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1 STATE OF OKLAHOMA
1
2 1st Session of the 60th Legislature (2025)
2
3 SENATE BILL 284 By: Jett
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4
4
5
5
6 AS INTRODUCED
6
7 An Act relating to specie; amending 62 O.S. 2021,
7 Section 4500, which relates to gold and silver coins
8 as legal tender; defining terms; authorizing the
8 payment of certain public and private debts;
9 restricting the requirement of payment in specie;
9 prohibiting the levy of tax upon sale or exchange of
10 specie; excluding specie from assessment of personal
10 property; requiring the State Treasurer to develop
11 certain plan; amending 68 O.S. 2021, Section 2358, as
11 last amended by Section 155, Chapter 452, O.S.L. 2024
12 (68 O.S. Supp. 2024, Section 2358), which relates to
12 adjustments to arrive at taxable income; authorizing
13 deduction for gains derived from the sale of specie;
13 updating statutory language; updating statutory
14 references; and providing an effective date.
14
15
15
16 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
16
17 SECTION 1. AMENDATORY 62 O.S. 2021, Section 4500, is
17
18 amended to read as follows:
18
19 Section 4500. Gold and silver coins issued by the United States
19
20 government are legal tender in the State of Oklahoma. No person may
20
21 compel another person to tender or accept gold or silver coins that
21
22 are issued by the United States government, except as agreed upon by
22
23 contract A. As used in this section:
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24
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Req. No. 1572 Page 1
1 1. "Legal tender" means a recognized medium of exchange for the
1
2 payment of public and private debts and taxes; and
2
3 2. "Specie" means gold or silver bullion in the form of coins,
3
4 bars, or rounds that are coined, stamped, or imprinted with its
4
5 weight and purity with value based on metal content and not on its
5
6 form. Silver bullion bars and rounds are stamped with "purity of
6
7 .999 fine silver".
7
8 B. Gold and silver bullion in the form of coins issued by the
8
9 United States government shall be considered legal tender in this
9
10 state.
10
11 C. Legal tender, as defined in this section, may be used to pay
11
12 public debt in this state.
12
13 D. Silver specie, in the form of bars and rounds, may be used
13
14 for the payment of private debts in this state.
14
15 E. No person shall compel another person or entity to tender or
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16 accept specie for the payment of any debt except as agreed to by
16
17 agreement or contract.
17
18 F. The purchase, sale, or exchange of any type or form of
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19 specie, including legal tender, shall not give rise to any tax
19
20 liability in this state.
20
21 G. Specie or legal tender shall not be characterized as
21
22 personal property for taxation or regulatory purposes.
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23 H. The State Treasurer, in consultation with state agencies the
23
24 Treasurer deems applicable, shall develop a plan to store a minimum
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Req. No. 1572 Page 2
1 of ten percent (10%) of this state's fund balances in the form of
1
2 gold and silver legal tender and for taxpayers to pay ad valorem
2
3 taxes in the form of gold and silver legal tender.
3
4 SECTION 2. AMENDATORY 68 O.S. 2021, Section 2358, as
4
5 last amended by Section 155, Chapter 452, O.S.L. 2024 (68 O.S. Supp.
5
6 2024, Section 2358), is amended to read as follows:
6
7 Section 2358. For all tax years beginning after December 31,
7
8 1981, taxable income and adjusted gross income shall be adjusted to
8
9 arrive at Oklahoma taxable income and Oklahoma adjusted gross income
9
10 as required by this section.
10
11 A. The taxable income of any taxpayer shall be adjusted to
11
12 arrive at Oklahoma taxable income for corporations and Oklahoma
12
13 adjusted gross income for individuals, as follows:
13
14 1. There shall be added interest income on obligations of any
14
15 state or political subdivision thereto which is not otherwise
15
16 exempted pursuant to other laws of this state, to the extent that
16
17 such interest is not included in taxable income and adjusted gross
17
18 income.
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19 2. There shall be deducted amounts included in such income that
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20 the state is prohibited from taxing because of the provisions of the
20
21 Federal United States Constitution, the State Oklahoma Constitution,
21
22 federal laws or laws of Oklahoma.
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23 3. The amount of any federal net operating loss deduction shall
23
24 be adjusted as follows:
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Req. No. 1572 Page 3
1 a. For carryovers and carrybacks to taxable years
1
2 beginning before January 1, 1981, the amount of any
2
3 net operating loss deduction allowed to a taxpayer for
3
4 federal income tax purposes shall be reduced to an
4
5 amount which is the same portion thereof as the loss
5
6 from sources within this state, as determined pursuant
6
7 to this section and Section 2362 of this title, for
7
8 the taxable year in which such loss is sustained is of
8
9 the total loss for such year;
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10 b. For carryovers and carrybacks to taxable years
10
11 beginning after December 31, 1980, the amount of any
11
12 net operating loss deduction allowed for the taxable
12
13 year shall be an amount equal to the aggregate of the
13
14 Oklahoma net operating loss carryovers and carrybacks
14
15 to such year. Oklahoma net operating losses shall be
15
16 separately determined by reference to Section 172 of
16
17 the Internal Revenue Code of 1986, as amended, 26
17
18 U.S.C., Section 172, as modified by the Oklahoma
18
19 Income Tax Act, Section 2351 et seq. of this title,
19
20 and shall be allowed without regard to the existence
20
21 of a federal net operating loss. For tax years
21
22 beginning after December 31, 2000, and ending before
22
23 January 1, 2008, the years to which such losses may be
23
24 carried shall be determined solely by reference to
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Req. No. 1572 Page 4
1 Section 172 of the Internal Revenue Code of 1986, as
1
2 amended, 26 U.S.C., Section 172, with the exception
2
3 that the terms "net operating loss" and "taxable
3
4 income" shall be replaced with "Oklahoma net operating
4
5 loss" and "Oklahoma taxable income". For tax years
5
6 beginning after December 31, 2007, and ending before
6
7 January 1, 2009, years to which such losses may be
7
8 carried back shall be limited to two (2) years. For
8
9 tax years beginning after December 31, 2008, the years
9
10 to which such losses may be carried back shall be
10
11 determined solely by reference to Section 172 of the
11
12 Internal Revenue Code of 1986, as amended, 26 U.S.C.,
12
13 Section 172, with the exception that the terms "net
13
14 operating loss" and "taxable income" shall be replaced
14
15 with "Oklahoma net operating loss" and "Oklahoma
15
16 taxable income".
16
17 4. Items of the following nature shall be allocated as
17
18 indicated. Allowable deductions attributable to items separately
18
19 allocable in subparagraphs a, b and c of this paragraph, whether or
19
20 not such items of income were actually received, shall be allocated
20
21 on the same basis as those items:
21
22 a. Income from real and tangible personal property, such
22
23 as rents, oil and mining production or royalties, and
23
24 gains or losses from sales of such property, shall be
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Req. No. 1572 Page 5
1 allocated in accordance with the situs of such
1
2 property;
2
3 b. Income from intangible personal property, such as
3
4 interest, dividends, patent or copyright royalties,
4
5 and gains or losses from sales of such property, shall
5
6 be allocated in accordance with the domiciliary situs
6
7 of the taxpayer, except that:
7
8 (1) where such property has acquired a nonunitary
8
9 business or commercial situs apart from the
9
10 domicile of the taxpayer such income shall be
10
11 allocated in accordance with such business or
11
12 commercial situs; interest income from
12
13 investments held to generate working capital for
13
14 a unitary business enterprise shall be included
14
15 in apportionable income; a resident trust or
15
16 resident estate shall be treated as having a
16
17 separate commercial or business situs insofar as
17
18 undistributed income is concerned, but shall not
18
19 be treated as having a separate commercial or
19
20 business situs insofar as distributed income is
20
21 concerned,
21
22 (2) for taxable years beginning after December 31,
22
23 2003, capital or ordinary gains or losses from
23
24 the sale of an ownership interest in a publicly
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Req. No. 1572 Page 6
1 traded partnership, as defined by Section 7704(b)
1 of the Internal Revenue Code of 1986, as amended,
2 shall be allocated to this state in the ratio of
2 the original cost of such partnership's tangible
3 property in this state to the original cost of
3 such partnership's tangible property everywhere,
4 as determined at the time of the sale; if more
4 than fifty percent (50%) of the value of the
5 partnership's assets consists of intangible
5 assets, capital or ordinary gains or losses from
6 the sale of an ownership interest in the
6 partnership shall be allocated to this state in
7 accordance with the sales factor of the
7 partnership for its first full tax period
8 immediately preceding its tax period during which
8 the ownership interest in the partnership was
9 sold; the provisions of this division shall only
9 apply if the capital or ordinary gains or losses
10 from the sale of an ownership interest in a
10 partnership do not constitute qualifying gain
11 receiving capital treatment as defined in
11 subparagraph a of paragraph 2 of subsection F of
12 this section,
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13 Page 7
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Req. No. 1572
1 (3) income from such property which is required to be
1
2 allocated pursuant to the provisions of paragraph
2
3 5 of this subsection shall be allocated as herein
3
4 provided;
4
5 c. Net income or loss from a business activity which is
5
6 not a part of business carried on within or without
6
7 the state of a unitary character shall be separately
7
8 allocated to the state in which such activity is
8
9 conducted;
9
10 d. In the case of a manufacturing or processing
10
11 enterprise the business of which in Oklahoma this
11
12 state consists solely of marketing its products by:
12
13 (1) sales having a situs without this state, shipped
13
14 directly to a point from without the state to a
14
15 purchaser within the state, commonly known as
15
16 interstate sales,
16
17 (2) sales of the product stored in public warehouses
17
18 within the state pursuant to "in transit"
18
19 tariffs, as prescribed and allowed by the
19
20 Interstate Commerce Commission, to a purchaser
20
21 within the state,
21
22 (3) sales of the product stored in public warehouses
22
23 within the state where the shipment to such
23
24 warehouses is not covered by "in transit"
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Req. No. 1572 Page 8
1 tariffs, as prescribed and allowed by the
1
2 Interstate Commerce Commission, to a purchaser
2
3 within or without the state,
3
4 the Oklahoma net income shall, at the option of the
4
5 taxpayer, be that portion of the total net income of
5
6 the taxpayer for federal income tax purposes derived
6
7 from the manufacture and/or processing and sales
7
8 everywhere as determined by the ratio of the sales
8
9 defined in this section made to the purchaser within
9
10 the state to the total sales everywhere. The term
10
11 "public warehouse" as used in this subparagraph means
11
12 a licensed public warehouse, the principal business of
12
13 which is warehousing merchandise for the public;
13
14 e. In the case of insurance companies, Oklahoma taxable
14
15 income shall be taxable income of the taxpayer for
15
16 federal tax purposes, as adjusted for the adjustments
16
17 provided pursuant to the provisions of paragraphs 1
17
18 and 2 of this subsection, apportioned as follows:
18
19 (1) except as otherwise provided by division (2) of
19
20 this subparagraph, taxable income of an insurance
20
21 company for a taxable year shall be apportioned
21
22 to this state by multiplying such income by a
22
23 fraction, the numerator of which is the direct
23
24 premiums written for insurance on property or
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Req. No. 1572 Page 9
1 risks in this state, and the denominator of which
1
2 is the direct premiums written for insurance on
2
3 property or risks everywhere. For purposes of
3
4 this subsection, the term "direct premiums
4
5 written" means the total amount of direct
5
6 premiums written, assessments and annuity
6
7 considerations as reported for the taxable year
7
8 on the annual statement filed by the company with
8
9 the Insurance Commissioner in the form approved
9
10 by the National Association of Insurance
10
11 Commissioners, or such other form as may be
11
12 prescribed in lieu thereof,
12
13 (2) if the principal source of premiums written by an
13
14 insurance company consists of premiums for
14
15 reinsurance accepted by it, the taxable income of
15
16 such company shall be apportioned to this state
16
17 by multiplying such income by a fraction, the
17
18 numerator of which is the sum of (a) direct
18
19 premiums written for insurance on property or
19
20 risks in this state, plus (b) premiums written
20
21 for reinsurance accepted in respect of property
21
22 or risks in this state, and the denominator of
22
23 which is the sum of (c) direct premiums written
23
24 for insurance on property or risks everywhere,
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Req. No. 1572 Page 10
1 plus (d) premiums written for reinsurance
1
2 accepted in respect of property or risks
2
3 everywhere. For purposes of this paragraph,
3
4 premiums written for reinsurance accepted in
4
5 respect of property or risks in this state,
5
6 whether or not otherwise determinable, may at the
6
7 election of the company be determined on the
7
8 basis of the proportion which premiums written
8
9 for insurance accepted from companies
9
10 commercially domiciled in Oklahoma this state
10
11 bears to premiums written for reinsurance
11
12 accepted from all sources, or alternatively in
12
13 the proportion which the sum of the direct
13
14 premiums written for insurance on property or
14
15 risks in this state by each ceding company from
15
16 which reinsurance is accepted bears to the sum of
16
17 the total direct premiums written by each such
17
18 ceding company for the taxable year.
18
19 5. The net income or loss remaining after the separate
19
20 allocation in paragraph 4 of this subsection, being that which is
20
21 derived from a unitary business enterprise, shall be apportioned to
21
22 this state on the basis of the arithmetical average of three factors
22
23 consisting of property, payroll and sales or gross revenue
23
24 enumerated as subparagraphs a, b and c of this paragraph. Net
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Req. No. 1572 Page 11
1 income or loss as used in this paragraph includes that derived from
1
2 patent or copyright royalties, purchase discounts, and interest on
2
3 accounts receivable relating to or arising from a business activity,
3
4 the income from which is apportioned pursuant to this subsection,
4
5 including the sale or other disposition of such property and any
5
6 other property used in the unitary enterprise. Deductions used in
6
7 computing such net income or loss shall not include taxes based on
7
8 or measured by income. Provided, for corporations whose property
8
9 for purposes of the tax imposed by Section 2355 of this title has an
9
10 initial investment cost equaling or exceeding Two Hundred Million
10
11 Dollars ($200,000,000.00) and such investment is made on or after
11
12 July 1, 1997, or for corporations which expand their property or
12
13 facilities in this state and such expansion has an investment cost
13
14 equaling or exceeding Two Hundred Million Dollars ($200,000,000.00)
14
15 over a period not to exceed three (3) years, and such expansion is
15
16 commenced on or after January 1, 2000, the three factors shall be
16
17 apportioned with property and payroll, each comprising twenty-five
17
18 percent (25%) of the apportionment factor and sales comprising fifty
18
19 percent (50%) of the apportionment factor. The apportionment
19
20 factors shall be computed as follows:
20
21 a. The property factor is a fraction, the numerator of
21
22 which is the average value of the taxpayer's real and
22
23 tangible personal property owned or rented and used in
23
24 this state during the tax period and the denominator
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Req. No. 1572 Page 12
1 of which is the average value of all the taxpayer's
1
2 real and tangible personal property everywhere owned
2
3 or rented and used during the tax period.
3
4 (1) Property, the income from which is separately
4
5 allocated in paragraph 4 of this subsection,
5
6 shall not be included in determining this
6
7 fraction. The numerator of the fraction shall
7
8 include a portion of the investment in
8
9 transportation and other equipment having no
9
10 fixed situs, such as rolling stock, buses, trucks
10
11 and trailers, including machinery and equipment
11
12 carried thereon, airplanes, salespersons'
12
13 automobiles and other similar equipment, in the
13
14 proportion that miles traveled in Oklahoma this
14
15 state by such equipment bears to total miles
15
16 traveled,
16
17 (2) Property owned by the taxpayer is valued at its
17
18 original cost. Property rented by the taxpayer
18
19 is valued at eight times the net annual rental
19
20 rate. Net annual rental rate is the annual
20
21 rental rate paid by the taxpayer, less any annual
21
22 rental rate received by the taxpayer from
22
23 subrentals,
23
24
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Req. No. 1572 Page 13
1 (3) The average value of property shall be determined
1
2 by averaging the values at the beginning and
2
3 ending of the tax period but the Oklahoma Tax
3
4 Commission may require the averaging of monthly
4
5 values during the tax period if reasonably
5
6 required to reflect properly the average value of
6
7 the taxpayer's property;
7
8 b. The payroll factor is a fraction, the numerator of
8
9 which is the total compensation for services rendered
9
10 in the state during the tax period, and the
10
11 denominator of which is the total compensation for
11
12 services rendered everywhere during the tax period.
12
13 "Compensation", as used in this subsection, means
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14 those paid-for services to the extent related to the
14
15 unitary business but does not include officers'
15
16 salaries, wages and other compensation.
16
17 (1) In the case of a transportation enterprise, the
17
18 numerator of the fraction shall include a portion
18
19 of such expenditure in connection with employees
19
20 operating equipment over a fixed route, such as
20
21 railroad employees, airline pilots, or bus
21
22 drivers, in this state only a part of the time,
22
23 in the proportion that mileage traveled in
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24
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Req. No. 1572 Page 14
1 Oklahoma this state bears to total mileage
1
2 traveled by such employees,
2
3 (2) In any case the numerator of the fraction shall
3
4 include a portion of such expenditures in
4
5 connection with itinerant employees, such as
5
6 traveling salespersons, in this state only a part
6
7 of the time, in the proportion that time spent in
7
8 Oklahoma this state bears to total time spent in
8
9 furtherance of the enterprise by such employees;
9
10 c. The sales factor is a fraction, the numerator of which
10
11 is the total sales or gross revenue of the taxpayer in
11
12 this state during the tax period, and the denominator
12
13 of which is the total sales or gross revenue of the
13
14 taxpayer everywhere during the tax period. "Sales",
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15 as used in this subsection, does not include sales or
15
16 gross revenue which are separately allocated in
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17 paragraph 4 of this subsection.
17
18 (1) Sales of tangible personal property have a situs
18
19 in this state if the property is delivered or
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20 shipped to a purchaser other than the United
20
21 States government, within this state regardless
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22 of the FOB Freight on Board (FOB) point or other
22
23 conditions of the sale; or the property is
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24 shipped from an office, store, warehouse, factory
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Req. No. 1572 Page 15
1 or other place of storage in this state and (a)
1
2 the purchaser is the United States government or
2
3 (b) the taxpayer is not doing business in the
3
4 state of the destination of the shipment.
4
5 (2) In the case of a railroad or interurban railway
5
6 enterprise, the numerator of the fraction shall
6
7 not be less than the allocation of revenues to
7
8 this state as shown in its annual report to the
8
9 Corporation Commission.
9
10 (3) In the case of an airline, truck or bus
10
11 enterprise or freight car, tank car, refrigerator
11
12 car or other railroad equipment enterprise, the
12
13 numerator of the fraction shall include a portion
13
14 of revenue from interstate transportation in the
14
15 proportion that interstate mileage traveled in
15
16 Oklahoma this state bears to total interstate
16
17 mileage traveled.
17
18 (4) In the case of an oil, gasoline or gas pipeline
18
19 enterprise, the numerator of the fraction shall
19
20 be either the total of traffic units of the
20
21 enterprise within Oklahoma this state or the
21
22 revenue allocated to Oklahoma this state based
22
23 upon miles moved, at the option of the taxpayer,
23
24 and the denominator of which shall be the total
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Req. No. 1572 Page 16
1 of traffic units of the enterprise or the revenue
1
2 of the enterprise everywhere as appropriate to
2
3 the numerator. A "traffic unit" is hereby
3
4 defined as the transportation for a distance of
4
5 one (1) mile of one (1) barrel of oil, one (1)
5
6 gallon of gasoline or one thousand (1,000) cubic
6
7 feet of natural or casinghead gas, as the case
7
8 may be.
8
9 (5) In the case of a telephone or telegraph or other
9
10 communication enterprise, the numerator of the
10
11 fraction shall include that portion of the
11
12 interstate revenue as is allocated pursuant to
12
13 the accounting procedures prescribed by the
13
14 Federal Communications Commission; provided that
14
15 in respect to each corporation or business entity
15
16 required by the Federal Communications Commission
16
17 to keep its books and records in accordance with
17
18 a uniform system of accounts prescribed by such
18
19 Commission, the intrastate net income shall be
19
20 determined separately in the manner provided by
20
21 such uniform system of accounts and only the
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22 interstate income shall be subject to allocation
22
23 pursuant to the provisions of this subsection.
23
24 Provided further, that the gross revenue factors
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Req. No. 1572 Page 17
1 shall be those as are determined pursuant to the
1
2 accounting procedures prescribed by the Federal
2
3 Communications Commission.
3
4 In any case where the apportionment of the three factors
4
5 prescribed in this paragraph attributes to Oklahoma this state a
5
6 portion of net income of the enterprise out of all appropriate
6
7 proportion to the property owned and/or business transacted within
7
8 this state, because of the fact that one or more of the factors so
8
9 prescribed are not employed to any appreciable extent in furtherance
9
10 of the enterprise; or because one or more factors not so prescribed
10
11 are employed to a considerable extent in furtherance of the
11
12 enterprise; or because of other reasons, the Tax Commission is
12
13 empowered to permit, after a showing by taxpayer that an excessive
13
14 portion of net income has been attributed to Oklahoma this state, or
14
15 require, when in its judgment an insufficient portion of net income
15
16 has been attributed to Oklahoma this state, the elimination,
16
17 substitution, or use of additional factors, or reduction or increase
17
18 in the weight of such prescribed factors. Provided, however, that
18
19 any such variance from such prescribed factors which has the effect
19
20 of increasing the portion of net income attributable to Oklahoma
20
21 this state must not be inherently arbitrary, and application of the
21
22 recomputed final apportionment to the net income of the enterprise
22
23 must attribute to Oklahoma this state only a reasonable portion
23
24 thereof.
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Req. No. 1572 Page 18
1 6. For calendar years 1997 and 1998, the owner of a new or
1
2 expanded agricultural commodity processing facility in this state
2
3 may exclude from Oklahoma taxable income, or in the case of an
3
4 individual, the Oklahoma adjusted gross income, fifteen percent
4
5 (15%) of the investment by the owner in the new or expanded
5
6 agricultural commodity processing facility. For calendar year 1999,
6
7 and all subsequent years, the percentage, not to exceed fifteen
7
8 percent (15%), available to the owner of a new or expanded
8
9 agricultural commodity processing facility in this state claiming
9
10 the exemption shall be adjusted annually so that the total estimated
10
11 reduction in tax liability does not exceed One Million Dollars
11
12 ($1,000,000.00) annually. The Tax Commission shall promulgate rules
12
13 for determining the percentage of the investment which each eligible
13
14 taxpayer may exclude. The exclusion provided by this paragraph
14
15 shall be taken in the taxable year when the investment is made. In
15
16 the event the total reduction in tax liability authorized by this
16
17 paragraph exceeds One Million Dollars ($1,000,000.00) in any
17
18 calendar year, the Tax Commission shall permit any excess over One
18
19 Million Dollars ($1,000,000.00) and shall factor such excess into
19
20 the percentage for subsequent years. Any amount of the exemption
20
21 permitted to be excluded pursuant to the provisions of this
21
22 paragraph but not used in any year may be carried forward as an
22
23 exemption from income pursuant to the provisions of this paragraph
23
24
24
Req. No. 1572 Page 19
1 for a period not exceeding six (6) years following the year in which
1
2 the investment was originally made.
2
3 For purposes of this paragraph:
3
4 a. "Agricultural commodity processing facility" means
4
5 building buildings, structures, fixtures and
5
6 improvements used or operated primarily for the
6
7 processing or production of marketable products from
7
8 agricultural commodities. The term shall also mean a
8
9 dairy operation that requires a depreciable investment
9
10 of at least Two Hundred Fifty Thousand Dollars
10
11 ($250,000.00) and which produces milk from dairy cows.
11
12 The term does not include a facility that provides
12
13 only, and nothing more than, storage, cleaning, drying
13
14 or transportation of agricultural commodities, and
14
15 b. "Facility" means each part of the facility which is
15
16 used in a process primarily for:
16
17 (1) the processing of agricultural commodities,
17
18 including receiving or storing agricultural
18
19 commodities, or the production of milk at a dairy
19
20 operation,
20
21 (2) transporting the agricultural commodities or
21
22 product before, during or after the processing,
22
23 or
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24
24
Req. No. 1572 Page 20
1 (3) packaging or otherwise preparing the product for
1
2 sale or shipment.
2
3 7. Despite any provision to the contrary in paragraph 3 of this
3
4 subsection, for taxable years beginning after December 31, 1999, in
4
5 the case of a taxpayer which has a farming loss, such farming loss
5
6 shall be considered a net operating loss carryback in accordance
6
7 with and to the extent of the Internal Revenue Code of 1986, as
7
8 amended, 26 U.S.C., Section 172(b)(G) 172(b)(1)(B). However, the
8
9 amount of the net operating loss carryback shall not exceed the
9
10 lesser of:
10
11 a. Sixty Thousand Dollars ($60,000.00), or
11
12 b. the loss properly shown on Schedule F of the Internal
12
13 Revenue Service Form 1040 reduced by one-half (1/2) of
13
14 the income from all other sources other than reflected
14
15 on Schedule F.
15
16 8. In taxable years beginning after December 31, 1995, all
16
17 qualified wages equal to the federal income tax credit set forth in
17
18 26 U.S.C.A., Section 45A, shall be deducted from taxable income.
18
19 The deduction allowed pursuant to this paragraph shall only be
19
20 permitted for the tax years in which the federal tax credit pursuant
20
21 to 26 U.S.C.A., Section 45A, is allowed. For purposes of this
21
22 paragraph, "qualified wages" means those wages used to calculate the
22
23 federal credit pursuant to 26 U.S.C.A., Section 45A.
23
24
24
Req. No. 1572 Page 21
1 9. In taxable years beginning after December 31, 2005, an
1
2 employer that is eligible for and utilizes the Safety Pays OSHA
2
3 Consultation Service provided by the Oklahoma Department of Labor
3
4 shall receive an exemption from taxable income in the amount of One
4
5 Thousand Dollars ($1,000.00) for the tax year that the service is
5
6 utilized.
6
7 10. For taxable years beginning on or after January 1, 2010,
7
8 there shall be added to Oklahoma taxable income an amount equal to
8
9 the amount of deferred income not included in such taxable income
9
10 pursuant to Section 108(i)(1) of the Internal Revenue Code of 1986
10
11 as amended by Section 1231 of the American Recovery and Reinvestment
11
12 Act of 2009 (P.L. No. 111-5). There shall be subtracted from
12
13 Oklahoma taxable income an amount equal to the amount of deferred
13
14 income included in such taxable income pursuant to Section 108(i)(1)
14
15 of the Internal Revenue Code of 1986 as amended by Section 1231 of
15
16 the American Recovery and Reinvestment Act of 2009 (P.L. No. 111-5).
16
17 11. For taxable years beginning on or after January 1, 2019,
17
18 there shall be subtracted from Oklahoma taxable income or adjusted
18
19 gross income any item of income or gain, and there shall be added to
19
20 Oklahoma taxable income or adjusted gross income any item of loss or
20
21 deduction that in the absence of an election pursuant to the
21
22 provisions of the Pass-Through Entity Tax Equity Act of 2019 would
22
23 be allocated to a member or to an indirect member of an electing
23
24 pass-through entity pursuant to Section 2351 et seq. of this title,
24
Req. No. 1572 Page 22
1 if (i) the electing pass-through entity has accounted for such item
1
2 in computing its Oklahoma net entity income or loss pursuant to the
2
3 provisions of the Pass-Through Entity Tax Equity Act of 2019, and
3
4 (ii) the total amount of tax attributable to any resulting Oklahoma
4
5 net entity income has been paid. The Oklahoma Tax Commission shall
5
6 promulgate rules for the reporting of such exclusion to direct and
6
7 indirect members of the electing pass-through entity. As used in
7
8 this paragraph, "electing pass-through entity", "indirect member",
8
9 and "member" shall be defined in the same manner as prescribed by
9
10 Section 2355.1P-2 of this title. Notwithstanding the application of
10
11 this paragraph, the adjusted tax basis of any ownership interest in
11
12 a pass-through entity for purposes of Section 2351 et seq. of this
12
13 title shall be equal to its adjusted tax basis for federal income
13
14 tax purposes.
14
15 B. 1. The taxable income of any corporation shall be further
15
16 adjusted to arrive at Oklahoma taxable income, except those
16
17 corporations electing treatment as provided in subchapter S of the
17
18 Internal Revenue Code of 1986, as amended, 26 U.S.C., Section 1361
18
19 et seq., and Section 2365 of this title, deductions pursuant to the
19
20 provisions of the Accelerated Cost Recovery System as defined
20
21 provided and allowed in the Economic Recovery Tax Act of 1981,
21
22 Public Law 97-34, 26 U.S.C., Section 168, for depreciation of assets
22
23 placed into service after December 31, 1981, shall not be allowed in
23
24 calculating Oklahoma taxable income. Such corporations shall be
24
Req. No. 1572 Page 23
1 allowed a deduction for depreciation of assets placed into service
1
2 after December 31, 1981, in accordance with provisions of the
2
3 Internal Revenue Code of 1986, as amended, 26 U.S.C., Section 1 et
3
4 seq., in effect immediately prior to the enactment of the
4
5 Accelerated Cost Recovery System. The Oklahoma tax basis for all
5
6 such assets placed into service after December 31, 1981, calculated
6
7 in this section shall be retained and utilized for all Oklahoma
7
8 income tax purposes through the final disposition of such assets.
8
9 Notwithstanding any other provisions of the Oklahoma Income Tax
9
10 Act, Section 2351 et seq. of this title, or of the Internal Revenue
10
11 Code of 1986, as amended, to the contrary, this subsection shall
11
12 control calculation of depreciation of assets placed into service
12
13 after December 31, 1981, and before January 1, 1983.
13
14 For assets placed in service and held by a corporation in which
14
15 accelerated cost recovery system the Accelerated Cost Recovery
15
16 System was previously disallowed, an adjustment to taxable income is
16
17 required in the first taxable year beginning after December 31,
17
18 1982, to reconcile the basis of such assets to the basis allowed in
18
19 the Internal Revenue Code of 1986, as amended. The purpose of this
19
20 adjustment is to equalize the basis and allowance for depreciation
20
21 accounts between that reported to the Internal Revenue Service and
21
22 that reported to Oklahoma this state.
22
23 2. For tax years beginning on or after January 1, 2009, and
23
24 ending on or before December 31, 2009, there shall be added to
24
Req. No. 1572 Page 24
1 Oklahoma taxable income any amount in excess of One Hundred Seventy-
1
2 five Thousand Dollars ($175,000.00) which has been deducted as a
2
3 small business expense under Internal Revenue Code of 1986, as
3
4 amended, Section 179 as provided in the American Recovery and
4
5 Reinvestment Act of 2009.
5
6 C. 1. For taxable years beginning after December 31, 1987, the
6
7 taxable income of any corporation shall be further adjusted to
7
8 arrive at Oklahoma taxable income for transfers of technology to
8
9 qualified small businesses located in Oklahoma this state. Such
9
10 transferor corporation shall be allowed an exemption from taxable
10
11 income of an amount equal to the amount of royalty payment received
11
12 as a result of such transfer; provided, however, such amount shall
12
13 not exceed ten percent (10%) of the amount of gross proceeds
13
14 received by such transferor corporation as a result of the
14
15 technology transfer. Such exemption shall be allowed for a period
15
16 not to exceed ten (10) years from the date of receipt of the first
16
17 royalty payment accruing from such transfer. No exemption may be
17
18 claimed for transfers of technology to qualified small businesses
18
19 made prior to January 1, 1988.
19
20 2. For purposes of this subsection:
20
21 a. "Qualified small business" means an entity, whether
21
22 organized as a corporation, partnership, or
22
23 proprietorship, organized for profit with its
23
24
24
Req. No. 1572 Page 25
1 principal place of business located within this state
1
2 and which meets the following criteria:
2
3 (1) Capitalization of not more than Two Hundred Fifty
3
4 Thousand Dollars ($250,000.00),
4
5 (2) Having at least fifty percent (50%) of its
5
6 employees and assets located in Oklahoma this
6
7 state at the time of the transfer, and
7
8 (3) Not a subsidiary or affiliate of the transferor
8
9 corporation;
9
10 b. "Technology" means a proprietary process, formula,
10
11 pattern, device or compilation of scientific or
11
12 technical information which is not in the public
12
13 domain;
13
14 c. "Transferor corporation" means a corporation which is
14
15 the exclusive and undisputed owner of the technology
15
16 at the time the transfer is made; and
16
17 d. "Gross proceeds" means the total amount of
17
18 consideration for the transfer of technology, whether
18
19 the consideration is in money or otherwise.
19
20 D. 1. For taxable years beginning after December 31, 2005, the
20
21 taxable income of any corporation, estate or trust, shall be further
21
22 adjusted for qualifying gains receiving capital treatment. Such
22
23 corporations, estates or trusts shall be allowed a deduction from
23
24 Oklahoma taxable income for the amount of qualifying gains receiving
24
Req. No. 1572 Page 26
1 capital treatment earned by the corporation, estate or trust during
1
2 the taxable year and included in the federal taxable income of such
2
3 corporation, estate or trust.
3
4 2. As used in this subsection:
4
5 a. "qualifying gains receiving capital treatment" means
5
6 the amount of net capital gains, as defined in Section
6
7 1222(11) of the Internal Revenue Code of 1986, as
7
8 amended, included in the federal income tax return of
8
9 the corporation, estate or trust that result from:
9
10 (1) the sale of real property or tangible personal
10
11 property located within Oklahoma this state that
11
12 has been directly or indirectly owned by the
12
13 corporation, estate or trust for a holding period
13
14 of at least five (5) years prior to the date of
14
15 the transaction from which such net capital gains
15
16 arise,
16
17 (2) the sale of stock or on the sale of an ownership
17
18 interest in an Oklahoma company, limited
18
19 liability company, or partnership where such
19
20 stock or ownership interest has been directly or
20
21 indirectly owned by the corporation, estate or
21
22 trust for a holding period of at least three (3)
22
23 years prior to the date of the transaction from
23
24 which the net capital gains arise, or
24
Req. No. 1572 Page 27
1 (3) the sale of real property, tangible personal
1
2 property or intangible personal property located
2
3 within Oklahoma this state as part of the sale of
3
4 all or substantially all of the assets of an
4
5 Oklahoma company, limited liability company, or
5
6 partnership where such property has been directly
6
7 or indirectly owned by such entity owned by the
7
8 owners of such entity, and used in or derived
8
9 from such entity for a period of at least three
9
10 (3) years prior to the date of the transaction
10
11 from which the net capital gains arise, or
11
12 (4) the sale or exchange of specie, as defined in
12
13 Section 1 of this act, for tax year 2026 and
13
14 subsequent tax years,
14
15 b. "holding period" means an uninterrupted period of
15
16 time. The holding period shall include any additional
16
17 period when the property was held by another
17
18 individual or entity, if such additional period is
18
19 included in the taxpayer's holding period for the
19
20 asset pursuant to the Internal Revenue Code of 1986,
20
21 as amended,
21
22 c. "Oklahoma company", "limited liability company", or
22
23 "partnership" means an entity whose primary
23
24 headquarters have been located in Oklahoma this state
24
Req. No. 1572 Page 28
1 for at least three (3) uninterrupted years prior to
1
2 the date of the transaction from which the net capital
2
3 gains arise,
3
4 d. "direct" means the taxpayer directly owns the asset,
4
5 and
5
6 e. "indirect" means the taxpayer owns an interest in a
6
7 pass-through entity (or chain of pass-through
7
8 entities) that sells the asset that gives rise to the
8
9 qualifying gains receiving capital treatment.
9
10 (1) With respect to sales of real property or
10
11 tangible personal property located within
11
12 Oklahoma this state, the deduction described in
12
13 this subsection shall not apply unless the pass-
13
14 through entity that makes the sale has held the
14
15 property for not less than five (5) uninterrupted
15
16 years prior to the date of the transaction that
16
17 created the capital gain, and each pass-through
17
18 entity included in the chain of ownership has
18
19 been a member, partner, or shareholder of the
19
20 pass-through entity in the tier immediately below
20
21 it for an uninterrupted period of not less than
21
22 five (5) years.
22
23 (2) With respect to sales of stock or ownership
23
24 interest in or sales of all or substantially all
24
Req. No. 1572 Page 29
1 of the assets of an Oklahoma company, limited
1
2 liability company, or partnership, the deduction
2
3 described in this subsection shall not apply
3
4 unless the pass-through entity that makes the
4
5 sale has held the stock or ownership interest or
5
6 the assets for not less than three (3)
6
7 uninterrupted years prior to the date of the
7
8 transaction that created the capital gain, and
8
9 each pass-through entity included in the chain of
9
10 ownership has been a member, partner or
10
11 shareholder of the pass-through entity in the
11
12 tier immediately below it for an uninterrupted
12
13 period of not less than three (3) years.
13
14 E. The Oklahoma adjusted gross income of any individual
14
15 taxpayer shall be further adjusted as follows to arrive at Oklahoma
15
16 taxable income:
16
17 1. a. In the case of individuals, there shall be added or
17
18 deducted, as the case may be, the difference necessary
18
19 to allow personal exemptions of One Thousand Dollars
19
20 ($1,000.00) in lieu of the personal exemptions allowed
20
21 by the Internal Revenue Code of 1986, as amended.
21
22 b. There shall be allowed an additional exemption of One
22
23 Thousand Dollars ($1,000.00) for each taxpayer or
23
24 spouse who is blind at the close of the tax year. For
24
Req. No. 1572 Page 30
1 purposes of this subparagraph, an individual is blind
1
2 only if the central visual acuity of the individual
2
3 does not exceed 20/200 in the better eye with
3
4 correcting lenses, or if the visual acuity of the
4
5 individual is greater than 20/200, but is accompanied
5
6 by a limitation in the fields of vision such that the
6
7 widest diameter of the visual field subtends an angle
7
8 no greater than twenty (20) degrees.
8
9 c. There shall be allowed an additional exemption of One
9
10 Thousand Dollars ($1,000.00) for each taxpayer or
10
11 spouse who is sixty-five (65) years of age or older at
11
12 the close of the tax year based upon the filing status
12
13 and federal adjusted gross income of the taxpayer.
13
14 Taxpayers with the following filing status may claim
14
15 this exemption if the federal adjusted gross income
15
16 does not exceed:
16
17 (1) Twenty-five Thousand Dollars ($25,000.00) if
17
18 married and filing jointly,
18
19 (2) Twelve Thousand Five Hundred Dollars ($12,500.00)
19
20 if married and filing separately,
20
21 (3) Fifteen Thousand Dollars ($15,000.00) if single,
21
22 and
22
23 (4) Nineteen Thousand Dollars ($19,000.00) if a
23
24 qualifying head of household.
24
Req. No. 1572 Page 31
1 Provided, for taxable years beginning after December
1
2 31, 1999, amounts included in the calculation of
2
3 federal adjusted gross income pursuant to the
3
4 conversion of a traditional individual retirement
4
5 account to a Roth individual retirement account shall
5
6 be excluded from federal adjusted gross income for
6
7 purposes of the income thresholds provided in this
7
8 subparagraph.
8
9 2. a. For taxable years beginning on or before December 31,
9
10 2005, in the case of individuals who use the standard
10
11 deduction in determining taxable income, there shall
11
12 be added or deducted, as the case may be, the
12
13 difference necessary to allow a standard deduction in
13
14 lieu of the standard deduction allowed by the Internal
14
15 Revenue Code of 1986, as amended, in an amount equal
15
16 to the larger of fifteen percent (15%) of the Oklahoma
16
17 adjusted gross income or One Thousand Dollars
17
18 ($1,000.00), but not to exceed Two Thousand Dollars
18
19 ($2,000.00), except that in the case of a married
19
20 individual filing a separate return such deduction
20
21 shall be the larger of fifteen percent (15%) of such
21
22 Oklahoma adjusted gross income or Five Hundred Dollars
22
23 ($500.00), but not to exceed the maximum amount of One
23
24 Thousand Dollars ($1,000.00).
24
Req. No. 1572 Page 32
1 b. For taxable years beginning on or after January 1,
1
2 2006, and before January 1, 2007, in the case of
2
3 individuals who use the standard deduction in
3
4 determining taxable income, there shall be added or
4
5 deducted, as the case may be, the difference necessary
5
6 to allow a standard deduction in lieu of the standard
6
7 deduction allowed by the Internal Revenue Code of
7
8 1986, as amended, in an amount equal to:
8
9 (1) Three Thousand Dollars ($3,000.00), if the filing
9
10 status is married filing joint, head of household
10
11 or qualifying widow, or
11
12 (2) Two Thousand Dollars ($2,000.00), if the filing
12
13 status is single or married filing separate.
13
14 c. For the taxable year beginning on January 1, 2007, and
14
15 ending December 31, 2007, in the case of individuals
15
16 who use the standard deduction in determining taxable
16
17 income, there shall be added or deducted, as the case
17
18 may be, the difference necessary to allow a standard
18
19 deduction in lieu of the standard deduction allowed by
19
20 the Internal Revenue Code of 1986, as amended, in an
20
21 amount equal to:
21
22 (1) Five Thousand Five Hundred Dollars ($5,500.00),
22
23 if the filing status is married filing joint or
23
24 qualifying widow, or
24
Req. No. 1572 Page 33
1 (2) Four Thousand One Hundred Twenty-five Dollars
1
2 ($4,125.00) for a head of household, or
2
3 (3) Two Thousand Seven Hundred Fifty Dollars
3
4 ($2,750.00), if the filing status is single or
4
5 married filing separate.
5
6 d. For the taxable year beginning on January 1, 2008, and
6
7 ending December 31, 2008, in the case of individuals
7
8 who use the standard deduction in determining taxable
8
9 income, there shall be added or deducted, as the case
9
10 may be, the difference necessary to allow a standard
10
11 deduction in lieu of the standard deduction allowed by
11
12 the Internal Revenue Code of 1986, as amended, in an
12
13 amount equal to:
13
14 (1) Six Thousand Five Hundred Dollars ($6,500.00), if
14
15 the filing status is married filing joint or
15
16 qualifying widow,
16
17 (2) Four Thousand Eight Hundred Seventy-five Dollars
17
18 ($4,875.00) for a head of household, or
18
19 (3) Three Thousand Two Hundred Fifty Dollars
19
20 ($3,250.00), if the filing status is single or
20
21 married filing separate.
21
22 e. For the taxable year beginning on January 1, 2009, and
22
23 ending December 31, 2009, in the case of individuals
23
24 who use the standard deduction in determining taxable
24
Req. No. 1572 Page 34
1 income, there shall be added or deducted, as the case
1
2 may be, the difference necessary to allow a standard
2
3 deduction in lieu of the standard deduction allowed by
3
4 the Internal Revenue Code of 1986, as amended, in an
4
5 amount equal to:
5
6 (1) Eight Thousand Five Hundred Dollars ($8,500.00),
6
7 if the filing status is married filing joint or
7
8 qualifying widow,
8
9 (2) Six Thousand Three Hundred Seventy-five Dollars
9
10 ($6,375.00) for a head of household, or
10
11 (3) Four Thousand Two Hundred Fifty Dollars
11
12 ($4,250.00), if the filing status is single or
12
13 married filing separate.
13
14 Oklahoma adjusted gross income shall be increased by
14
15 any amounts paid for motor vehicle excise taxes which
15
16 were deducted as allowed by the Internal Revenue Code
16
17 of 1986, as amended.
17
18 f. For taxable years beginning on or after January 1,
18
19 2010, and ending on December 31, 2016, in the case of
19
20 individuals who use the standard deduction in
20
21 determining taxable income, there shall be added or
21
22 deducted, as the case may be, the difference necessary
22
23 to allow a standard deduction equal to the standard
23
24 deduction allowed by the Internal Revenue Code of
24
Req. No. 1572 Page 35
1 1986, as amended, based upon the amount and filing
1
2 status prescribed by such Code for purposes of filing
2
3 federal individual income tax returns.
3
4 g. For taxable years beginning on or after January 1,
4
5 2017, in the case of individuals who use the standard
5
6 deduction in determining taxable income, there shall
6
7 be added or deducted, as the case may be, the
7
8 difference necessary to allow a standard deduction in
8
9 lieu of the standard deduction allowed by the Internal
9
10 Revenue Code of 1986, as amended, as follows:
10
11 (1) Six Thousand Three Hundred Fifty Dollars
11
12 ($6,350.00) for single or married filing
12
13 separately,
13
14 (2) Twelve Thousand Seven Hundred Dollars
14
15 ($12,700.00) for married filing jointly or
15
16 qualifying widower with dependent child, and
16
17 (3) Nine Thousand Three Hundred Fifty Dollars
17
18 ($9,350.00) for head of household.
18
19 3. a. In the case of resident and part-year resident
19
20 individuals having adjusted gross income from sources
20
21 both within and without the state, the itemized or
21
22 standard deductions and personal exemptions shall be
22
23 reduced to an amount which is the same portion of the
23
24 total thereof as Oklahoma adjusted gross income is of
24
Req. No. 1572 Page 36
1 adjusted gross income. To the extent itemized
1
2 deductions include allowable moving expense, proration
2
3 of moving expense shall not be required or permitted
3
4 but allowable moving expense shall be fully deductible
4
5 for those taxpayers moving within or into Oklahoma
5
6 this state and no part of moving expense shall be
6
7 deductible for those taxpayers moving without or out
7
8 of Oklahoma this state. All other itemized or
8
9 standard deductions and personal exemptions shall be
9
10 subject to proration as provided by law.
10
11 b. For taxable years beginning on or after January 1,
11
12 2018, the net amount of itemized deductions allowable
12
13 on an Oklahoma income tax return, subject to the
13
14 provisions of paragraph 24 of this subsection, shall
14
15 not exceed Seventeen Thousand Dollars ($17,000.00).
15
16 For purposes of this subparagraph, charitable
16
17 contributions and medical expenses deductible for
17
18 federal income tax purposes shall be excluded from the
18
19 amount of Seventeen Thousand Dollars ($17,000.00) as
19
20 specified by this subparagraph.
20
21 4. A resident individual with a physical disability
21
22 constituting a substantial handicap to employment may deduct from
22
23 Oklahoma adjusted gross income such expenditures to modify a motor
23
24 vehicle, home or workplace as are necessary to compensate for his or
24
Req. No. 1572 Page 37
1 her handicap. A veteran certified by the United States Department
1
2 of Veterans Affairs of the federal government as having a service-
2
3 connected disability shall be conclusively presumed to be an
3
4 individual with a physical disability constituting a substantial
4
5 handicap to employment. The Tax Commission shall promulgate rules
5
6 containing a list of combinations of common disabilities and
6
7 modifications which may be presumed to qualify for this deduction.
7
8 The Tax Commission shall prescribe necessary requirements for
8
9 verification.
9
10 5. a. Before July 1, 2010, the first One Thousand Five
10
11 Hundred Dollars ($1,500.00) received by any person
11
12 from the United States as salary or compensation in
12
13 any form, other than retirement benefits, as a member
13
14 of any component of the Armed Forces of the United
14
15 States shall be deducted from taxable income.
15
16 b. On or after July 1, 2010, one hundred percent (100%)
16
17 of the income received by any person from the United
17
18 States as salary or compensation in any form, other
18
19 than retirement benefits, as a member of any component
19
20 of the Armed Forces of the United States shall be
20
21 deducted from taxable income.
21
22 c. Whenever the filing of a timely income tax return by a
22
23 member of the Armed Forces of the United States is
23
24
24
Req. No. 1572 Page 38
1 made impracticable or impossible of accomplishment by
1
2 reason of:
2
3 (1) absence from the United States, which term
3
4 includes only the states and the District of
4
5 Columbia,
5
6 (2) absence from the State of Oklahoma this state
6
7 while on active duty, or
7
8 (3) confinement in a hospital within the United
8
9 States for treatment of wounds, injuries or
9
10 disease,
10
11 the time for filing a return and paying an income tax
11
12 shall be and is hereby extended without incurring
12
13 liability for interest or penalties, to the fifteenth
13
14 day of the third month following the month in which:
14
15 (a) Such individual shall return to the United
15
16 States if the extension is granted pursuant
16
17 to subparagraph a division 1 of this
17
18 paragraph subparagraph, return to the State
18
19 of Oklahoma this state if the extension is
19
20 granted pursuant to subparagraph b division
20
21 2 of this paragraph subparagraph or be
21
22 discharged from such hospital if the
22
23 extension is granted pursuant to
23
24
24
Req. No. 1572 Page 39
1 subparagraph c division 3 of this paragraph
1
2 subparagraph, or
2
3 (b) An executor, administrator, or conservator
3
4 of the estate of the taxpayer is appointed,
4
5 whichever event occurs the earliest.
5
6 Provided, that the Tax Commission may, in its discretion, grant
6
7 any member of the Armed Forces of the United States an extension of
7
8 time for filing of income tax returns and payment of income tax
8
9 without incurring liabilities for interest or penalties. Such
9
10 extension may be granted only when in the judgment of the Tax
10
11 Commission a good cause exists therefor and may be for a period in
11
12 excess of six (6) months. A record of every such extension granted,
12
13 and the reason therefor, shall be kept.
13
14 6. Before July 1, 2010, the salary or any other form of
14
15 compensation, received from the United States by a member of any
15
16 component of the Armed Forces of the United States, shall be
16
17 deducted from taxable income during the time in which the person is
17
18 detained by the enemy in a conflict, is a prisoner of war or is
18
19 missing in action and not deceased; provided, after July 1, 2010,
19
20 all such salary or compensation shall be subject to the deduction as
20
21 provided pursuant to paragraph 5 of this subsection.
21
22 7. a. An individual taxpayer, whether resident or
22
23 nonresident, may deduct an amount equal to the federal
23
24
24
Req. No. 1572 Page 40
1 income taxes paid by the taxpayer during the taxable
1
2 year.
2
3 b. Federal taxes as described in subparagraph a of this
3
4 paragraph shall be deductible by any individual
4
5 taxpayer, whether resident or nonresident, only to the
5
6 extent they relate to income subject to taxation
6
7 pursuant to the provisions of the Oklahoma Income Tax
7
8 Act. The maximum amount allowable in the preceding
8
9 paragraph 5 of this subsection shall be prorated on
9
10 the ratio of the Oklahoma adjusted gross income to
10
11 federal adjusted gross income.
11
12 c. For the purpose of this paragraph, "federal income
12
13 taxes paid" shall mean federal income taxes, surtaxes
13
14 imposed on incomes or excess profits taxes, as though
14
15 the taxpayer was on the accrual basis. In determining
15
16 the amount of deduction for federal income taxes for
16
17 tax year 2001, the amount of the deduction shall not
17
18 be adjusted by the amount of any accelerated ten
18
19 percent (10%) tax rate bracket credit or advanced
19
20 refund of the credit received during the tax year
20
21 provided pursuant to the federal Economic Growth and
21
22 Tax Relief Reconciliation Act of 2001, P.L. No. 107-
22
23 16, and the advanced refund of such credit shall not
23
24 be subject to taxation.
24
Req. No. 1572 Page 41
1 d. The provisions of this paragraph shall apply to all
1
2 taxable years ending after December 31, 1978, and
2
3 beginning before January 1, 2006.
3
4 8. Retirement benefits not to exceed Five Thousand Five Hundred
4
5 Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five
5
6 Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Thousand
6
7 Dollars ($10,000.00) for the 2006 tax year and all subsequent tax
7
8 years, which are received by an individual from the civil service of
8
9 the United States, the Oklahoma Public Employees Retirement System,
9
10 the Teachers' Retirement System of Oklahoma, the Oklahoma Law
10
11 Enforcement Retirement System, the Oklahoma Firefighters Pension and
11
12 Retirement System, the Oklahoma Police Pension and Retirement
12
13 System, the employee retirement systems created by counties pursuant
13
14 to Section 951 et seq. of Title 19 of the Oklahoma Statutes, the The
14
15 Uniform Retirement System for Justices and Judges, the Oklahoma
15
16 Wildlife Conservation Department Retirement Fund, the Oklahoma
16
17 Employment Security Commission Retirement Plan, or the employee
17
18 retirement systems created by municipalities pursuant to Section 48-
18
19 101 et seq. of Title 11 of the Oklahoma Statutes shall be exempt
19
20 from taxable income.
20
21 9. In taxable years beginning after December 3l, 1984, Social
21
22 Security benefits received by an individual shall be exempt from
22
23 taxable income, to the extent such benefits are included in the
23
24 federal adjusted gross income pursuant to the provisions of Section
24
Req. No. 1572 Page 42
1 86 of the Internal Revenue Code of 1986, as amended, 26 U.S.C.,
1
2 Section 86.
2
3 10. For taxable years beginning after December 31, 1994, lump-
3
4 sum distributions from employer plans of deferred compensation,
4
5 which are not qualified plans within the meaning of Section 401(a)
5
6 of the Internal Revenue Code of 1986, as amended, 26 U.S.C., Section
6
7 401(a), and which are deposited in and accounted for within a
7
8 separate bank account or brokerage account in a financial
8
9 institution within this state, shall be excluded from taxable income
9
10 in the same manner as a qualifying rollover contribution to an
10
11 individual retirement account within the meaning of Section 408 of
11
12 the Internal Revenue Code of 1986, as amended, 26 U.S.C., Section
12
13 408. Amounts withdrawn from such bank or brokerage account,
13
14 including any earnings thereon, shall be included in taxable income
14
15 when withdrawn in the same manner as withdrawals from individual
15
16 retirement accounts within the meaning of Section 408 of the
16
17 Internal Revenue Code of 1986, as amended.
17
18 11. In taxable years beginning after December 31, 1995,
18
19 contributions made to and interest received from a medical savings
19
20 account established pursuant to Sections 2621 through 2623 of Title
20
21 63 of the Oklahoma Statutes shall be exempt from taxable income.
21
22 12. For taxable years beginning after December 31, 1996, the
22
23 Oklahoma adjusted gross income of any individual taxpayer who is a
23
24 swine or poultry producer may be further adjusted for the deduction
24
Req. No. 1572 Page 43
1 for depreciation allowed for new construction or expansion costs
1
2 which may be computed using the same depreciation method elected for
2
3 federal income tax purposes except that the useful life shall be
3
4 seven (7) years for purposes of this paragraph. If depreciation is
4
5 allowed as a deduction in determining the adjusted gross income of
5
6 an individual, any depreciation calculated and claimed pursuant to
6
7 this section shall in no event be a duplication of any depreciation
7
8 allowed or permitted on the federal income tax return of the
8
9 individual.
9
10 13. a. In taxable years beginning before January 1, 2005,
10
11 retirement benefits not to exceed the amounts
11
12 specified in this paragraph, which are received by an
12
13 individual sixty-five (65) years of age or older and
13
14 whose Oklahoma adjusted gross income is Twenty-five
14
15 Thousand Dollars ($25,000.00) or less if the filing
15
16 status is single, head of household, or married filing
16
17 separate, or Fifty Thousand Dollars ($50,000.00) or
17
18 less if the filing status is married filing joint or
18
19 qualifying widow, shall be exempt from taxable income.
19
20 In taxable years beginning after December 31, 2004,
20
21 retirement benefits not to exceed the amounts
21
22 specified in this paragraph, which are received by an
22
23 individual whose Oklahoma adjusted gross income is
23
24
24
Req. No. 1572 Page 44
1 less than the qualifying amount specified in this
1
2 paragraph, shall be exempt from taxable income.
2
3 b. For purposes of this paragraph, the qualifying amount
3
4 shall be as follows:
4
5 (1) in taxable years beginning after December 31,
5
6 2004, and prior to January 1, 2007, the
6
7 qualifying amount shall be Thirty-seven Thousand
7
8 Five Hundred Dollars ($37,500.00) or less if the
8
9 filing status is single, head of household, or
9
10 married filing separate, or Seventy-five Thousand
10
11 Dollars ($75,000.00) or less if the filing status
11
12 is married filing jointly or qualifying widow,
12
13 (2) in the taxable year beginning January 1, 2007,
13
14 the qualifying amount shall be Fifty Thousand
14
15 Dollars ($50,000.00) or less if the filing status
15
16 is single, head of household, or married filing
16
17 separate, or One Hundred Thousand Dollars
17
18 ($100,000.00) or less if the filing status is
18
19 married filing jointly or qualifying widow,
19
20 (3) in the taxable year beginning January 1, 2008,
20
21 the qualifying amount shall be Sixty-two Thousand
21
22 Five Hundred Dollars ($62,500.00) or less if the
22
23 filing status is single, head of household, or
23
24 married filing separate, or One Hundred Twenty-
24
Req. No. 1572 Page 45
1 five Thousand Dollars ($125,000.00) or less if
1
2 the filing status is married filing jointly or
2
3 qualifying widow,
3
4 (4) in the taxable year beginning January 1, 2009,
4
5 the qualifying amount shall be One Hundred
5
6 Thousand Dollars ($100,000.00) or less if the
6
7 filing status is single, head of household, or
7
8 married filing separate, or Two Hundred Thousand
8
9 Dollars ($200,000.00) or less if the filing
9
10 status is married filing jointly or qualifying
10
11 widow, and
11
12 (5) in the taxable year beginning January 1, 2010,
12
13 and subsequent taxable years, there shall be no
13
14 limitation upon the qualifying amount.
14
15 c. For purposes of this paragraph, "retirement benefits"
15
16 means the total distributions or withdrawals from the
16
17 following:
17
18 (1) an employee pension benefit plan which satisfies
18
19 the requirements of Section 401 of the Internal
19
20 Revenue Code of 1986, as amended, 26 U.S.C.,
20
21 Section 401,
21
22 (2) an eligible deferred compensation plan that
22
23 satisfies the requirements of Section 457 of the
23
24
24
Req. No. 1572 Page 46
1 Internal Revenue Code of 1986, as amended, 26
1
2 U.S.C., Section 457,
2
3 (3) an individual retirement account, annuity or
3
4 trust or simplified employee pension that
4
5 satisfies the requirements of Section 408 of the
5
6 Internal Revenue Code of 1986, as amended, 26
6
7 U.S.C., Section 408,
7
8 (4) an employee annuity subject to the provisions of
8
9 Section 403(a) or (b) of the Internal Revenue
9
10 Code of 1986, as amended, 26 U.S.C., Section
10
11 403(a) or (b),
11
12 (5) United States Retirement Bonds which satisfy the
12
13 requirements of Section 86 of the Internal
13
14 Revenue Code of 1986, as amended, 26 U.S.C.,
14
15 Section 86, or
15
16 (6) lump-sum distributions from a retirement plan
16
17 which satisfies the requirements of Section
17
18 402(e) of the Internal Revenue Code of 1986, as
18
19 amended, 26 U.S.C., Section 402(e).
19
20 d. The amount of the exemption provided by this paragraph
20
21 shall be limited to Five Thousand Five Hundred Dollars
21
22 ($5,500.00) for the 2004 tax year, Seven Thousand Five
22
23 Hundred Dollars ($7,500.00) for the 2005 tax year and
23
24 Ten Thousand Dollars ($10,000.00) for the tax year
24
Req. No. 1572 Page 47
1 2006 and for all subsequent tax years. Any individual
1
2 who claims the exemption provided for in paragraph 8
2
3 of this subsection shall not be permitted to claim a
3
4 combined total exemption pursuant to this paragraph
4
5 and paragraph 8 of this subsection in an amount
5
6 exceeding Five Thousand Five Hundred Dollars
6
7 ($5,500.00) for the 2004 tax year, Seven Thousand Five
7
8 Hundred Dollars ($7,500.00) for the 2005 tax year and
8
9 Ten Thousand Dollars ($10,000.00) for the 2006 tax
9
10 year and all subsequent tax years.
10
11 14. In taxable years beginning after December 31, 1999, for an
11
12 individual engaged in production agriculture who has filed a
12
13 Schedule F form with the taxpayer's federal income tax return for
13
14 such taxable year, there shall be excluded from taxable income any
14
15 amount which was included as federal taxable income or federal
15
16 adjusted gross income and which consists of the discharge of an
16
17 obligation by a creditor of the taxpayer incurred to finance the
17
18 production of agricultural products.
18
19 15. In taxable years beginning December 31, 2000, an amount
19
20 equal to one hundred percent (100%) of the amount of any scholarship
20
21 or stipend received from participation in the Oklahoma Police Corps
21
22 Program, as established in Section 2-140.3 of Title 47 of the
22
23 Oklahoma Statutes shall be exempt from taxable income.
23
24
24
Req. No. 1572 Page 48
1 16. a. In taxable years beginning after December 31, 2001,
1
2 and before January 1, 2005, there shall be allowed a
2
3 deduction in the amount of contributions to accounts
3
4 established pursuant to the Oklahoma College Savings
4
5 Plan Act. The deduction shall equal the amount of
5
6 contributions to accounts, but in no event shall the
6
7 deduction for each contributor exceed Two Thousand
7
8 Five Hundred Dollars ($2,500.00) each taxable year for
8
9 each account.
9
10 b. In taxable years beginning after December 31, 2004,
10
11 each taxpayer shall be allowed a deduction for
11
12 contributions to accounts established pursuant to the
12
13 Oklahoma College Savings Plan Act. The maximum annual
13
14 deduction shall equal the amount of contributions to
14
15 all such accounts plus any contributions to such
15
16 accounts by the taxpayer for prior taxable years after
16
17 December 31, 2004, which were not deducted, but in no
17
18 event shall the deduction for each tax year exceed Ten
18
19 Thousand Dollars ($10,000.00) for each individual
19
20 taxpayer or Twenty Thousand Dollars ($20,000.00) for
20
21 taxpayers filing a joint return. Any amount of a
21
22 contribution that is not deducted by the taxpayer in
22
23 the year for which the contribution is made may be
23
24 carried forward as a deduction from income for the
24
Req. No. 1572 Page 49
1 succeeding five (5) years. For taxable years
1
2 beginning after December 31, 2005, deductions may be
2
3 taken for contributions and rollovers made during a
3
4 taxable year and up to April 15 of the succeeding
4
5 year, or the due date of a taxpayer's state income tax
5
6 return, excluding extensions, whichever is later.
6
7 Provided, a deduction for the same contribution may
7
8 not be taken for two (2) different taxable years.
8
9 c. In taxable years beginning after December 31, 2006,
9
10 deductions for contributions made pursuant to
10
11 subparagraph b of this paragraph shall be limited as
11
12 follows:
12
13 (1) for a taxpayer who qualified for the five-year
13
14 carryforward election and who takes a rollover or
14
15 nonqualified withdrawal during that period, the
15
16 tax deduction otherwise available pursuant to
16
17 subparagraph b of this paragraph shall be reduced
17
18 by the amount which is equal to the rollover or
18
19 nonqualified withdrawal, and
19
20 (2) for a taxpayer who elects to take a rollover or
20
21 nonqualified withdrawal within the same tax year
21
22 in which a contribution was made to the
22
23 taxpayer's account, the tax deduction otherwise
23
24 available pursuant to subparagraph b of this
24
Req. No. 1572 Page 50
1 paragraph shall be reduced by the amount of the
1
2 contribution which is equal to the rollover or
2
3 nonqualified withdrawal.
3
4 d. If a taxpayer elects to take a rollover on a
4
5 contribution for which a deduction has been taken
5
6 pursuant to subparagraph b of this paragraph within
6
7 one (1) year of the date of contribution, the amount
7
8 of such rollover shall be included in the adjusted
8
9 gross income of the taxpayer in the taxable year of
9
10 the rollover.
10
11 e. If a taxpayer makes a nonqualified withdrawal of
11
12 contributions for which a deduction was taken pursuant
12
13 to subparagraph b of this paragraph, such nonqualified
13
14 withdrawal and any earnings thereon shall be included
14
15 in the adjusted gross income of the taxpayer in the
15
16 taxable year of the nonqualified withdrawal.
16
17 f. As used in this paragraph:
17
18 (1) "non-qualified withdrawal" means a withdrawal
18
19 from an Oklahoma College Savings Plan account
19
20 other than one of the following:
20
21 (a) a qualified withdrawal,
21
22 (b) a withdrawal made as a result of the death
22
23 or disability of the designated beneficiary
23
24 of an account,
24
Req. No. 1572 Page 51
1 (c) a withdrawal that is made on the account of
1
2 a scholarship or the allowance or payment
2
3 described in Section 135(d)(1)(B) or (C) or
3
4 by the Internal Revenue Code of 1986, as
4
5 amended, received by the designated
5
6 beneficiary to the extent the amount of the
6
7 refund does not exceed the amount of the
7
8 scholarship, allowance, or payment, or
8
9 (d) a rollover or change of designated
9
10 beneficiary as permitted by subsection F of
10
11 Section 3970.7 of Title 70 of the Oklahoma
11
12 Statutes, and
12
13 (2) "rollover" means the transfer of funds from the
13
14 Oklahoma College Savings Plan to any other plan
14
15 under Section 529 of the Internal Revenue Code of
15
16 1986, as amended.
16
17 17. For tax years 2006 through 2021, retirement benefits
17
18 received by an individual from any component of the Armed Forces of
18
19 the United States in an amount not to exceed the greater of seventy-
19
20 five percent (75%) of such benefits or Ten Thousand Dollars
20
21 ($10,000.00) shall be exempt from taxable income but in no case less
21
22 than the amount of the exemption provided by paragraph 13 of this
22
23 subsection. For tax year 2022 and subsequent tax years, retirement
23
24
24
Req. No. 1572 Page 52
1 benefits received by an individual from any component of the Armed
1
2 Forces of the United States shall be exempt from taxable income.
2
3 18. For taxable years beginning after December 31, 2006,
3
4 retirement benefits received by federal civil service retirees,
4
5 including survivor annuities, paid in lieu of Social Security
5
6 benefits shall be exempt from taxable income to the extent such
6
7 benefits are included in the federal adjusted gross income pursuant
7
8 to the provisions of Section 86 of the Internal Revenue Code of
8
9 1986, as amended, 26 U.S.C., Section 86, according to the following
9
10 schedule:
10
11 a. in the taxable year beginning January 1, 2007, twenty
11
12 percent (20%) of such benefits shall be exempt,
12
13 b. in the taxable year beginning January 1, 2008, forty
13
14 percent (40%) of such benefits shall be exempt,
14
15 c. in the taxable year beginning January 1, 2009, sixty
15
16 percent (60%) of such benefits shall be exempt,
16
17 d. in the taxable year beginning January 1, 2010, eighty
17
18 percent (80%) of such benefits shall be exempt, and
18
19 e. in the taxable year beginning January 1, 2011, and
19
20 subsequent taxable years, one hundred percent (100%)
20
21 of such benefits shall be exempt.
21
22 19. a. For taxable years beginning after December 31, 2007, a
22
23 resident individual may deduct up to Ten Thousand
23
24 Dollars ($10,000.00) from Oklahoma adjusted gross
24
Req. No. 1572 Page 53
1 income if the individual, or the dependent of the
1
2 individual, while living, donates one or more human
2
3 organs of the individual to another human being for
3
4 human organ transplantation. As used in this
4
5 paragraph, "human organ" means all or part of a liver,
5
6 pancreas, kidney, intestine, lung, or bone marrow. A
6
7 deduction that is claimed under this paragraph may be
7
8 claimed in the taxable year in which the human organ
8
9 transplantation occurs.
9
10 b. An individual may claim this deduction only once, and
10
11 the deduction may be claimed only for unreimbursed
11
12 expenses that are incurred by the individual and
12
13 related to the organ donation of the individual.
13
14 c. The Oklahoma Tax Commission shall promulgate rules to
14
15 implement the provisions of this paragraph which shall
15
16 contain a specific list of expenses which may be
16
17 presumed to qualify for the deduction. The Tax
17
18 Commission shall prescribe necessary requirements for
18
19 verification.
19
20 20. For taxable years beginning after December 31, 2009, there
20
21 shall be exempt from taxable income any amount received by the
21
22 beneficiary of the death benefit for an emergency medical technician
22
23 or a registered emergency medical responder provided by Section 1-
23
24 2505.1 of Title 63 of the Oklahoma Statutes.
24
Req. No. 1572 Page 54
1 21. For taxable years beginning after December 31, 2008,
1
2 taxable income shall be increased by any unemployment compensation
2
3 exempted under Section 85(c) of the Internal Revenue Code of 1986,
3
4 as amended, 26 U.S.C., Section 85(c)(2009).
4
5 22. For taxable years beginning after December 31, 2008, there
5
6 shall be exempt from taxable income any payment in an amount less
6
7 than Six Hundred Dollars ($600.00) received by a person as an award
7
8 for participation in a competitive livestock show event. For
8
9 purposes of this paragraph, the payment shall be treated as a
9
10 scholarship amount paid by the entity sponsoring the event and the
10
11 sponsoring entity shall cause the payment to be categorized as a
11
12 scholarship in its books and records.
12
13 23. For taxable years beginning on or after January 1, 2016,
13
14 taxable income shall be increased by any amount of state and local
14
15 sales or income taxes deducted under 26 U.S.C., Section 164 of the
15
16 Internal Revenue Code of 1986, as amended. If the amount of state
16
17 and local taxes deducted on the federal return is limited, taxable
17
18 income on the state return shall be increased only by the amount
18
19 actually deducted after any such limitations are applied.
19
20 24. For taxable years beginning after December 31, 2020, each
20
21 taxpayer shall be allowed a deduction for contributions to accounts
21
22 established pursuant to the Achieving a Better Life Experience
22
23 (ABLE) Program program as established in Section 4001.1 et seq. of
23
24 Title 56 of the Oklahoma Statutes. For any tax year, the deduction
24
Req. No. 1572 Page 55
1 provided for in this paragraph shall not exceed Ten Thousand Dollars
1
2 ($10,000.00) for an individual taxpayer or Twenty Thousand Dollars
2
3 ($20,000.00) for taxpayers filing a joint return. Any amount of
3
4 contribution not deducted by the taxpayer in the tax year for which
4
5 the contribution is made may be carried forward as a deduction from
5
6 income for up to five (5) tax years. Deductions may be taken for
6
7 contributions made during the tax year and through April 15 of the
7
8 succeeding tax year, or through the due date of a taxpayer's state
8
9 income tax return excluding extensions, whichever is later.
9
10 Provided, a deduction for the same contribution may not be taken in
10
11 more than one (1) tax year.
11
12 F. 1. For taxable years beginning after December 31, 2004, a
12
13 deduction from the Oklahoma adjusted gross income of any individual
13
14 taxpayer shall be allowed for qualifying gains receiving capital
14
15 treatment that are included in the federal adjusted gross income of
15
16 such individual taxpayer during the taxable year.
16
17 2. As used in this subsection:
17
18 a. "qualifying gains receiving capital treatment" means
18
19 the amount of net capital gains, as defined in Section
19
20 1222(11) of the Internal Revenue Code of 1986, as
20
21 amended, included in an individual taxpayer's federal
21
22 income tax return that result from:
22
23 (1) the sale of real property or tangible personal
23
24 property located within Oklahoma this state that
24
Req. No. 1572 Page 56
1 has been directly or indirectly owned by the
1
2 individual taxpayer for a holding period of at
2
3 least five (5) years prior to the date of the
3
4 transaction from which such net capital gains
4
5 arise,
5
6 (2) the sale of stock or the sale of a direct or
6
7 indirect ownership interest in an Oklahoma
7
8 company, limited liability company, or
8
9 partnership where such stock or ownership
9
10 interest has been directly or indirectly owned by
10
11 the individual taxpayer for a holding period of
11
12 at least two (2) years prior to the date of the
12
13 transaction from which the net capital gains
13
14 arise, or
14
15 (3) the sale of real property, tangible personal
15
16 property or intangible personal property located
16
17 within Oklahoma this state as part of the sale of
17
18 all or substantially all of the assets of an
18
19 Oklahoma company, limited liability company, or
19
20 partnership or an Oklahoma proprietorship
20
21 business enterprise where such property has been
21
22 directly or indirectly owned by such entity or
22
23 business enterprise or owned by the owners of
23
24 such entity or business enterprise for a period
24
Req. No. 1572 Page 57
1 of at least two (2) years prior to the date of
1
2 the transaction from which the net capital gains
2
3 arise,
3
4 b. "holding period" means an uninterrupted period of
4
5 time. The holding period shall include any additional
5
6 period when the property was held by another
6
7 individual or entity, if such additional period is
7
8 included in the taxpayer's holding period for the
8
9 asset pursuant to the Internal Revenue Code of 1986,
9
10 as amended,
10
11 c. "Oklahoma company," "limited liability company," or
11
12 "partnership" means an entity whose primary
12
13 headquarters have been located in Oklahoma this state
13
14 for at least three (3) uninterrupted years prior to
14
15 the date of the transaction from which the net capital
15
16 gains arise,
16
17 d. "direct" means the individual taxpayer directly owns
17
18 the asset,
18
19 e. "indirect" means the individual taxpayer owns an
19
20 interest in a pass-through entity (or chain of pass-
20
21 through entities) that sells the asset that gives rise
21
22 to the qualifying gains receiving capital treatment.
22
23 (1) With respect to sales of real property or
23
24 tangible personal property located within
24
Req. No. 1572 Page 58
1 Oklahoma this state, the deduction described in
1
2 this subsection shall not apply unless the pass-
2
3 through entity that makes the sale has held the
3
4 property for not less than five (5) uninterrupted
4
5 years prior to the date of the transaction that
5
6 created the capital gain, and each pass-through
6
7 entity included in the chain of ownership has
7
8 been a member, partner, or shareholder of the
8
9 pass-through entity in the tier immediately below
9
10 it for an uninterrupted period of not less than
10
11 five (5) years.
11
12 (2) With respect to sales of stock or ownership
12
13 interest in or sales of all or substantially all
13
14 of the assets of an Oklahoma company, limited
14
15 liability company, partnership or Oklahoma
15
16 proprietorship business enterprise, the deduction
16
17 described in this subsection shall not apply
17
18 unless the pass-through entity that makes the
18
19 sale has held the stock or ownership interest for
19
20 not less than two (2) uninterrupted years prior
20
21 to the date of the transaction that created the
21
22 capital gain, and each pass-through entity
22
23 included in the chain of ownership has been a
23
24 member, partner or shareholder of the pass-
24
Req. No. 1572 Page 59
1 through entity in the tier immediately below it
1
2 for an uninterrupted period of not less than two
2
3 (2) years. For purposes of this division,
3
4 uninterrupted ownership prior to July 1, 2007,
4
5 shall be included in the determination of the
5
6 required holding period prescribed by this
6
7 division, and
7
8 f. "Oklahoma proprietorship business enterprise" means a
8
9 business enterprise whose income and expenses have
9
10 been reported on Schedule C or F of an individual
10
11 taxpayer's federal income tax return, or any similar
11
12 successor schedule published by the Internal Revenue
12
13 Service and whose primary headquarters have been
13
14 located in Oklahoma this state for at least three (3)
14
15 uninterrupted years prior to the date of the
15
16 transaction from which the net capital gains arise.
16
17 G. 1. For purposes of computing its Oklahoma taxable income
17
18 under this section, the dividends-paid deduction otherwise allowed
18
19 by federal law in computing net income of a real estate investment
19
20 trust that is subject to federal income tax shall be added back in
20
21 computing the tax imposed by this state under this title if the real
21
22 estate investment trust is a captive real estate investment trust.
22
23 2. For purposes of computing its Oklahoma taxable income under
23
24 this section, a taxpayer shall add back otherwise deductible rents
24
Req. No. 1572 Page 60
1 and interest expenses paid to a captive real estate investment trust
1
2 that is not subject to the provisions of paragraph 1 of this
2
3 subsection. As used in this subsection:
3
4 a. the term "real estate investment trust" or "REIT"
4
5 means the meaning ascribed to such term in Section 856
5
6 of the Internal Revenue Code of 1986, as amended,
6
7 b. the term "captive real estate investment trust" means
7
8 a real estate investment trust, the shares or
8
9 beneficial interests of which are not regularly traded
9
10 on an established securities market and more than
10
11 fifty percent (50%) of the voting power or value of
11
12 the beneficial interests or shares of which are owned
12
13 or controlled, directly or indirectly, or
13
14 constructively, by a single entity that is:
14
15 (1) treated as an association taxable as a
15
16 corporation under the Internal Revenue Code of
16
17 1986, as amended, and
17
18 (2) not exempt from federal income tax pursuant to
18
19 the provisions of Section 501(a) of the Internal
19
20 Revenue Code of 1986, as amended.
20
21 The term shall not include a real estate investment
21
22 trust that is intended to be regularly traded on an
22
23 established securities market, and that satisfies the
23
24 requirements of Section 856(a)(5) and (6) of the U.S.
24
Req. No. 1572 Page 61
1 Internal Revenue Code of 1986, as amended, by reason
1
2 of Section 856(h)(2) of the Internal Revenue Code of
2
3 1986, as amended,
3
4 c. the term "association taxable as a corporation" shall
4
5 not include the following entities:
5
6 (1) any real estate investment trust as defined in
6
7 paragraph a of this subsection other than a
7
8 "captive real estate investment trust" captive
8
9 real estate investment trust,
9
10 (2) any qualified real estate investment trust
10
11 subsidiary under Section 856(i) of the Internal
11
12 Revenue Code of 1986, as amended, other than a
12
13 qualified REIT subsidiary of a "captive real
13
14 estate investment trust" captive real estate
14
15 investment trust,
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16 (3) any Listed Australian Property Trust listed
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17 Australian property trust (meaning an Australian
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18 unit trust registered as a "Managed Investment
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19 Scheme" "managed investment scheme" under the
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20 Australian Corporations Act 2001 in which the
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21 principal class of units is listed on a
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22 recognized stock exchange in Australia and is
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23 regularly traded on an established securities
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24 market), or an entity organized as a trust,
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Req. No. 1572 Page 62
1 provided that a Listed Australian Property Trust
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2 listed Australian property trust owns or
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3 controls, directly or indirectly, seventy-five
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4 percent (75%) or more of the voting power or
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5 value of the beneficial interests or shares of
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6 such trust, or
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7 (4) any Qualified Foreign Entity qualified foreign
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8 entity, meaning a corporation, trust, association
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9 or partnership organized outside the laws of the
9
10 United States and which satisfies the following
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11 criteria:
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12 (a) at least seventy-five percent (75%) of the
12
13 entity's total asset value at the close of
13
14 its taxable year is represented by real
14
15 estate assets, as defined in Section
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16 856(c)(5)(B) of the Internal Revenue Code of
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17 1986, as amended, thereby including shares
17
18 or certificates of beneficial interest in
18
19 any real estate investment trust, cash and
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20 cash equivalents, and U.S. Government
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21 securities,
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22 (b) the entity receives a dividend-paid
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23 deduction comparable to Section 561 of the
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24
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Req. No. 1572 Page 63
1 Internal Revenue Code of 1986, as amended,
1
2 or is exempt from entity level tax,
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3 (c) the entity is required to distribute at
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4 least eighty-five percent (85%) of its
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5 taxable income, as computed in the
5
6 jurisdiction in which it is organized, to
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7 the holders of its shares or certificates of
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8 beneficial interest on an annual basis,
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9 (d) not more than ten percent (10%) of the
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10 voting power or value in such entity is held
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11 directly or indirectly or constructively by
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12 a single entity or individual, or the shares
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13 or beneficial interests of such entity are
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14 regularly traded on an established
14
15 securities market, and
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16 (e) the entity is organized in a country which
16
17 has a tax treaty with the United States.
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18 3. For purposes of this subsection, the constructive ownership
18
19 rules of Section 318(a) of the Internal Revenue Code, as modified by
19
20 Section 856(d)(5) of the Internal Revenue Code of 1986, as amended,
20
21 shall apply in determining the ownership of stock, assets, or net
21
22 profits of any person.
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23 4. A real estate investment trust that does not become
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24 regularly traded on an established securities market within one (1)
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Req. No. 1572 Page 64
1 year of the date on which it first becomes a real estate investment
1
2 trust shall be deemed not to have been regularly traded on an
2
3 established securities market, retroactive to the date it first
3
4 became a real estate investment trust, and shall file an amended
4
5 return reflecting such retroactive designation for any tax year or
5
6 part year occurring during its initial year of status as a real
6
7 estate investment trust. For purposes of this subsection, a real
7
8 estate investment trust becomes a real estate investment trust on
8
9 the first day it has both met the requirements of Section 856 of the
9
10 Internal Revenue Code of 1986, as amended, and has elected to be
10
11 treated as a real estate investment trust pursuant to Section
11
12 856(c)(1) of the Internal Revenue Code of 1986, as amended.
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13 SECTION 3. This act shall become effective November 1, 2025.
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15 60-1-1572 QD 12/30/2024 11:14:35 PM
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Req. No. 1572 Page 65Every fact on this page links to its source, starting with the official bill record.