OK
Oklahoma House Bill HB2199

Oklahoma 2025 Regular Session

Oklahoma House Bill HB2199 Compare Versions

Only one version of the bill is available at this time.
OldNewDifferences
11
22 1
33 2
44 3
55 4
66 5
77 6
88 7
99 8
1010 9
1111 10
1212 11
1313 12
1414 13
1515 14
1616 15
1717 16
1818 17
1919 18
2020 19
2121 20
2222 21
2323 22
2424 23
2525 24
2626
2727 STATE OF OKLAHOMA
2828
2929 1st Session of the 60th Legislature (2025)
3030
3131 HOUSE BILL 2199 By: Wolfley
3232
3333
3434
3535
3636
3737 AS INTRODUCED
3838
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 ( 68 O.S. Supp. 2024,
4242 Section 2358), which relates to Oklahoma taxable
4343 income and adjusted gross income; modifying
4444 provisions related to computation of standard
4545 deduction amounts; and providing an effective date .
4646
4747
4848
4949
5050
5151 BE IT ENACTED BY THE PEOPLE OF TH E STATE OF OKLAHOMA:
5252 SECTION 1. AMENDATORY 68 O.S. 2 021, Section 2358, as
5353 last amended by Section 155, Chapter 452, O.S.L. 2024 (68 O.S. Supp.
5454 2024, Section 2358), is amended to read as follows:
5555 Section 2358. For all tax years be ginning after December 31,
5656 1981, taxable income and adjusted gross income shall be adjusted to
5757 arrive at Oklahoma taxable income and Oklahoma adjusted gross income
5858 as required by this section.
5959 A. The taxable income of any taxpayer shall be adjusted to
6060 arrive at Oklahoma taxable income for corporations and Oklahoma
6161 adjusted gross income for individuals, as follows:
6262 1
6363 2
6464 3
6565 4
6666 5
6767 6
6868 7
6969 8
7070 9
7171 10
7272 11
7373 12
7474 13
7575 14
7676 15
7777 16
7878 17
7979 18
8080 19
8181 20
8282 21
8383 22
8484 23
8585 24
8686
8787 1. There shall be added interest income on obligations of any
8888 state or political subdivision thereto which is not otherwise
8989 exempted pursuant to other laws of this state, to the extent that
9090 such interest is not included in taxable income and adjusted gross
9191 income.
9292 2. There shall be deducted amounts included in such income that
9393 the state is prohibited from taxing because of the provisions of the
9494 Federal Constitution, the State Constitution, federal laws or laws
9595 of Oklahoma.
9696 3. The amount of any federal net operating loss deduction shall
9797 be adjusted as follows:
9898 a. For carryovers and carrybacks to taxable years
9999 beginning before January 1, 1981, the amount of any
100100 net operating loss deduction allowed to a taxpayer for
101101 federal income tax purposes shall be reduced to an
102102 amount which is the same portion thereof as the loss
103103 from sources within this state, as determined pursuant
104104 to this section and Section 2362 of this title, for
105105 the taxable year in which such loss is sustained is o f
106106 the total loss for such year;
107107 b. For carryovers and carrybacks to taxable years
108108 beginning after December 31, 1980, the amount of any
109109 net operating loss deduction allowed for th e taxable
110110 year shall be an amount equal to the aggregate of the
111111 1
112112 2
113113 3
114114 4
115115 5
116116 6
117117 7
118118 8
119119 9
120120 10
121121 11
122122 12
123123 13
124124 14
125125 15
126126 16
127127 17
128128 18
129129 19
130130 20
131131 21
132132 22
133133 23
134134 24
135135
136136 Oklahoma net operating loss carryovers and carrybacks
137137 to such year. Oklahoma net operating losses shall be
138138 separately determined by reference to Section 172 of
139139 the Internal Revenue Code, 26 U .S.C., Section 172, as
140140 modified by the Oklahoma Income Tax Act, Section 2351
141141 et seq. of this title, and shall be allowed without
142142 regard to the existence of a federal net operating
143143 loss. For tax years beginning after December 31,
144144 2000, and ending before Ja nuary 1, 2008, the years to
145145 which such losses may be carried shall be determined
146146 solely by reference to Section 172 of the Internal
147147 Revenue Code, 26 U.S.C., Section 172, with the
148148 exception that the terms "net operating loss" and
149149 "taxable income" shall be replaced with "Oklahoma net
150150 operating loss" and "Oklahoma taxable income ". For
151151 tax years beginning after December 31, 2007, and
152152 ending before January 1, 2009, years to which such
153153 losses may be carried back shall be limited to two (2)
154154 years. For tax years beginning after December 31,
155155 2008, the years to which such losses may be carried
156156 back shall be determined solely by reference to
157157 Section 172 of the Internal Revenue Code, 26 U.S.C.,
158158 Section 172, with the exception that the terms "net
159159 operating loss" and "taxable income" shall be replaced
160160 1
161161 2
162162 3
163163 4
164164 5
165165 6
166166 7
167167 8
168168 9
169169 10
170170 11
171171 12
172172 13
173173 14
174174 15
175175 16
176176 17
177177 18
178178 19
179179 20
180180 21
181181 22
182182 23
183183 24
184184
185185 with "Oklahoma net operating loss " and "Oklahoma
186186 taxable income".
187187 4. Items of the following nature shall be allocated as
188188 indicated. Allowable deductions attributable to items separately
189189 allocable in subparagraphs a, b and c of this paragraph, whether or
190190 not such items of income were actually received, shall be allocated
191191 on the same basis as those items:
192192 a. Income from real and tangible personal property, such
193193 as rents, oil and mining production or royalties, and
194194 gains or losses from sales of such property, shall be
195195 allocated in accordance with the s itus of such
196196 property;
197197 b. Income from intangible personal property, such as
198198 interest, dividends, patent or copyright royalties,
199199 and gains or losses from sales of such property, s hall
200200 be allocated in accordance with the domiciliary situs
201201 of the taxpayer, except that:
202202 (1) where such property has acquired a nonunitary
203203 business or commercial situs apart from the
204204 domicile of the taxpayer such income shall be
205205 allocated in accordance wit h such business or
206206 commercial situs; interest income from
207207 investments held to generate working capital for
208208 a unitary business enterprise shall be included
209209 1
210210 2
211211 3
212212 4
213213 5
214214 6
215215 7
216216 8
217217 9
218218 10
219219 11
220220 12
221221 13
222222 14
223223 15
224224 16
225225 17
226226 18
227227 19
228228 20
229229 21
230230 22
231231 23
232232 24
233233
234234 in apportionable income; a resident trust or
235235 resident estate shall be treated as having a
236236 separate commercial or business situs insofar as
237237 undistributed income is concerned, but shall not
238238 be treated as having a separate commercial or
239239 business situs insofar as distributed income is
240240 concerned,
241241 (2) for taxable years beginning after December 31,
242242 2003, capital or ordinary gains or losses from
243243 the sale of an ownership interest in a publi cly
244244 traded partnership, as defined by Section 7704(b)
245245 of the Internal Revenue Code, shall be allocated
246246 to this state in the ratio of the original cost
247247 of such partnership's tangible property in this
248248 state to the original cost of such partnership 's
249249 tangible property everywhere, as determined at
250250 the time of the sale; if more than fifty percent
251251 (50%) of the value of the partnership 's assets
252252 consists of intangible assets, capital or
253253 ordinary gains or losses from the sale of an
254254 ownership interest in the partners hip shall be
255255 allocated to this state in accordance with the
256256 sales factor of the partnership for its first
257257 full tax period immediately preceding its tax
258258 1
259259 2
260260 3
261261 4
262262 5
263263 6
264264 7
265265 8
266266 9
267267 10
268268 11
269269 12
270270 13
271271 14
272272 15
273273 16
274274 17
275275 18
276276 19
277277 20
278278 21
279279 22
280280 23
281281 24
282282
283283 period during which the ow nership interest in the
284284 partnership was sold; the provisions of this
285285 division shall only apply if the capital or
286286 ordinary gains or losses from the sale of an
287287 ownership interest in a partnership do not
288288 constitute qualifying gain receiving capital
289289 treatment as defined in subparagraph a of
290290 paragraph 2 of subsection F of this section,
291291 (3) income from such property which is required to be
292292 allocated pursuant to the provisions of paragraph
293293 5 of this subsection shall be allocated as herein
294294 provided;
295295 c. Net income or loss from a business activity which is
296296 not a part of business carried on within or without
297297 the state of a unitary character shall be separately
298298 allocated to the state in which such activity is
299299 conducted;
300300 d. In the case of a manufacturing or processing
301301 enterprise the business of which in Oklahoma consists
302302 solely of marketing its pr oducts by:
303303 (1) sales having a situs without this state, shipped
304304 directly to a point from without the state to a
305305 purchaser within the state, commonly known as
306306 interstate sales,
307307 1
308308 2
309309 3
310310 4
311311 5
312312 6
313313 7
314314 8
315315 9
316316 10
317317 11
318318 12
319319 13
320320 14
321321 15
322322 16
323323 17
324324 18
325325 19
326326 20
327327 21
328328 22
329329 23
330330 24
331331
332332 (2) sales of the product stored in public warehouses
333333 within the state pursuant to "in transit"
334334 tariffs, as prescribed and allowed by the
335335 Interstate Commerce Commission, to a purchaser
336336 within the state,
337337 (3) sales of the product stored in public warehouses
338338 within the state where the shipment to such
339339 warehouses is not covered by "in transit"
340340 tariffs, as prescribed and allowed by the
341341 Interstate Commerce Commission, to a purchaser
342342 within or without the state,
343343 the Oklahoma net income shall, at the option of the
344344 taxpayer, be that portion of the total net income of
345345 the taxpayer for federal income tax purposes derived
346346 from the manufacture and/or processing and sales
347347 everywhere as determined by the ratio of the sales
348348 defined in this section made to the purchaser within
349349 the state to the total sales everywhere. The term
350350 "public warehouse" as used in this subparagraph means
351351 a licensed public warehouse, the principal business of
352352 which is warehousing merchandise for the public;
353353 e. In the case of insurance companies, Oklahoma taxable
354354 income shall be taxable income of the taxpayer for
355355 federal tax purposes, as adjusted for the adjustments
356356 1
357357 2
358358 3
359359 4
360360 5
361361 6
362362 7
363363 8
364364 9
365365 10
366366 11
367367 12
368368 13
369369 14
370370 15
371371 16
372372 17
373373 18
374374 19
375375 20
376376 21
377377 22
378378 23
379379 24
380380
381381 provided pursuant to the provisions of paragraphs 1
382382 and 2 of this subsection, apportioned as follows:
383383 (1) except as otherwise provided by divi sion (2) of
384384 this subparagraph, taxable income of an insurance
385385 company for a taxable year shall be apportioned
386386 to this state by multiplying such income by a
387387 fraction, the numerator of which is the direct
388388 premiums written for insurance on property or
389389 risks in this state, and the denominator of which
390390 is the direct premiums written for insurance on
391391 property or risks everywhere. For purposes of
392392 this subsection, the term "direct premiums
393393 written" means the total amount of direct
394394 premiums written, assessments and annuity
395395 considerations as reported for the taxable year
396396 on the annual stateme nt filed by the company with
397397 the Insurance Commissioner in the form approved
398398 by the National Association of Insurance
399399 Commissioners, or such other form as may be
400400 prescribed in lieu thereof,
401401 (2) if the principal source of premiums written by an
402402 insurance company consists of premiums for
403403 reinsurance accepted by it, the taxable income of
404404 such company shall be apportioned to this state
405405 1
406406 2
407407 3
408408 4
409409 5
410410 6
411411 7
412412 8
413413 9
414414 10
415415 11
416416 12
417417 13
418418 14
419419 15
420420 16
421421 17
422422 18
423423 19
424424 20
425425 21
426426 22
427427 23
428428 24
429429
430430 by multiplying such income by a fraction, the
431431 numerator of which is the sum of (a) direct
432432 premiums written for insurance on pro perty or
433433 risks in this state, plus (b) premiums written
434434 for reinsurance accepted in respect of property
435435 or risks in this state, and the denominator of
436436 which is the sum of (c) dir ect premiums written
437437 for insurance on property or risks everywhere,
438438 plus (d) premiums written for reinsurance
439439 accepted in respect of property or risks
440440 everywhere. For purposes of this paragraph,
441441 premiums written for reinsurance accepted in
442442 respect of property or risks in this state,
443443 whether or not otherwise determinable, may at the
444444 election of the company be determined on the
445445 basis of the proportion which premiums written
446446 for insurance accepted from companies
447447 commercially domiciled in Oklahoma bears to
448448 premiums written for reinsurance accepted from
449449 all sources, or alternatively in the proportion
450450 which the sum of the direct premiums written for
451451 insurance on property or risks in this state by
452452 each ceding company from which reinsurance is
453453 accepted bears to the sum of the total direct
454454 1
455455 2
456456 3
457457 4
458458 5
459459 6
460460 7
461461 8
462462 9
463463 10
464464 11
465465 12
466466 13
467467 14
468468 15
469469 16
470470 17
471471 18
472472 19
473473 20
474474 21
475475 22
476476 23
477477 24
478478
479479 premiums written by each such ceding company for
480480 the taxable year.
481481 5. The net income or loss remaining after the separate
482482 allocation in paragraph 4 of this subsection, being that which is
483483 derived from a unitary business enterprise , shall be apportioned to
484484 this state on the basis of the arithmetical average of three factors
485485 consisting of property, payroll and sales or gross revenue
486486 enumerated as subparagraphs a, b and c of this paragraph. Net
487487 income or loss as used in this paragrap h includes that derived from
488488 patent or copyright royalties, purchase discounts , and interest on
489489 accounts receivable relating to or arising from a business activity,
490490 the income from which is apportioned pursuant to this subsection,
491491 including the sale or oth er disposition of such property and any
492492 other property used in the unitary enterprise. Deductions used in
493493 computing such net income or loss shall not include taxes based on
494494 or measured by income. Provided, for corporations whose property
495495 for purposes of the tax imposed by Section 2355 of this title has an
496496 initial investment cost e qualing or exceeding Two Hundred Million
497497 Dollars ($200,000,000.00) and such investment is made on or after
498498 July 1, 1997, or for corporations which expand their property or
499499 facilities in this state and such expansion has an investment cost
500500 equaling or exceeding Two Hundred Million Dollars ($200,000,000.00)
501501 over a period not to exceed three (3) years, and such expansion is
502502 commenced on or after January 1, 2000, the three factors sha ll be
503503 1
504504 2
505505 3
506506 4
507507 5
508508 6
509509 7
510510 8
511511 9
512512 10
513513 11
514514 12
515515 13
516516 14
517517 15
518518 16
519519 17
520520 18
521521 19
522522 20
523523 21
524524 22
525525 23
526526 24
527527
528528 apportioned with property and payroll, each comprising twenty -five
529529 percent (25%) of the apportionment factor and sales comprising fifty
530530 percent (50%) of the apportionment factor. The apportionment
531531 factors shall be computed as follows:
532532 a. The property factor is a fraction, the numerator of
533533 which is the average value of the taxpayer 's real and
534534 tangible personal property owned or rented and used in
535535 this state during the tax period and the denominator
536536 of which is the average value of all the taxpayer 's
537537 real and tangible personal property everywhere owned
538538 or rented and used during the tax period.
539539 (1) Property, the income from which is separately
540540 allocated in paragraph 4 of this subsection,
541541 shall not be included in determining this
542542 fraction. The numerator of the fraction shall
543543 include a portion of the investment in
544544 transportation and other equipment having no
545545 fixed situs, such as rolling stock, buses, trucks
546546 and trailers, including machinery and equipment
547547 carried thereon, airplanes, salespersons '
548548 automobiles and other similar equipment, in the
549549 proportion that miles traveled in Oklaho ma by
550550 such equipment bears to total miles traveled,
551551 1
552552 2
553553 3
554554 4
555555 5
556556 6
557557 7
558558 8
559559 9
560560 10
561561 11
562562 12
563563 13
564564 14
565565 15
566566 16
567567 17
568568 18
569569 19
570570 20
571571 21
572572 22
573573 23
574574 24
575575
576576 (2) Property owned by the taxpayer is valued at its
577577 original cost. Property rented by the taxpayer
578578 is valued at eight times t he net annual rental
579579 rate. Net annual rental rate is the annual
580580 rental rate paid by the taxpayer, less any annual
581581 rental rate received by the taxpayer from
582582 subrentals,
583583 (3) The average value of property shall be determined
584584 by averaging the values at the be ginning and
585585 ending of the tax period but the Oklahoma Tax
586586 Commission may requi re the averaging of monthly
587587 values during the tax period if reasonably
588588 required to reflect properly the average value of
589589 the taxpayer's property;
590590 b. The payroll factor is a fract ion, the numerator of
591591 which is the total compensation for services rendered
592592 in the state during the tax period, and the
593593 denominator of which is the total compensation for
594594 services rendered everywhere during the tax period.
595595 "Compensation", as used in this subsection means those
596596 paid-for services to the extent related to the unitary
597597 business but does not include officers ' salaries,
598598 wages and other compensation.
599599 1
600600 2
601601 3
602602 4
603603 5
604604 6
605605 7
606606 8
607607 9
608608 10
609609 11
610610 12
611611 13
612612 14
613613 15
614614 16
615615 17
616616 18
617617 19
618618 20
619619 21
620620 22
621621 23
622622 24
623623
624624 (1) In the case of a transportation enterprise, the
625625 numerator of the fraction shall include a port ion
626626 of such expenditure in connection with employees
627627 operating equipment over a fixed route, such as
628628 railroad employees, airline pilots, or bus
629629 drivers, in this state only a part of the time,
630630 in the proportion that mileage traveled in
631631 Oklahoma bears to tot al mileage traveled by such
632632 employees,
633633 (2) In any case the numerator of the fr action shall
634634 include a portion of such expenditures in
635635 connection with itinerant employees, such as
636636 traveling salespersons, in this state only a part
637637 of the time, in the proporti on that time spent in
638638 Oklahoma bears to total time spent in furtherance
639639 of the enterprise by such employees;
640640 c. The sales factor is a fraction, the numerator of which
641641 is the total sales or gross revenue of the taxpayer in
642642 this state during the tax period, and the denominator
643643 of which is the total sales or gross revenue of the
644644 taxpayer everywhere during the tax period. "Sales",
645645 as used in this subsection does not include sales or
646646 gross revenue which are separately allocated in
647647 paragraph 4 of this subsection .
648648 1
649649 2
650650 3
651651 4
652652 5
653653 6
654654 7
655655 8
656656 9
657657 10
658658 11
659659 12
660660 13
661661 14
662662 15
663663 16
664664 17
665665 18
666666 19
667667 20
668668 21
669669 22
670670 23
671671 24
672672
673673 (1) Sales of tangible personal property have a situs
674674 in this state if the property is delivered or
675675 shipped to a purchaser other than the United
676676 States government, within this state regardless
677677 of the FOB point or other conditions of the sale;
678678 or the property is shipped from an office, store,
679679 warehouse, factory or other place of sto rage in
680680 this state and (a) the purchaser is the United
681681 States government or (b) the taxpayer is not
682682 doing business in the state of the destination of
683683 the shipment.
684684 (2) In the case of a railroad or interurban railway
685685 enterprise, the numerator of the fraction shall
686686 not be less than the allocation of revenues to
687687 this state as shown in its annual report to the
688688 Corporation Commission.
689689 (3) In the case of an airline, truck or bus
690690 enterprise or freight car, tank car, refrigerator
691691 car or other railroad equipment ent erprise, the
692692 numerator of the fraction shall include a portion
693693 of revenue from interstate transportation in the
694694 proportion that interstate mileage traveled in
695695 Oklahoma bears to total interstate mileage
696696 traveled.
697697 1
698698 2
699699 3
700700 4
701701 5
702702 6
703703 7
704704 8
705705 9
706706 10
707707 11
708708 12
709709 13
710710 14
711711 15
712712 16
713713 17
714714 18
715715 19
716716 20
717717 21
718718 22
719719 23
720720 24
721721
722722 (4) In the case of an oil, gasoline or gas pipeline
723723 enterprise, the numerator of the fraction shall
724724 be either the total of traffic units of the
725725 enterprise within Oklahoma or the revenue
726726 allocated to Oklahoma based upon mil es moved, at
727727 the option of the taxpayer, and the denominator
728728 of which shall be the total of traffic units of
729729 the enterprise or the revenue of the enterprise
730730 everywhere as appropriate to the numerator. A
731731 "traffic unit" is hereby defined as the
732732 transportation for a distance of one (1) mile of
733733 one (1) barrel of oil, one (1) gallon of gasoline
734734 or one thousand (1,000) cubic feet of natural or
735735 casinghead gas, as the case may be.
736736 (5) In the case of a telephone or telegraph or other
737737 communication enterprise, the n umerator of the
738738 fraction shall include that portion of the
739739 interstate revenue as is allocated pursuant to
740740 the accounting procedures prescribed by the
741741 Federal Communications Commission; provided that
742742 in respect to each corporation or business entity
743743 required by the Federal Communications Commission
744744 to keep its books and records in accordance with
745745 a uniform system of accounts prescribed by such
746746 1
747747 2
748748 3
749749 4
750750 5
751751 6
752752 7
753753 8
754754 9
755755 10
756756 11
757757 12
758758 13
759759 14
760760 15
761761 16
762762 17
763763 18
764764 19
765765 20
766766 21
767767 22
768768 23
769769 24
770770
771771 Commission, the intrastate net income shall be
772772 determined separately in the manner provided by
773773 such uniform system o f accounts and only the
774774 interstate income shall be subject to allocation
775775 pursuant to the provisions of this subsection.
776776 Provided further, that the gross revenue factors
777777 shall be those as are determined pursuant to the
778778 accounting procedures prescribed by t he Federal
779779 Communications Commission.
780780 In any case where the apportionment of the three factors
781781 prescribed in this paragraph attributes to Oklahoma a portion of net
782782 income of the enterprise out of all appropriate proportion to the
783783 property owned and/or busi ness transacted within this state, because
784784 of the fact that one or more of the factors so prescribed are not
785785 employed to any appreciable extent in furtherance of the enterprise;
786786 or because one or more factors not so prescribed are employed to a
787787 considerable extent in furtherance of the enterprise; or because of
788788 other reasons, the Tax Commission is empowered to permit, after a
789789 showing by taxpayer that an excessive portion of net income has been
790790 attributed to Oklahoma, or require, when in its judgment an
791791 insufficient portion of net income has been attributed to Oklahoma,
792792 the elimination, substitution, or use of additional factors, or
793793 reduction or increase in the weight of such prescribed factors.
794794 Provided, however, that any such variance from such prescribed
795795 1
796796 2
797797 3
798798 4
799799 5
800800 6
801801 7
802802 8
803803 9
804804 10
805805 11
806806 12
807807 13
808808 14
809809 15
810810 16
811811 17
812812 18
813813 19
814814 20
815815 21
816816 22
817817 23
818818 24
819819
820820 factors which has the effect of increasing the portion of net income
821821 attributable to Oklahoma must not be inherently arbitrary, and
822822 application of the recomputed final apportionment to the net income
823823 of the enterprise must attribute to Oklahoma only a reas onable
824824 portion thereof.
825825 6. For calendar years 1997 and 1998, the owner of a n ew or
826826 expanded agricultural commodity processing facility in this state
827827 may exclude from Oklahoma taxable income, or in the case of an
828828 individual, the Oklahoma adjusted gross inc ome, fifteen percent
829829 (15%) of the investment by the owner in the new or expanded
830830 agricultural commodity processing facility. For calendar year 1999,
831831 and all subsequent years, the percentage, not to exceed fifteen
832832 percent (15%), available to the owner of a new or expanded
833833 agricultural commodity processing facility in this state clai ming
834834 the exemption shall be adjusted annually so that the total estimated
835835 reduction in tax liability does not exceed One Million Dollars
836836 ($1,000,000.00) annually. The Tax Commis sion shall promulgate rules
837837 for determining the percentage of the investment which each eligible
838838 taxpayer may exclude. The exclusion provided by this paragraph
839839 shall be taken in the taxable year when the investment is made. In
840840 the event the total reducti on in tax liability authorized by this
841841 paragraph exceeds One Million Dollars ( $1,000,000.00) in any
842842 calendar year, the Tax Commission shall permit any excess over One
843843 Million Dollars ($1,000,000.00) and shall factor such excess into
844844 1
845845 2
846846 3
847847 4
848848 5
849849 6
850850 7
851851 8
852852 9
853853 10
854854 11
855855 12
856856 13
857857 14
858858 15
859859 16
860860 17
861861 18
862862 19
863863 20
864864 21
865865 22
866866 23
867867 24
868868
869869 the percentage for subs equent years. Any amount of the exemption
870870 permitted to be excluded pursuant to the provisions of this
871871 paragraph but not used in any year may be carried forward as an
872872 exemption from income pursuant to the provisions of this paragraph
873873 for a period not excee ding six (6) years following the year in which
874874 the investment was originally m ade.
875875 For purposes of this paragraph:
876876 a. "Agricultural commodity processing facility " means
877877 building, structures, fixtures and improvements used
878878 or operated primarily for the proc essing or production
879879 of marketable products from agricultural commodities.
880880 The term shall also mean a dairy operation that
881881 requires a depreciable investment of at least Two
882882 Hundred Fifty Thousand Dollars ($250,000.00) and which
883883 produces milk from dairy co ws. The term does not
884884 include a facility that provides only, and nothing
885885 more than, storage, cleaning, drying or transportation
886886 of agricultural commodities, and
887887 b. "Facility" means each part of the facility which is
888888 used in a process primarily for:
889889 (1) the processing of agricultural commodities,
890890 including receiving or storing agricultural
891891 commodities, or the production of milk at a dairy
892892 operation,
893893 1
894894 2
895895 3
896896 4
897897 5
898898 6
899899 7
900900 8
901901 9
902902 10
903903 11
904904 12
905905 13
906906 14
907907 15
908908 16
909909 17
910910 18
911911 19
912912 20
913913 21
914914 22
915915 23
916916 24
917917
918918 (2) transporting the agricultural commodities or
919919 product before, during or after the processing,
920920 or
921921 (3) packaging or otherwise preparing the product for
922922 sale or shipment.
923923 7. Despite any provision to the contrary in paragraph 3 of this
924924 subsection, for taxable years beginning after December 31, 1999, in
925925 the case of a taxpayer which has a farming loss, such farming loss
926926 shall be considered a net operating loss carryback in accordance
927927 with and to the extent of the Internal Revenue Code, 26 U.S.C.,
928928 Section 172(b)(G). However, the amount of the net operating loss
929929 carryback shall not exceed the lesser of:
930930 a. Sixty Thousand Dollars ($60,000.00), or
931931 b. the loss properly shown on Schedule F of the Internal
932932 Revenue Service Form 1040 reduced by one -half (1/2) of
933933 the income from all other sources other than reflected
934934 on Schedule F.
935935 8. In taxable years beginning after Decembe r 31, 1995, all
936936 qualified wages equal to the federal income tax credit set forth in
937937 26 U.S.C.A., Section 45A, shall be deducted from taxable income.
938938 The deduction allowed pursuant to this paragraph shall only be
939939 permitted for the tax years in which the fe deral tax credit pursuant
940940 to 26 U.S.C.A., Section 45A, is allowed. For purpos es of this
941941 1
942942 2
943943 3
944944 4
945945 5
946946 6
947947 7
948948 8
949949 9
950950 10
951951 11
952952 12
953953 13
954954 14
955955 15
956956 16
957957 17
958958 18
959959 19
960960 20
961961 21
962962 22
963963 23
964964 24
965965
966966 paragraph, "qualified wages" means those wages used to calculate the
967967 federal credit pursuant to 26 U.S.C.A., Section 45A.
968968 9. In taxable years beginning after December 31, 2005, an
969969 employer that is eligible for and utilizes the Safety Pays OSHA
970970 Consultation Service provided by the Oklahoma Department of Labor
971971 shall receive an exemption from taxable income in the amount of One
972972 Thousand Dollars ($1,000.00) for the tax yea r that the service is
973973 utilized.
974974 10. For taxable years beginning on or after J anuary 1, 2010,
975975 there shall be added to Oklahoma taxable income an amount equal to
976976 the amount of deferred income not included in such taxable income
977977 pursuant to Section 108(i)(1) of the Internal Revenue Code of 1986
978978 as amended by Section 1231 of the American Recovery and Reinvestment
979979 Act of 2009 (P.L. No. 111 -5). There shall be subtracted from
980980 Oklahoma taxable income an amount equal to the amount of deferred
981981 income included in su ch taxable income pursuant to Section 108(i)(1)
982982 of the Internal Revenue Code b y Section 1231 of the American
983983 Recovery and Reinvestment Act of 2009 (P.L. No. 111 -5).
984984 11. For taxable years beginning on or after January 1, 2019,
985985 there shall be subtracted fro m Oklahoma taxable income or adjusted
986986 gross income any item of income or gain, and there shall be added to
987987 Oklahoma taxable income or adjusted gross income any item of loss or
988988 deduction that in the absence of an election pursuant to the
989989 provisions of the Pass-Through Entity Tax Equity Act of 2019 would
990990 1
991991 2
992992 3
993993 4
994994 5
995995 6
996996 7
997997 8
998998 9
999999 10
10001000 11
10011001 12
10021002 13
10031003 14
10041004 15
10051005 16
10061006 17
10071007 18
10081008 19
10091009 20
10101010 21
10111011 22
10121012 23
10131013 24
10141014
10151015 be allocated to a member or to an indirect member of an electing
10161016 pass-through entity pursuant to Section 2351 et seq. of this title,
10171017 if (i) the electing pass -through entity has accounted for such item
10181018 in computing its Oklahoma net entity income or loss pursuant to the
10191019 provisions of the Pass -Through Entity Tax Equity Act of 2019, and
10201020 (ii) the total amount of tax attributable to any resulting Oklahoma
10211021 net entity income has been paid. The Oklahoma Tax Commission shall
10221022 promulgate rules for the reporting of such exclusion to direct and
10231023 indirect members of the electing pass -through entity. As used in
10241024 this paragraph, "electing pass-through entity", "indirect member",
10251025 and "member" shall be defined in the same manner as prescribed by
10261026 Section 2355.1P-2 of this title. Notwithstanding the application of
10271027 this paragraph, the adjusted tax basis of any ownership interest in
10281028 a pass-through entity for purposes of Section 2351 et seq. of this
10291029 title shall be equal to its adjuste d tax basis for federal income
10301030 tax purposes.
10311031 B. 1. The taxable income of any corporation shall be further
10321032 adjusted to arrive at Oklahoma taxable income, except those
10331033 corporations electing treatment as provided in subchapter S of the
10341034 Internal Revenue Code , 26 U.S.C., Section 1361 et seq., and Section
10351035 2365 of this title, deductions pursuant to the provisions of the
10361036 Accelerated Cost Recovery System as defined and allowed in the
10371037 Economic Recovery Tax Act of 1981, Public Law 97 -34, 26 U.S.C.,
10381038 Section 168, for depreciation of assets placed into service after
10391039 1
10401040 2
10411041 3
10421042 4
10431043 5
10441044 6
10451045 7
10461046 8
10471047 9
10481048 10
10491049 11
10501050 12
10511051 13
10521052 14
10531053 15
10541054 16
10551055 17
10561056 18
10571057 19
10581058 20
10591059 21
10601060 22
10611061 23
10621062 24
10631063
10641064 December 31, 1981, shall not be allowed in calculating Oklahoma
10651065 taxable income. Such corporations shall be allowed a deduction for
10661066 depreciation of assets placed into service after December 31, 1981,
10671067 in accordance with provisions of the Internal Revenue Code, 26
10681068 U.S.C., Section 1 et seq., in effect immediately prior to the
10691069 enactment of the Accelerated Cost Recovery System. The Oklahoma tax
10701070 basis for all such assets placed into service after December 31,
10711071 1981, calculated in this section shall be retained and utilized for
10721072 all Oklahoma income tax purposes through the final disposition of
10731073 such assets.
10741074 Notwithstanding any other provisions of the Oklahoma Income Tax
10751075 Act, Section 2351 et seq. of this title, or of th e Internal Revenue
10761076 Code to the contrary, this subsection shall control calculation of
10771077 depreciation of assets placed into service after December 31, 1981,
10781078 and before January 1, 1983.
10791079 For assets placed in service and held by a corporation in which
10801080 accelerated cost recovery system was previously disallowed, an
10811081 adjustment to taxable inc ome is required in the first taxable year
10821082 beginning after December 31, 1982, to reconcile the basis of such
10831083 assets to the basis allowed in the Internal Revenue Code. The
10841084 purpose of this adjustment is to equalize the basis and allowance
10851085 for depreciation accounts between that reported to the Internal
10861086 Revenue Service and that reported to Oklahoma.
10871087 1
10881088 2
10891089 3
10901090 4
10911091 5
10921092 6
10931093 7
10941094 8
10951095 9
10961096 10
10971097 11
10981098 12
10991099 13
11001100 14
11011101 15
11021102 16
11031103 17
11041104 18
11051105 19
11061106 20
11071107 21
11081108 22
11091109 23
11101110 24
11111111
11121112 2. For tax years beginning on or after January 1, 2009, and
11131113 ending on or before Decem ber 31, 2009, there shall be added to
11141114 Oklahoma taxable income any amount in ex cess of One Hundred Seventy -
11151115 five Thousand Dollars ($175,000.00) which has been deducted as a
11161116 small business expense under Internal Revenue Code, Section 179 as
11171117 provided in the American Recovery and Reinvestment Act of 2009.
11181118 C. 1. For taxable years beginning after December 31, 1987, the
11191119 taxable income of any corporation shall be further adjusted to
11201120 arrive at Oklahoma taxable income for transfers of technology to
11211121 qualified small businesses located in Oklahoma. Such transferor
11221122 corporation shall be allowed a n exemption from taxable income of an
11231123 amount equal to the amount of royalty payment received as a result
11241124 of such transfer; provided, however, such amount shall not exceed
11251125 ten percent (10%) of the amount of gross proceeds received by such
11261126 transferor corporation as a result of the technology transfer. Such
11271127 exemption shall be allowed for a period not to exceed ten (10) years
11281128 from the date of receipt of the first royalty payment accr uing from
11291129 such transfer. No exemption may be claimed for transfers of
11301130 technology to qualified small businesses made prior to January 1,
11311131 1988.
11321132 2. For purposes of this subsection:
11331133 a. "Qualified small business " means an entity, whether
11341134 organized as a corpor ation, partnership, or
11351135 proprietorship, organized for profit with its
11361136 1
11371137 2
11381138 3
11391139 4
11401140 5
11411141 6
11421142 7
11431143 8
11441144 9
11451145 10
11461146 11
11471147 12
11481148 13
11491149 14
11501150 15
11511151 16
11521152 17
11531153 18
11541154 19
11551155 20
11561156 21
11571157 22
11581158 23
11591159 24
11601160
11611161 principal place of business located within this state
11621162 and which meets the following criteria:
11631163 (1) Capitalization of not more than Two Hundred Fifty
11641164 Thousand Dollars ($250,000.00),
11651165 (2) Having at least fifty percent (50%) of its
11661166 employees and assets located in Oklaho ma at the
11671167 time of the transfer, and
11681168 (3) Not a subsidiary or affiliate of the transferor
11691169 corporation;
11701170 b. "Technology" means a proprietary process, formula,
11711171 pattern, device or comp ilation of scientific or
11721172 technical information which is not in the public
11731173 domain;
11741174 c. "Transferor corporation " means a corporation which is
11751175 the exclusive and undisputed owner of the technology
11761176 at the time the transfer is made; and
11771177 d. "Gross proceeds" means the total amount of
11781178 consideration for the transfer of technology, whether
11791179 the consideration is in money or otherwise.
11801180 D. 1. For taxable years beginning after December 31, 2005, the
11811181 taxable income of any corporation, estate or trust, shall be further
11821182 adjusted for qualifying gains receiving capital treatment. Such
11831183 corporations, estates or trusts shall be allowed a deduction from
11841184 Oklahoma taxable income for the amount of qualifying gains receiving
11851185 1
11861186 2
11871187 3
11881188 4
11891189 5
11901190 6
11911191 7
11921192 8
11931193 9
11941194 10
11951195 11
11961196 12
11971197 13
11981198 14
11991199 15
12001200 16
12011201 17
12021202 18
12031203 19
12041204 20
12051205 21
12061206 22
12071207 23
12081208 24
12091209
12101210 capital treatment earned by the corporation, estate or trust during
12111211 the taxable year and included in the federal taxable income of such
12121212 corporation, estate or trust.
12131213 2. As used in this subsection:
12141214 a. "qualifying gains receiving capital treatment " means
12151215 the amount of net capital gains, as defined in Section
12161216 1222(11) of the Internal Revenue Code, included in the
12171217 federal income tax return of the corporation, estate
12181218 or trust that result from:
12191219 (1) the sale of real property or tangible personal
12201220 property located within Oklahoma that has been
12211221 directly or indirectly owned b y the corporation,
12221222 estate or trust for a holding period of at least
12231223 five (5) years prior to the date of the
12241224 transaction from which such net capital gains
12251225 arise,
12261226 (2) the sale of stock or on the sale of an ownership
12271227 interest in an Oklahoma company, limited
12281228 liability company, or partnership where such
12291229 stock or ownership interest has been directly or
12301230 indirectly owned by the corporation, estate or
12311231 trust for a holding period of at least three (3)
12321232 years prior to the date of the transaction from
12331233 which the net capital gains arise, or
12341234 1
12351235 2
12361236 3
12371237 4
12381238 5
12391239 6
12401240 7
12411241 8
12421242 9
12431243 10
12441244 11
12451245 12
12461246 13
12471247 14
12481248 15
12491249 16
12501250 17
12511251 18
12521252 19
12531253 20
12541254 21
12551255 22
12561256 23
12571257 24
12581258
12591259 (3) the sale of real property, tangible personal
12601260 property or intangible personal property located
12611261 within Oklahoma as part of the sale of all or
12621262 substantially all of the assets of an Oklahoma
12631263 company, limited liability company, or
12641264 partnership where such property has been directly
12651265 or indirectly owned by such entity owned by the
12661266 owners of such entity, and used in or derived
12671267 from such entity for a period of at least three
12681268 (3) years prior to the date of the transaction
12691269 from which the net capit al gains arise,
12701270 b. "holding period" means an uninterrupted period of
12711271 time. The holding period shall include any additional
12721272 period when the property was held by another
12731273 individual or entity, if such additional period is
12741274 included in the taxpayer 's holding period for the
12751275 asset pursuant to the Internal Revenue Code,
12761276 c. "Oklahoma company", "limited liability company ", or
12771277 "partnership" means an entity whose primary
12781278 headquarters have been located in Oklahoma for at
12791279 least three (3) uninterrupted years prior to the date
12801280 of the transaction from which the net capital gains
12811281 arise,
12821282 1
12831283 2
12841284 3
12851285 4
12861286 5
12871287 6
12881288 7
12891289 8
12901290 9
12911291 10
12921292 11
12931293 12
12941294 13
12951295 14
12961296 15
12971297 16
12981298 17
12991299 18
13001300 19
13011301 20
13021302 21
13031303 22
13041304 23
13051305 24
13061306
13071307 d. "direct" means the taxpayer directly owns the asset,
13081308 and
13091309 e. "indirect" means the taxpayer owns an interest in a
13101310 pass-through entity (or chain of pass -through
13111311 entities) that sells the asset that gives rise to the
13121312 qualifying gains receiving capital treatment.
13131313 (1) With respect to sales of real property or
13141314 tangible personal property located within
13151315 Oklahoma, the deduction described in this
13161316 subsection shall not apply unless the pass -
13171317 through entity that makes the sale has held the
13181318 property for not less than five (5) uninter rupted
13191319 years prior to the date of the transaction that
13201320 created the capital gain, and each pass -through
13211321 entity included in the chain of ownership has
13221322 been a member, partner, or sh areholder of the
13231323 pass-through entity in the tier immediately below
13241324 it for an uninterrupted period of not less than
13251325 five (5) years.
13261326 (2) With respect to sales of stock or ownership
13271327 interest in or sales of all or substantially all
13281328 of the assets of an Oklahoma company, limited
13291329 liability company, or partnership, the deduction
13301330 described in this subsection shall not apply
13311331 1
13321332 2
13331333 3
13341334 4
13351335 5
13361336 6
13371337 7
13381338 8
13391339 9
13401340 10
13411341 11
13421342 12
13431343 13
13441344 14
13451345 15
13461346 16
13471347 17
13481348 18
13491349 19
13501350 20
13511351 21
13521352 22
13531353 23
13541354 24
13551355
13561356 unless the pass-through entity that makes the
13571357 sale has held the stock or ownership interest or
13581358 the assets for not less than three (3)
13591359 uninterrupted years prior to the date of the
13601360 transaction that created the capital gain, and
13611361 each pass-through entity included in the chain of
13621362 ownership has been a member, partner or
13631363 shareholder of the pass -through entity in the
13641364 tier immediately below it for an unint errupted
13651365 period of not less than three (3) years.
13661366 E. The Oklahoma adjusted gr oss income of any individual
13671367 taxpayer shall be further adjusted as follows to arrive at Oklahoma
13681368 taxable income:
13691369 1. a. In the case of individuals, there shall be added or
13701370 deducted, as the case may be, the difference necessary
13711371 to allow personal exemptions of One Thousand Dollars
13721372 ($1,000.00) in lieu of the personal exemptions allowed
13731373 by the Internal Revenue Code.
13741374 b. There shall be allowed an additional exemption of One
13751375 Thousand Dollars ($1,000.00) for each taxpayer or
13761376 spouse who is blind at the close of the t ax year. For
13771377 purposes of this subparagraph, an individual is blind
13781378 only if the central visual acuity of the individual
13791379 does not exceed 20/200 in the better eye with
13801380 1
13811381 2
13821382 3
13831383 4
13841384 5
13851385 6
13861386 7
13871387 8
13881388 9
13891389 10
13901390 11
13911391 12
13921392 13
13931393 14
13941394 15
13951395 16
13961396 17
13971397 18
13981398 19
13991399 20
14001400 21
14011401 22
14021402 23
14031403 24
14041404
14051405 correcting lenses, or if the visual acuity of the
14061406 individual is greater than 20/200, but is accompanied
14071407 by a limitation in the fields of vision such that the
14081408 widest diameter of the visual field subtends an angle
14091409 no greater than twenty (20) degrees.
14101410 c. There shall be allowed an additional exemption of One
14111411 Thousand Dollars ($1,000.00) for each ta xpayer or
14121412 spouse who is sixty-five (65) years of age or older at
14131413 the close of the tax year based upon the filing status
14141414 and federal adjusted gross income of the taxpayer.
14151415 Taxpayers with the following filing status may claim
14161416 this exemption if the federal adjusted gross income
14171417 does not exceed:
14181418 (1) Twenty-five Thousand Dollars ($25,000.00) if
14191419 married and filing jointly,
14201420 (2) Twelve Thousand Five Hundred Dollars ($12,500.00)
14211421 if married and filing separately,
14221422 (3) Fifteen Thousand Dollars ($15,000.00) if single,
14231423 and
14241424 (4) Nineteen Thousand Dollars ($19,000.00) if a
14251425 qualifying head of household.
14261426 Provided, for taxable years beginning after December
14271427 31, 1999, amounts included in the calculati on of
14281428 federal adjusted gross income pursuant to the
14291429 1
14301430 2
14311431 3
14321432 4
14331433 5
14341434 6
14351435 7
14361436 8
14371437 9
14381438 10
14391439 11
14401440 12
14411441 13
14421442 14
14431443 15
14441444 16
14451445 17
14461446 18
14471447 19
14481448 20
14491449 21
14501450 22
14511451 23
14521452 24
14531453
14541454 conversion of a traditional individual retirement
14551455 account to a Roth individual retirement account shall
14561456 be excluded from federal adjusted gross income for
14571457 purposes of the income thresholds provided in thi s
14581458 subparagraph.
14591459 2. a. For taxable years beginning on or before December 31,
14601460 2005, in the case of individuals who use the standard
14611461 deduction in determining taxable income, there shall
14621462 be added or deducted, as the case may be, the
14631463 difference necessary to all ow a standard deduction in
14641464 lieu of the standard deduction allowed by the Internal
14651465 Revenue Code, in an amount equal to the larger of
14661466 fifteen percent (15%) of the Oklahoma adjusted gross
14671467 income or One Thousand Dollars ($1,000.00), but not to
14681468 exceed Two Thousand Dollars ($2,000.00), except that
14691469 in the case of a married individual filin g a separate
14701470 return such deduction shall be the larger of fifteen
14711471 percent (15%) of such Oklahoma adjusted gross income
14721472 or Five Hundred Dollars ($500.00), but not to exceed
14731473 the maximum amount of One Thousand Dollars
14741474 ($1,000.00).
14751475 b. For taxable years beginning on or after January 1,
14761476 2006, and before January 1, 2007, in the case of
14771477 individuals who use the standard deduction in
14781478 1
14791479 2
14801480 3
14811481 4
14821482 5
14831483 6
14841484 7
14851485 8
14861486 9
14871487 10
14881488 11
14891489 12
14901490 13
14911491 14
14921492 15
14931493 16
14941494 17
14951495 18
14961496 19
14971497 20
14981498 21
14991499 22
15001500 23
15011501 24
15021502
15031503 determining taxable income, there shall be added or
15041504 deducted, as the case may be, the difference necessary
15051505 to allow a standard deductio n in lieu of the standard
15061506 deduction allowed by the Internal Revenue Code, in an
15071507 amount equal to:
15081508 (1) Three Thousand Dollars ($3,000.00), if the filing
15091509 status is married filing jo int, head of household
15101510 or qualifying widow, or
15111511 (2) Two Thousand Dollars ($2,000.00), if the filing
15121512 status is single or married filing separate.
15131513 c. For the taxable year beginning on January 1, 2007, and
15141514 ending December 31, 2007, in the case of individuals
15151515 who use the standard deduction in determining taxable
15161516 income, there shall be ad ded or deducted, as the case
15171517 may be, the difference necessary to allow a standard
15181518 deduction in lieu of the standard deduction allowed by
15191519 the Internal Revenue Code, in an amount e qual to:
15201520 (1) Five Thousand Five Hundred Dollars ($5,500.00),
15211521 if the filing status is married filing joint or
15221522 qualifying widow, or
15231523 (2) Four Thousand One Hundred Twenty -five Dollars
15241524 ($4,125.00) for a head of household, or
15251525 1
15261526 2
15271527 3
15281528 4
15291529 5
15301530 6
15311531 7
15321532 8
15331533 9
15341534 10
15351535 11
15361536 12
15371537 13
15381538 14
15391539 15
15401540 16
15411541 17
15421542 18
15431543 19
15441544 20
15451545 21
15461546 22
15471547 23
15481548 24
15491549
15501550 (3) Two Thousand Seven Hundred Fifty Dollars
15511551 ($2,750.00), if the filing status is single or
15521552 married filing separat e.
15531553 d. For the taxable year beginning on January 1, 2008, and
15541554 ending December 31, 2008, in the case of individuals
15551555 who use the standard deduction in determining taxable
15561556 income, there shall be added or deducted, as the case
15571557 may be, the difference necessary to allow a standard
15581558 deduction in lieu of the standard deduction allowed by
15591559 the Internal Revenue Code, in an amount equal to:
15601560 (1) Six Thousand Five Hundred Dollars ($6,500.00), if
15611561 the filing status is married filing joint or
15621562 qualifying widow,
15631563 (2) Four Thousand Eight Hundred Seventy -five Dollars
15641564 ($4,875.00) for a head of household, or
15651565 (3) Three Thousand Two Hundred Fifty Dollars
15661566 ($3,250.00), if the filing status is single or
15671567 married filing separate.
15681568 e. For the taxable year beginning on January 1, 2009, and
15691569 ending December 31, 2009, in the case of individuals
15701570 who use the standard deduction in determining taxable
15711571 income, there shall be added or deducted, as the case
15721572 may be, the differen ce necessary to allow a standard
15731573 1
15741574 2
15751575 3
15761576 4
15771577 5
15781578 6
15791579 7
15801580 8
15811581 9
15821582 10
15831583 11
15841584 12
15851585 13
15861586 14
15871587 15
15881588 16
15891589 17
15901590 18
15911591 19
15921592 20
15931593 21
15941594 22
15951595 23
15961596 24
15971597
15981598 deduction in lieu of the standard deduction a llowed by
15991599 the Internal Revenue Code, in an amount equal to:
16001600 (1) Eight Thousand Five Hundred Dollars ($8,500.00),
16011601 if the filing status is married filing joint or
16021602 qualifying widow,
16031603 (2) Six Thousand Three Hundred Seventy -five Dollars
16041604 ($6,375.00) for a head of household, or
16051605 (3) Four Thousand Two Hundred Fifty Dollars
16061606 ($4,250.00), if the filing status is single or
16071607 married filing separate.
16081608 Oklahoma adjusted gross income shall be increas ed by
16091609 any amounts paid for motor vehicle excise taxes which
16101610 were deducted as allowed by the Internal Revenue Code.
16111611 f. For taxable years beginning on or after January 1,
16121612 2010, and ending on December 31, 2016, in the case of
16131613 individuals who use the standard deduction in
16141614 determining taxable income, there shall be added or
16151615 deducted, as the case may be, the difference necessary
16161616 to allow a standard deduction equal to the standard
16171617 deduction allowed by the Internal Revenue Code, based
16181618 upon the amount and filing sta tus prescribed by such
16191619 Code for purposes of filing federal individual income
16201620 tax returns.
16211621 1
16221622 2
16231623 3
16241624 4
16251625 5
16261626 6
16271627 7
16281628 8
16291629 9
16301630 10
16311631 11
16321632 12
16331633 13
16341634 14
16351635 15
16361636 16
16371637 17
16381638 18
16391639 19
16401640 20
16411641 21
16421642 22
16431643 23
16441644 24
16451645
16461646 g. For taxable years beginning on or after January 1,
16471647 2017, ending not later than December 31, 2025, in the
16481648 case of individuals who use the standard deduction in
16491649 determining taxable income, there shall be added or
16501650 deducted, as the case may be, the difference necessary
16511651 to allow a standard deduction in lieu of the standard
16521652 deduction allowed by the Internal Revenue Code, as
16531653 follows:
16541654 (1) Six Thousand Three Hundred Fifty Do llars
16551655 ($6,350.00) for single or married filing
16561656 separately,
16571657 (2) Twelve Thousand Seven Hundred Dollars
16581658 ($12,700.00) for married filing jointly or
16591659 qualifying widower with dependent child, and
16601660 (3) Nine Thousand Three Hundred Fifty Dollars
16611661 ($9,350.00) for head of household.
16621662 h. For taxable years beginning on or after January 1,
16631663 2026, in the case of individuals who use the standard
16641664 deduction in determining taxable income, there shall
16651665 be added or deducted, as the case may be, the
16661666 difference necessary to allow a sta ndard deduction
16671667 equal to the standard deduction allowed by the
16681668 Internal Revenue Code of 1986, as amended based upon
16691669 the amount and filing status prescribed by such Code
16701670 1
16711671 2
16721672 3
16731673 4
16741674 5
16751675 6
16761676 7
16771677 8
16781678 9
16791679 10
16801680 11
16811681 12
16821682 13
16831683 14
16841684 15
16851685 16
16861686 17
16871687 18
16881688 19
16891689 20
16901690 21
16911691 22
16921692 23
16931693 24
16941694
16951695 for purposes of filing federal individual income tax
16961696 returns.
16971697 3. a. In the case of resident and part-year resident
16981698 individuals having adjusted gross income from sources
16991699 both within and without the state, the itemized or
17001700 standard deductions and personal exemptions shall be
17011701 reduced to an amount which is the same portion of the
17021702 total thereof as Oklahoma adjusted gross income is of
17031703 adjusted gross income. To the extent it emized
17041704 deductions include allowable moving expense, proration
17051705 of moving expense shall not be required or permitted
17061706 but allowable moving expense shall be fully deductible
17071707 for those taxpayers moving within or into Oklahoma and
17081708 no part of moving expense shall be deductible for
17091709 those taxpayers moving without or out of Oklahoma.
17101710 All other itemized or standard deductions and personal
17111711 exemptions shall be subject to proration as provided
17121712 by law.
17131713 b. For taxable years beginning on or after January 1,
17141714 2018, the net amount of itemized deductions allowable
17151715 on an Oklahoma income tax return, subject to the
17161716 provisions of paragraph 24 of this subsection, shall
17171717 not exceed Seventeen Thousand Dollars ($17,000.00).
17181718 For purposes of this subparagraph, charitable
17191719 1
17201720 2
17211721 3
17221722 4
17231723 5
17241724 6
17251725 7
17261726 8
17271727 9
17281728 10
17291729 11
17301730 12
17311731 13
17321732 14
17331733 15
17341734 16
17351735 17
17361736 18
17371737 19
17381738 20
17391739 21
17401740 22
17411741 23
17421742 24
17431743
17441744 contributions and medical expenses deductible for
17451745 federal income tax purposes shall be excluded from the
17461746 amount of Seventeen Thousand Dollars ($17,000.00) as
17471747 specified by this subparagraph.
17481748 4. A resident individual with a physical disability
17491749 constituting a substantial ha ndicap to employment may deduct from
17501750 Oklahoma adjusted gross income such expenditures to modify a motor
17511751 vehicle, home or workplace as are necessary to compensate for his or
17521752 her handicap. A veteran certified by the Department of Veterans
17531753 Affairs of the federal government as having a service -connected
17541754 disability shall be conclusively presumed to be an individual with a
17551755 physical disability constituting a substantial handicap to
17561756 employment. The Tax Commission shall promulgate rules containing a
17571757 list of combinations of common disabilities and modifications which
17581758 may be presumed to qualify for this deduction. The Tax Commission
17591759 shall prescribe necessary requirements for verification.
17601760 5. a. Before July 1, 2010, the first One Thousand Five
17611761 Hundred Dollars ($1,500.00) received by any person
17621762 from the United States as salary or compensation in
17631763 any form, other than retirement benefits, as a member
17641764 of any component of the Armed Forces of the United
17651765 States shall be deducted from taxable income.
17661766 b. On or after July 1, 20 10, one hundred percent (100%)
17671767 of the income received by any person from the United
17681768 1
17691769 2
17701770 3
17711771 4
17721772 5
17731773 6
17741774 7
17751775 8
17761776 9
17771777 10
17781778 11
17791779 12
17801780 13
17811781 14
17821782 15
17831783 16
17841784 17
17851785 18
17861786 19
17871787 20
17881788 21
17891789 22
17901790 23
17911791 24
17921792
17931793 States as salary or compensation in any form, other
17941794 than retirement benefits, as a member of a ny component
17951795 of the Armed Forces of the United States shall be
17961796 deducted from taxable income.
17971797 c. Whenever the filing of a timely income tax return by a
17981798 member of the Armed Forces of the United States is
17991799 made impracticable or impossible of accomplishment by
18001800 reason of:
18011801 (1) absence from the United States, which term
18021802 includes only the st ates and the District of
18031803 Columbia,
18041804 (2) absence from the State of Oklahoma while on
18051805 active duty, or
18061806 (3) confinement in a hospital within the United
18071807 States for treatment of wounds, injuries or
18081808 disease,
18091809 the time for filing a return and paying an income tax
18101810 shall be and is hereby extended without incurring
18111811 liability for interest or penalties, to the fifteenth
18121812 day of the third month following the month in which:
18131813 (a) Such individual shall return to the United
18141814 States if the extension is granted pursuant
18151815 to subparagraph a of this paragraph, return
18161816 to the State of Oklahoma if the extension is
18171817 1
18181818 2
18191819 3
18201820 4
18211821 5
18221822 6
18231823 7
18241824 8
18251825 9
18261826 10
18271827 11
18281828 12
18291829 13
18301830 14
18311831 15
18321832 16
18331833 17
18341834 18
18351835 19
18361836 20
18371837 21
18381838 22
18391839 23
18401840 24
18411841
18421842 granted pursuant to subparagraph b of this
18431843 paragraph or be discharged from such
18441844 hospital if the extension is granted
18451845 pursuant to subparagraph c of this
18461846 paragraph, or
18471847 (b) An executor, administrator, or conservator
18481848 of the estate of the taxpayer is appointed,
18491849 whichever event occurs the earliest.
18501850 Provided, that the Tax Commission may, in its discretion, gra nt
18511851 any member of the Armed Forces of the United States an extension of
18521852 time for filing of income tax returns and payment of income tax
18531853 without incurring liabilities for interest or penalties. Such
18541854 extension may be granted only when in the judgment of the Tax
18551855 Commission a good cause exists therefor and may be for a period in
18561856 excess of six (6) months. A record of every such extension granted,
18571857 and the reason therefor, shall be kept.
18581858 6. Before July 1, 2010, the salary or any other form of
18591859 compensation, received from the United States by a member of any
18601860 component of the Armed Forces of the United States, shall be
18611861 deducted from taxable income during the time in which the person is
18621862 detained by the enemy in a conflict, is a prisoner of war or is
18631863 missing in action and not deceased; provided, after July 1, 2010,
18641864 all such salary or compensation shall be subject to the deduction as
18651865 provided pursuant to paragraph 5 of this subsection.
18661866 1
18671867 2
18681868 3
18691869 4
18701870 5
18711871 6
18721872 7
18731873 8
18741874 9
18751875 10
18761876 11
18771877 12
18781878 13
18791879 14
18801880 15
18811881 16
18821882 17
18831883 18
18841884 19
18851885 20
18861886 21
18871887 22
18881888 23
18891889 24
18901890
18911891 7. a. An individual taxpayer, whether resident or
18921892 nonresident, may deduct an amount e qual to the federal
18931893 income taxes paid by the taxpayer during the taxable
18941894 year.
18951895 b. Federal taxes as described in subparagraph a of this
18961896 paragraph shall be deductible by any individual
18971897 taxpayer, whether resident or nonresident, only to the
18981898 extent they relate to income subject to taxation
18991899 pursuant to the provisions of the Oklahoma Income Tax
19001900 Act. The maximum amount allowable in the preceding
19011901 paragraph shall be prorated on the ratio of the
19021902 Oklahoma adjusted gross income to federal adjusted
19031903 gross income.
19041904 c. For the purpose of this paragraph, "federal income
19051905 taxes paid" shall mean federal income taxes, surtaxes
19061906 imposed on incomes or excess profits taxes, as though
19071907 the taxpayer was on the accrual basis. In determining
19081908 the amount of deduction for federal income ta xes for
19091909 tax year 2001, the amount of the deduction shall not
19101910 be adjusted by the amount of any accelerated ten
19111911 percent (10%) tax rate bracket credit or advanced
19121912 refund of the credit received during the tax year
19131913 provided pursuant to the federal Economic Grow th and
19141914 Tax Relief Reconciliation Act of 2001, P.L. No. 107 -
19151915 1
19161916 2
19171917 3
19181918 4
19191919 5
19201920 6
19211921 7
19221922 8
19231923 9
19241924 10
19251925 11
19261926 12
19271927 13
19281928 14
19291929 15
19301930 16
19311931 17
19321932 18
19331933 19
19341934 20
19351935 21
19361936 22
19371937 23
19381938 24
19391939
19401940 16, and the advanced refund of such credit shall not
19411941 be subject to taxation.
19421942 d. The provisions of this paragraph shall apply to all
19431943 taxable years ending after December 31, 1978, and
19441944 beginning before January 1, 2006.
19451945 8. Retirement benefits not to exceed Five Thousand Five Hundred
19461946 Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five
19471947 Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Thousand
19481948 Dollars ($10,000.00) for the 2006 tax year and all subsequent tax
19491949 years, which are received by an individual from the ci vil service of
19501950 the United States, the Oklahoma Public Employees Retirement System,
19511951 the Teachers' Retirement System of Oklahoma, the Oklahoma Law
19521952 Enforcement Retirement System, th e Oklahoma Firefighters Pension and
19531953 Retirement System, the Oklahoma Police Pension and Retirement
19541954 System, the employee retirement systems created by counties pursuant
19551955 to Section 951 et seq. of Title 19 of the Oklahoma Statutes, the
19561956 Uniform Retirement Syste m for Justices and Judges, the Oklahoma
19571957 Wildlife Conservation Department Retir ement Fund, the Oklahoma
19581958 Employment Security Commission Retirement Plan, or the employee
19591959 retirement systems created by municipalities pursuant to Section 48 -
19601960 101 et seq. of Title 11 of the Oklahoma Statutes shall be exempt
19611961 from taxable income.
19621962 9. In taxable years beginning after December 3l, 1984, Social
19631963 Security benefits received by an individual shall be exempt from
19641964 1
19651965 2
19661966 3
19671967 4
19681968 5
19691969 6
19701970 7
19711971 8
19721972 9
19731973 10
19741974 11
19751975 12
19761976 13
19771977 14
19781978 15
19791979 16
19801980 17
19811981 18
19821982 19
19831983 20
19841984 21
19851985 22
19861986 23
19871987 24
19881988
19891989 taxable income, to the extent such benefits are included in the
19901990 federal adjusted gross income pursuant to the provisions of Section
19911991 86 of the Internal Revenue Code, 26 U.S.C., Section 86.
19921992 10. For taxable years beginning after December 31, 1994, lump -
19931993 sum distributions from employer plans of deferred compensation,
19941994 which are not qualified plans within the meaning of Section 401(a)
19951995 of the Internal Revenue Code, 26 U.S.C., Section 401(a), and which
19961996 are deposited in and accounted for within a separate bank account or
19971997 brokerage account in a financial institution within this state,
19981998 shall be excluded from taxable income in the same manner as a
19991999 qualifying rollover contribution to an individual retirement account
20002000 within the meaning of Section 408 of the Internal Revenue Code, 26
20012001 U.S.C., Section 408. Amounts withdrawn from such b ank or brokerage
20022002 account, including any earnings thereon, shall be included in
20032003 taxable income when withdrawn in the same manner as withdrawals from
20042004 individual retirement accounts within the meaning of Section 408 of
20052005 the Internal Revenue Code.
20062006 11. In taxable years beginning after December 31, 1995,
20072007 contributions made to and interest received from a medical savings
20082008 account established pursuant to Sections 2621 through 2623 of Title
20092009 63 of the Oklahoma Statutes shall be exempt from taxable income.
20102010 12. For taxable years beginning after December 31, 1996, the
20112011 Oklahoma adjusted gross income of any individual taxpayer who is a
20122012 swine or poultry producer may be further adjusted for the deduction
20132013 1
20142014 2
20152015 3
20162016 4
20172017 5
20182018 6
20192019 7
20202020 8
20212021 9
20222022 10
20232023 11
20242024 12
20252025 13
20262026 14
20272027 15
20282028 16
20292029 17
20302030 18
20312031 19
20322032 20
20332033 21
20342034 22
20352035 23
20362036 24
20372037
20382038 for depreciation allowed for new construction or expansion costs
20392039 which may be computed using the same depreciation method elected for
20402040 federal income tax purposes except that the useful life shall be
20412041 seven (7) years for purposes of this paragraph. If depreciation is
20422042 allowed as a deduction in determining the adjusted gross inc ome of
20432043 an individual, any depreciation calculated and claimed pursuant to
20442044 this section shall in no event be a duplication of any depreciation
20452045 allowed or permitted on the federal income tax return of the
20462046 individual.
20472047 13. a. In taxable years beginning before January 1, 2005,
20482048 retirement benefits not to exceed the amounts
20492049 specified in this paragraph, which are received by an
20502050 individual sixty-five (65) years of age or older and
20512051 whose Oklahoma adjusted gross income is Twenty -five
20522052 Thousand Dollars ($25,000.00) or l ess if the filing
20532053 status is single, head of household, or married filing
20542054 separate, or Fifty Thousand Dollars ($50,000.00) or
20552055 less if the filing status is married filing joint or
20562056 qualifying widow, shall be exempt from taxable income.
20572057 In taxable years begin ning after December 31, 2004,
20582058 retirement benefits not to exceed the amounts
20592059 specified in this paragraph, which are received by an
20602060 individual whose Oklahoma adjusted gross income is
20612061 1
20622062 2
20632063 3
20642064 4
20652065 5
20662066 6
20672067 7
20682068 8
20692069 9
20702070 10
20712071 11
20722072 12
20732073 13
20742074 14
20752075 15
20762076 16
20772077 17
20782078 18
20792079 19
20802080 20
20812081 21
20822082 22
20832083 23
20842084 24
20852085
20862086 less than the qualifying amount specified in this
20872087 paragraph, shall be exemp t from taxable income.
20882088 b. For purposes of this paragraph, the qualifying amount
20892089 shall be as follows:
20902090 (1) in taxable years beginning after December 31,
20912091 2004, and prior to January 1, 2007, the
20922092 qualifying amount shall be Thirty -seven Thousand
20932093 Five Hundred Dollars ($37,500.00) or less if the
20942094 filing status is single, head of household, o r
20952095 married filing separate, or Seventy -five Thousand
20962096 Dollars ($75,000.00) or less if the filing status
20972097 is married filing jointly or qualifying widow,
20982098 (2) in the taxable year begin ning January 1, 2007,
20992099 the qualifying amount shall be Fifty Thousand
21002100 Dollars ($50,000.00) or less if the filing status
21012101 is single, head of household, or married filing
21022102 separate, or One Hundred Thousand Dollars
21032103 ($100,000.00) or less if the filing status is
21042104 married filing jointly or qualifying widow,
21052105 (3) in the taxable year beginning Ja nuary 1, 2008,
21062106 the qualifying amount shall be Sixty -two Thousand
21072107 Five Hundred Dollars ($62,500.00) or less if the
21082108 filing status is single, head of household, or
21092109 married filing separate, or One Hundred Twenty -
21102110 1
21112111 2
21122112 3
21132113 4
21142114 5
21152115 6
21162116 7
21172117 8
21182118 9
21192119 10
21202120 11
21212121 12
21222122 13
21232123 14
21242124 15
21252125 16
21262126 17
21272127 18
21282128 19
21292129 20
21302130 21
21312131 22
21322132 23
21332133 24
21342134
21352135 five Thousand Dollars ($125,000.00) or less if
21362136 the filing status is married filing jointly or
21372137 qualifying widow,
21382138 (4) in the taxable year beginning January 1, 2009,
21392139 the qualifying amount shall be One Hundred
21402140 Thousand Dollars ($1 00,000.00) or less if the
21412141 filing status is single, head of household, or
21422142 married filing separate, or Two Hundred Thousand
21432143 Dollars ($200,000.00) or less if the filing
21442144 status is married filing jointly or qualifying
21452145 widow, and
21462146 (5) in the taxable year beginnin g January 1, 2010,
21472147 and subsequent taxable years, there shall be no
21482148 limitation upon the qualifying amount.
21492149 c. For purposes of this paragraph, "retirement benefits"
21502150 means the total distributions or withdrawals from the
21512151 following:
21522152 (1) an employee pension bene fit plan which satisfies
21532153 the requirements of Section 401 of the Internal
21542154 Revenue Code, 26 U.S.C., Section 401,
21552155 (2) an eligible deferred compensation plan that
21562156 satisfies the requirements of Section 457 of the
21572157 Internal Revenue Code, 26 U.S.C., Section 457,
21582158 1
21592159 2
21602160 3
21612161 4
21622162 5
21632163 6
21642164 7
21652165 8
21662166 9
21672167 10
21682168 11
21692169 12
21702170 13
21712171 14
21722172 15
21732173 16
21742174 17
21752175 18
21762176 19
21772177 20
21782178 21
21792179 22
21802180 23
21812181 24
21822182
21832183 (3) an individual retirement account, annuity or
21842184 trust or simplified employee pension that
21852185 satisfies the requirements of Section 408 of the
21862186 Internal Revenue Code, 26 U.S.C., Section 408,
21872187 (4) an employee annuity subject to the provisions of
21882188 Section 403(a) or (b) of the Internal Revenue
21892189 Code, 26 U.S.C., Section 403(a) or (b),
21902190 (5) United States Retirement Bonds which satisfy the
21912191 requirements of Section 86 of the Internal
21922192 Revenue Code, 26 U.S.C., Section 86, or
21932193 (6) lump-sum distributions from a retirement plan
21942194 which satisfies the requirements of Section
21952195 402(e) of the Internal Revenue Code, 26 U.S.C.,
21962196 Section 402(e).
21972197 d. The amount of the exemption provided by this paragraph
21982198 shall be limited to Five Thousand Five Hundred Dollars
21992199 ($5,500.00) for the 2004 tax year, S even Thousand Five
22002200 Hundred Dollars ($7,500.00) for the 2005 tax year and
22012201 Ten Thousand Dollars ($10,000.00) for the tax year
22022202 2006 and for all subsequent tax years. Any individual
22032203 who claims the exemption provided for in paragraph 8
22042204 of this subsection shall not be permitted to claim a
22052205 combined total exemption pursuant to this paragraph
22062206 and paragraph 8 of this subsection in an amount
22072207 1
22082208 2
22092209 3
22102210 4
22112211 5
22122212 6
22132213 7
22142214 8
22152215 9
22162216 10
22172217 11
22182218 12
22192219 13
22202220 14
22212221 15
22222222 16
22232223 17
22242224 18
22252225 19
22262226 20
22272227 21
22282228 22
22292229 23
22302230 24
22312231
22322232 exceeding Five Thousand Five Hundred Dollars
22332233 ($5,500.00) for the 2004 tax year, Seven Thousand Five
22342234 Hundred Dollars ($7,500.00) for the 2005 tax year and
22352235 Ten Thousand Dollars ($10,000.00) for the 2006 tax
22362236 year and all subsequent tax years.
22372237 14. In taxable years beginning after December 31, 1999, for an
22382238 individual engaged in production agriculture who has filed a
22392239 Schedule F form with the taxpayer's federal income tax return for
22402240 such taxable year, there shall be excluded from taxable income any
22412241 amount which was included as federal taxable income or federal
22422242 adjusted gross income and which consists of the discharge of an
22432243 obligation by a creditor of the taxpayer incurred to finance the
22442244 production of agricultural products.
22452245 15. In taxable years beginning December 31, 2000, an amount
22462246 equal to one hundred percent (100%) of the amount of any scholarship
22472247 or stipend received from participation in the Oklahoma Police Corps
22482248 Program, as established in Section 2 -140.3 of Title 47 of the
22492249 Oklahoma Statutes shall be exempt from taxable income.
22502250 16. a. In taxable years beginning after December 31, 2001,
22512251 and before January 1, 2005, there shall be allowed a
22522252 deduction in the amount of contributions to accounts
22532253 established pursuant t o the Oklahoma College Savings
22542254 Plan Act. The deduction shall equal the amount of
22552255 contributions to accounts, but in no event shall the
22562256 1
22572257 2
22582258 3
22592259 4
22602260 5
22612261 6
22622262 7
22632263 8
22642264 9
22652265 10
22662266 11
22672267 12
22682268 13
22692269 14
22702270 15
22712271 16
22722272 17
22732273 18
22742274 19
22752275 20
22762276 21
22772277 22
22782278 23
22792279 24
22802280
22812281 deduction for each contributor exceed Two T housand
22822282 Five Hundred Dollars ($2,500.00) each taxable year for
22832283 each account.
22842284 b. In taxable years beginning after December 31, 2004,
22852285 each taxpayer shall be allowed a deduction for
22862286 contributions to accounts established pursuant to the
22872287 Oklahoma College Saving s Plan Act. The maximum annual
22882288 deduction shall equal the amount of contributi ons to
22892289 all such accounts plus any contributions to such
22902290 accounts by the taxpayer for prior taxable years after
22912291 December 31, 2004, which were not deducted, but in no
22922292 event shall the deduction for each tax year exceed Ten
22932293 Thousand Dollars ($10,000.00) for each individual
22942294 taxpayer or Twenty Thousand Dollars ($20,000.00) for
22952295 taxpayers filing a joint return. Any amount of a
22962296 contribution that is not deducted by the taxpayer in
22972297 the year for which the contribution is made may be
22982298 carried forward as a deduction from income for the
22992299 succeeding five (5) years. For taxable years
23002300 beginning after December 31, 2005, deductions may be
23012301 taken for contributions and rollovers made during a
23022302 taxable year and up to April 15 of the succeeding
23032303 year, or the due date of a taxpayer 's state income tax
23042304 return, excluding extensions, whichever is later.
23052305 1
23062306 2
23072307 3
23082308 4
23092309 5
23102310 6
23112311 7
23122312 8
23132313 9
23142314 10
23152315 11
23162316 12
23172317 13
23182318 14
23192319 15
23202320 16
23212321 17
23222322 18
23232323 19
23242324 20
23252325 21
23262326 22
23272327 23
23282328 24
23292329
23302330 Provided, a deduction for the same contribution may
23312331 not be taken for two (2) different taxable years.
23322332 c. In taxable years beginning after December 31, 2006,
23332333 deductions for contributions mad e pursuant to
23342334 subparagraph b of this paragraph shall be limited as
23352335 follows:
23362336 (1) for a taxpayer who qualified for the five -year
23372337 carryforward election and who takes a rollover or
23382338 nonqualified withdrawal during that period, the
23392339 tax deduction otherwise available pursuant to
23402340 subparagraph b of this paragraph shall be reduced
23412341 by the amount which is equal to the rollover or
23422342 nonqualified withdrawal, and
23432343 (2) for a taxpayer who elects to tak e a rollover or
23442344 nonqualified withdrawal within the same tax year
23452345 in which a contribution was made to the
23462346 taxpayer's account, the tax deduction otherwise
23472347 available pursuant to subparagraph b of this
23482348 paragraph shall be reduced by the amount of the
23492349 contribution which is equal to the rollover or
23502350 nonqualified withdrawal.
23512351 d. If a taxpayer elects to take a rollover on a
23522352 contribution for which a deduction has been taken
23532353 pursuant to subparagraph b of this paragraph within
23542354 1
23552355 2
23562356 3
23572357 4
23582358 5
23592359 6
23602360 7
23612361 8
23622362 9
23632363 10
23642364 11
23652365 12
23662366 13
23672367 14
23682368 15
23692369 16
23702370 17
23712371 18
23722372 19
23732373 20
23742374 21
23752375 22
23762376 23
23772377 24
23782378
23792379 one (1) year of the date of contribution, th e amount
23802380 of such rollover shall be included in the adjusted
23812381 gross income of the taxpayer in the taxable year of
23822382 the rollover.
23832383 e. If a taxpayer makes a nonqualified withdrawal of
23842384 contributions for which a deduction was taken pursuant
23852385 to subparagraph b of th is paragraph, such nonqualified
23862386 withdrawal and any earnings thereon shall be included
23872387 in the adjusted gross income of the taxpayer in the
23882388 taxable year of the nonqualified withdrawal.
23892389 f. As used in this paragraph:
23902390 (1) "non-qualified withdrawal " means a withdrawal
23912391 from an Oklahoma College Savings Plan account
23922392 other than one of the fol lowing:
23932393 (a) a qualified withdrawal,
23942394 (b) a withdrawal made as a result of the death
23952395 or disability of the designated beneficiary
23962396 of an account,
23972397 (c) a withdrawal that is made on the account of
23982398 a scholarship or the allowance or payment
23992399 described in Section 135(d)(1)(B) or (C) or
24002400 by the Internal Revenue Code, received by
24012401 the designated beneficiary to the extent the
24022402 amount of the refund does not exceed the
24032403 1
24042404 2
24052405 3
24062406 4
24072407 5
24082408 6
24092409 7
24102410 8
24112411 9
24122412 10
24132413 11
24142414 12
24152415 13
24162416 14
24172417 15
24182418 16
24192419 17
24202420 18
24212421 19
24222422 20
24232423 21
24242424 22
24252425 23
24262426 24
24272427
24282428 amount of the scholarship, all owance, or
24292429 payment, or
24302430 (d) a rollover or change of designated
24312431 beneficiary as permitted by subsection F of
24322432 Section 3970.7 of Title 70 of Oklahoma
24332433 Statutes, and
24342434 (2) "rollover" means the transfer of funds from the
24352435 Oklahoma College Savings Plan to any other pl an
24362436 under Section 529 of the Internal Revenue Code.
24372437 17. For tax years 2006 through 2021, retirement benefits
24382438 received by an individual from any component of the Armed Forces of
24392439 the United States in an amount not to exceed the greater of seventy -
24402440 five percent (75%) of such benefits or Ten Thousand Dollars
24412441 ($10,000.00) shall be exempt from taxable income but in no case less
24422442 than the amount of the exemption provided by paragraph 13 of this
24432443 subsection. For tax year 2022 and subsequent tax years, retirement
24442444 benefits received by an individual from any component of the Armed
24452445 Forces of the United States shall be exempt from taxable income.
24462446 18. For taxable years beginning after December 31, 2006,
24472447 retirement benefits received by federal civil service retirees,
24482448 including survivor annuities, paid in lieu of Social Security
24492449 benefits shall be exem pt from taxable income to the extent such
24502450 benefits are included in the federal adjusted gross income pursuant
24512451 1
24522452 2
24532453 3
24542454 4
24552455 5
24562456 6
24572457 7
24582458 8
24592459 9
24602460 10
24612461 11
24622462 12
24632463 13
24642464 14
24652465 15
24662466 16
24672467 17
24682468 18
24692469 19
24702470 20
24712471 21
24722472 22
24732473 23
24742474 24
24752475
24762476 to the provisions of Section 86 of the Internal Revenue Code, 26
24772477 U.S.C., Section 86, according to the following schedule:
24782478 a. in the taxable year beginning January 1, 2007, twenty
24792479 percent (20%) of such benefits shall be exempt,
24802480 b. in the taxable year beginning January 1, 2008, forty
24812481 percent (40%) of such benefits shall be e xempt,
24822482 c. in the taxable year beginning January 1, 2009, sixty
24832483 percent (60%) of such benefits shall be exempt,
24842484 d. in the taxable year beginning January 1, 2010, eighty
24852485 percent (80%) of such benefits shall be exempt, and
24862486 e. in the taxable year beginning Jan uary 1, 2011, and
24872487 subsequent taxable years, one hundred percent (100%)
24882488 of such benefits shall be exempt.
24892489 19. a. For taxable years beginning after December 31, 2007, a
24902490 resident individual may deduct up to Ten Thousand
24912491 Dollars ($10,000.00) from Oklahoma adju sted gross
24922492 income if the individual, or the dependent of the
24932493 individual, while living, donates one or more human
24942494 organs of the individual to another human being for
24952495 human organ transplantation. As used in this
24962496 paragraph, "human organ" means all or part of a liver,
24972497 pancreas, kidney, intestine, lung, or bone marrow. A
24982498 deduction that is claimed under this paragraph may be
24992499 1
25002500 2
25012501 3
25022502 4
25032503 5
25042504 6
25052505 7
25062506 8
25072507 9
25082508 10
25092509 11
25102510 12
25112511 13
25122512 14
25132513 15
25142514 16
25152515 17
25162516 18
25172517 19
25182518 20
25192519 21
25202520 22
25212521 23
25222522 24
25232523
25242524 claimed in the taxable year in which the human organ
25252525 transplantation occurs.
25262526 b. An individual may claim this deduction only once, and
25272527 the deduction may be claimed only for unreimbursed
25282528 expenses that are incurred by t he individual and
25292529 related to the organ donation of the individual.
25302530 c. The Oklahoma Tax Commission shall promulgate rules to
25312531 implement the provisions of this paragraph which shall
25322532 contain a specific list of expenses which may be
25332533 presumed to qualify for the deduction. The Tax
25342534 Commission shall prescribe necessary requirements for
25352535 verification.
25362536 20. For taxable years beginning after December 31, 2009, there
25372537 shall be exempt from taxab le income any amount received by the
25382538 beneficiary of the death benefit for an e mergency medical technician
25392539 or a registered emergency medical responder provided by Section 1 -
25402540 2505.1 of Title 63 of the Oklahoma Statutes.
25412541 21. For taxable years beginning after December 31, 2008,
25422542 taxable income shall be increased by any unemployment compensation
25432543 exempted under Section 85(c) of the Internal Revenue Code, 26
25442544 U.S.C., Section 85(c)(2009).
25452545 22. For taxable years beginning after December 31, 2008, there
25462546 shall be exempt from taxable income any payment in an amount less
25472547 than Six Hundred Dollars ($ 600.00) received by a person as an award
25482548 1
25492549 2
25502550 3
25512551 4
25522552 5
25532553 6
25542554 7
25552555 8
25562556 9
25572557 10
25582558 11
25592559 12
25602560 13
25612561 14
25622562 15
25632563 16
25642564 17
25652565 18
25662566 19
25672567 20
25682568 21
25692569 22
25702570 23
25712571 24
25722572
25732573 for participation in a competitive livestock show event. For
25742574 purposes of this paragraph, the payment shall be treated as a
25752575 scholarship amount paid by the entity sponsoring the event and the
25762576 sponsoring entity shall cause the payment to be categorized as a
25772577 scholarship in its books and records.
25782578 23. For taxable years beginning on or after January 1, 2016,
25792579 taxable income shall be increased by any amount of state and local
25802580 sales or income taxes deducted under 26 U.S.C., Section 164 of the
25812581 Internal Revenue Code. If the amount of state and local taxes
25822582 deducted on the federal return is limited, taxable income on the
25832583 state return shall be increased only by the amount actually deducted
25842584 after any such limitations are applied.
25852585 24. For taxable years beginning after December 31, 2020, each
25862586 taxpayer shall be allowed a deduction for contributions to accounts
25872587 established pursuant to the Achieving a Better Life Experience
25882588 (ABLE) Program as established in Section 4001.1 et seq. of Tit le 56
25892589 of the Oklahoma Statutes. For any tax year, the deduction provided
25902590 for in this paragraph shall not exceed Ten Thousand Dollars
25912591 ($10,000.00) for an individual taxpayer or T wenty Thousand Dollars
25922592 ($20,000.00) for taxpayers filing a joint return. Any amount of
25932593 contribution not deducted by the taxpayer in the tax year for which
25942594 the contribution is made may be carried forward as a deduction from
25952595 income for up to five (5) tax ye ars. Deductions may be taken for
25962596 contributions made during the tax year and t hrough April 15 of the
25972597 1
25982598 2
25992599 3
26002600 4
26012601 5
26022602 6
26032603 7
26042604 8
26052605 9
26062606 10
26072607 11
26082608 12
26092609 13
26102610 14
26112611 15
26122612 16
26132613 17
26142614 18
26152615 19
26162616 20
26172617 21
26182618 22
26192619 23
26202620 24
26212621
26222622 succeeding tax year, or through the due date of a taxpayer 's state
26232623 income tax return excluding extensions, whichever is later.
26242624 Provided, a deduction for t he same contribution may not be taken in
26252625 more than one (1) tax year.
26262626 F. 1. For taxable years beginning after December 31, 2004, a
26272627 deduction from the Oklahoma adjusted gross income of any individual
26282628 taxpayer shall be allowed for qualifying gains receiving capital
26292629 treatment that are included in the federal adjusted gross income of
26302630 such individual taxpayer during the taxable year.
26312631 2. As used in this subsection:
26322632 a. "qualifying gains receiving capital treatment " means
26332633 the amount of net capital gains, as defin ed in Section
26342634 1222(11) of the Internal Revenue Code, included in an
26352635 individual taxpayer's federal income tax return that
26362636 result from:
26372637 (1) the sale of real property or tangible personal
26382638 property located within Oklahoma that has been
26392639 directly or indirectly o wned by the individual
26402640 taxpayer for a holding period of at least five
26412641 (5) years prior to the date of the transaction
26422642 from which such net capital gains arise,
26432643 (2) the sale of stock or the sale of a direct or
26442644 indirect ownership interest in an Oklahoma
26452645 company, limited liability company, or
26462646 1
26472647 2
26482648 3
26492649 4
26502650 5
26512651 6
26522652 7
26532653 8
26542654 9
26552655 10
26562656 11
26572657 12
26582658 13
26592659 14
26602660 15
26612661 16
26622662 17
26632663 18
26642664 19
26652665 20
26662666 21
26672667 22
26682668 23
26692669 24
26702670
26712671 partnership where such stock or ownership
26722672 interest has been directly or indirectly owned by
26732673 the individual taxpayer for a holding period of
26742674 at least two (2) years prior to the date of the
26752675 transaction from which the net capi tal gains
26762676 arise, or
26772677 (3) the sale of real property, tangible personal
26782678 property or intangible personal property located
26792679 within Oklahoma as part of the sale of all or
26802680 substantially all of the assets of an Oklahoma
26812681 company, limited liability company, or
26822682 partnership or an Oklahoma proprietorship
26832683 business enterprise where such property has been
26842684 directly or indirectly owned by such entity or
26852685 business enterprise or owned by the owners of
26862686 such entity or business enterprise for a period
26872687 of at least two (2) years prio r to the date of
26882688 the transaction from which the net capital gains
26892689 arise,
26902690 b. "holding period" means an uninterrupted period of
26912691 time. The holding period shall include any additional
26922692 period when the property was held by another
26932693 individual or entity, if such additional period is
26942694 1
26952695 2
26962696 3
26972697 4
26982698 5
26992699 6
27002700 7
27012701 8
27022702 9
27032703 10
27042704 11
27052705 12
27062706 13
27072707 14
27082708 15
27092709 16
27102710 17
27112711 18
27122712 19
27132713 20
27142714 21
27152715 22
27162716 23
27172717 24
27182718
27192719 included in the taxpayer 's holding period for the
27202720 asset pursuant to the Internal Revenue Code,
27212721 c. "Oklahoma company," "limited liability company, " or
27222722 "partnership" means an entity whose primary
27232723 headquarters have been located in Oklahom a for at
27242724 least three (3) uninterrupted years prior to the date
27252725 of the transaction from which the net capital gains
27262726 arise,
27272727 d. "direct" means the individual taxpayer directly owns
27282728 the asset,
27292729 e. "indirect" means the individual taxpayer owns an
27302730 interest in a pass-through entity (or chain of pass -
27312731 through entities) that sells the asset that gives rise
27322732 to the qualifying gains receiving capital treatment.
27332733 (1) With respect to sales of real property or
27342734 tangible personal property located within
27352735 Oklahoma, the deduction described in this
27362736 subsection shall not apply unless the pass -
27372737 through entity that makes the sale has held the
27382738 property for not less than five (5) uninterrupted
27392739 years prior to the date of the transaction that
27402740 created the capital gain, and each pass -through
27412741 entity included in the chain of ownership has
27422742 been a member, partner, or shareholder of the
27432743 1
27442744 2
27452745 3
27462746 4
27472747 5
27482748 6
27492749 7
27502750 8
27512751 9
27522752 10
27532753 11
27542754 12
27552755 13
27562756 14
27572757 15
27582758 16
27592759 17
27602760 18
27612761 19
27622762 20
27632763 21
27642764 22
27652765 23
27662766 24
27672767
27682768 pass-through entity in the tier immediately below
27692769 it for an uninterrupted period of not less than
27702770 five (5) years.
27712771 (2) With respect to sales of stock or ownership
27722772 interest in or sales of all or substantially all
27732773 of the assets of an Oklahoma co mpany, limited
27742774 liability company, partnership or Oklahoma
27752775 proprietorship business enterprise, the deduction
27762776 described in this subsection shall not apply
27772777 unless the pass-through entity that makes the
27782778 sale has held the stock or ownership interest for
27792779 not less than two (2) uninterrupted years prior
27802780 to the date of the transaction that created the
27812781 capital gain, and each pass -through entity
27822782 included in the chain of ownership has been a
27832783 member, partner or shareholder of the pass -
27842784 through entity in the tier immediat ely below it
27852785 for an uninterrupted period of not less than two
27862786 (2) years. For purposes of this division,
27872787 uninterrupted ownership prior to July 1, 2007,
27882788 shall be included in the d etermination of the
27892789 required holding period prescribed by this
27902790 division, and
27912791 1
27922792 2
27932793 3
27942794 4
27952795 5
27962796 6
27972797 7
27982798 8
27992799 9
28002800 10
28012801 11
28022802 12
28032803 13
28042804 14
28052805 15
28062806 16
28072807 17
28082808 18
28092809 19
28102810 20
28112811 21
28122812 22
28132813 23
28142814 24
28152815
28162816 f. "Oklahoma proprietorship business enterprise " means a
28172817 business enterprise whose income and expenses have
28182818 been reported on Schedule C or F of an individual
28192819 taxpayer's federal income tax return, or any similar
28202820 successor schedule published by the Internal R evenue
28212821 Service and whose primary headquarters have been
28222822 located in Oklahoma for at least three (3)
28232823 uninterrupted years prior to the date of the
28242824 transaction from which the net cap ital gains arise.
28252825 G. 1. For purposes of computing its Oklahoma taxable income
28262826 under this section, the dividends -paid deduction otherwise allowed
28272827 by federal law in computing net income of a real estate investment
28282828 trust that is subject to federal income ta x shall be added back in
28292829 computing the tax imposed by this state under this ti tle if the real
28302830 estate investment trust is a captive real estate investment trust.
28312831 2. For purposes of computing its Oklahoma taxable income under
28322832 this section, a taxpayer shall add back otherwise deductible rents
28332833 and interest expenses paid to a captive real estate investment trust
28342834 that is not subject to the provisions of paragraph 1 of this
28352835 subsection. As used in this subsection:
28362836 a. the term "real estate investment trust " or "REIT"
28372837 means the meaning ascribed to such term in Section 856
28382838 of the Internal Revenue Code,
28392839 1
28402840 2
28412841 3
28422842 4
28432843 5
28442844 6
28452845 7
28462846 8
28472847 9
28482848 10
28492849 11
28502850 12
28512851 13
28522852 14
28532853 15
28542854 16
28552855 17
28562856 18
28572857 19
28582858 20
28592859 21
28602860 22
28612861 23
28622862 24
28632863
28642864 b. the term "captive real estate investment trust " means
28652865 a real estate investment trust, the shares or
28662866 beneficial interests of which are not regularly traded
28672867 on an established securities market and more than
28682868 fifty percent (50%) of the voting power or value of
28692869 the beneficial interests or shares of which are owned
28702870 or controlled, directly or indirectly, or
28712871 constructively, by a single entity that is:
28722872 (1) treated as an association taxable as a
28732873 corporation under the Internal Revenue Code, and
28742874 (2) not exempt from federal income tax pursuant to
28752875 the provisions of Section 501(a) of the Internal
28762876 Revenue Code.
28772877 The term shall not include a real estate investment
28782878 trust that is intende d to be regularly traded on an
28792879 established securities market, and that satisfies the
28802880 requirements of Section 856(a)(5) and (6) of the U.S.
28812881 Internal Revenue Code by reason of Section 856(h)(2)
28822882 of the Internal Revenue Code,
28832883 c. the term "association taxable a s a corporation" shall
28842884 not include the following entities:
28852885 (1) any real estate investment trust as defined in
28862886 paragraph a of this subsection other than a
28872887 "captive real estate investment trust ",
28882888 1
28892889 2
28902890 3
28912891 4
28922892 5
28932893 6
28942894 7
28952895 8
28962896 9
28972897 10
28982898 11
28992899 12
29002900 13
29012901 14
29022902 15
29032903 16
29042904 17
29052905 18
29062906 19
29072907 20
29082908 21
29092909 22
29102910 23
29112911 24
29122912
29132913 (2) any qualified real estate investment trust
29142914 subsidiary under Section 856(i) of the Internal
29152915 Revenue Code, other than a qualified REIT
29162916 subsidiary of a "captive real estate investment
29172917 trust",
29182918 (3) any Listed Australian Property Trust (meaning an
29192919 Australian unit trust registered as a "Managed
29202920 Investment Scheme" under the Australian
29212921 Corporations Act in which the principal class of
29222922 units is listed on a recognized stock exchange in
29232923 Australia and is regularly traded on an
29242924 established securities market), or an entity
29252925 organized as a trust, provided that a Listed
29262926 Australian Property Trust owns or controls,
29272927 directly or indirectly, seventy -five percent
29282928 (75%) or more of the voting power or value of the
29292929 beneficial interests or shares of such trust, or
29302930 (4) any Qualified Foreign Entity, meaning a
29312931 corporation, trust, association or p artnership
29322932 organized outside the laws of the United States
29332933 and which satisfies the following criteria:
29342934 (a) at least seventy-five percent (75%) of the
29352935 entity's total asset value at the close of
29362936 its taxable year is represented by real
29372937 1
29382938 2
29392939 3
29402940 4
29412941 5
29422942 6
29432943 7
29442944 8
29452945 9
29462946 10
29472947 11
29482948 12
29492949 13
29502950 14
29512951 15
29522952 16
29532953 17
29542954 18
29552955 19
29562956 20
29572957 21
29582958 22
29592959 23
29602960 24
29612961
29622962 estate assets, as defin ed in Section
29632963 856(c)(5)(B) of the Internal Revenue Code,
29642964 thereby including shares or certificates of
29652965 beneficial interest in any real estate
29662966 investment trust, cash and cash equivalents,
29672967 and U.S. Government securities,
29682968 (b) the entity receives a dividend -paid
29692969 deduction comparable to Section 561 of the
29702970 Internal Revenue Code, or is exemp t from
29712971 entity level tax,
29722972 (c) the entity is required to distribute at
29732973 least eighty-five percent (85%) of its
29742974 taxable income, as computed in the
29752975 jurisdiction in which it is organiz ed, to
29762976 the holders of its shares or certificates of
29772977 beneficial interest on an annual basis,
29782978 (d) not more than ten percent (10%) of the
29792979 voting power or value in such entity is held
29802980 directly or indirectly or constructively by
29812981 a single entity or individual, o r the shares
29822982 or beneficial interests of such entity are
29832983 regularly traded on an established
29842984 securities market, and
29852985 1
29862986 2
29872987 3
29882988 4
29892989 5
29902990 6
29912991 7
29922992 8
29932993 9
29942994 10
29952995 11
29962996 12
29972997 13
29982998 14
29992999 15
30003000 16
30013001 17
30023002 18
30033003 19
30043004 20
30053005 21
30063006 22
30073007 23
30083008 24
30093009
30103010 (e) the entity is organized in a country which
30113011 has a tax treaty with the United States.
30123012 3. For purposes of this subsection, the constructive ownership
30133013 rules of Section 318(a) of the Internal Revenue Code, as modified by
30143014 Section 856(d)(5) of the Internal Revenue Code, shall apply in
30153015 determining the ownership of stock, assets, or net profits of any
30163016 person.
30173017 4. A real estate investment trust that does not become
30183018 regularly traded on an established securities market within on e (1)
30193019 year of the date on which it first becomes a real estate investment
30203020 trust shall be deemed not to have been regularly traded on an
30213021 established securities market, retroactive to the date it first
30223022 became a real estate investment trust, and shall file an amended
30233023 return reflecting such retroactive designation for any tax year or
30243024 part year occurring during its initial year of status as a real
30253025 estate investment trust. For purposes of this subsection, a real
30263026 estate investment trust becomes a real estate inve stment trust on
30273027 the first day it has both met the requirements of Section 856 of the
30283028 Internal Revenue Code and has elected to be treated as a real estate
30293029 investment trust pursuan t to Section 856(c)(1) of the Internal
30303030 Revenue Code.
30313031 SECTION 2. This act shall become effective November 1, 2025.
30323032
30333033 60-1-11068 MAH 01/02/25