OK
Oklahoma House Bill HB1742

Oklahoma 2025 Regular Session

Oklahoma House Bill HB1742 Compare Versions

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2727 STATE OF OKLAHOMA
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2929 1st Session of the 60th Legislature (2025)
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3131 HOUSE BILL 1742 By: Johns
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3737 AS INTRODUCED
3838
3939 An Act relating to schools; amending Section 2,
4040 Chapter 278, O.S.L. 2023, as amended by Section 3,
4141 Chapter 277, O.S.L. 2024 (70 O.S. Supp. 2024, Section
4242 28-101), which relates to the Oklahoma Parental
4343 Choice Tax Credit Act; modifying website requirements
4444 for the Oklahoma Tax Commission; and providing an
4545 effective date.
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5151 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
5252 SECTION 1. AMENDATORY Section 2, Chapter 278, O.S.L.
5353 2023, as amended by Section 3, Chapter 277, O.S.L. 2024 (70 O.S.
5454 Supp. 2024, Section 28 -101), is amended to read as follows:
5555 Section 28-101. A. As used in the Oklahoma Parental Choic e Tax
5656 Credit Act:
5757 1. "Commission" means the Oklahoma Tax Commission;
5858 2. "Curriculum" means a complete course of study for a
5959 particular content area or grade level;
6060 3. "Department" means the State Department of Education;
6161 4. "Education service provider " means a person, business,
6262 public school district, public charter school, magn et school, or
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8888 organization that provides educational goods and/or services to
8989 eligible students in this state;
9090 5. "Eligible student" means a resident of this state who is
9191 eligible to enroll in a public school in this state. Eligible
9292 student shall include a student who is enrolled in and attends or is
9393 expected to enroll in a private school in this state accredited by
9494 the State Board of Education or another accrediting association or a
9595 student who is educated pursuant to the other means of education
9696 exception provided for in subsection A of Section 10 -105 of this
9797 title;
9898 6. "Qualified expense" for the purpose of claiming the credit
9999 authorized by paragraph 1 of subsection C of this section means
100100 tuition and fees at a private school in this state accredited by the
101101 State Board of Education or another accrediting association.
102102 Provided, the amount of tuition and fees considered a qualified
103103 expense pursuant to this paragraph shall not in clude tuition and
104104 fees paid with any scholarship or tuition and fees discounte d or
105105 otherwise reduced by the school;
106106 7. "Qualified expense" for the purpose of claiming the credit
107107 authorized by paragraph 2 of subsection C of this section means the
108108 following expenditures:
109109 a. tuition and fees for nonpublic learning programs,
110110 online or in person,
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136136 b. academic tutoring services provided by an individual
137137 or a private academic tutoring facility,
138138 c. textbooks, curriculum, or other instructional
139139 materials including, but not limited to, supplemental
140140 materials or associated online instruction re quired by
141141 an education service provider, and
142142 d. fees for nationally standardized assessments
143143 including, but not limited to, assessments used to
144144 determine college admission and ad vanced placement
145145 examinations as well as tuition and fees for tutoring
146146 or preparatory courses for the assessments; and
147147 8. "Taxpayer" means a biological or adoptive parent,
148148 grandparent, aunt, uncle, legal guardian, custodian, or other person
149149 with legal authority to act on behalf of an eligible student.
150150 B. There is hereby created th e Oklahoma Parental Choice Tax
151151 Credit Program to provide an income tax credit to a taxpayer for
152152 qualified expenses to support the education of eligible students in
153153 this state.
154154 C. For the tax year 2024 and subsequent tax years, and fiscal
155155 year 2026 and subsequent fiscal years, there shall be allowed
156156 against the tax imposed by Section 2355 of Title 68 of the Oklahoma
157157 Statutes a credit for any Oklahoma taxpayer who incurs a qualifie d
158158 expense on behalf of an eligible student, to be administered subject
159159 to the following amounts:
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185185 1. If the eligible student attends a private school in this
186186 state accredited by the State Board of Education or another
187187 accrediting association, the annual ma ximum credit amount for tax
188188 year 2024, fiscal year 2026, and each subsequent fiscal year shall
189189 be:
190190 a. Seven Thousand Five Hundred Dollars ($7,500.00) or the
191191 amount of tuition and fees for the private school,
192192 whichever is less, if the combined adjusted gros s
193193 income of the parents or legal guardians of the
194194 eligible student during the second preceding tax year
195195 does not exceed Seventy -five Thousand Dollars
196196 ($75,000.00),
197197 b. Seven Thousand Dollars ($7,000.00) or the amount of
198198 tuition and fees for the private scho ol, whichever is
199199 less, if the combined adjusted gross income of the
200200 parents or legal guardians of the eligible student
201201 during the second preceding tax year is more than
202202 Seventy-five Thousand Dollars ($75,000.00) but does
203203 not exceed One Hundred Fifty Thousa nd Dollars
204204 ($150,000.00),
205205 c. Six Thousand Five Hundred Dollars ($6,500.00) or the
206206 amount of tuition and fees for the private school,
207207 whichever is less, if the combined adjusted gross
208208 income of the parents or legal guardians of the
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234234 eligible student during t he second preceding tax year
235235 is more than One Hundred Fifty Thousand Dollars
236236 ($150,000.00) but does not exceed Two Hundred Twenty -
237237 five Thousand Dollars ($225,000.00),
238238 d. Six Thousand Dollars ($6,000.00) or the amount of
239239 tuition and fees for the private sch ool, whichever is
240240 less, if the combined adjusted gross income of the
241241 parents or legal guardians of the eligible student
242242 during the second preceding tax year is more than Two
243243 Hundred Twenty-five Thousand Dollars ($225,000.00) but
244244 does not exceed Two Hundred Fifty Thousand Dollars
245245 ($250,000.00), or
246246 e. Five Thousand Dollars ($5,000.00) or the amount of
247247 tuition and fees for the private school, whichever is
248248 less, if the combined adjusted gross income of the
249249 parents or legal guardians of the eligible student
250250 during the second preceding tax year is more than Two
251251 Hundred Fifty Thousand Dolla rs ($250,000.00);
252252 2. For tax year 2024 and subsequent tax years, the maximum
253253 credit amount shall be One Thousand Dollars ($1,000.00) in qualified
254254 expenses per eligible student i n each tax year if the eligible
255255 student is educated pursuant to the other means of education
256256 exception provided for in subsection A of Section 10 -105 of this
257257 title. To claim the credit, the taxpayer shall submit to the
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283283 Commission receipts for qualified ex penses as defined by paragraph 7
284284 of subsection A of this section;
285285 3. If the eligible student attends a private school in this
286286 state, accredited by the State Board of Education or another
287287 accrediting association, that exclusively serves students
288288 experiencing homelessness, the credit amount shall be Seven Thousand
289289 Five Hundred Dollars ($7,500.00) or the amount of the cost to
290290 educate the eligible student at the private school, whichever is
291291 less;
292292 4. If the eligible student attends a private school in this
293293 state, accredited by the State Board of Education or another
294294 accrediting associat ion, that primarily serves financially
295295 disadvantaged students, the credit amount shall be the maximum
296296 credit amount authorized by paragraph 1 of this subsection or the
297297 amount of the cost to educate the eligible student at the private
298298 school, whichever is less. The cost to educate the eligible student
299299 shall be equal to the average cost to educate all students attending
300300 the private school, which shall be calculated by dividing the
301301 private school's total expenditures in the previous year by the
302302 total enrollment in the previous school year. A private school
303303 shall be deemed to be primarily serving financially disadvantaged
304304 students if ninety percent (90%) of the private school 's admissions
305305 are based on enrolling students whose gross family income is two
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331331 hundred fifty percent (250%) of the federal poverty threshold or
332332 below;
333333 5. The taxpayer shall retain all receipts of qualified expenses
334334 as proof of the amounts paid each tax year the c redit is claimed and
335335 shall submit them to the Commission upon request;
336336 6. If the credit exceeds the tax imposed by Section 2355 of
337337 Title 68 of the Oklahoma Statutes, the excess amount shall be
338338 refunded to the taxpayer; and
339339 7. Credits claimed by a taxpaye r pursuant to the provisions of
340340 this section shall not be used to offset or pay the following:
341341 a. delinquent tax liability,
342342 b. accrued penalty or interest from the failure to file a
343343 report or return,
344344 c. accrued penalty or interest from the failure to pay a
345345 state tax within the statutory period allowed for its
346346 payment,
347347 d. tax liability of the taxpayer from any prior tax year,
348348 or
349349 e. any debt, unpaid fine, final judgment, or claim filed
350350 with the Commission by a qualified entity as defined
351351 in Section 205.2 of T itle 68 of the Oklahoma Statutes.
352352 D. 1. a. For tax year 2024, the total amount of credits
353353 authorized by paragraph 1 of subsection C of this
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379379 section shall not exceed One Hundred Fifty Million
380380 Dollars ($150,000,000.00).
381381 b. For the period of January 1, 2025, through June 30,
382382 2025, the total amount of credits authorized by
383383 paragraph 1 of subsection C of this section shall not
384384 exceed One Hundred Million Dollars ($100,000,000.00).
385385 The Commission shall not require a taxpayer who
386386 received a credit pursuant to para graph 1 of
387387 subsection C of this section in tax year 2024 to
388388 reapply for a credit payable during the period
389389 described in this subparagraph. The Commission shall
390390 base the credit amount payable for the spring 2025 on
391391 the fall 2024 installment disbursement pa yment amount.
392392 c. For fiscal year 2026 and subsequent fiscal years, the
393393 total amount of credits authorized by paragraph 1 of
394394 subsection C of this section shall not exceed Two
395395 Hundred Fifty Million Dollars ($250,000,000.00).
396396 2. For tax year 2025 and subsequ ent tax years, the total amount
397397 of credits authorized by paragraph 2 of subsection C of this section
398398 shall not exceed Five Million Dollars ($5,000,000.00).
399399 E. The Commission shall prescribe applications for the purposes
400400 of claiming the credits authorized by the Oklahoma Parental Choice
401401 Tax Credit Act and a deadline by which applica tions shall be
402402 submitted. A taxpayer claiming the credit authorized by paragraph 1
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428428 of subsection C of this section shall submit an application
429429 prescribed by the Commission to re ceive the credit in two
430430 installments, each of which shall be half of the expected amount of
431431 tuition and fees for the private school based on the enrollment
432432 verification form submitted pursuant to this subsection, but in no
433433 event shall an installment paymen t exceed the amount of the credit
434434 authorized by paragraph 1 of subsection C of this section. If an
435435 eligible taxpayer provides documentation on the application that he
436436 or she is a recipient of income -based government benefits including
437437 the Supplemental Nut rition Assistance Program (SNAP), Temporary
438438 Assistance for Needy Families (TANF), or SoonerCare, the eligible
439439 taxpayer shall not be required to provide additional income
440440 verification. A taxpayer claiming the credit authorized by
441441 paragraph 1 of subsection C of this section shall submit to the
442442 Commission an enrollment verification fo rm from the private school
443443 in which the eligible student is enrolled or is expected to enroll
444444 with the tuition and fees to be charged the taxpayer for the
445445 applicable school year. In reviewing applications submitted by
446446 eligible taxpayers to determine whether they qualify for a credit
447447 authorized by paragraph 1 of subsection C of this section, the
448448 Commission shall give first preference in making installments to
449449 taxpayers who qualify pursuant to subparagraphs a and b of paragraph
450450 1 of subsection C of this sect ion. For credits issued in the 2025 -
451451 2026 school year and subsequent school years, the application period
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477477 shall open on February 15 prior to the beginning of each school
478478 year. For any eligible student whose parents or legal guardians
479479 have a combined adjusted gross income that does not exceed One
480480 Hundred Fifty Thousand Dollars ($150,000.00), applications shall be
481481 submitted to the Commission within the first sixty (60) days of the
482482 opening of the application period to receive priority consideration.
483483 For students enrolled in the full school year, the credit shall be
484484 paid in two installments, one per school semester, to be paid no
485485 later than August 30 and January 15, each of which sha ll be half of
486486 the total expected amount of tuition and fees on the enrollment
487487 verification form submitted pursuant to this subsection.
488488 F. In the event there are more applications submitted by
489489 eligible taxpayers for a credit authorized by paragraph 1 of
490490 subsection C of this section than available credits pursuant to
491491 subsection D of this section, then the Commission shall give first
492492 preference in authorizing credits for eligible students of taxpayers
493493 who qualify pursuant to subparagraphs a and b of paragraph 1 of
494494 subsection C of this section and have received the credit in the
495495 prior year.
496496 G. Taxpayers claiming the credit shall:
497497 1. Only claim the credit for qualified expenses as defined in
498498 paragraphs 6 and 7 of subsection A of this section to provide an
499499 education for an eligible student;
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525525 2. Ensure no other person is claiming a credit for the eligible
526526 student;
527527 3. Not claim the credit for an eligible student who enrolls as
528528 a full-time student in a public school district, public charter
529529 school, public virtual charter school, or magnet school;
530530 4. Comply with rules and requirements established by the
531531 Commission for administration of the Oklahoma Parental Choice Tax
532532 Credit Program; and
533533 5. Notify the Commission not later than thirty (30) days after
534534 the date on which the eligible student:
535535 a. enrolls in a public school, including an open -
536536 enrollment charter school,
537537 b. enrolls in a nonaccredited private school,
538538 c. graduates from high school, or
539539 d. is no longer utilizing credits authorized by paragraph
540540 1 of subsection C of this section for any reason.
541541 H. Eligible students may accept a scholarship from the Lindsey
542542 Nicole Henry Scholarships for Students with Disabilities Program
543543 created by Section 13 -101.2 of this title while participating in the
544544 Oklahoma Parental Choice Tax Credit Program.
545545 I. 1. The Commission shall have the authority to conduc t an
546546 audit or contract for the auditing of receipts for qualified
547547 expenses submitted pursuant to paragraph 2 of subsection C of this
548548 section.
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574574 2. The Commission shall be authoriz ed to recapture the credits
575575 otherwise authorized by the provisions of the Oklahoma Parental
576576 Choice Tax Credit Act on a prorated basis if an audit conducted
577577 pursuant to this subsection shows that the credit was claimed for
578578 expenditures that were not qualifi ed expenses or it finds that the
579579 taxpayer has claimed an eligible student who no longer attends a
580580 private school or has enrolled in a public school in the state.
581581 3. The Commission shall be authorized to reallocate credits to
582582 the next eligible taxpayer in line when a taxpayer, on behalf of an
583583 eligible student in the program, chooses not to participate, is no
584584 longer eligible to participate, or chooses to forgo participation in
585585 the program for any reason.
586586 4. The Commission shall provide notification of appro val status
587587 to applicants within thirty (30) days of closure of the application
588588 window. Notice to applicants with an eligible student, whose
589589 parents or legal guardians have a combined adjusted gross income of
590590 more than One Hundred Fifty Thousand Dollars ($ 150,000.00), shall be
591591 sent within thirty (30) days or no later than thirty (30) days after
592592 the last day of the priority consideration period.
593593 J. In the event of a failure of revenue pursuant to the
594594 Oklahoma State Finance Act, the tax credits otherwise aut horized in
595595 subsection C of this section shall be reduced proportionately to th e
596596 reduction in the amount of money appropriated to the State Board of
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622622 Education for the financial support of public schools for the fiscal
623623 year in which the failure of revenue oc curs.
624624 K. The Commission shall make available on its website to be
625625 updated monthly:
626626 1. The total amount of credits claimed each year , listed in
627627 total and disaggregated by individual private school and/or
628628 homeschool, pursuant to paragraphs 1 through 4 of s ubsection C of
629629 this section;
630630 2. The By individual private school and/or homes chool, the
631631 amount of credits claimed and number of students awarded each fiscal
632632 year pursuant to paragraph 1 of subsection C of this section
633633 disaggregated by income categories and race of the student ;
634634 3. The By individual private school and/or homeschool, the
635635 total amount of credits claimed and number of students awarded who
636636 attended a public school in the semester immediately preceding the
637637 school year for which the application i s made each year; and
638638 4. The By individual private school and/or homeschool, the
639639 total number of applications denied and total amount of credits the
640640 denied applications represent for each fiscal year ;
641641 5. By individual private school, the number of awarde d students
642642 who also receive a Lindsey Nicole Henry for Students with
643643 Disabilities scholarship, the number of awarded students who also
644644 receive an Equal Opportunity Scholarship Act scholarship, and the
645645 number of awarded students who receive both a Lindsey N icole Henry
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671671 for Students with Disabilities scholarship and an Equal Opportunit y
672672 Scholarship Act scholarship; and
673673 6. The total amount by category of qualified expenses as listed
674674 in paragraph 7 of Section A of this act .
675675 L. Credits received pursuant to the Oklahoma Parental Choice
676676 Tax Credit Act shall not constitute taxable income to a taxpayer who
677677 received the credit on behalf of an eligible student.
678678 SECTION 2. This act shall become effective November 1, 2025.
679679
680680 60-1-12213 AO 01/15/25