. For calendar years 1997 and 1998, the owner of a new or
830830 expanded agricultural commodity processing facility in this state
831831 may exclude from Oklahoma taxable income, or in the case o f an
832832 individual, the Oklahoma adjusted gross income, fifteen percent
833833 (15%) of the investment by the owner in the new or expanded
834834 agricultural commodity processing facility. For calendar year 1999,
835835 and all subsequent years, the percentage, not to exceed fi fteen
836836 percent (15%), available to the owner of a new or expanded
837837 agricultural commodity processing facility in this state claiming
838838 the exemption shall be adjusted annually so that the total estimated
839839 reduction in tax liability does not exceed One Million D ollars
840840 ($1,000,000.00) annually. The Tax Commission shall promulgate rules
841841 for determining the percentage of the investment which each eligible
842842 taxpayer may exclude. The exclusion provided by this paragraph
843843 shall be taken in the taxable year when the inv estment is made. In
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869869 the event the total reduction in tax liability authorized by this
870870 paragraph exceeds One Million Dollars ($1,000,000.00) in any
871871 calendar year, the Tax Commission shall permit any excess over One
872872 Million Dollars ($1,000,000.00) and shall factor such excess into
873873 the percentage for subsequent years. Any amount of the exemption
874874 permitted to be excluded pursuant to the provisions of this
875875 paragraph but not used in any year may be carried forward as an
876876 exemption from income pursuant to the pro visions of this paragraph
877877 for a period not exceeding six (6) years following t he year in which
878878 the investment was originally made.
879879 For purposes of this paragraph:
880880 a. "Agricultural commodity processing facility " means
881881 building, structures, fixtures and impr ovements used
882882 or operated primarily for the processing or production
883883 of marketable products from agricultural commodities.
884884 The term shall also mean a dairy operation that
885885 requires a depreciable investment of at least Two
886886 Hundred Fifty Thousand Dollars ($2 50,000.00) and which
887887 produces milk from dairy cows. The term does not
888888 include a facility that provides only, and nothing
889889 more than, storage, cleaning, drying or transportation
890890 of agricultural commodities, and
891891 b. "Facility" means each part of the facility which is
892892 used in a process primarily for:
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918918 (1) the processing of agricultural commodities,
919919 including receiving or storing agricultural
920920 commodities, or the production of milk at a dairy
921921 operation,
922922 (2) transporting the agricultural commodities or
923923 product before, during or after the processing,
924924 or
925925 (3) packaging or otherwise preparing th e product for
926926 sale or shipment.
927927 7. Despite any provision to the contrary in paragraph 3 of this
928928 subsection, for taxable years beginning after December 31, 1999, in
929929 the case of a taxpayer which has a farming loss, such farming loss
930930 shall be considered a net operating loss carryback in accordance
931931 with and to the extent of the Internal Revenue Code, 26 U.S.C.,
932932 Section 172(b)(G). However, the amount of the net operating loss
933933 carryback shall not exceed the lesser of:
934934 a. Sixty Thousand Dollars ($60,000.00), or
935935 b. the loss properly shown on Schedule F of the Internal
936936 Revenue Service Form 1040 reduced by one -half (1/2) of
937937 the income from all other sources other than reflected
938938 on Schedule F.
939939 8. In taxable years beginning after December 31, 1995, all
940940 qualified wages equal to the federal income tax credit set forth in
941941 26 U.S.C.A., Section 45A, shall be deducted from taxable income.
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967967 The deduction allowed pursuant to this paragraph shall onl y be
968968 permitted for the tax years in which the federal tax credit pursuant
969969 to 26 U.S.C.A., Section 45A, is allowed. For purposes of this
970970 paragraph, "qualified wages" means those wages used to calculate the
971971 federal credit pursuant to 26 U.S.C.A., Section 45 A.
972972 9. In taxable years beginning after December 31, 2005, an
973973 employer that is eligible for and utilizes the Safety Pays OSHA
974974 Consultation Service provided by the Oklahoma Department of Labor
975975 shall receive an exemption from taxable income in the amount of One
976976 Thousand Dollars ($1,000.00) for the tax year that the service is
977977 utilized.
978978 10. For taxable years beginning on or after January 1, 2010,
979979 there shall be added to Oklahoma taxable income an amount equal to
980980 the amount of deferred income not included in s uch taxable income
981981 pursuant to Section 108(i)(1) of the Internal Revenue Code of 1986
982982 as amended by Section 1231 of the American Recovery and Reinvestment
983983 Act of 2009 (P.L. No. 111 -5). There shall be subtracted from
984984 Oklahoma taxable income an amount equal to the amount of deferred
985985 income included in such taxable income pursuant to Section 108(i)(1)
986986 of the Internal Revenue Code by Section 1231 of the American
987987 Recovery and Reinvestment Act of 2009 (P.L. No. 111 -5).
988988 11. For taxable years beginning on or afte r January 1, 2019,
989989 there shall be subtracted from Oklahoma taxable income or adjusted
990990 gross income any item of income or gain, and there shall be added to
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10161016 Oklahoma taxable income or adjusted gross income any item of loss or
10171017 deduction that in the absence of an election pursuant to the
10181018 provisions of the Pass -Through Entity Tax Equity Act of 2019 would
10191019 be allocated to a member or to an indirect member of an electing
10201020 pass-through entity pursuant to Section 2351 et seq. of this title,
10211021 if (i) the electing pass -through entity has accounted for such item
10221022 in computing its Oklahoma net entity income or loss pursuant to the
10231023 provisions of the Pass -Through Entity Tax Equity Act of 2019, and
10241024 (ii) the total amount of tax attributable to any resulting Oklahoma
10251025 net entity income has been paid. The Oklahoma Tax Commission shall
10261026 promulgate rules for th e reporting of such exclusion to direct and
10271027 indirect members of the electing pass -through entity. As used in
10281028 this paragraph, "electing pass-through entity", "indirect member",
10291029 and "member" shall be defined in the same manner as prescribed by
10301030 Section 2355.1P-2 of this title. Notwithstanding the application of
10311031 this paragraph, the adjusted tax basis of any ownership interest in
10321032 a pass-through entity for purposes of Section 2351 et seq. of this
10331033 title shall be equal to its adjusted tax basis for federal income
10341034 tax purposes.
10351035 B. 1. The taxable income of any corporation shall be further
10361036 adjusted to arrive at Oklahoma taxable income, except those
10371037 corporations electing treatment as provi ded in subchapter S of the
10381038 Internal Revenue Code, 26 U.S.C., Section 1361 et seq., and Section
10391039 2365 of this title, deductions pursuant to the provisions of the
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10651065 Accelerated Cost Recovery System as defined and allowed in the
10661066 Economic Recovery Tax Act of 1981 , Public Law 97-34, 26 U.S.C.,
10671067 Section 168, for depreciation of assets placed into service after
10681068 December 31, 1981, shall not be allowed in calculating Oklahoma
10691069 taxable income. Such corporations shall be allowed a deduction for
10701070 depreciation of assets plac ed into service after December 31, 1981,
10711071 in accordance with provisions of the Internal Revenue Code, 26
10721072 U.S.C., Section 1 et seq., in effect immediately prior to the
10731073 enactment of the Accelerated Cost Recovery System. The Oklahoma tax
10741074 basis for all such as sets placed into service after December 31,
10751075 1981, calculated in this section s hall be retained and utilized for
10761076 all Oklahoma income tax purposes through the final disposition of
10771077 such assets.
10781078 Notwithstanding any other provisions of the Oklahoma Income Tax
10791079 Act, Section 2351 et seq. of this title, or of the Internal Revenue
10801080 Code to the contrary, this subsection shall control calculation of
10811081 depreciation of assets placed into service after December 31, 1981,
10821082 and before January 1, 1983.
10831083 For assets placed in servi ce and held by a corporation in which
10841084 accelerated cost recovery system was pre viously disallowed, an
10851085 adjustment to taxable income is required in the first taxable year
10861086 beginning after December 31, 1982, to reconcile the basis of such
10871087 assets to the basis al lowed in the Internal Revenue Code. The
10881088 purpose of this adjustment is to equalize the basis and allowance
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11141114 for depreciation accounts between that reported to the Internal
11151115 Revenue Service and that reported to Oklahoma.
11161116 2. For tax years beginning on or afte r January 1, 2009, and
11171117 ending on or before December 31, 2009, there shall be a dded to
11181118 Oklahoma taxable income any amount in excess of One Hundred Seventy -
11191119 five Thousand Dollars ($175,000.00) which has been deducted as a
11201120 small business expense under Internal Revenue Code, Section 179 as
11211121 provided in the American Recovery and Reinvestment Act of 2009.
11221122 C. 1. For taxable years beginning after December 31, 1987, the
11231123 taxable income of any corporation shall be further adjusted to
11241124 arrive at Oklahoma taxable income for transfers of technology to
11251125 qualified small businesses located in Oklahoma. Such transferor
11261126 corporation shall be allowed an exemption from taxable income of an
11271127 amount equal to the amount of royalty payment received as a result
11281128 of such transfer; provide d, however, such amount shall not exceed
11291129 ten percent (10%) of the amount of gross proceeds received by such
11301130 transferor corporation as a result of the technology transfer. Such
11311131 exemption shall be allowed for a period not to exceed ten (10) years
11321132 from the date of receipt of the first royalty payment accruing from
11331133 such transfer. No e xemption may be claimed for transfers of
11341134 technology to qualified small businesses made prior to January 1,
11351135 1988.
11361136 2. For purposes of this subsection:
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11621162 a. "Qualified small business " means an entity, whether
11631163 organized as a corporation, partnership, or
11641164 proprietorship, organized for profit with its
11651165 principal place of business located within this state
11661166 and which meets the following criteria:
11671167 (1) Capitalization of not more than Two Hundr ed Fifty
11681168 Thousand Dollars ($250,000.00),
11691169 (2) Having at least fifty percent (50 %) of its
11701170 employees and assets located in Oklahoma at the
11711171 time of the transfer, and
11721172 (3) Not a subsidiary or affiliate of the transferor
11731173 corporation;
11741174 b. "Technology" means a proprietary process, formula,
11751175 pattern, device or compilation of scientific or
11761176 technical information which is not in the public
11771177 domain;
11781178 c. "Transferor corporation " means a corporation which is
11791179 the exclusive and undisputed owner of the technology
11801180 at the time the transfer is made; and
11811181 d. "Gross proceeds" means the total amount of
11821182 consideration for the transfer of technology, whether
11831183 the consideration is in money or otherwise.
11841184 D. 1. For taxable years beginning after December 31, 2005, the
11851185 taxable income of any cor poration, estate or trust, shall be further
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12111211 adjusted for qualifying gains receiving capital treatment. Such
12121212 corporations, estates or trusts shall be allowed a deduction from
12131213 Oklahoma taxable income for the amount of qualifying gains receiving
12141214 capital treatment earned by the corporation, estate or trust during
12151215 the taxable year and i ncluded in the federal taxable income of such
12161216 corporation, estate or trust.
12171217 2. As used in this subsection:
12181218 a. "qualifying gains receiving capital treatment " means
12191219 the amount of net capital gains, as defined in Section
12201220 1222(11) of the Internal Revenue Code, included in the
12211221 federal income tax return of the corporation, estate
12221222 or trust that result from:
12231223 (1) the sale of real property or tangible personal
12241224 property located within Oklah oma that has been
12251225 directly or indirectly owned by the corporation,
12261226 estate or trust for a holding period of at least
12271227 five (5) years prior to the date of the
12281228 transaction from which such net capital gains
12291229 arise,
12301230 (2) the sale of stock or on the sale of an owne rship
12311231 interest in an Oklahoma company, limited
12321232 liability company, or partnership where such
12331233 stock or ownership interest has been directly or
12341234 indirectly owned by the corporation, estate or
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12601260 trust for a holding period of at least three (3)
12611261 years prior to the date of the transaction from
12621262 which the net capital gains arise, or
12631263 (3) the sale of real property, tangible personal
12641264 property or intangible personal property located
12651265 within Oklahoma as part of the sale of all or
12661266 substantially all of the assets of an Oklahom a
12671267 company, limited liability company, or
12681268 partnership where such property has been directly
12691269 or indirectly owned by such entity owned by the
12701270 owners of such entity, and used in or derived
12711271 from such entity for a period of at least three
12721272 (3) years prior to the date of the transaction
12731273 from which the net capital gains arise,
12741274 b. "holding period" means an uninterrupted period of
12751275 time. The holding period shall include any additional
12761276 period when the property was held by another
12771277 individual or entity, if such additiona l period is
12781278 included in the taxpayer 's holding period for the
12791279 asset pursuant to the Internal Revenue Code,
12801280 c. "Oklahoma company", "limited liability company ", or
12811281 "partnership" means an entity whose primary
12821282 headquarters have been located in Oklahoma for at
12831283 least three (3) uninterrupted years prior to the date
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13091309 of the transaction from which the net capital gains
13101310 arise,
13111311 d. "direct" means the taxpayer directly owns the asset,
13121312 and
13131313 e. "indirect" means the taxpayer owns an interest in a
13141314 pass-through entity (or chai n of pass-through
13151315 entities) that sells the asset that gives rise to the
13161316 qualifying gains receiving capital treatment.
13171317 (1) With respect to sales of real property or
13181318 tangible personal property located within
13191319 Oklahoma, the deduction described in this
13201320 subsection shall not apply unless the pass -
13211321 through entity that makes the sale has held the
13221322 property for not less than five (5) uninterrupted
13231323 years prior to the date of the transaction that
13241324 created the capital gain, and each pass -through
13251325 entity included in the chai n of ownership has
13261326 been a member, partner, or shareholder of the
13271327 pass-through entity in the tier immediately below
13281328 it for an uninterrupted period of not less than
13291329 five (5) years.
13301330 (2) With respect to sales of stock or ownership
13311331 interest in or sales of all o r substantially all
13321332 of the assets of an Oklahoma company, limited
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13581358 liability company, or partnership, the deduction
13591359 described in this subsection shall not apply
13601360 unless the pass-through entity that makes the
13611361 sale has held the stock or ownership interest or
13621362 the assets for not less than three (3)
13631363 uninterrupted years prior to the date of the
13641364 transaction that created the capital gain, and
13651365 each pass-through entity included in the chain of
13661366 ownership has been a member, partner or
13671367 shareholder of the pass -through entity in the
13681368 tier immediately below it for an uninterrupted
13691369 period of not less th an three (3) years.
13701370 E. The Oklahoma adjusted gross income of any individual
13711371 taxpayer shall be further adjusted as follows to arrive at Oklahoma
13721372 taxable income:
13731373 1. a. In the case of individuals, there shall be added or
13741374 deducted, as the case may be, the difference necessary
13751375 to allow personal exemptions of One Thousand Dollars
13761376 ($1,000.00) in lieu of the personal exemptions allowed
13771377 by the Internal Revenue Code.
13781378 b. There shall be allowed an additional exemption of One
13791379 Thousand Dollars ($1,000.00) for each taxpa yer or
13801380 spouse who is blind at the close of the tax year. For
13811381 purposes of this subparagraph, an individual is blind
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14071407 only if the central visual acuity of the individual
14081408 does not exceed 20/200 in the better eye with
14091409 correcting lenses, or if the visual acuity of the
14101410 individual is greater than 20/200, but is accompanied
14111411 by a limitation in the fields of vision such that the
14121412 widest diameter of the visual field subtends an angle
14131413 no greater than twenty (20) degrees.
14141414 c. There shall be allowed an additional exemption of One
14151415 Thousand Dollars ($1,000.00) for each taxpayer or
14161416 spouse who is sixty-five (65) years of age or older at
14171417 the close of the tax year based upon the filing status
14181418 and federal adjusted gross income of the taxpayer.
14191419 Taxpayers with the following filing status may claim
14201420 this exemption if the federal adjusted gross income
14211421 does not exceed:
14221422 (1) Twenty-five Thousand Dollars ($25,000.00) if
14231423 married and filing jointly,
14241424 (2) Twelve Thousand Five Hundred Dollars ($12,500.00)
14251425 if married and filing separately,
14261426 (3) Fifteen Thousand Dollars ($15,000.00) if single,
14271427 and
14281428 (4) Nineteen Thousand Dollars ($19,000.00) if a
14291429 qualifying head of household.
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14551455 Provided, for taxable years beginning after Dece mber
14561456 31, 1999, amounts included in the calculation of
14571457 federal adjusted gross income pursuant to the
14581458 conversion of a traditional individual retirement
14591459 account to a Roth individual retirement account shall
14601460 be excluded from federal adjusted gross income for
14611461 purposes of the income thresholds provided in this
14621462 subparagraph.
14631463 2. a. For taxable years beginning on or before December 31,
14641464 2005, in the case of individuals who use the standard
14651465 deduction in determining taxable income, there shall
14661466 be added or deducted, as the case may be, the
14671467 difference necessary to allow a standard deduction in
14681468 lieu of the standard deduction allowed by the Internal
14691469 Revenue Code, in an amount equal to the larger of
14701470 fifteen percent (15%) of the Oklahoma adjusted gross
14711471 income or One Thousand Dollars ($1,000.00), but not to
14721472 exceed Two Thousand Dollars ($2,000.00), excep t that
14731473 in the case of a married individual filing a separate
14741474 return such deduction shall be the larger of fifteen
14751475 percent (15%) of such Oklahoma adjusted gross income
14761476 or Five Hundred Dollars ($500.00), but not to exceed
14771477 the maximum amount of One Thousand Dollars
14781478 ($1,000.00).
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15041504 b. For taxable years beginning on or after January 1,
15051505 2006, and before January 1, 2007, in the case of
15061506 individuals who use the standard deduction in
15071507 determining taxable income, there shall be added or
15081508 deducted, as the case may be, the d ifference necessary
15091509 to allow a standard deduction in lieu of the standard
15101510 deduction allowed by the Internal Revenue Code, in an
15111511 amount equal to:
15121512 (1) Three Thousand Dollars ($3,00 0.00), if the filing
15131513 status is married filing joint, head of household
15141514 or qualifying widow, or
15151515 (2) Two Thousand Dollars ($2,000.00), if the filing
15161516 status is single or married filing separate.
15171517 c. For the taxable year beginning on January 1, 2007, and
15181518 ending December 31, 2007, in the case of individuals
15191519 who use the standard deduction in determining taxable
15201520 income, there shall be added or deducted, as the case
15211521 may be, the difference necessary to allow a standard
15221522 deduction in lieu of the standard deduction allo wed by
15231523 the Internal Revenue Code, in an amount equal to:
15241524 (1) Five Thousand Five Hundred Dollars ($5,500.00),
15251525 if the filing status is married filing joint or
15261526 qualifying widow, or
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15521552 (2) Four Thousand One Hundred Twenty -five Dollars
15531553 ($4,125.00) for a head of ho usehold, or
15541554 (3) Two Thousand Seven Hundred Fifty Dollars
15551555 ($2,750.00), if the f iling status is single or
15561556 married filing separate.
15571557 d. For the taxable year beginning on January 1, 2008, and
15581558 ending December 31, 2008, in the case of individuals
15591559 who use the standard deduction in determining taxable
15601560 income, there shall be added or deducted, as the case
15611561 may be, the difference necessary to allow a standard
15621562 deduction in lieu of the standard deduction allowed by
15631563 the Internal Revenue Code, in an amount equal to:
15641564 (1) Six Thousand Five Hundred Dollars ($6,500.00), if
15651565 the filing status is married f iling joint or
15661566 qualifying widow,
15671567 (2) Four Thousand Eight Hundred Seventy -five Dollars
15681568 ($4,875.00) for a head of household, or
15691569 (3) Three Thousand Two Hundred Fifty Dollars
15701570 ($3,250.00), if the filing status is single or
15711571 married filing separate.
15721572 e. For the taxable year beginning on January 1, 2009, and
15731573 ending December 31, 2009, in the case of individuals
15741574 who use the standard deduction in determining taxable
15751575 income, there shall be add ed or deducted, as the case
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16011601 may be, the difference necessary to allow a standa rd
16021602 deduction in lieu of the standard deduction allowed by
16031603 the Internal Revenue Code, in an amount equal to:
16041604 (1) Eight Thousand Five Hundred Dollars ($8,500.00),
16051605 if the filing status is married filing joint or
16061606 qualifying widow,
16071607 (2) Six Thousand Three Hundred Seventy -five Dollars
16081608 ($6,375.00) for a head of household, or
16091609 (3) Four Thousand Two Hundred Fifty Dollars
16101610 ($4,250.00), if the filing status is single or
16111611 married filing separate.
16121612 Oklahoma adjusted gross income shall be increased by
16131613 any amounts paid for mot or vehicle excise taxes which
16141614 were deducted as allowed by the Internal Revenue Code.
16151615 f. For taxable years beginning on or after January 1,
16161616 2010, and ending on December 31, 2016, in the case of
16171617 individuals who use the standard deduction in
16181618 determining taxable income, there shall be added or
16191619 deducted, as the case may be, the difference necessary
16201620 to allow a standard deduction equal to the standard
16211621 deduction allowed by the Internal Re venue Code, based
16221622 upon the amount and filing status prescribed by such
16231623 Code for purposes of filing federal individual income
16241624 tax returns.
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16501650 g. For taxable years beginning on or after January 1,
16511651 2017, in the case of individuals who use the standard
16521652 deduction in determining taxable income, there shall
16531653 be added or deducted, as the case may be, the
16541654 difference necessary to allow a standard deduction in
16551655 lieu of the standard deduction allowed by the Internal
16561656 Revenue Code, as follows:
16571657 (1) Six Thousand Three Hundred F ifty Dollars
16581658 ($6,350.00) for single or married filing
16591659 separately,
16601660 (2) Twelve Thousand Seven Hundred Dollars
16611661 ($12,700.00) for married filing jointly or
16621662 qualifying widower with dependent child, and
16631663 (3) Nine Thousand Three Hundred Fifty Dollars
16641664 ($9,350.00) for head of household.
16651665 3. a. In the case of resident and part -year resident
16661666 individuals having adjusted gross income from sources
16671667 both within and without the state, the itemized or
16681668 standard deductions and personal exemptions shall be
16691669 reduced to an amount whi ch is the same portion of the
16701670 total thereof as Oklahoma adjusted gross income is of
16711671 adjusted gross income. To the extent itemized
16721672 deductions include allowable moving expense, proration
16731673 of moving expense shall not be required or permitted
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16991699 but allowable moving expense shall be fully deductible
17001700 for those taxpayers moving within or into Oklahoma and
17011701 no part of moving expense shall be deductible for
17021702 those taxpayers moving without or out of Oklahoma.
17031703 All other itemized or standard deductions and personal
17041704 exemptions shall be subject to proration as provided
17051705 by law.
17061706 b. For taxable years be ginning on or after January 1,
17071707 2018, the net amount of itemized deductions allowable
17081708 on an Oklahoma income tax return, subject to the
17091709 provisions of paragraph 24 of this subsectio n, shall
17101710 not exceed Seventeen Thousand Dollars ($17,000.00).
17111711 For purposes of this subparagraph, charitable
17121712 contributions and medical expenses deductible for
17131713 federal income tax purposes shall be excluded from the
17141714 amount of Seventeen Thousand Dollars ($17,0 00.00) as
17151715 specified by this subparagraph.
17161716 4. A resident individual with a phy sical disability
17171717 constituting a substantial handicap to employment may deduct from
17181718 Oklahoma adjusted gross income such expenditures to modify a motor
17191719 vehicle, home or workplace a s are necessary to compensate for his or
17201720 her handicap. A veteran certified by the Department of Veterans
17211721 Affairs of the federal government as having a service -connected
17221722 disability shall be conclusively presumed to be an individual with a
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17481748 physical disability constituting a substantial handicap to
17491749 employment. The Tax Commission shal l promulgate rules containing a
17501750 list of combinations of common disabilities and modifications which
17511751 may be presumed to qualify for this deduction. The Tax Commission
17521752 shall prescribe necessary requirements for verification.
17531753 5. a. Before July 1, 2010, the first One Thousand Five
17541754 Hundred Dollars ($1,500.00) received by any person
17551755 from the United States as salary or compensation in
17561756 any form, other than retirement benefits, as a membe r
17571757 of any component of the Armed Forces of the United
17581758 States shall be deducted from taxable income.
17591759 b. On or after July 1, 2010, one hundred percent (100%)
17601760 of the income received by any person from the United
17611761 States as salary or compensation in any form, ot her
17621762 than retirement benefits, as a member of any component
17631763 of the Armed Forces of the United States shall be
17641764 deducted from taxable income.
17651765 c. Whenever the filing of a timely income tax return by a
17661766 member of the Armed Forces of the United States is
17671767 made impracticable or impossible of accomplishment by
17681768 reason of:
17691769 (1) absence from the United States, which term
17701770 includes only the states and the District of
17711771 Columbia,
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17971797 (2) absence from the State of Oklahoma while on
17981798 active duty, or
17991799 (3) confinement in a hospital wit hin the United
18001800 States for treatment of wounds, injuries or
18011801 disease,
18021802 the time for filing a return and paying an income tax
18031803 shall be and is hereby extended without incurring
18041804 liability for interest or penalties, to the fifteenth
18051805 day of the third month followi ng the month in which:
18061806 (a) Such individual shall return to the United
18071807 States if the extension is granted pursuant
18081808 to subparagraph a of this paragraph, return
18091809 to the State of Oklahoma if the extension is
18101810 granted pursuant to subparagraph b of this
18111811 paragraph or be discharged from such
18121812 hospital if the extension is granted
18131813 pursuant to subparagraph c of this
18141814 paragraph, or
18151815 (b) An executor, administrator, or conservator
18161816 of the estate of the taxpayer is appointed,
18171817 whichever event occurs the earliest.
18181818 Provided, that the Tax Commission may, in its discretion, grant
18191819 any member of the Armed Force s of the United States an extension of
18201820 time for filing of income tax returns and payment of income tax
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18461846 without incurring liabilities for interest or penalties. Such
18471847 extension may be granted only when in the judgment of the Tax
18481848 Commission a good cause exists therefor and may be for a period in
18491849 excess of six (6) months. A record of every such extension granted,
18501850 and the reason therefor, shall be kept.
18511851 6. Before July 1, 2010, the s alary or any other form of
18521852 compensation, received from the United States by a member of any
18531853 component of the Armed Forces of the United States, shall be
18541854 deducted from taxable income during the time in which the person is
18551855 detained by the enemy in a conflict , is a prisoner of war or is
18561856 missing in action and not deceased; provided, after July 1, 2010,
18571857 all such salary or compensation shall be subject to the deduction as
18581858 provided pursuant to paragraph 5 of this subsection.
18591859 7. a. An individual taxpayer, whether r esident or
18601860 nonresident, may deduct an amount equal to the federal
18611861 income taxes paid by the taxpayer during the taxable
18621862 year.
18631863 b. Federal taxes as described in subparagraph a of this
18641864 paragraph shall be deductible by any individual
18651865 taxpayer, whether resident or nonresident, only to the
18661866 extent they relate to income subject to taxation
18671867 pursuant to the provisions of the Oklahoma Income Tax
18681868 Act. The maximum amount allowable in the preceding
18691869 paragraph shall be prorated on the ratio of the
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18951895 Oklahoma adjusted gross i ncome to federal adjusted
18961896 gross income.
18971897 c. For the purpose of this paragraph, "federal income
18981898 taxes paid" shall mean federal income taxes, surtaxes
18991899 imposed on incomes or excess profits taxes, as though
19001900 the taxpayer was on the accrual basis. In determining
19011901 the amount of deduction for federal income taxes for
19021902 tax year 2001, the amount of the deduction shall not
19031903 be adjusted by the amount of any accelerated ten
19041904 percent (10%) tax rate bracket credit or advanced
19051905 refund of the credit received during the tax year
19061906 provided pursuant to the federal Economic Growth and
19071907 Tax Relief Reconciliation Act of 2001, P.L. No. 107 -
19081908 16, and the advanced refund of such credit shall not
19091909 be subject to taxation.
19101910 d. The provisions of this paragraph shall apply to all
19111911 taxable years ending after December 31, 1978, and
19121912 beginning before January 1, 2006.
19131913 8. Retirement benefits not to exceed Five Thousand Five Hundred
19141914 Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five
19151915 Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Thousand
19161916 Dollars ($10,000.00) for the 2006 tax year and all subsequent tax
19171917 years, which are received by an individual from the civil service of
19181918 the United States, the Oklahoma Public Employees Retirement System,
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19431943
19441944 the Teachers' Retirement System of Oklahoma, the Oklahoma Law
19451945 Enforcement Retirement System, the Oklahoma Firefighters Pension and
19461946 Retirement System, the Oklahoma Police Pension and Retirement
19471947 System, the employee retirement systems created by counties pursuant
19481948 to Section 951 et seq. of Title 19 of the O klahoma Statutes, the
19491949 Uniform Retirement System for Justices and Judges, the O klahoma
19501950 Wildlife Conservation Department Retirement Fund, the Oklahoma
19511951 Employment Security Commission Retirement Plan, or the employee
19521952 retirement systems created by municipalitie s pursuant to Section 48 -
19531953 101 et seq. of Title 11 of the Oklahoma Statutes shall be exempt
19541954 from taxable income.
19551955 9. For the 2026 tax year and all subsequent tax years,
19561956 retirement benefits which are received by an individual from the
19571957 Oklahoma Public Employee s Retirement System, the Teachers'
19581958 Retirement System of Oklahoma, the Oklahoma Law Enforcement
19591959 Retirement System , the Oklahoma Firefighters Pension and Retirement
19601960 System, the Uniform Retirement System for Justices and Judges, the
19611961 Oklahoma Wildlife Conserv ation Department Fund, the Oklahoma Police
19621962 Pension and Retirement System, and the Oklahoma Employment Security
19631963 Commission Retirement Plan shall be exempt from taxable income once
19641964 the individual reaches sixty -five (65) years of age.
19651965 10. In taxable years beginning after December 3l, 1984, Social
19661966 Security benefits received by an indiv idual shall be exempt from
19671967 taxable income, to the extent such benefits are included in the
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19921992
19931993 federal adjusted gross income pursuant to the provisions of Section
19941994 86 of the Internal Revenue Code, 26 U.S.C., Section 86.
19951995 10. 11. For taxable years beginning after December 31, 1994,
19961996 lump-sum distributions from employer plans of deferred compensation,
19971997 which are not qualified plans within the meaning of Section 401(a)
19981998 of the Internal Reven ue Code, 26 U.S.C., Section 401(a), and which
19991999 are deposited in and accounted f or within a separate bank account or
20002000 brokerage account in a financial institution within this state,
20012001 shall be excluded from taxable income in the same manner as a
20022002 qualifying rollover contribution to an individual retirement account
20032003 within the meaning of Section 408 of the Internal Revenue Code, 26
20042004 U.S.C., Section 408. Amounts withdrawn from such bank or brokerage
20052005 account, including any earnings thereon, shall be included in
20062006 taxable income when withdrawn in the same manner as withdrawals from
20072007 individual retirement accounts within the meaning of Section 408 of
20082008 the Internal Revenue Code.
20092009 11. 12. In taxable years beginning after December 31, 1995,
20102010 contributions made to and interest r eceived from a medical savings
20112011 account established pursuant to Sections 2621 through 2623 of Title
20122012 63 of the Oklahoma Statutes shall be exempt from taxable income.
20132013 12. 13. For taxable years beginning after December 31, 1996,
20142014 the Oklahoma adjusted gross in come of any individual taxpayer who is
20152015 a swine or poultry producer may be furt her adjusted for the
20162016 deduction for depreciation allowed for new construction or expansion
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20422042 costs which may be computed using the same depreciation method
20432043 elected for federal incom e tax purposes except that the useful life
20442044 shall be seven (7) years for purposes of this paragraph. If
20452045 depreciation is allowed as a deduction in determining the adjusted
20462046 gross income of an individual, any depreciation calculated and
20472047 claimed pursuant to th is section shall in no event be a duplication
20482048 of any depreciation allowed or p ermitted on the federal income tax
20492049 return of the individual.
20502050 13.
20512051 14. a. In taxable years beginning before January 1, 2005,
20522052 retirement benefits not to exceed the amounts
20532053 specified in this paragraph, which are received by an
20542054 individual sixty-five (65) years of age or older and
20552055 whose Oklahoma adjusted gross income is Twenty -five
20562056 Thousand Dollars ($25,000.00) or less if the filing
20572057 status is single, head of household, or married filin g
20582058 separate, or Fifty Thousand Dollars ($50,000.00) or
20592059 less if the filing statu s is married filing joint or
20602060 qualifying widow, shall be exempt from taxable income.
20612061 In taxable years beginning after December 31, 2004,
20622062 retirement benefits not to exceed the amo unts
20632063 specified in this paragraph, which are received by an
20642064 individual whose Oklahoma adjusted gross income is
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20902090 less than the qualifying amount specified in this
20912091 paragraph, shall be exempt from taxable income.
20922092 b. For purposes of this paragraph, the qualifyin g amount
20932093 shall be as follows:
20942094 (1) in taxable years beginning after December 31 ,
20952095 2004, and prior to January 1, 2007, the
20962096 qualifying amount shall be Thirty -seven Thousand
20972097 Five Hundred Dollars ($37,500.00) or less if the
20982098 filing status is single, head of house hold, or
20992099 married filing separate, or Seventy -five Thousand
21002100 Dollars ($75,000.00) or less if the filing status
21012101 is married filing jointly or qualifying widow,
21022102 (2) in the taxable year beginning January 1, 2007,
21032103 the qualifying amount shall be Fifty Thousand
21042104 Dollars ($50,000.00) or less if the filing status
21052105 is single, head of household, o r married filing
21062106 separate, or One Hundred Thousand Dollars
21072107 ($100,000.00) or less if the filing status is
21082108 married filing jointly or qualifying widow,
21092109 (3) in the taxable year begin ning January 1, 2008,
21102110 the qualifying amount shall be Sixty -two Thousand
21112111 Five Hundred Dollars ($62,500.00) or less if the
21122112 filing status is single, head of household, or
21132113 married filing separate, or One Hundred Twenty -
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21392139 five Thousand Dollars ($125,000.00) or le ss if
21402140 the filing status is married filing jointly or
21412141 qualifying widow,
21422142 (4) in the taxable year beginning January 1, 2009,
21432143 the qualifying amount shall be One Hundred
21442144 Thousand Dollars ($100,000.00) or less if the
21452145 filing status is single, head of household, o r
21462146 married filing separate, or Two Hundred Thousand
21472147 Dollars ($200,000.00) or less if the filing
21482148 status is married filing jointly or qualifying
21492149 widow, and
21502150 (5) in the taxable year beginning January 1, 2010,
21512151 and subsequent taxable years, there shall be no
21522152 limitation upon the qualifying amount.
21532153 c. For purposes of this paragraph, "retirement benefits"
21542154 means the total distributions or withdrawals from the
21552155 following:
21562156 (1) an employee pension benefit plan which satisfies
21572157 the requirements of Section 401 of the Interna l
21582158 Revenue Code, 26 U.S.C., Section 401,
21592159 (2) an eligible deferred compensation plan that
21602160 satisfies the requirements of Section 457 of the
21612161 Internal Revenue Code, 26 U.S.C., Section 457,
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21872187 (3) an individual retirement account, annuity or
21882188 trust or simplified emp loyee pension that
21892189 satisfies the requirements of Section 408 of the
21902190 Internal Revenue Code, 26 U.S.C., Section 408,
21912191 (4) an employee annuity subject to the provisions of
21922192 Section 403(a) or (b) of the Internal Revenue
21932193 Code, 26 U.S.C., Section 403(a) or (b),
21942194 (5) United States Retirement Bonds which satisfy the
21952195 requirements of Section 86 of the Internal
21962196 Revenue Code, 26 U.S.C., Section 86, or
21972197 (6) lump-sum distributions from a retirement plan
21982198 which satisfies the requirements of Section
21992199 402(e) of the Internal Reven ue Code, 26 U.S.C.,
22002200 Section 402(e).
22012201 d. The amount of the exemption provided by this paragraph
22022202 shall be limited to Five Thousand Five Hundred Dollars
22032203 ($5,500.00) for the 2004 tax year, Seven Thousand Five
22042204 Hundred Dollars ($7,500.00) for the 2005 tax year an d
22052205 Ten Thousand Dollars ($10,000.00) for the tax year
22062206 2006 and for all subsequent tax years. Any individual
22072207 who claims the exemption provided for in paragraph 8
22082208 of this subsection shall not be permitted to claim a
22092209 combined total exemption pursuant to this paragraph
22102210 and paragraph 8 of this subsection in an amount
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22362236 exceeding Five Thous and Five Hundred Dollars
22372237 ($5,500.00) for the 2004 tax year, Seven Thousand Five
22382238 Hundred Dollars ($7,500.00) for the 2005 tax year and
22392239 Ten Thousand Dollars ($10,000.00) for the 20 06 tax
22402240 year and all subsequent tax years.
22412241 14. 15. In taxable years beginning after December 31, 1999, for
22422242 an individual engaged in production agriculture who has filed a
22432243 Schedule F form with the taxpayer 's federal income tax return for
22442244 such taxable year, there shall be excluded from taxable income any
22452245 amount which was included as f ederal taxable income or federal
22462246 adjusted gross income and which consists of the discharge of an
22472247 obligation by a creditor of the taxpayer incurred to finance the
22482248 production of agricultural products.
22492249 15. 16. In taxable years beginning December 31, 2000, an amount
22502250 equal to one hundred percent (100%) of the amount of any scholarship
22512251 or stipend received from participation in the Oklahoma Police Corps
22522252 Program, as established in Sectio n 2-140.3 of Title 47 of the
22532253 Oklahoma Statutes shall be exempt from taxable in come.
22542254 16.
22552255 17. a. In taxable years beginning after December 31, 2001,
22562256 and before January 1, 2005, there shall be allowed a
22572257 deduction in the amount of contributions to accounts
22582258 established pursuant to the Oklahoma College Savings
22592259 Plan Act. The deduction shall equal the amount of
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22852285 contributions to accounts, but in no event shall the
22862286 deduction for each contributor exceed Two Thousand
22872287 Five Hundred Dollars ($2,500.00) each taxable year for
22882288 each account.
22892289 b. In taxable years beginning after December 31, 2004,
22902290 each taxpayer shall be allowed a deduction for
22912291 contributions to accounts established pursuant to the
22922292 Oklahoma College Savings Plan Act. The maximum annual
22932293 deduction shall equal the amount of contributions to
22942294 all such accounts plus any contributions to such
22952295 accounts by the taxpayer for prior taxable years after
22962296 December 31, 2004, which were not deducted, but in no
22972297 event shall the deduction for each tax year exceed Ten
22982298 Thousand Dollars ($10,000.00) for each individual
22992299 taxpayer or Twenty Thousand Dollars ($20,000 .00) for
23002300 taxpayers filing a joint return. Any amount of a
23012301 contribution that is not deducted by the taxpayer in
23022302 the year for which the contribution is made may be
23032303 carried forward as a deduction from income for the
23042304 succeeding five (5) years. For taxable years
23052305 beginning after December 31, 2005, deductions may be
23062306 taken for contributions and rollovers made during a
23072307 taxable year and up to April 15 of the succeeding
23082308 year, or the due date of a taxpayer's state income tax
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23342334 return, excluding extensions, whichever is later.
23352335 Provided, a deduction for the same contribution may
23362336 not be taken for two (2) different taxable years.
23372337 c. In taxable years beginning after December 31, 2006,
23382338 deductions for contributions made pursuant to
23392339 subparagraph b of this paragraph shall be limited as
23402340 follows:
23412341 (1) for a taxpayer who qualified for the five -year
23422342 carryforward election and who takes a rollover or
23432343 nonqualified withdrawal during that period, the
23442344 tax deduction otherwise available pursuant to
23452345 subparagraph b of this paragraph shall be r educed
23462346 by the amount which is equal to the rollover or
23472347 nonqualified withdrawal, and
23482348 (2) for a taxpayer who elects to take a rollover or
23492349 nonqualified withdrawal within the same ta x year
23502350 in which a contribution was made to the
23512351 taxpayer's account, the tax deduction otherwise
23522352 available pursuant to subparagraph b of this
23532353 paragraph shall be reduced by the amount of the
23542354 contribution which is equal to the rollover or
23552355 nonqualified withdraw al.
23562356 d. If a taxpayer elects to take a rollover on a
23572357 contribution for which a d eduction has been taken
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23832383 pursuant to subparagraph b of this paragraph within
23842384 one (1) year of the date of contribution, the amount
23852385 of such rollover shall be included in the adjuste d
23862386 gross income of the taxpayer in the taxable year of
23872387 the rollover.
23882388 e. If a taxpayer makes a nonqualified withdrawal of
23892389 contributions for which a deduction was taken pursuant
23902390 to subparagraph b of this paragraph, such nonqualified
23912391 withdrawal and any earning s thereon shall be included
23922392 in the adjusted gross income of the taxpayer in th e
23932393 taxable year of the nonqualified withdrawal.
23942394 f. As used in this paragraph:
23952395 (1) "non-qualified withdrawal " means a withdrawal
23962396 from an Oklahoma College Savings Plan account
23972397 other than one of the following:
23982398 (a) a qualified withdrawal,
23992399 (b) a withdrawal made as a result of the death
24002400 or disability of the designated beneficiary
24012401 of an account,
24022402 (c) a withdrawal that is made on the account of
24032403 a scholarship or the allowance or payment
24042404 described in Section 135(d)(1)(B) or (C) or
24052405 by the Internal Revenue Code, received by
24062406 the designated beneficiary to the extent the
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24322432 amount of the refund does not exceed the
24332433 amount of the scholarship, allowance, or
24342434 payment, or
24352435 (d) a rollover or change of designa ted
24362436 beneficiary as permitted by subsection F of
24372437 Section 3970.7 of Title 70 of Oklahoma
24382438 Statutes, and
24392439 (2) "rollover" means the transfer of funds from the
24402440 Oklahoma College Savings Plan to any other plan
24412441 under Section 529 of the Internal Revenue Code.
24422442 17. 18. For tax years 2006 through 2021, retirement benefits
24432443 received by an individu al from any component of the Armed Forces of
24442444 the United States in an amount not to exceed the greater of seventy -
24452445 five percent (75%) of such benefits or Ten Thousand Dollars
24462446 ($10,000.00) shall be exempt from taxable income but in no case less
24472447 than the amount of the exemption provided by paragraph 13 of this
24482448 subsection. For tax year 2022 and subsequent tax years, retirement
24492449 benefits received by an individual from any component of t he Armed
24502450 Forces of the United States shall be exempt from taxable income.
24512451 18. 19. For taxable years beginning after December 31, 2006,
24522452 retirement benefits received by federal civil service retirees,
24532453 including survivor annuities, paid in lieu of Social Sec urity
24542454 benefits shall be exempt from taxable income to the extent such
24552455 benefits are included in the federal adjusted gross income pursuant
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24812481 to the provisions of Section 86 of the Internal Revenue Code, 26
24822482 U.S.C., Section 86, according to the following schedu le:
24832483 a. in the taxable year beginning January 1, 2007, twenty
24842484 percent (20%) of such benefits shall be exempt,
24852485 b. in the taxable year beginning January 1, 2008, forty
24862486 percent (40%) of such benefits shall be exempt,
24872487 c. in the taxable year beginning January 1, 2009, sixty
24882488 percent (60%) of such benefits shall be exempt,
24892489 d. in the taxable year beginning January 1, 2010, eighty
24902490 percent (80%) of such benefits shall be exempt, and
24912491 e. in the taxable year beginning January 1, 2011, and
24922492 subsequent taxable years, one hu ndred percent (100%)
24932493 of such benefits shall be exempt.
24942494 19.
24952495 20. a. For taxable years beginning after December 31, 2007, a
24962496 resident individual may deduct up to Ten Thousand
24972497 Dollars ($10,000.00) from Oklahoma adjusted gross
24982498 income if the individual, or the d ependent of the
24992499 individual, while living, donates one or more human
25002500 organs of the individual to another human being for
25012501 human organ transplantation. As used in this
25022502 paragraph, "human organ" means all or part of a liver,
25032503 pancreas, kidney, intestine, lung, or bone marrow. A
25042504 deduction that is claimed under this paragraph may be
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25302530 claimed in the taxable year in which the human organ
25312531 transplantation occurs.
25322532 b. An individual may claim this deduction only once, and
25332533 the deduction may be claimed only for unreimburse d
25342534 expenses that are incurred by the individual and
25352535 related to the organ donation of the individual.
25362536 c. The Oklahoma Tax Commission shall promulgate rules to
25372537 implement the provisions of this paragraph which shall
25382538 contain a specific list of expenses which ma y be
25392539 presumed to qualify for the deduction. The Tax
25402540 Commission shall prescrib e necessary requirements for
25412541 verification.
25422542 20. 21. For taxable years beginning after December 31, 2009,
25432543 there shall be exempt from taxable income any amount received by the
25442544 beneficiary of the death benefit for an emergency medical technician
25452545 or a registered emergency medical responder provided by Section 1 -
25462546 2505.1 of Title 63 of the Oklahoma Statutes.
25472547 21. 22. For taxable years beginning after December 31, 2008,
25482548 taxable income shall be increased by any unemployment compensation
25492549 exempted under Section 85(c) of the Internal Revenue Code, 26
25502550 U.S.C., Section 85(c)(2009).
25512551 22. 23. For taxable years beginning after December 31, 2008,
25522552 there shall be exempt from taxable income any payment in an amount
25532553 less than Six Hundred Dollars ($600.00) received by a person as an
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25792579 award for participation in a competitive livestock show event. For
25802580 purposes of this paragraph, the payment shall be treated as a
25812581 scholarship amount paid by the entity sponsori ng the event and the
25822582 sponsoring entity shall cause the payment to be categoriz ed as a
25832583 scholarship in its books and records.
25842584 23. 24. For taxable years beginning on or after January 1,
25852585 2016, taxable income shall be increased by any amount of state and
25862586 local sales or income taxes deducted under 26 U.S.C., Section 164 of
25872587 the Internal Revenue Code. If the amount of state and local taxes
25882588 deducted on the federal return is limited, taxable income on the
25892589 state return shall be increased only by the amount actually deducted
25902590 after any such limitations are applied.
25912591 24. 25. For taxable years be ginning after December 31, 2020,
25922592 each taxpayer shall be allowed a deduction for contributions to
25932593 accounts established pursuant to the Achieving a Better Life
25942594 Experience (ABLE) Pr ogram as established in Section 4001.1 et seq.
25952595 of Title 56 of the Oklahoma Statutes. For any tax year, the
25962596 deduction provided for in this paragraph shall not exceed Ten
25972597 Thousand Dollars ($10,000.00) for an individual taxpayer or Twenty
25982598 Thousand Dollars ($20,000.00) for taxpayers filing a joint return.
25992599 Any amount of contribution no t deducted by the taxpayer in the tax
26002600 year for which the contribution is made may be carried forward as a
26012601 deduction from income for up to five (5) tax years. Deductions may
26022602 be taken for contributions made during the tax year and through
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26282628 April 15 of the succeeding tax year, or through the due date of a
26292629 taxpayer's state income tax return excluding extensions, whichever
26302630 is later. Provided, a deduction for the same contribution may not
26312631 be taken in more than one (1) tax year.
26322632 F. 1. For taxable years beginnin g after December 31, 2004, a
26332633 deduction from the Oklahoma adjusted gross income of any individual
26342634 taxpayer shall be allowed for qualifying gains receiving capital
26352635 treatment that are included in the federal adjusted gross income of
26362636 such individual taxpayer during the taxable year.
26372637 2. As used in this subsection:
26382638 a. "qualifying gains receiving capital treatment " means
26392639 the amount of net capital gains, as defined in Section
26402640 1222(11) of the Internal Revenue Code, included in an
26412641 individual taxpayer's federal income tax return that
26422642 result from:
26432643 (1) the sale of real property or tangible personal
26442644 property located within Oklahoma that has been
26452645 directly or indirectly owned by the individual
26462646 taxpayer for a holding period of at least five
26472647 (5) years prior to the date of the transaction
26482648 from which such net capital gains arise,
26492649 (2) the sale of stock or the sale of a direct or
26502650 indirect ownership interest in an Oklahoma
26512651 company, limited liability comp any, or
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26772677 partnership where such stock or ownership
26782678 interest has been directly o r indirectly owned by
26792679 the individual taxpayer for a holding period of
26802680 at least two (2) years prior to the date of the
26812681 transaction from which the net capital gains
26822682 arise, or
26832683 (3) the sale of real property, tangible personal
26842684 property or intangible personal property located
26852685 within Oklahoma as part of the sale of all or
26862686 substantially all of the assets of an Oklahoma
26872687 company, limited liability company, or
26882688 partnership or an Oklahoma prop rietorship
26892689 business enterprise where such property has been
26902690 directly or indirectly owned by such entity or
26912691 business enterprise or owned by the owners of
26922692 such entity or business enterprise for a period
26932693 of at least two (2) years prior to the date of
26942694 the transaction from which the net capital gains
26952695 arise,
26962696 b. "holding period" means an uninterrupted period of
26972697 time. The holding period shall include any additional
26982698 period when the property was held by another
26992699 individual or entity, if such additional period is
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27252725 included in the taxpayer 's holding period for the
27262726 asset pursuant to the Internal R evenue Code,
27272727 c. "Oklahoma company," "limited liability company, " or
27282728 "partnership" means an entity whose primary
27292729 headquarters have been located in Oklahoma for at
27302730 least three (3) uninterrupted years prior to the date
27312731 of the transaction from which the net capital gains
27322732 arise,
27332733 d. "direct" means the individual taxpayer directly owns
27342734 the asset,
27352735 e. "indirect" means the individual taxpayer owns an
27362736 interest in a pass-through entity (or ch ain of pass-
27372737 through entities) that sells the asset that gives rise
27382738 to the qualifying gains receiving capital treatment.
27392739 (1) With respect to sales of real property or
27402740 tangible personal property located within
27412741 Oklahoma, the deduction described in this
27422742 subsection shall not apply unless the pass -
27432743 through entity that makes the sale has held the
27442744 property for not less than five (5) uninterrupted
27452745 years prior to the date of the transaction that
27462746 created the capital gain, and each pass -through
27472747 entity included in the ch ain of ownership has
27482748 been a member, partner, or shareholder of the
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27742774 pass-through entity in the tier immediately below
27752775 it for an uninterrupted period of not less than
27762776 five (5) years.
27772777 (2) With respect to sales of stock or ownership
27782778 interest in or sales of all or substantially all
27792779 of the assets of an Oklahoma company, limited
27802780 liability company, partnership or Oklahoma
27812781 proprietorship business enterprise, the deduction
27822782 described in this subsection shall not apply
27832783 unless the pass-through entity that makes the
27842784 sale has held the stock or ownership interest for
27852785 not less than two (2) uninterrup ted years prior
27862786 to the date of the transaction that created the
27872787 capital gain, and each pass -through entity
27882788 included in the chain of ownership has been a
27892789 member, partner or shareh older of the pass-
27902790 through entity in the tier immediately below it
27912791 for an uninterrupted period of not less than two
27922792 (2) years. For purposes of this division,
27932793 uninterrupted ownership prior to July 1, 2007,
27942794 shall be included in the determination of the
27952795 required holding period prescribed by this
27962796 division, and
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28222822 f. "Oklahoma proprietorshi p business enterprise " means a
28232823 business enterprise whose income and expenses have
28242824 been reported on Schedule C or F of an individual
28252825 taxpayer's federal income tax return, or any s imilar
28262826 successor schedule published by the Internal Revenue
28272827 Service and whose primary headquarters have been
28282828 located in Oklahoma for at least three (3)
28292829 uninterrupted years prior to the date of the
28302830 transaction from which the net capital gains arise.
28312831 G. 1. For purposes of computing its Oklahoma taxable income
28322832 under this section, the dividends-paid deduction otherwise allowed
28332833 by federal law in computing net income of a real estate investment
28342834 trust that is subject to federal income tax shall be added back in
28352835 computing the tax imposed by this state under this title if the real
28362836 estate investment trust is a captive real estate investment trust.
28372837 2. For purposes of computing its Oklahoma taxable income under
28382838 this section, a taxpayer shall add back otherwise deduct ible rents
28392839 and interest expenses paid to a captive real estate investment trus t
28402840 that is not subject to the provisions of paragraph 1 of this
28412841 subsection. As used in this subsection:
28422842 a. the term "real estate investment trust " or "REIT"
28432843 means the meaning asc ribed to such term in Section 856
28442844 of the Internal Revenue Code,
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28702870 b. the term "captive real estate investment trust " means
28712871 a real estate investment trust, the shares or
28722872 beneficial interests of which are not regularly traded
28732873 on an established securities marke t and more than
28742874 fifty percent (50%) of the voting power or value of
28752875 the beneficial interests or shares of which are owned
28762876 or controlled, directly or indirectly, or
28772877 constructively, by a single entity that is:
28782878 (1) treated as an association taxable as a
28792879 corporation under the Internal Revenue Code, and
28802880 (2) not exempt from federal income tax pursuant to
28812881 the provisions of Section 501(a) of the Internal
28822882 Revenue Code.
28832883 The term shall not include a real estate investment
28842884 trust that is intended to be regularly traded on an
28852885 established securities market, and that satisfies the
28862886 requirements of Section 856(a)(5) and (6) of the U.S.
28872887 Internal Revenue Code by reason of Section 856(h)(2)
28882888 of the Internal Revenue Code,
28892889 c. the term "association taxable as a corporation " shall
28902890 not include the following entities:
28912891 (1) any real estate investment trust as defined in
28922892 paragraph a of this subsection other than a
28932893 "captive real estate investment trust ",
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29192919 (2) any qualified real estate investment trust
29202920 subsidiary under Section 856(i) of the I nternal
29212921 Revenue Code, other than a qualified REIT
29222922 subsidiary of a "captive real estate investment
29232923 trust",
29242924 (3) any Listed Australian Property Trust (meaning an
29252925 Australian unit trust registered as a "Managed
29262926 Investment Scheme" under the Australian
29272927 Corporations Act in which the principal class of
29282928 units is listed on a recognized stock exchange in
29292929 Australia and is regularly traded on an
29302930 established securities market), or an entity
29312931 organized as a trust, provided that a Listed
29322932 Australian Property Trust owns or con trols,
29332933 directly or indirectly, seventy -five percent
29342934 (75%) or more of the votin g power or value of the
29352935 beneficial interests or shares of such trust, or
29362936 (4) any Qualified Foreign Entity, meaning a
29372937 corporation, trust, association or partnership
29382938 organized outside the laws of the United States
29392939 and which satisfies the following criteria:
29402940 (a) at least seventy-five percent (75%) of the
29412941 entity's total asset value at the close of
29422942 its taxable year is represented by real
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29682968 estate assets, as defined in Section
29692969 856(c)(5)(B) of the Internal Revenue Code,
29702970 thereby including shares or certificates of
29712971 beneficial interest in any real estate
29722972 investment trust, cash and cash equivalents,
29732973 and U.S. Government securities,
29742974 (b) the entity receives a dividend -paid
29752975 deduction comparable to Section 561 of the
29762976 Internal Revenue Code, or is exempt from
29772977 entity level tax,
29782978 (c) the entity is required to distribute at
29792979 least eighty-five percent (85%) of its
29802980 taxable income, as computed in the
29812981 jurisdiction in which it is organized, to
29822982 the holders of its shares or certificates of
29832983 beneficial interest on an annual basis,
29842984 (d) not more than ten percent (10%) of the
29852985 voting power or value in such entity is held
29862986 directly or indirectly or constructively by
29872987 a single entity or individual, or the shares
29882988 or beneficial interests of such entity are
29892989 regularly traded on an established
29902990 securities market, and
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30163016 (e) the entity is organized in a country which
30173017 has a tax treaty with the United States.
30183018 3. For purposes of this subsection, the constructive ownership
30193019 rules of Section 318(a) of the Internal Revenue Code, as modified by
30203020 Section 856(d)(5) of the Internal Revenue Code, shall apply in
30213021 determining the ownership of stock, assets, or net profits of any
30223022 person.
30233023 4. A real estate investment trust that does not become
30243024 regularly traded on an established securities market within one (1)
30253025 year of the date on which it first becomes a real estate investment
30263026 trust shall be deemed not to have been regularly traded on an
30273027 established securities market, retroactive to the date it first
30283028 became a real estate investment trust, and shall file an amended
30293029 return reflecting such retroactive designation for any tax year or
30303030 part year occurring during its initial year of status as a real
30313031 estate investment trust. For purposes of this subsection, a re al
30323032 estate investment trust becomes a real estate investment trust on
30333033 the first day it has both met the requirements of Section 856 of the
30343034 Internal Revenue Code and has elected to be treated as a real estate
30353035 investment trust pursuant to Section 856(c)(1) of the Internal
30363036 Revenue Code.
30373037 SECTION 2. This act shall become effective January 1, 2026.
30383038
30393039 60-1-10085 AO 01/16/25