34 | 27 | | |
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35 | 28 | | ENGROSSED SENATE |
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36 | 29 | | BILL NO. 684 By: Paxton and Daniels of the |
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37 | 30 | | Senate |
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38 | 31 | | |
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39 | 32 | | and |
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40 | 33 | | |
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41 | 34 | | Hilbert of the House |
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42 | 35 | | |
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43 | 36 | | |
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44 | 37 | | |
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45 | 38 | | |
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46 | 39 | | |
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47 | 40 | | An Act relating to income tax credit; amending |
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48 | 41 | | Section 2, Chapter 278, O.S.L. 2023, as amended by |
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49 | 42 | | Section 3, Chapter 277, O.S.L. 2024 (70 O.S. Supp. |
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50 | 43 | | 2024, Section 28-101), which relates to the Oklahoma |
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51 | 44 | | Parental Choice Tax Credit Act; defining term; |
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52 | 45 | | modifying definition; modifying tax years for which |
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53 | 46 | | certain annual credit limit is enforced; prescribing |
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54 | 47 | | procedure for enforcement of annual limit; increasing |
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55 | 48 | | the annual credit limitation by the amount of certain |
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56 | 49 | | unused credit; requiring the Department of Human |
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57 | 50 | | Services and the Oklahoma Health Care Authority to |
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58 | 51 | | verify certain claims by applicants upon request; |
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59 | 52 | | modifying application period for certain school |
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60 | 53 | | years; requiring the payment of full credit amount by |
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61 | 54 | | certain date; modifying preference for taxpayers who |
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62 | 55 | | received credit in prior years; stipulating that |
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63 | 56 | | authorization to reallocate credit is before certain |
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64 | 57 | | date; requiring participating private schools to |
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65 | 58 | | provide certain information to the Oklahoma Tax |
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66 | 59 | | Commission; updating statutory references; updating |
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67 | 60 | | statutory language; providing an effective date ; and |
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68 | 61 | | declaring an emergency . |
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69 | 62 | | |
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70 | 63 | | |
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71 | 64 | | |
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72 | 65 | | |
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73 | 66 | | BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA: |
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104 | 96 | | Section 28-101. A. As used in the Oklahoma Parental Choice Tax |
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105 | 97 | | Credit Act: |
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106 | 98 | | 1. “Accrediting association ” means a legal entity, or that part |
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107 | 99 | | of a legal entity, that meets the accreditation requirements set by |
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108 | 100 | | the State Board of Education or another accrediting association |
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109 | 101 | | approved by the State Board of Education; |
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110 | 102 | | 2. “Commission” means the Oklahoma Tax Commission; |
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111 | 103 | | 2. 3. “Curriculum” means a complete course of study for a |
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112 | 104 | | particular content area or grade level; |
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113 | 105 | | 3. 4. “Department” means the State Department of Education; |
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114 | 106 | | 4. 5. “Education service provider ” means a person, busines s, |
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115 | 107 | | public school district, public charter school, magnet school, or |
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116 | 108 | | organization that provides educational goods and/or services to |
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117 | 109 | | eligible students in this state; |
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118 | 110 | | 5. 6. “Eligible student” means a resident of this state who is |
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119 | 111 | | eligible to enroll in a pub lic school in this state. Eligible |
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120 | 112 | | student shall include a student who is enrolled in and attends or is |
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121 | 113 | | expected to enroll in a private school in this state accredited by |
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122 | 114 | | the State Board of Education or another accrediting association or a |
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123 | 115 | | student who is educated pursuant to the other means of education |
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155 | 146 | | means tuition and fees at a private school in this state accredited |
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156 | 147 | | by the State Board of Education or another accrediting association. |
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157 | 148 | | Such private school shall comply with the provisions of subsection L |
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158 | 149 | | of this section. Provided, the amount of tuition and fees |
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159 | 150 | | considered a qualified expense pursuant to this paragraph shall not |
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160 | 151 | | include tuition and fees paid with any scholarship or tuition and |
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161 | 152 | | fees discounted or otherwise reduced by t he school; |
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162 | 153 | | 7. 8. “Qualified expense” for the purpose of claiming the |
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163 | 154 | | credit authorized by paragraph 2 of subsection C of this section |
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164 | 155 | | means the following expenditures: |
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165 | 156 | | a. tuition and fees for nonpublic learning programs, |
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166 | 157 | | online or in person, |
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167 | 158 | | b. academic tutoring services provided by an individual |
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168 | 159 | | or a private academic tutoring facility , |
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169 | 160 | | c. textbooks, curriculum, or other instructional |
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170 | 161 | | materials including, but not limited to, supplemental |
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171 | 162 | | materials or associated online instruction required by |
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172 | 163 | | an education service provider, and |
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173 | 164 | | d. fees for nationally standardized assessments |
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174 | 165 | | including, but not limited to, assessments used to |
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205 | 195 | | 8. 9. “Taxpayer” means a biological or adoptive parent, |
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206 | 196 | | grandparent, aunt, uncle, legal guardian, custodian, or other person |
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207 | 197 | | with legal authority to act on behalf of an eligible student. |
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208 | 198 | | B. There is hereby created the Oklahoma Parental C hoice Tax |
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209 | 199 | | Credit Program to provide an income tax credit to a taxpayer for |
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210 | 200 | | qualified expenses to support the education of eligible students in |
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211 | 201 | | this state. |
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212 | 202 | | C. For the tax year 2024 and subsequent tax years, and fiscal |
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213 | 203 | | year 2026 and subsequent fiscal years, there shall be allowed |
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214 | 204 | | against the tax imposed by Section 2355 of Title 68 of the Oklahoma |
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215 | 205 | | Statutes a credit for any Oklahoma taxpayer who incurs a qualified |
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216 | 206 | | expense on behalf of an eligible student, to be administered subject |
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217 | 207 | | to the following amounts: |
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218 | 208 | | 1. If the eligible student attends a private school in this |
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219 | 209 | | state accredited by the State Board of Education or another |
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220 | 210 | | accrediting association, the annual maximum credit amount for tax |
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221 | 211 | | year 2024, fiscal year 2026, and each subsequent fiscal year shall |
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222 | 212 | | be: |
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223 | 213 | | a. Seven Thousand Five Hundred Dollars ($7,500.00) or the |
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224 | 214 | | amount of tuition and fe es for the private school, |
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225 | 215 | | whichever is less, if the combined adjusted gross |
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255 | 244 | | does not exceed Seventy -five Thousand Dollars |
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256 | 245 | | ($75,000.00), |
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257 | 246 | | b. Seven Thousand Dollars ($7,000.00) or the amount of |
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258 | 247 | | tuition and fees for the private school, whichever is |
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259 | 248 | | less, if the combined adjusted gross income of the |
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260 | 249 | | parents or legal guardians of the eligible student |
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261 | 250 | | during the second preceding tax year is more than |
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262 | 251 | | Seventy-five Thousand Dollars ($75,000.00) but does |
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263 | 252 | | not exceed One Hundred Fifty Thousand Dollars |
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264 | 253 | | ($150,000.00), |
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265 | 254 | | c. Six Thousand Five Hundred Dollars ($6,500.00) or the |
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266 | 255 | | amount of tuition and fees for the private school, |
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267 | 256 | | whichever is less, if the combined adjusted gros s |
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268 | 257 | | income of the parents or legal guardians of the |
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269 | 258 | | eligible student during the second preceding tax year |
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270 | 259 | | is more than One Hundred Fifty Thousand Dollars |
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271 | 260 | | ($150,000.00) but does not exceed Two Hundred Twenty - |
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272 | 261 | | five Thousand Dollars ($225,000.00), |
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273 | 262 | | d. Six Thousand Dollars ($6,000.00) or the amount of |
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274 | 263 | | tuition and fees for the private school, whichever is |
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275 | 264 | | less, if the combined adjusted gross income of the |
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276 | 265 | | parents or legal guardians of the eligible student |
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306 | 294 | | does not exceed Two Hundred Fifty Thousand Dollars |
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307 | 295 | | ($250,000.00), or |
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308 | 296 | | e. Five Thousand Dollars ($5,000.00) or the amount of |
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309 | 297 | | tuition and fees for the private school, whichever is |
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310 | 298 | | less, if the combined adjusted gross income of the |
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311 | 299 | | parents or legal guardians of the eligible student |
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312 | 300 | | during the second preceding tax year is more than Two |
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313 | 301 | | Hundred Fifty Thousand Dollars ($250,000.00); |
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314 | 302 | | 2. For tax year 2024 and subsequent tax years, the maximum |
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315 | 303 | | credit amount shall be On e Thousand Dollars ($1,000.00) in qualified |
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316 | 304 | | expenses per eligible student in each tax year if the eligible |
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317 | 305 | | student is educated pursuant to the other means of education |
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318 | 306 | | exception provided for in subsection A of Section 10 -105 of this |
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319 | 307 | | title. To claim the cr edit, the taxpayer shall submit to the |
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320 | 308 | | Commission receipts for qualified expenses as defined by paragraph 7 |
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321 | 309 | | 8 of subsection A of this section; |
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322 | 310 | | 3. If the eligible student att ends a private school in this |
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323 | 311 | | state, accredited by the State Board of Education or another |
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324 | 312 | | accrediting association, that exclusively serves students |
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325 | 313 | | experiencing homelessness, the credit amount shall be Seven Thousand |
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326 | 314 | | Five Hundred Dollars ($7,500.00) or the amount of the cost to |
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356 | 343 | | 4. If the eligible student attends a private school in this |
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357 | 344 | | state, accredited by the State Board of Education or another |
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358 | 345 | | accrediting association, that primarily serves financially |
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359 | 346 | | disadvantaged students, the credit amount shall be the maximum |
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360 | 347 | | credit amount authorized by paragraph 1 of this subsection or the |
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361 | 348 | | amount of the cost to educate the eligible student at the private |
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362 | 349 | | school, whichever is less. The cost to educate the eligible student |
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363 | 350 | | shall be equal to the average cost to educate all stud ents attending |
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364 | 351 | | the private school, which shall be calculated by dividing the |
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365 | 352 | | private school’s total expenditures in the previous year by the |
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366 | 353 | | total enrollment in the previous school year. A private school |
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367 | 354 | | shall be deemed to be primarily serving financially disadvantaged |
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368 | 355 | | students if ninety percent (90%) of the private school ’s admissions |
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369 | 356 | | are based on enrolling students whose gross family income is two |
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370 | 357 | | hundred fifty percent (250%) of the federal poverty threshold or |
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371 | 358 | | below; |
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372 | 359 | | 5. The taxpayer shall retain all re ceipts of qualified expenses |
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373 | 360 | | as proof of the amounts paid each tax year the credit is claimed and |
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374 | 361 | | shall submit them to the Commission upon request; |
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375 | 362 | | 6. If the credit exceeds the tax imposed by Section 2355 of |
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376 | 363 | | Title 68 of the Oklahoma Statutes, the excess a mount shall be |
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377 | 364 | | refunded to the taxpayer; and |
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407 | 393 | | a. delinquent tax liability, |
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408 | 394 | | b. accrued penalty or interest from the failure to file a |
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409 | 395 | | report or return, |
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410 | 396 | | c. accrued penalty or interest from the failure to pay a |
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411 | 397 | | state tax within the statutory period allowed for its |
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412 | 398 | | payment, |
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413 | 399 | | d. tax liability of the taxpayer from any prior tax year, |
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414 | 400 | | or |
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415 | 401 | | e. any debt, unpaid fine, final judgment, or claim fil ed |
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416 | 402 | | with the Commission by a qualified entity as defined |
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417 | 403 | | in Section 205.2 of Title 68 of the Oklahoma Statutes. |
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418 | 404 | | D. 1. a. For tax year 2024, the total amount of credits |
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419 | 405 | | authorized by paragraph 1 of subsection C of this |
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420 | 406 | | section shall not exceed One Hundred Fi fty Million |
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421 | 407 | | Dollars ($150,000,000.00). |
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422 | 408 | | b. For the period of January 1, 2025, through June 30, |
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423 | 409 | | 2025, the total amount of credits authorized by |
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424 | 410 | | paragraph 1 of subsection C of t his section shall not |
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425 | 411 | | exceed One Hundred Million Dollars ($100,000,000.00). |
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426 | 412 | | The Commission shall not require a taxpayer who |
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427 | 413 | | received a credit pursuant to paragraph 1 of |
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428 | 414 | | subsection C of this section in tax year 2024 to |
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458 | 443 | | base the credit amount payable for the spring 2025 on |
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459 | 444 | | the fall 2024 installment disbursement payment amount. |
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460 | 445 | | c. For fiscal year 2026 and subsequent fiscal years, the |
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461 | 446 | | total amount of credits au thorized by paragraph 1 of |
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462 | 447 | | subsection C of this section shall not exceed Two |
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463 | 448 | | Hundred Fifty Million Dollars ($250,000,000.00). |
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464 | 449 | | 2. For tax year 2025 2026 and subsequent tax years, the total |
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465 | 450 | | amount of credits authorized by paragraph 2 of subsection C of this |
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466 | 451 | | section shall not exceed Five Million Dollars ($5,000,000.00). The |
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467 | 452 | | Oklahoma Tax Commission shall annually calculate and publish a |
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468 | 453 | | percentage by which the credits authorized by this section shall be |
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469 | 454 | | reduced so the total amount of credits used to offset ta x does not |
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470 | 455 | | exceed the annual limit. The formula to be used for the percentage |
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471 | 456 | | adjustment shall be Five Million Dollars ($5,000,000.00) divided by |
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472 | 457 | | the amount of credit claimed in the second preceding tax year. In |
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473 | 458 | | the event the total tax credits authorized by this section exceed |
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474 | 459 | | the annual limit in any tax year, the Tax Commission shall permit |
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475 | 460 | | any excess but shall factor such excess into the percentage |
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476 | 461 | | adjustment formula for subsequent tax years. |
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477 | 462 | | 3. If a taxpayer, on behalf of an eligible student in the |
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478 | 463 | | program, chooses not to participate, is no longer eligible to |
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479 | 464 | | participate, or choose s to forgo participation in the program for |
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509 | 493 | | 3 of subsection H of this section shall be added to the subsequent |
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510 | 494 | | fiscal year limitation as provided in paragraph 1 of this |
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511 | 495 | | subsection. |
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512 | 496 | | E. The Commission shall prescribe applications for the purposes |
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513 | 497 | | of claiming the credits authorized by the Oklaho ma Parental Choice |
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514 | 498 | | Tax Credit Act and a deadline by which applications shall be |
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515 | 499 | | submitted. A taxpayer claiming the credit authorized by paragraph 1 |
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516 | 500 | | of subsection C of this section shall submit an application |
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517 | 501 | | prescribed by the Commission to receive the credit in two |
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518 | 502 | | installments, each of which shall be half of the expected amount of |
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519 | 503 | | tuition and fees for the private school based on the enrollment |
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520 | 504 | | verification form submitted pursuant to this subsection, but in no |
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521 | 505 | | event shall an installment a payment exceed the amount of the credit |
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522 | 506 | | authorized by paragraph 1 of subsection C of this section. If an |
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523 | 507 | | eligible taxpayer provides documentation on the application that he |
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524 | 508 | | or she is a recipient of income -based government benefits including |
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525 | 509 | | the Supplemental Nutrition Assistance Program (SNAP), Temporary |
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526 | 510 | | Assistance for Needy Families (TANF), or SoonerCare the Oklahoma |
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527 | 511 | | Medicaid Program commonly known as SoonerCare , the eligible taxpayer |
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528 | 512 | | shall not be required to provide additional income verification. |
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529 | 513 | | The Department of Human Services and the Oklahoma Health Care |
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530 | 514 | | Authority shall, upon request by the Oklaho ma Tax Commission, verify |
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560 | 543 | | to disclose application data to the Department of Human Services |
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561 | 544 | | and/or the Oklahoma Health Care Authority, and for Department of |
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562 | 545 | | Human Services and/or the Oklahoma Health Care Authority to provide |
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563 | 546 | | confirmation of benefits to the Oklahoma Tax Commission for purposes |
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564 | 547 | | of verifying that the taxpayer is a current recipient of SNAP, TANF , |
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565 | 548 | | or Oklahoma Medicaid Program benefits; provided, the information |
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566 | 549 | | shall not be used for any other purpose. A taxpayer claiming the |
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567 | 550 | | credit authorized by paragraph 1 of subsection C of this section |
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568 | 551 | | shall submit to the Commission an enrollment verification form from |
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569 | 552 | | the private school in which the eligible student is enrolled or is |
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570 | 553 | | expected to enroll with the tuition and fees to be charged the |
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571 | 554 | | taxpayer for the applicable school year. In rev iewing applications |
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572 | 555 | | submitted by eligible taxpayers to determine whether they qual ify |
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573 | 556 | | for a credit authorized by paragraph 1 of subsection C of this |
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574 | 557 | | section, the Commission shall give first preference in making |
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575 | 558 | | installments payments to taxpayers who qualify pursuant to |
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576 | 559 | | subparagraphs a and b of paragraph 1 of subsection C of this |
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577 | 560 | | section. The Commission shall give second preference in making |
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578 | 561 | | payments to taxpayers who qualify and have received the credit in |
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579 | 562 | | the prior year. For credits issued in the 2025-2026 2026-2027 |
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580 | 563 | | school year and subsequent school years, the application period |
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581 | 564 | | shall be open on February 15 March 15 through June 15 prior to the |
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611 | 593 | | that does not exceed One Hundred Fifty Thousand Dollars |
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612 | 594 | | ($150,000.00) or qualified and received credit in the prior year , |
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613 | 595 | | applications shall be submitted to the Commission within the first |
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614 | 596 | | sixty (60) days of the opening of the application pe riod to receive |
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615 | 597 | | priority consideration. For students enrolled in the full school |
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616 | 598 | | year, the full credit amount authorized for the school year shall be |
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617 | 599 | | paid in two installments, one per school semester, to be paid no |
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618 | 600 | | later than August 30 and January 15, each of which shall be half of |
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619 | 601 | | the total expected amount of tuition and fees on the e nrollment |
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620 | 602 | | verification form submitted pursuant to this subsection . |
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621 | 603 | | F. In the event there are more applications submitted by |
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622 | 604 | | eligible taxpayers for a credit authorized by par agraph 1 of |
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623 | 605 | | subsection C of this section than available credits pursuant to |
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624 | 606 | | subsection D of this section, then the Commission shall give first |
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625 | 607 | | preference in authorizing credits for eligible students of taxpayers |
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626 | 608 | | who qualify pursuant to subparagraphs a and b of paragraph 1 of |
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627 | 609 | | subsection C of this section and have received the credit in t he |
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628 | 610 | | prior year. |
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629 | 611 | | G. Taxpayers claiming the credit shall: |
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630 | 612 | | 1. Only claim the credit for qualified expenses as defined in |
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631 | 613 | | paragraphs 6 7 and 7 8 of subsection A of this section to provide an |
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632 | 614 | | education for an eligible student; |
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662 | 643 | | 3. Not claim the credit for an eligible student who enrolls as |
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663 | 644 | | a full-time student in a public school district, public charter |
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664 | 645 | | school, public virtual charter school, or magnet school; |
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665 | 646 | | 4. Comply with rules and requ irements established by the |
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666 | 647 | | Commission for administration of the Oklahoma Parental Choice Tax |
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667 | 648 | | Credit Program; and |
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668 | 649 | | 5. Notify the Commission not later than thirty (30) days af ter |
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669 | 650 | | the date on which the eligible student: |
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670 | 651 | | a. enrolls in a public school, includi ng an open- |
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671 | 652 | | enrollment charter school, |
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672 | 653 | | b. enrolls in a nonaccredited private school, |
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673 | 654 | | c. graduates from high school, or |
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674 | 655 | | d. is no longer utilizing credits authorized by paragraph |
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675 | 656 | | 1 of subsection C of this section for any reason. |
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676 | 657 | | H. G. Eligible students may a ccept a scholarship from the |
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677 | 658 | | Lindsey Nicole Henry Scholarships for Students with Disabilities |
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678 | 659 | | Program created by Section 13 -101.2 of this title while |
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679 | 660 | | participating in the Okl ahoma Parental Choice Tax Credit Program. |
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680 | 661 | | I. H. 1. The Commission shall have the authority to conduct an |
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681 | 662 | | audit or contract for the auditing of receipts for qualified |
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682 | 663 | | expenses submitted pursuant to paragraph 2 of subsection C of this |
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683 | 664 | | section. |
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713 | 693 | | Choice Tax Credit Act on a prorated basis if an audit conducted |
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714 | 694 | | pursuant to this subsection shows that the credit was claimed for |
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715 | 695 | | expenditures that were not qualified expenses or it finds that the |
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716 | 696 | | taxpayer has claimed an e ligible student who no longer attends a |
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717 | 697 | | private school or has enrolled in a public school in the state. |
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718 | 698 | | 3. The Commission shall be authorized to reallocate credits for |
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719 | 699 | | the current application year to the next eligible taxpayer in line |
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720 | 700 | | when a taxpayer, on behalf of an eligible student in the program, |
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721 | 701 | | chooses not to participate, is no longer eligible to participate, or |
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722 | 702 | | chooses to forgo participation in the program for any reaso n no |
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723 | 703 | | later than September 1 following the opening of the application |
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724 | 704 | | period of each year. |
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725 | 705 | | 4. The Commission shall provide notification of approval status |
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726 | 706 | | to applicants within thirty (30) days of closure of the application |
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727 | 707 | | window. Notice to applicants with an eligible student, whose |
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728 | 708 | | parents or legal guardians have a combined adjusted g ross income of |
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729 | 709 | | more than One Hundred Fifty Thousand Dollars ($150,000.00), shall be |
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730 | 710 | | sent within thirty (30) days or no later than thirty (30) days after |
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731 | 711 | | the last day of the p riority consideration period. |
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732 | 712 | | J. I. In the event of a failure of revenue pursuant to the |
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733 | 713 | | Oklahoma State Finance Act, the tax credits otherwise authorized in |
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734 | 714 | | subsection C of this section shall be reduced proportionately to the |
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763 | 742 | | Education for the financial support of publ ic schools for the fiscal |
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764 | 743 | | year in which the failure of revenue occurs. |
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765 | 744 | | K. J. The Commission shall make available on its website to be |
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766 | 745 | | updated monthly: |
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767 | 746 | | 1. The total amount o f credits claimed each year pursuant to |
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768 | 747 | | paragraphs 1 through 4 of subsection C of this section; |
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769 | 748 | | 2. The amount of credits claimed and number of students awarded |
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770 | 749 | | each fiscal year pursuant to paragraph 1 of subsection C of this |
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771 | 750 | | section disaggregated by income categories; |
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772 | 751 | | 3. The total amount of credits claimed and number of students |
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773 | 752 | | awarded who attended a public school in the semester immediately |
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774 | 753 | | preceding the school year for which the application is made each |
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775 | 754 | | year; and |
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776 | 755 | | 4. The total number of applications de nied and total amount of |
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777 | 756 | | credits the denied applications represent for each fiscal year. |
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778 | 757 | | L. K. Credits received pursuant to the Oklahoma Parental Choice |
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779 | 758 | | Tax Credit Act shall not constitute taxable income to a taxpayer who |
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780 | 759 | | received the credit on behalf of an eligible student. |
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781 | 760 | | L. No later than June 15 of each year, each participating |
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782 | 761 | | private school shall electronically provide information to confirm |
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783 | 762 | | student enrollment and tuition information for the fall and spring |
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784 | 763 | | semesters of the preceding school year and any other information |
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785 | 764 | | requested by the Oklahoma Tax Commission. Failure to provide this |
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786 | 765 | | |
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