Oklahoma 2025 Regular Session

Oklahoma House Bill HB2894 Compare Versions

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	3	+	ENGR. H. B. NO. 2894 Page 1 1
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33	28		ENGROSSED HOUSE
34	29		BILL NO. 2894 By: Townley of the House
35	30
36	31		and
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38	33		Thompson of the Senate
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43	38		An Act relating to revenue and taxation; amending 68
44	39		O.S. 2021, Section 2397, as amended by Section 2,
45	40		Chapter 30, 1st Extraordinary Session, O.S.L. 2023
46	41		(68 O.S. Supp. 2024, Section 2397), which relates to
47	42		Oklahoma Tourism Development Act inducements;
48	43		changing date that prohibits the granting of certain
49	44		sales tax credits and incentive payment rights; and
50	45		providing an effective date.
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55	50		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
56	51		SECTION 1. AMENDATORY 68 O.S. 2021, Section 2397, as
57	52		amended by Section 2, Chapter 30, 1st Extraordinary Session, O.S.L.
58	53		2023 (68 O.S. Supp. 2024, Section 2397), is amended to read as
59	54		follows:
60	55		Section 2397. A. Upon receiving notification from the
61	56		Executive Director of the Oklahoma Department of Commerce that an
62	57		approved company has entered into a tourism project agreement and is
63	58		entitled to the inducements provided by the Oklahoma Tourism
64	59		Development Act, the Oklahoma Tax Commission shall provide the
	60	+	approved company with forms and instructions as necessary to claim
	61	+	or receive or pass-through those inducements.
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92		-	approved company with forms and instructions as necessary to claim
93		-	or receive or pass-through those inducements.
94	88		B. An approved company whose agreement provides that it shall
95	89		expend approved costs of more t han Five Hundred Thousand Dollars
96	90		($500,000.00) for a tourism attraction project but less than One
97	91		Million Dollars ($1,000,000.00) shall be entitled to a sales tax
98	92		credit if the company certifies to the Tax Commission that i t has
99	93		expended at least the mini mum amount in approved costs, and the
100	94		Executive Director certifies that the approved company is in
101	95		compliance with the Oklahoma Tourism Development Act. The Tax
102	96		Commission shall then issue a tax credit memorandum to the approved
103	97		company granting a sales t ax credit in the amount of up to ten
104	98		percent (10%) of the approved costs, but limited to the percent of
105	99		the approved costs that will result in the project being revenue -
106	100		neutral to this state as determined by the Oklahoma Dep artment of
107	101		Commerce. Subsequent requests for credit for additional certified
108	102		approved costs in excess of the minimum amount for each project as
109	103		listed in this subsection but less than One Million Dollars
110	104		($1,000,000.00) shall result in a sales tax credit in the amount of
111	105		up to ten percent (10%) of the approved costs, but limited to the
112	106		percent of the approved costs that will result in the project being
113	107		revenue-neutral to this state as determined by the Oklahoma
114	108		Department of Commerce. Sales tax credits al lowed pursuant to the
115	109		provisions of the Oklahoma Tourism Development Act shall not be
	110	+	transferable or assignable; provided that, with respect to a tourism
	111	+	attraction project that is an Entertainment District, the approved
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143		-	transferable or assignable; provided that, with respect to a tourism
144		-	attraction project that is an Entertainment District, the approved
145	138		company can elect to pass -through all or a portion of the sales ta x
146	139		credit to one or more Entertainment District Tenant Parties. The
147	140		approved company and the Entertainment District Tenant Party shall
148	141		jointly file a copy of the written credit pass -through agreement
149	142		with the Oklahoma Tax Co mmission within thirty (30) days of the
150	143		effective date of the agreement. Such filing of the agreement with
151	144		the Oklahoma Tax Commission shall perfect such agreement. The
152	145		written agreement shall contain the name, address and taxpayer
153	146		identification number of the parties to the agreement, the amount of
154	147		credit being passed-through, the month and year the credit was
155	148		originally allowed to the approved company, the month and tax year
156	149		or years for which the credit may be claimed, and a representation
157	150		by the approved company that the approved co mpany has neither
158	151		claimed for its own behalf nor conveyed such credits to any other
159	152		Entertainment District Tenant Party. The Tax Commission shall
160	153		develop a standard form for use by an approved company and an
161	154		Entertainment District Tenant Party demonstrati ng eligibility for
162	155		the Entertainment District Tenant Party to utilize the sales tax
163	156		credit. The Tax Commission shall develop a system to record and
164	157		track the pass-through of the sales tax credit and certify the
165	158		ownership of the sales tax credit and may pr omulgate rules to permit
166	159		verification of the validity and timeliness of a sales tax credit
	160	+	claimed upon a sales tax return pursuant to this subsection but
	161	+	shall not promulgate any rules which unduly restrict or hinder the
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194		-	claimed upon a sales tax return pursuant to this subsection but
195		-	shall not promulgate any rules which unduly restrict or hinder t he
196	188		pass-through of such sales tax cre dit to an Entertainment District
197	189		Tenant Party.
198	190		An approved company whose agreement provides that it shall
199	191		expend approved costs in excess of One Million Dollars
200	192		($1,000,000.00) shall be entitled to a sales tax credit if the
201	193		company certifies to the Tax Com mission that it has expended at
202	194		least One Million Dollars ($1,000,000.00) in approved costs and the
203	195		Executive Director certifies that the approved company is in
204	196		compliance with the Oklahoma Tourism Development Act. The Tax
205	197		Commission shall then issue a ta x credit memorandum to the approved
206	198		company granting a sales tax credit in the amount of up to twenty -
207	199		five percent (25%) of the approved costs, but limited to the percent
208	200		of the approved costs that will result in the project being revenue-
209	201		neutral to this state as determined by the Oklahoma Department of
210	202		Commerce. The credit on all subsequent additional certified
211	203		approved costs shall be in the amount of up to twenty -five percent
212	204		(25%) of the costs, but limited to the percent of the approved costs
213	205		that will result in the project being revenue -neutral to this state
214	206		as determined by the Oklahoma Department of Commerce. For a tourism
215	207		attraction project that is an Entertainment District, an approved
216	208		company may elect to receive an incentive payment based on sale s tax
217	209		collections of Entertainment District Tenant Parties rather than a
	210	+	sales tax credit. The incentive payment shall be in the amount of
	211	+	up to twenty-five percent (25%) of the approved costs but limited to
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245		-	sales tax credit. The incentive payment shall be in the amount of
246		-	up to twenty-five percent (25%) of the approved costs but limited to
247	238		the percent of the approved costs that will res ult in the project
248	239		being revenue-neutral to this state as determined by the Oklahoma
249	240		Department of Commerce; provided that, (A) in no event shall the
250	241		incentive payments exceed the increased state sales tax liability of
251	242		the approved company and the Entertai nment District Tenant Parties
252	243		that is actually received by the Tax Commission, and (B) the
253	244		approved company shall be entitled to receive only ten percent (10%)
254	245		of the incentive payment amount during each calendar year. The Tax
255	246		Commission shall issue an in centive payment memorandum to the
256	247		approved company granting a right to receive an incentive payment
257	248		from the Tax Commission in the amount of up to twenty -five percent
258	249		(25%) of the approved costs but limited to the percent of the
259	250		approved costs that will re sult in the project being revenue -neutral
260	251		to this state as determined by the Oklahoma Department of Commerce.
261	252		As soon as practicable after the end of each calendar year during
262	253		the term of the agreement, the approved company shall file a claim
263	254		for the incentive payment with the Tax Commission, and the Tax
264	255		Commission shall be responsible for ensuring that the amount of the
265	256		incentive payment claimed does not exceed the increased state sales
266	257		tax liability of the approved company and the Entertainment District
267	258		Tenant Parties that has been actually received by the Tax
268	259		Commission, which may include accessing the Oklahoma sales tax
	260	+	returns of the Entertainment District Tenant Parties as permitted by
	261	+	this section.
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296		-	returns of the Entertainment District Tenant Parties as permitted by
297		-	this section.
298	288		The cumulative inducements provided pursuant to the Oklahoma
299	289		Tourism Development Act shall not exceed Thirty Million Dollars
300	290		($30,000,000.00) per year.
301	291		The Tax Commission shall require proof of expenditures prior to
302	292		issuing a tax credit memorandum or incentive payment memoran dum to
303	293		the approved company whic h may be satisfied by a report from an
304	294		independent certified public accountant. Additional credit
305	295		memoranda or incentive memoranda may be issued as the approved
306	296		company certifies additional expenditures of approved costs.
307	297		No tax credit memorandum or incen tive payment memorandum shall
308	298		be issued for any approved costs expended after the expiration of
309	299		three (3) years from the date the agreement was signed by the
310	300		Executive Director and the approved company. However, the Executi ve
311	301		Director, with the advice and consent of the Tax Commission, may
312	302		authorize inducements for approved costs expended up to five (5)
313	303		years from the date the agreement was signed if the Executive
314	304		Director determines that the failure to complete the tourism
315	305		attraction project within three (3) years resulted from:
316	306		1. Unanticipated and unavoidable delay in the construction of
317	307		the tourism attraction;
	308	+	2. An original completion date for the tourism attraction, as
	309	+	originally planned, which will be more than three (3) years from the
	310	+	date construction began; or
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345		-	2. An original completion date for the tourism attraction, as
346		-	originally planned, which will be more than three (3) years from the
347		-	date construction began; or
348	337		3. A change in business ownership or business structure
349	338		resulting from a merger or acquisition.
350	339		C. A sales tax credit allowed pursuant to the provisions of
351	340		this section may be used to offset a portion of the reported state
352	341		sales tax liability of the approved company or an Entertainment
353	342		District Tenant Party, if applicable, for all sales tax reporting
354	343		periods following the issuance of the credit memorandum subject to
355	344		the following limitations:
356	345		1. Only increased state sales tax liability ma y be offset by
357	346		the issued credit;
358	347		2. An approved company whose agreement provides that it shall
359	348		expend approved costs in excess of One Million Dollars
360	349		($1,000,000.00) or an Entertainment District Party, if applicable,
361	350		shall be entitled to use only ten per cent (10%) of the amount of
362	351		each issued credit to offset increased state sales tax liability
363	352		during each calendar year, plus the amount of any unused credit
364	353		carried forward from a prior calendar year, and an approved company
365	354		whose agreement provides that i t shall expend approved costs of more
366	355		than the minimum amount for each project as listed in this
367	356		subsection but less than One Million Dollars ($1,000,000.00) shall
368	357		be entitled to use only twenty percent (20%) of the amount of each
	358	+	issued credit to offset i ncreased state sales tax liability during
	359	+	each calendar year, plus the amount of any unused credit carried
	360	+	forward from a prior calendar year; and
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396		-	issued credit to offset increased state sales tax liability during
397		-	each calendar year, plus the amount of any unused credit carried
398		-	forward from a prior calendar year; and
399	387		3. All issued credit memoranda or incentive payment memoranda
400	388		shall expire at the end of the month following the expiration of the
401	389		agreement as provided in Section 2396 of this title.
402	390		The approved company or an Entertainment District Tenant Party,
403	391		if applicable, shall have no obligation to refund or otherwise
404	392		return any amount of this inducement to the person fr om whom the
405	393		sales tax was collected.
406	394		D. The Tax Commission shall promulgate rules as are necessary
407	395		for the proper administration of the Oklahoma Tourism Development
408	396		Act. The Tax Commission may also develop forms and instru ctions as
409	397		necessary for an appro ved company or Entertainment District Tenant
410	398		Party, if applicable, to claim or receive or pass -through the
411	399		inducements provided by the Oklahoma Tourism Development Act.
412	400		E. The Tax Commission shall have the authority to obtain any
413	401		information necessary fro m or regarding the approved company or an
414	402		Entertainment District Tenant Party, if applicable, and the
415	403		Executive Director to verify that approved companies or an
416	404		Entertainment District Tenant Party, if applicable, have receiv ed
417	405		the proper amounts of inducem ents as authorized by the Oklahoma
418	406		Tourism Development Act. The Oklahoma Tax Commission shall demand
	407	+	the repayment of any inducements taken or received in excess of the
	408	+	inducements allowed by the Oklahoma Tourism Development Act.
	409	+	F. No sales tax credit o r incentive payment right authorized by
	410	+	this section shall be granted on or after January 1, 2026 January 1,
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446		-	the repayment of any inducements taken or received in excess of the
447		-	inducements allowed by the Oklahoma Tourism Devel opment Act.
448		-	F. No sales tax credit or incentive payment right authorized by
449		-	this section shall be granted on or after January 1, 2026 January 1,
450	437		2032. Notwithstanding the foregoing, an approved company that has
451	438		entered into a tourism attraction project agreem ent with the
452	439		Oklahoma Department of Commerce pursuant to Section 2396 of this
453	440		title prior to January 1, 2026 January 1, 2032, shall continue to be
454	441		entitled to claim or receive any inducements authorized by this
455	442		section as contemplated by the tourism project agreement.
456	443		G. All currently approved tourism project agreements executed
457	444		by the Oklahoma Tourism and Recreation Department are hereby
458	445		transferred to the Oklahoma Department of Commerce upon November 1,
459	446		2021.
460	447		H. On November 1, 2021, all administrative r ules promulgated by
461	448		the Oklahoma Tourism and Recreation Department regarding the
462	449		Oklahoma Tourism Development Act shall be transferred to and become
463	450		a part of the administrative rules of the Oklahoma Department of
464	451		Commerce. The Office of Administrative Rules in the Office of the
465	452		Secretary of State shall provide adequate notice in the Oklahoma
466	453		Register of the transferred rules and shall place the transferred
467	454		rules under the Administrative Code section of the Oklahoma
468	455		Department of Commerce. On November 1, 2021, any amendment, repeal,
469	456		or addition to the transferred rules shall be under the jurisdiction
	457	+	of the Oklahoma Department of Commerce, who shall have the authority
	458	+	to enact rules in order to carry out the provisions of the Oklahoma
	459	+	Tourism Development Act.
	460	+	SECTION 2. This act shall become effective November 1, 2025.
470	461
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497		-	of the Oklahoma Department of Commerce, who shall have the authority
498		-	to enact rules in order to carry out the provisions of the Oklahoma
499		-	Tourism Development Act.
500		-	SECTION 2. This act shall become effective November 1, 2025.
501		-	COMMITTEE REPORT BY: COMMITTEE ON REVENUE AND TAXATION
502		-	April 14, 2025 - DO PASS
	487	+	Passed the House of Representatives the 26th day of March, 2025.
	488	+
	489	+
	490	+
	491	+
	492	+	Presiding Officer of the House
	493	+	of Representatives
	494	+
	495	+
	496	+
	497	+	Passed the Senate the ___ day of __________, 2025.
	498	+
	499	+
	500	+
	501	+
	502	+	Presiding Officer of the Senate
	503	+
	504	+