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STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
SENATE BILL 472 By: Bergstrom
AS INTRODUCED
An Act relating to income tax credit; amending
Section 2, Chapter 278, O.S.L. 2023, as amended by
Section 3, Chapter 277, O.S.L. 2024 (70 O.S. Supp.
2024, Section 28-101), which relates to the Oklahoma
Parental Choice Tax Credit Act; modifying definition;
expanding the scope of scholarships while
participating in the program; and providing an
effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY Section 2, Chapter 278, O.S.L.
2023, as amended by Section 3, Chapter 277, O.S.L. 2024 (70 O.S.
Supp. 2024, Section 28 -101), is amended to read as follows:
Section 28-101. A. As used in the Oklahoma Parental Choice Tax
Credit Act:
1. “Commission” means the Oklahoma Tax Commission;
2. “Curriculum” means a complete course of study for a
particular content area or grade level;
3. “Department” means the State Department of Education;
4. “Education service provider ” means a person, business,
public school district, public charter school, magnet school, or
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organization that provides educational goods and/or services to
eligible students in this state;
5. “Eligible student” means a resident of this state who is
eligible to enroll in a public school in this state. Eligible
student shall include a student who is enrolled in and attends or is
expected to enroll in a private school in this state accredited by
the State Board of Education or another accrediting association or a
student who is educated purs uant to the other means of education
exception provided for in subsection A of Section 10 -105 of this
title;
6. “Qualified expense” for the purpose of claiming the credit
authorized by paragraph 1 of subsection C of this section means
tuition and fees at a private school in this state accredited by the
State Board of Education or another accrediting association.
Provided, the amount of tuition and fees considered a qualified
expense pursuant to this paragraph shall not include the portion of
tuition and fees paid with any scholarship or the portion of tuition
and fees discounted or otherwise reduced by the school;
7. “Qualified expense” for the purpose of claiming the credit
authorized by paragraph 2 of subsection C of this section means the
following expenditures:
a. tuition and fees for nonpublic learning programs,
online or in person,
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b. academic tutoring services provided by an individual
or a private academic tutoring facili ty,
c. textbooks, curriculum, or other instructional
materials including, but not limited to, supplemental
materials or associated online instruction required by
an education service provider, and
d. fees for nationally standardized assessments
including, but not limited to, assessments used to
determine college admission and advanced placement
examinations as well as tuition and fees for tutoring
or preparatory courses for the assessments; and
8. “Taxpayer” means a biological or adoptive parent,
grandparent, aunt, uncle, legal guardian, custodian, or other person
with legal authority to act on behalf of an eligible student.
B. There is hereby created the Oklahoma Parental Choice Tax
Credit Program to provide an income tax credit to a taxpayer for
qualified expenses to support the education of eligible students in
this state.
C. For the tax year 2024 and subsequent tax years, and fiscal
year 2026 and subsequent fiscal years, there shall be allowed
against the tax imposed by Section 2355 of Title 68 of the Oklahoma
Statutes a credit for any Oklahoma taxpayer who incurs a qualified
expense on behalf of an eligible student, to be administered subject
to the following amounts:
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1. If the eligible student attends a private school in this
state accredited by the State Board of Education or another
accrediting association, the annual maximum credit amount for tax
year 2024, fiscal year 2026, and each subsequent fiscal year shall
be:
a. Seven Thousand Five Hundred Dollars ($7,500.00) or the
amount of tuition and fee s for the private school,
whichever is less, if the combined adjusted gross
income of the parents or legal guardians of the
eligible student during the second preceding tax year
does not exceed Seventy -five Thousand Dollars
($75,000.00),
b. Seven Thousand Dollars ($7,000.00) or the amount of
tuition and fees for the private school, whichever is
less, if the combined adjusted gross income of the
parents or legal guardians of the eligible student
during the second preceding tax year is more than
Seventy-five Thousand Dollars ($75,000.00) but does
not exceed One Hundred Fifty Thousand D ollars
($150,000.00),
c. Six Thousand Five Hundred Dollars ($6,500.00) or the
amount of tuition and fees for the private school,
whichever is less, if the combined adjusted gross
income of the parents or legal guardians of the
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eligible student during the second preceding tax year
is more than One Hundred Fifty Thousand Dollars
($150,000.00) but does not exceed Two Hundred Twenty -
five Thousand Dollars ($225,000.00),
d. Six Thousand Dollars ($6,000.00) or the amount of
tuition and fees for the private school, whichever is
less, if the combined adjusted gross income of the
parents or legal guardians of the eligible student
during the second preceding tax year is more than Two
Hundred Twenty-five Thousand Dollars ($225,000.00) but
does not exceed Two Hundred Fifty Thousand Dollars
($250,000.00), or
e. Five Thousand Dollars ($5,000.00) or the amount of
tuition and fees for the private school, whichever is
less, if the combined adjusted g ross income of the
parents or legal guardians of the eligible student
during the second preceding tax year is more than Two
Hundred Fifty Thousand Dollars ($250,000.00);
2. For tax year 2024 and subsequent tax years, the maximum
credit amount shall be One Thousand Dollars ($1,000.00) in qualified
expenses per eligible student in each tax year if the eligible
student is educated pursuant to the other means of education
exception provided for in subsection A of Section 10 -105 of this
title. To claim the cre dit, the taxpayer shall submit to the
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Commission receipts for qualified expens es as defined by paragraph 7
of subsection A of this section;
3. If the eligible student attends a private school in this
state, accredited by the State Board of Education or an other
accrediting association, that exclusively serves students
experiencing homelessness, the credit amount shall be Seven Thousand
Five Hundred Dollars ($7,500.00) or the amount of the cost to
educate the eligible student at the private school, whichever is
less;
4. If the eligible student attends a private school in this
state, accredited by the State Board of Education or another
accrediting association, that primarily serves financially
disadvantaged students, the credit amount shall be the maximum
credit amount authorized by paragraph 1 of this subsection or the
amount of the cost to educate the eligible student at the private
school, whichever is less. The cost to educate the eligible student
shall be equal to the average cost to educate all student s attending
the private school, which shall be calculated by dividing the
private school’s total expenditures in the previous year by the
total enrollment in the previous school year. A private school
shall be deemed to be primarily serving financially di sadvantaged
students if ninety percent (90%) of the private school ’s admissions
are based on enrolling students whose gross family income is two
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hundred fifty percent (250%) of the federal poverty threshold or
below;
5. The taxpayer shall retain all recei pts of qualified expenses
as proof of the amounts paid each tax year the credi t is claimed and
shall submit them to the Commission upon request;
6. If the credit exceeds the tax imposed by Section 2355 of
Title 68 of the Oklahoma Statutes, the excess amou nt shall be
refunded to the taxpayer; and
7. Credits claimed by a taxpayer pursuant to the provisions of
this section shall not be used to offset or pay the following:
a. delinquent tax liability,
b. accrued penalty or interest from the failure to file a
report or return,
c. accrued penalty or interest from the failure to pay a
state tax within the statutory period allowed for its
payment,
d. tax liability of the taxpayer from any prior tax year,
or
e. any debt, unpaid fine, final judgment, or claim filed
with the Commission by a qualified entity as defined
in Section 205.2 of Title 68 of the Oklahoma Statutes.
D. 1. a. For tax year 2024, the total amount of credits
authorized by paragraph 1 of subsection C of this
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section shall not exceed One Hundred Fifty Million
Dollars ($150,000,000.00).
b. For the period of January 1, 2025, thro ugh June 30,
2025, the total amount of credits authorized by
paragraph 1 of subsection C of this section shall not
exceed One Hundred Million Dollars ($100,000,000.00).
The Commission shall not require a taxpayer who
received a credit pursuant to paragraph 1 of
subsection C of this section in tax year 2024 to
reapply for a credit payable during the period
described in this subparagraph. The Commission shall
base the credit amoun t payable for the spring 2025 on
the fall 2024 installment disbursement paymen t amount.
c. For fiscal year 2026 and subsequent fiscal years, the
total amount of credits authorized by paragraph 1 of
subsection C of this section shall not exceed Two
Hundred Fifty Million Dollars ($250,000,000.00).
2. For tax year 2025 and subsequent tax years, the total amount
of credits authorized by paragraph 2 of subsection C of this section
shall not exceed Five Million Dollars ($5,000,000.00).
E. The Commission shall p rescribe applications for the purposes
of claiming the credits authorized by t he Oklahoma Parental Choice
Tax Credit Act and a deadline by which applications shall be
submitted. A taxpayer claiming the credit authorized by paragraph 1
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of subsection C of t his section shall submit an application
prescribed by the Commission to receive the credit in two
installments, each of which shall be half of the expected amount of
tuition and fees for the private school based on the enrollment
verification form submitte d pursuant to this subsection, but in no
event shall an installment payment ex ceed the amount of the credit
authorized by paragraph 1 of subsection C of this section. If an
eligible taxpayer provides documentation on the application that he
or she is a recipient of income-based government benefits including
the Supplemental Nutrition Assistance Program (SNAP), Temporary
Assistance for Needy Families (TANF), or SoonerCare, the eligible
taxpayer shall not be required to provide additional income
verification. A taxpayer claiming the credit authorized by
paragraph 1 of subsection C of this section shall submit to the
Commission an enrollment verification form from the private school
in which the eligible student is enrolled or is expected to enroll
with the tuition and fees to be charged the taxpayer for the
applicable school year. In reviewing applications submitted by
eligible taxpayers to determine whether they qualify for a credit
authorized by paragraph 1 of subsection C of this section, the
Commission shall give first preference in making installments to
taxpayers who qualify pur suant to subparagraphs a and b of paragraph
1 of subsection C of this section. For credits issued in the 2025 -
2026 school year and subsequent school years, the application perio d
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shall open on February 15 prior to the beginning of each school
year. For any eligible student whose parents or legal guardians
have a combined adjusted gross income that does not exceed One
Hundred Fifty Thousand Dollars ($150,000.00), applications sha ll be
submitted to the Commission within the first sixty (60) days of the
opening of the application period to receive priority consideration.
For students enrolled in the full school year, the credit shall be
paid in two installments, one per school seme ster, to be paid no
later than August 30 and January 15, each of which shall be half of
the total expected amount of tuition and fees on the enrollment
verification form submitted pursuant to this subsection.
F. In the event there are more applications su bmitted by
eligible taxpayers for a credit authorized by paragraph 1 of
subsection C of this section than available credits pursuant to
subsection D of this section, then the Commission shall give first
preference in authorizing credits for eligible studen ts of taxpayers
who qualify pursuant to subparagraphs a and b of paragraph 1 of
subsection C of this section and have received the credit in the
prior year.
G. Taxpayers claiming the credit shall:
1. Only claim the credit for qualified expenses as define d in
paragraphs 6 and 7 of subsection A of this section to provide an
education for an eligible student;
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2. Ensure no other person is claiming a credit for the eligible
student;
3. Not claim the credit for an eligible student who enrolls as
a full-time student in a public school district, public charter
school, public virtual charter school, or magnet school;
4. Comply with rules and requirements established by the
Commission for administration of the Oklahoma Parental Choice Tax
Credit Program; and
5. Notify the Commission not later than thirty (30) days after
the date on which the eligible student:
a. enrolls in a public school, including an open -
enrollment charter school,
b. enrolls in a nonaccredited private school,
c. graduates from high school, or
d. is no longer utilizing credits authorized by paragraph
1 of subsection C of this section for any reason.
H. Eligible For fiscal year 2026 and subsequent fiscal years,
eligible students may accept a scholarship from the Lindsey Nicole
Henry Scholarships for Students with Disabilities Program created by
Section 13-101.2 of this title while participating in the Oklahoma
Parental Choice Tax Credit Program.
I. 1. The Commission shall have the authority to conduct an
audit or contract for the auditing of re ceipts for qualified
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expenses submitted pursuant to paragraph 2 of subsection C of this
section.
2. The Commission shall be authorized to recapture the credits
otherwise authorized by the provisions of the Oklahoma Parental
Choice Tax Credit Act on a pror ated basis if an audit conducted
pursuant to this subsection shows that the cr edit was claimed for
expenditures that were not qualified expenses or it finds that the
taxpayer has claimed an eligible student who no longer attends a
private school or has enr olled in a public school in the state.
3. The Commission shall be authorized to reallocate credits to
the next eligible taxpayer in line when a taxpayer, on behalf of an
eligible student in the program, chooses not to participate, is no
longer eligible to participate, or chooses to forgo participation in
the program for any reason.
4. The Commission shall provide notification of approval status
to applicants within thirty (30) days of closure of the application
window. Notice to applicants with an eligib le student, whose
parents or legal guardians have a combined adjusted gross income of
more than One Hundred Fifty Thousand Dollars ($150,000.00), shall be
sent within thirty (30) days or no later than thirty (30) days after
the last day of the priority con sideration period.
J. In the event of a failure of revenue pursuant to the
Oklahoma State Finance Act, the tax credits otherwise authorized in
subsection C of this section shall be reduced proportionately to the
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reduction in the amount of money appropriat ed to the State Board of
Education for the financial support of public schools for the fiscal
year in which the failure of revenue occurs.
K. The Commission shall make available on its website to be
updated monthly:
1. The total amount of credits claimed each year pursuant to
paragraphs 1 through 4 of subsection C of this section;
2. The amount of credits claimed and number of students awarded
each fiscal year pursuant to paragraph 1 of subsection C of this
section disaggregated by income categories;
3. The total amount of credits claimed and number of students
awarded who attended a public school in the semester immediately
preceding the school year for which the application is made each
year; and
4. The total number of applications denied and total am ount of
credits the denied applications represent for each fiscal year.
L. Credits received pursuant to the Oklahoma Parental Choice
Tax Credit Act shall not constitute taxable income to a taxpayer who
received the credit on behalf of an eligible student.
SECTION 2. This act shall become effective November 1, 2025.
60-1-186 QD 1/8/2025 9:14:54 PM