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53	53	STATE OF OKLAHOMA
54	54
55	55	1st Session of the 60th Legislature (2025)
56	56
57	57	SENATE BILL 239 By: Wingard
58	58
59	59
60	60
61	61
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63	63	AS INTRODUCED
64	64
65	65	An Act relating to income tax; amending 68 O.S. 2021,
66	66	Section 2357.32A, which relates to credit on the sale
67	67	of electricity generated by zero-emission facilities;
68	68	limiting credit to certain tax years; limiting carry
69	69	forward provisions; updating statutory language; and
70	70	providing an effective date .
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75	75	BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
76	76	SECTION 1. AMENDATORY 68 O.S. 2021, Section 2357.32A, is
77	77	amended to read as follo ws:
78	78	Section 2357.32A. A. Except as otherwise provided in
79	79	subsection H of this section, for tax years beginning on or after
80	80	January 1, 2003 2003 through 2025, but with respect t o tax credits
81	81	for eligible renewable resources described by subparagraphs b, c and
82	82	d of paragraph 2 of this subsection, for tax years ending not later
83	83	than December 31, 2021, there shall be allowed a credit against the
84	84	tax imposed by Section 2355 of this t itle to a taxpayer for the
85	85	taxpayer’s production and sale to an unrelated pers on of electricity
86	86	generated by zero-emission facilities located in this state. As
87	87	used in this section:
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139	139	1. “Electricity generated by zero -emission facilities” means
140	140	electricity that is exclusively produced by any facility located in
141	141	this state with a rated production capacity of one megawatt (1 mw)
142	142	or greater, constructed for the generation of electricity and placed
143	143	in operation after June 4, 2001, and with respect to electricit y
144	144	generated by wind for any facility placed in operation not later
145	145	than July 1, 2017, which utilizes eligible renewable resources as
146	146	its fuel source. The construction and operation of such facilities
147	147	shall result in no pollution or emissions that are or m ay be harmful
148	148	to the environment, pursuant to a determination by the Department of
149	149	Environmental Quality; and
150	150	2. “Eligible renewable resources ” means resources derived from:
151	151	a. wind,
152	152	b. moving water,
153	153	c. sun, or
154	154	d. geothermal energy.
155	155	B. For facilities pla ced in operation on or after January 1,
156	156	2003, and before January 1, 2007, the amount of the credit for the
157	157	electricity generated on or after January 1, 2003, but prior to
158	158	January 1, 2004, shall be seventy -five one-hundredths of one cent
159	159	($0.0075) for each kilowatt-hour of electricity generated by zero -
160	160	emission facilities. For electricity generated on or after January
161	161	1, 2004, but prior to January 1, 2007, the amount of the credit
162	162	shall be fifty one-hundredths of one cent ($0.0050) per kilowatt -
163	163
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214	214	hour for electricity generated by zero -emission facilities. For
215	215	electricity generated on or after January 1, 2007, but prior to
216	216	January 1, 2012, the amount of the credit shall be twenty -five one-
217	217	hundredths of one cent ($0.0025) per kilowatt -hour of electricity
218	218	generated by zero-emission facilities. For facilities placed in
219	219	operation on or after January 1, 2007, and before January 1, 2021,
220	220	or with respect to electricity generated by wind for any facility
221	221	placed in operation not later than July 1, 2017, the amount of t he
222	222	credit for the electricity generated on or after January 1, 2007,
223	223	shall be fifty one-hundredths of one cent ($0.0050) for each
224	224	kilowatt-hour of electricity generated by zero -emission facilities.
225	225	C. Credits may be claimed with respect to electricity gen erated
226	226	on or after January 1, 2003, during a ten -year period following the
227	227	date that the facility is placed in operation on or after June 4,
228	228	2001, or through tax year 2025, whichever occurs earlier .
229	229	D. 1. For credits generated prior to January 1, 2014, i f the
230	230	credit allowed pursuant to this section exceeds the amount of income
231	231	taxes due or if there are no state income taxes due on the income of
232	232	the taxpayer, the amount of the credit allowed but not used in any
233	233	tax year may be carried forward as a credit a gainst subsequent
234	234	income tax liability for a period not exceeding ten (10) years.
235	235	2. Except as provided by paragraph 3 of this subsection, for
236	236	credits generated, but not used, on or after January 1, 2014, the
237	237	Oklahoma Tax Commission shall refund, at the t axpayer’s election,
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289	289	directly to the taxpayer eighty -five percent (85%) of the face
290	290	amount of such credits. The direct refund of the credits pursuant
291	291	to this paragraph shall be available to all taxpayers, including,
292	292	without limitation, pass -through entities and taxpayers subject to
293	293	Section 2355 of this title, but shall not be available to any
294	294	entities falling within the provisions of subsection E of this
295	295	section. The amount of any direct refund of credits actually
296	296	received at the eighty -five percent (85%) level by the taxpayer
297	297	pursuant to this paragraph shall not be subject to the t ax imposed
298	298	by Section 2355 of this title. If the pass -through entity does not
299	299	file a claim for a direct refund, the pass -through entity shall
300	300	allocate the credit to one or more of the shareholders, partners or
301	301	members of the pass-through entity; provided, the total of all
302	302	credits refunded or allocated shall not exceed the amount of the
303	303	credit or refund to which the pass -through entity is entitled. For
304	304	the purposes of this paragr aph, “pass-through entity” means a
305	305	corporation that for the applicable tax yea r is treated as an S
306	306	corporation under the Internal Revenue Code of 1986, as amended,
307	307	general partnership, limited partnership, limited liability
308	308	partnership, trust or limited li ability company that for the
309	309	applicable tax year is not taxed as a corporation for federal income
310	310	tax purposes.
311	311	3. With respect to credits claimed for the first time on or
312	312	after July 1, 2019, or the effective date of this act, whichever
313	313
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364	364	date last occurs, a taxpayer may irrevocably elect to not receive a
365	365	direct refund for a given ta x year. Any credits not directly
366	366	refunded may be carried forward as a credit against subsequent
367	367	income tax liability for a period not exceeding ten (10) years , but
368	368	in no event shall credit be carried forward to tax year 2026 or
369	369	subsequent tax years . If a taxpayer makes the irrevocable election
370	370	to carry over credits for a given tax year pursuant to this
371	371	paragraph, any credits remaining in the tenth year of carry forward
372	372	or tax year 2025, whichever occurs first, shall be refunded at
373	373	eighty-five percent (85%).
374	374	E. Any nontaxable entities, including agencies of the State of
375	375	Oklahoma or political subdivisions thereof, shall be eligible to
376	376	establish a transferable tax credit in the amo unt provided in
377	377	subsection B of this section. Such tax credit shall be a property
378	378	right available to a state agency or political subdivision of this
379	379	state to transfer or sell to a taxable entity, whether individual or
380	380	corporate, who shall have an actual o r anticipated income tax
381	381	liability under Section 2355 of this title. These ta x credit
382	382	provisions are authorized as an incentive to the State of Oklahoma,
383	383	its agencies and political subdivisions to encourage the expenditure
384	384	of funds in the development, con struction and utilization of
385	385	electricity from zero -emission facilities as defined in subsection A
386	386	of this section.
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438	438	F. For credits generated prior to January 1, 2014, the amount
439	439	of the credit allowed, but not used, shall be freely transferable at
440	440	any time during the ten (10) years following the year of
441	441	qualification. Any person to whom or to which a tax credit is
442	442	transferred shall have only such rights to claim and use the credit
443	443	under the terms that would have applied to the entity by whom or by
444	444	which the tax credit was transferred. The provisions of this
445	445	subsection shall not limit the ability of a tax credit transferee to
446	446	reduce the tax liability of the transferee, regardless of the actual
447	447	tax liability of the tax credit transferor, for the relevant taxa ble
448	448	period. The transferor initially allowed the credit and any
449	449	subsequent transferees shall jointly file a copy of any written
450	450	transfer agreement with the Oklahoma Tax Commission within thirty
451	451	(30) days of the transfer. The written agreement shall conta in the
452	452	name, address and taxpayer identification number or Social Security
453	453	number of the parties to the transfer, the amount of the credit
454	454	being transferred, the year the credit was originally allowed to the
455	455	transferor, and the tax year or years for which the credit may be
456	456	claimed. The Tax Commission may promulgate rules to permit
457	457	verification of the validity and timeliness of the tax credit
458	458	claimed upon a tax return pursuant to this subsection but shall not
459	459	promulgate any rules that unduly restrict or hin der the transfers of
460	460	such tax credit. The tax credit allowed by this section, upon the
461	461	election of the taxpayer, may be claimed as a payment of tax, a
462	462
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513	513	prepayment of tax or a payment of estimated tax for purposes of
514	514	Section 1803 or Section 2355 of this tit le.
515	515	G. For electricity generation produced and sold in a calendar
516	516	year, the tax credit allowed by the provisions of this section, upon
517	517	election of the taxpayer, shall be treated and may be claimed as a
518	518	payment of tax, a prepayment of tax or a payment of e stimated tax
519	519	for purposes of Section 2355 of this title on or after July 1 of the
520	520	following calendar year.
521	521	H. No credit otherwise authorized by the provisions of this
522	522	section may be claimed for any event, transaction, investment,
523	523	expenditure or other act occurring on or after July 1, 2010, for
524	524	which the credit would otherwise be al lowable until the provisions
525	525	of this subsection shall cease to be operative on July 1, 2011.
526	526	Beginning July 1, 2011, the credit authorized by this section may be
527	527	claimed for any event, transaction, investment, expenditure or other
528	528	act occurring on or after July 1, 2010, according to the provisions
529	529	of this section. Any tax credits which accrue during the period of
530	530	July 1, 2010, through June 30, 2011, may not be claimed for any
531	531	period prior to the taxable year beginning January 1, 2012. No
532	532	credits which accrue during the period of July 1, 2010, through June
533	533	30, 2011, may be used to file an amended tax return for any taxable
534	534	year prior to the taxable year beginning January 1, 2012.
535	535	I. For tax years beginning on or after January 1, 2019, the
536	536	total amount of credits authorized by this section with respect to
537	537
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588	588	eligible renewable resources described by subparagraphs b, c and d
589	589	of paragraph 2 of subsection A of this section used to offse t tax or
590	590	paid as a refund shall be adjusted annually to limit the annual
591	591	amount of credits to Five Hundred Thousand Dollars ($500,000.00).
592	592	The Tax Commission shall annually calculate and publish a percentage
593	593	by which the credits authorized by subparagraph s b, c and d of
594	594	paragraph 2 of subsection A of this section shall be reduced so the
595	595	total amount of credits used to offset tax or paid as a refund does
596	596	not exceed Five Hundred Thousand Dollars ($500,000.00) per year.
597	597	The formula to be used for the percent age adjustment shall be Five
598	598	Hundred Thousand Dollars ($500,000.00) divided by the credits
599	599	claimed in the second preceding year.
600	600	J. Pursuant to subsection I of this section, in the event the
601	601	total tax credits authorized by this section with respect to
602	602	eligible renewable resources described by subparagraphs b, c and d
603	603	of paragraph 2 of subsection A of this section exceed Five Hundred
604	604	Thousand Dollars ($500,000.00) in any calendar year, the Tax
605	605	Commission shall permit any excess over Five Hundred Thousand
606	606	Dollars ($500,000.00) but shall factor such excess into the
607	607	percentage adjustmen t formula for subsequent years.
608	608	K. Any credits authorized by this section with respect to
609	609	eligible renewable resources described by subparagraphs b, c and d
610	610	of paragraph 2 of su bsection A of this section not used or unable to
611	611
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662	662	be used because of the provisions of subsection I or J of this
663	663	section may be carried over until such credits are fully used.
664	664	L. The Tax Commission shall prepare an annual report and submit
665	665	it to the Office of the State Secretary of Energy and Environment,
666	666	the Governor, the Speaker o f the Oklahoma House of Representatives
667	667	and the President Pro Tempore of the Oklahoma State Senate
668	668	summarizing the amount of credits allowed pursuant to subparagraphs
669	669	b, c and d of paragraph 2 of subsection A of this section. The
670	670	Secretary of Energy and Environment shall submit recommendations for
671	671	changes to the tax credit to the Governor, the Speaker of the
672	672	Oklahoma House of Representatives and the President Pro Tempore of
673	673	the Oklahoma State Senate within sixty (60) days after receipt of
674	674	the report from the Oklahoma Tax Commission.
675	675	SECTION 2. This act shall become effective November 1, 2025.
676	676
677	677	60-1-796 QD 12/30/2024 5:20:05 PM

Oklahoma 2025 Regular Session

Oklahoma Senate Bill SB239 Compare Versions