Oklahoma 2025 Regular Session

Oklahoma House Bill HB2745 Compare Versions

Version 1 (Old)

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3		-	ENGR. H. B. NO. 2745 Page 1 1
	3	+	HB2745 HFLR Page 1
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28		-	ENGROSSED HOUSE
29		-	BILL NO. 2745 By: Caldwell (Trey) of the
	29	+	HOUSE OF REPRESENTATIVES - FLOOR VERSION
	30	+
	31	+	STATE OF OKLAHOMA
	32	+
	33	+	1st Session of the 60th Legislature (2025)
	34	+
	35	+	HOUSE BILL 2745 By: Caldwell (Trey) of the
30	36		House
31	37
32	38		and
33	39
34	40		Pugh of the Senate
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	45	+	AS INTRODUCED
39	46
40	47		[ revenue and taxation - banking privilege taxation –
41	48		references - additional treatment of tax -
42	49		deductions - eligibility - annual cap - effective
43	50		date ]
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48	55		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
49	56		SECTION 1. AMENDATORY 68 O.S. 2021, Section 2370, is
50	57		amended to read as follows:
51	58		Section 2370. A. For taxable years beginning after December
52	59		31, 2021, for the privilege of doing business within this state,
53	60		every state banking association, national banking association and
54	61		credit union organized under the laws of this state, located or
55	62		doing business within the limits of the State of Oklahoma this state
56	63		shall annually pay to thi s state a privilege tax at the rate of four
57		-	percent (4%) of the amount of the taxable income as provided in this
58		-	section.
59	64
60		-	ENGR. H. B. NO. 2745 Page 2 1
	65	+	HB2745 HFLR Page 2
	66	+	BOLD FACE denotes Committee Amendments. 1
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	91	+	percent (4%) of the amount of the taxable income as provided in this
	92	+	section.
85	93		B. 1. The privilege tax le vied by this section shall be in
86	94		addition to the Business Activity Tax levied in Section 1218 of this
87	95		title and the franchise tax levied in Article 12 of this title and
88	96		in lieu of the tax levied by Section 2355 of this title and in lieu
89	97		of all taxes levied by the State of Oklahoma this state, or any
90	98		subdivision thereof, upon the shares of stock or personal pro perty
91	99		of any banking association or credit union subject to taxation under
92	100		this section.
93	101		2. Nothing in this section shall be construed to exempt the
94	102		real property of any banking associations or credit unions from
95	103		taxation to the same extent, according to its value, as other real
96	104		property is taxed. Nothing herein shall be construed to exempt an
97	105		association from payment of any fee or tax authorized or l evied
98	106		pursuant to the banking laws.
99	107		3. Personal property which is subject to a lease agreement
100	108		between a bank or credit union, as lessor, and a nonbanking business
101	109		entity or individual, as lessee, is not exempt from personal
102	110		property ad valorem taxation. Provided further, that it shall be
103	111		the duty of the lessee of such personal property to return sworn
104		-	lists or schedules of their the lessee's taxable property within
105		-	each county to the county assessor of such county as provided in
106		-	Sections 2433 and 2434 of this title the Ad Valorem Tax Code .
107		-	C. Any tax levied under this section shall accrue on the last
108		-	day of the taxable year and be payable as provided in Section 2375
	112	+	lists or schedules of their the lessees taxable property within each
	113	+	county to the county assessor of such county as provided in Sections
	114	+	2433 and 2434 of this title the Ad Valorem Tax Code .
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110		-	ENGR. H. B. NO. 2745 Page 3 1
	116	+	HB2745 HFLR Page 3
	117	+	BOLD FACE denotes Committee Amendments. 1
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	142	+	C. Any tax levied under this section shall accrue on the last
	143	+	day of the taxable year and be payable as provided in Section 2375
135	144		of this title. The accrual of such tax for the first taxable year
136	145		to which this act appli es, 1971 shall apply notwithstanding the
137	146		prior accrual of a tax in the same taxable year based upon the net
138	147		income of the next preceding taxable year; provided, however, any
139	148		additional deduction enuring inuring to the benefit of the taxpayer
140	149		shall be deducted in accordance with the optional transitional
141	150		deduction procedures in Section 2354 of this title.
142	151		D. The basis of the tax shall be United States taxable income
143	152		as defined in paragraph 10 of Section 2353 of this title and any
144	153		adjustments thereto under t he provisions of Section 2358 of this
145	154		title with the following adjustments:
146	155		1. There shall be deducted all interest income on obligations
147	156		of the United States government and agencies thereof not otherwise
148	157		exempted and all interest income on obligations of the State of
149	158		Oklahoma this state or political subdivisions thereof, including
150	159		public trust authorities, n ot otherwise exempted under the laws of
151	160		this state; and
152	161		2. Expense deductions claimed in arriving at taxable income
153	162		under paragraph 10 of Section 235 3 of this title shall be reduced by
154	163		an amount equal to fifty percent (50%) of excluded interest income
155	164		on obligations of the United States government or agencies thereof
156		-	and obligations of the State of Oklahoma this state or political
157		-	subdivisions thereof.
158	165
159		-	ENGR. H. B. NO. 2745 Page 4 1
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	192	+	and obligations of the State of Oklahoma this state or political
	193	+	subdivisions thereof.
184	194		E. 1. Except as otherwise provided in paragraph 2 of this
185	195		subsection, before January 1, 2017, there sha ll be allowed a credit
186	196		against the tax levied in subsection A of this section in an amount
187	197		equal to the amount of taxable income received by a partici pating
188	198		financial institution as defined in Section 90.2 of Title 62 of the
189	199		Oklahoma Statutes pursuant to a loan made under the Rural Economic
190	200		Development Loan Act. Such credit shall be limited each year to
191	201		five percent (5%) of the amount of annual payroll certified by the
192	202		Oklahoma Rural Economic Development Loan Program Review Board
193	203		pursuant to the provisions of paragraph 3 of subsection B of Section
194	204		90.4 of Title 62 of the Oklahoma Statutes with respect to the loan
195	205		made by the participating financial inst itution and may be claimed
196	206		for any number of years necessary until the amount of total credits
197	207		claimed is equal to the total amount of taxable income received by
198	208		the participating financial institution pursuant to the loan. Any
199	209		credit allowed but not used in a taxable year may be carried forward
200	210		for a period not to exceed five (5) taxable years. In no event
201	211		shall a credit allowed pursuant to the provisions of this subsection
202	212		be transferable or refundable.
203	213		2. No credit otherwise authorized by the provisio ns of this
204	214		subsection may be claimed for any event, transaction, investment,
205	215		expenditure or other act occurring on or after July 1, 2010, for
206		-	which the credit would otherwise be allowable. The provisions of
207		-	this paragraph shall cease to be operative on July 1, 2012.
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209		-	ENGR. H. B. NO. 2745 Page 5 1
	217	+	HB2745 HFLR Page 5
	218	+	BOLD FACE denotes Committee Amendments. 1
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	243	+	which the credit would otherwise be allowable. The provisions of
	244	+	this paragraph shall cease to be operative on Ju ly 1, 2012.
234	245		Beginning July 1, 2012, the credit authorized by this subsection may
235	246		be claimed for any event , transaction, investment, expenditure or
236	247		other act occurring on or after July 1, 2012, according to the
237	248		provisions of this subsection.
238	249		F. 1. For tax year 2025 and subsequent tax years, national
239	250		banking associations, state banks, trust companies, savings and loan
240	251		associations, and other lending institutions organized under the
241	252		laws of this state and whose main office is located in this state
242		-	shall be allowed as a ~~de duction~~ from net income the net interest
	253	+	shall be allowed as a deduction from net income, the net interest
243	254		income received from qualified agricultural real estate loans
244	255		attributed to this state, net interest income received from
245	256		agricultural operating loans attributed to this state, and net
246	257		interest income received from single -family residence loans
247	258		attributed to this state, as defined in this subsection, to the
248	259		extent such interest is included in the Oklahoma taxable income of a
249	260		corporation.
250	261		2. The deduction authorized by this subsection may be claimed
251		-	for interest earned on eligible loans made after December 31, 2024 ,
	262	+	for interest earned on eligible loans made after December 31, 2024
252	263		and before January 1, 2028.
253	264		3. Financial institutions with Oklahoma -based deposits of more
254	265		than Seven Hundred Fifty Million Dollars ($750,000,000.00) shall be
255	266		entitled to no more than Five Hundred Thousand Dollars ($500,000.00)
256		-	per institution in deductible interest earned over a three -year
257		-	period under the provisions of this section. Financial institutions
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259		-	ENGR. H. B. NO. 2745 Page 6 1
	268	+	HB2745 HFLR Page 6
	269	+	BOLD FACE denotes Committee Amendments. 1
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	294	+	per institution in deductible interest earned over a three -year
	295	+	period under the provisions of this section. Financial institutions
284	296		with Oklahoma-based deposits of Seven Hundred Fifty Million Dollars
285	297		($750,000,000.00) or less shall be entitled to no more than Two
286	298		Hundred Fifty Thousand Dollars ($250,000.00) per instituti on in
287	299		deductible interest earned over a three -year period under the
288	300		provisions of this section .
289	301		4. For tax year 2027 and subsequent tax years, the to tal amount
290	302		of deductions authorized by this subsection shall be adjusted
291	303		annually to limit the annual amount of deductions to Five Million
292	304		Dollars ($5,000,000.00). The Oklahoma Tax Commission shall annually
293		-	~~calculate~~ and publish a percentage by which the deductions
	305	+	calculated and publish a percentage by which the deductions
294	306		authorized by this subsection shall be reduced so the total amount
295	307		of deductions does not exce ed Five Million Dollars ($5,000,000.00)
296	308		per tax year. The formula to be used for the percentage adjustment
297	309		shall be Five Million Dollars ($5,000,000. 00) divided by the amount
298	310		of deductions claimed in the second preceding tax year. In the
299	311		event the total deductions authorized by this subsection exceed Five
300	312		Million Dollars ($5,000,000.00) in any tax year, the Commission
301	313		shall permit any excess, but shal l factor such excess into the
302	314		percentage adjustment formula for subsequent tax years.
303	315		5. As used in this subsection:
304	316		a. "interest" means interest on an indebtedness
305	317		attributed to this state and incurred in the ordinary
306		-	course of the active conduct of any business and
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	320	+	BOLD FACE denotes Committee Amendments. 1
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	345	+	course of the active conduct of any business and
333	346		interest on indebtedness incurred that is secured by a
334		-	single-family residence,
	347	+	single family residence,
335	348		b. "qualified agricultural real estate loans " means loans
336	349		made on real property that are substantially used for
337	350		the production of one or more agricultural products ,
338	351		and:
339	352		(1) have maturities of not less than five (5) years
340	353		and not more than forty (40) years,
341	354		(2) are secured by a first lien interest in real
342	355		estate, except that the loans may be secured by a
343	356		second lien interest if the institution also
344	357		holds the first lien on the real property, and
345	358		(3) have an outstanding loan balance, which when
346	359		made, is less than eighty -five percent (85%) of
347	360		the appraised value of the real estate, except
348	361		loans for which private mortgage insurance is
349	362		obtained may exceed eighty -five percent (85%) of
350	363		the appraised value of the real estate to the
351	364		extent a loan amount in excess of eighty -five
352	365		percent (85%) is covered by such insurance,
353	366		c. "agriculture operating loans " means loans made for the
354	367		purpose of:
355		-	(1) the purchase, care, feeding, or refinancing of
356		-	livestock or poultry,
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358		-	ENGR. H. B. NO. 2745 Page 8 1
	369	+	HB2745 HFLR Page 8
	370	+	BOLD FACE denotes Committee Amendments. 1
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	395	+	(1) the purchase, care, feeding, or r efinancing of
	396	+	livestock or poultry,
383	397		(2) purchasing seed, and
384	398		(3) the purchase and maintenance of equipment, which
385	399		shall include, but is not limited to, fences,
386	400		barns, sheds, tractors, combines, and vehicles,
387	401		d. "single-family residence" means a residence that:
388		-	(1) is the ~~principal~~ residence of its occupant,
	402	+	(1) is the principle residence of its occupant,
389	403		(2) is located in this state, in a rural area that is
390	404		not within the city limits of a town with a
391	405		population of five thousand (5,000) or more as
392	406		determined according to the most recent Federal
393	407		Decennial Census for which data is available, and
394	408		(3) is purchased or improved with the proceeds of the
395	409		loan,
396	410		e. "net interest income received from qualified
397	411		agricultural real estate loans attributed to the
398	412		state" means the product of the ratio of the interest
399	413		income earned on qualified agricultural real estate
400	414		loans over total interest income earned, in relation
401	415		to the net income of the national banking association,
402	416		state bank, trust company, savings and loan
403	417		association, or other lending institution without
404	418		regard to this deduction,
405		-	f. "net interest income received from agricultural
406		-	operating loans attributed to this state" means the
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408		-	ENGR. H. B. NO. 2745 Page 9 1
	420	+	HB2745 HFLR Page 9
	421	+	BOLD FACE denotes Committee Amendments. 1
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	446	+	f. "net interest income received from agricultural
	447	+	operating loans attributed to this state " means the
433	448		product of the ratio of the interest income earned on
434	449		agricultural operating loans over total interest
435	450		income earned, in relation to t he net income of the
436	451		national banking association, state bank, trust
437	452		company, savings and loan association , or other
438	453		lending institution without regard to this deduction,
439	454		and
440	455		g. "net interest income received from single -family
441		-	residence loans attributed to this state " means the
	456	+	residence loans attributed to this state means the
442	457		product of the ratio of the interest income earned on
443	458		single-family residence loans over total interest
444	459		income earned, in relation to the net income of the
445	460		national banking association, state bank, trust
446	461		company, saving s and loan ass ociation, or other
447	462		lending institution without regard to this deduction.
448	463		SECTION 2. This act shall become effective November 1, 2025.
449	464
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475		-	Passed the House of Representatives the 25th day of March, 2025.
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480		-	Presiding Officer of the House
481		-	of Representatives
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485		-	Passed the Senate the ___ day of __________, 2025.
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490		-	Presiding Officer of the Sen ate
	465	+	COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS AND BUDGET, dated
	466	+	02/26/2025 - DO PASS, As Amended and Coauthored.