SB 60 — Income tax; modifying certain apportionment factors for determining Oklahoma taxable income for certain tax years. Effective date.

73 Page 6 purchaser within the state, commonly known as 2 interstate sales, 3 (2) sales of the product stored in public warehouses within the state pursuant to “in transit” 5 tariffs, as prescribed and allowed by the 6 Interstate Commerce Commission, to a purchaser 7 within the state, (3) sales of the product stored in public warehouses 9 within the state where the shipment to such warehouses is not covered by “in transit” tariffs, as prescribed and allowed by the Interstate Commerce Commission, to a purchaser within or without the state, the Oklahoma net income shall, at the option of the taxpayer, be that portion of the total net income of the taxpayer for federal income tax purposes derived from the manufacture and/or processing and sales everywhere as determined by the ratio of the sales defined in this section made to the purchaser within the state to the total sales everywhere.

Req.SENATE FLOOR VERSION - SB60 SFLR Page 7 (Bold face denotes Committee Amendments) e.

No.In the case of insurance companies, Oklahoma taxable income shall be taxable income of the taxpayer for federal tax purposes, as adjusted for the adjustments provided pursuant to the provisions of paragraphs 1 and 2 of this subsection, apportioned as follows:

73(1) Pageexcept 7as e.otherwise provided by division (2) of this subparagraph, taxable income of an insurance company for a taxable year shall be apportioned to this state by multiplying such income by a fraction, the numerator of which is the direct premiums written for insurance on property or risks in this state, and the denominator of which is the direct premiums written for insurance on property or risks everywhere.

InFor purposes of this subsection, the caseterm “direct premiums written” means the total amount of insurancedirect companies,premiums Oklahomawritten, assessments and annuity considerations as reported for the taxable 2year on the annual statement filed by the company with the Insurance Commissioner in the form approved by the National Association of Insurance Commissioners, or such other form as may be prescribed in lieu thereof, SENATE FLOOR VERSION - SB60 SFLR Page 8 (Bold face denotes Committee Amendments) (2) if the principal source of premiums written by an insurance company consists of premiums for reinsurance accepted by it, the taxable income of such company shall be taxableapportioned to this state by multiplying such income by a fraction, the numerator of which is the taxpayersum of (a) direct premiums written for 3insurance federalon taxproperty purposes,or asrisks adjustedin this state, plus (b) premiums written for reinsurance accepted in respect of property or risks in this state, and the adjustmentsdenominator providedof pursuantwhich tois the provisionssum of paragraphs(c) 1direct 5premiums andwritten 2for ofinsurance thison subsection,property apportionedor asrisks follows:everywhere, plus (d) premiums written for reinsurance accepted in respect of property or risks everywhere.

6For (1)purposes exceptof asthis otherwiseparagraph, providedpremiums bywritten divisionfor (2)reinsurance accepted in respect of 7property or risks in this subparagraph,state, taxablewhether incomeor ofnot anotherwise insurancedeterminable, may at the election of the company be determined on the basis of the proportion which premiums written for ainsurance taxableaccepted yearfrom shallcompanies becommercially apportioneddomiciled 9in toOklahoma this state bybears multiplyingto suchpremiums incomewritten byfor areinsurance fraction,accepted thefrom numeratorall ofsources, or alternatively in SENATE FLOOR VERSION - SB60 SFLR Page 9 (Bold face denotes Committee Amendments) the proportion which isthe sum of the direct premiums written for insurance on property or risks in this state,state andby theeach denominatorceding ofcompany from which reinsurance is accepted bears to the sum of the total direct premiums written forby insuranceeach onsuch propertyceding orcompany risksfor everywhere.the taxable year.

For5. purposes of this subsection, the term “direct premiums written” means the total amount of direct premiums written, assessments and annuity considerations as reported for the taxable year on the annual statement filed by the company with the Insurance Commissioner in the form approved by the National Association of Insurance Commissioners, or such other form as may be prescribed in lieu thereof, Req.

No.The For tax year 2025 and previous tax years, the net income or loss remaining after the separate allocation in paragraph 4 of this subsection, being that which is derived from a unitary business enterprise, shall be apportioned to this state on the basis of the arithmetical average of three factors consisting of property, payroll and sales or gross revenue enumerated as subparagraphs a, b and c of this paragraph.

73 Page 8 (2) if the principal source of premiums written by an 2 insurance company consists of premiums for 3 reinsurance accepted by it, the taxable income of such company shall be apportioned to this state 5 by multiplying such income by a fraction, the 6 numerator of which is the sum of (a) direct 7 premiums written for insurance on property or risks in this state, plus (b) premiums written 9 for reinsurance accepted in respect of property or risks in this state, and the denominator of which is the sum of (c) direct premiums written for insurance on property or risks everywhere, plus (d) premiums written for reinsurance accepted in respect of property or risks everywhere.

For purposes of this paragraph, premiums written for reinsurance accepted in respect of property or risks in this state, whether or not otherwise determinable, may at the election of the company be determined on the basis of the proportion which premiums written for insurance accepted from companies commercially domiciled in Oklahoma this state bears to premiums written for reinsurance accepted from all sources, or alternatively in Req.

No.

73 Page 9 the proportion which the sum of the direct 2 premiums written for insurance on property or 3 risks in this state by each ceding company from which reinsurance is accepted bears to the sum of 5 the total direct premiums written by each such 6 ceding company for the taxable year.

7 5.

The For tax year 2025 and previous tax years, the net income or loss remaining after the separate allocation in paragraph 4 of 9 this subsection, being that which is derived from a unitary business enterprise, shall be apportioned to this state on the basis of the arithmetical average of three factors consisting of property, payroll and sales or gross revenue enumerated as subparagraphs a, b and c of this paragraph.

Deductions used in computing such net income or loss shall not include taxes based on Req.SENATE FLOOR VERSION - SB60 SFLR Page 10 (Bold face denotes Committee Amendments) or measured by income.

No.Provided, for tax year 2025 and previous tax years, for corporations whose property for purposes of the tax imposed by Section 2355 of this title has an initial investment cost equaling or exceeding Two Hundred Million Dollars ($200,000,000.00) and such investment is made on or after July 1, 1997, or for corporations which expand their property or facilities in this state and such expansion has an investment cost equaling or exceeding Two Hundred Million Dollars ($200,000,000.00) over a period not to exceed three (3) years, and such expansion is commenced on or after January 1, 2000, the three factors shall be apportioned with property and payroll, each comprising twenty-five percent (25%) of the apportionment factor and sales comprising fifty percent (50%) of the apportionment factor.

73 Page 10 or measured by income.

Provided, for tax year 2025 and previous tax 2 years, for corporations whose property for purposes of the tax 3 imposed by Section 2355 of this title has an initial investment cost equaling or exceeding Two Hundred Million Dollars ($200,000,000.00) 5 and such investment is made on or after July 1, 1997, or for 6 corporations which expand their property or facilities in this state 7 and such expansion has an investment cost equaling or exceeding Two Hundred Million Dollars ($200,000,000.00) over a period not to 9 exceed three (3) years, and such expansion is commenced on or after January 1, 2000, the three factors shall be apportioned with property and payroll, each comprising twenty-five percent (25%) of the apportionment factor and sales comprising fifty percent (50%) of the apportionment factor.

(1) Property, the income from which is separately allocated in paragraph 4 of this subsection, shall not be included in determining this Req.SENATE FLOOR VERSION - SB60 SFLR Page 11 (Bold face denotes Committee Amendments) fraction.

No.The numerator of the fraction shall include a portion of the investment in transportation and other equipment having no fixed situs, such as rolling stock, buses, trucks and trailers, including machinery and equipment carried thereon, airplanes, salespersons’ automobiles and other similar equipment, in the proportion that miles traveled in Oklahoma this state by such equipment bears to total miles traveled, (2) Property owned by the taxpayer is valued at its original cost.

73 Page 11 fraction.

The numerator of the fraction shall 2 include a portion of the investment in 3 transportation and other equipment having no fixed situs, such as rolling stock, buses, trucks 5 and trailers, including machinery and equipment 6 carried thereon, airplanes, salespersons’ 7 automobiles and other similar equipment, in the proportion that miles traveled in Oklahoma this 9 state by such equipment bears to total miles traveled, (2) Property owned by the taxpayer is valued at its original cost.

Req.SENATE FLOOR VERSION - SB60 SFLR Page 12 (Bold face denotes Committee Amendments) b.

No.The payroll factor is a fraction, the numerator of which is the total compensation for services rendered in the state during the tax period, and the denominator of which is the total compensation for services rendered everywhere during the tax period.

73“Compensation”, Pageas 12used b.in this subsection, means those paid-for services to the extent related to the unitary business but does not include officers’ salaries, wages and other compensation.

The(1) payrollIn factorthe iscase of a fraction,transportation enterprise, the numerator of 2the whichfraction isshall theinclude totala compensationportion forof servicessuch renderedexpenditure 3in connection with employees operating equipment over a fixed route, such as railroad employees, airline pilots, or bus drivers, in thethis state duringonly a part of the taxtime, period,in andthe proportion that mileage traveled in Oklahoma this state bears to total mileage traveled by such employees, (2) In any case the denominatornumerator of whichthe isfraction shall include a portion of such expenditures in connection with itinerant employees, such as traveling salespersons, in this state only a part of the totaltime, compensationin forthe 5proportion servicesthat renderedtime everywherespent duringin SENATE FLOOR VERSION - SB60 SFLR Page 13 (Bold face denotes Committee Amendments) Oklahoma this state bears to total time spent in furtherance of the taxenterprise period.by such employees;

6c. “Compensation”, as used in this subsection, means 7 those paid-for services to the extent related to the unitary business but does not include officers’ 9 salaries, wages and other compensation.

(1)The Insales thefactor caseis of a transportationfraction, enterprise, the numerator of thewhich fractionis shallthe includetotal asales portion of such expenditure in connection with employees operating equipment over a fixed route, such as railroad employees, airline pilots, or busgross drivers,revenue in this state only a part of the time,taxpayer in the proportion that mileage traveled in Oklahoma this state bearsduring tothe totaltax mileageperiod, traveledand by such employees, (2) In any case the numeratordenominator of thewhich fractionis shallthe includetotal asales portionor ofgross suchrevenue expenditures in connection with itinerant employees, such as traveling salespersons, in this state only a part of the time,taxpayer ineverywhere during the proportiontax thatperiod. time spent in Req.

No.“Sales”, as used in this subsection, does not include sales or gross revenue which are separately allocated in paragraph 4 of this subsection.

73 Page 13 Oklahoma this state bears to total time spent in 2 furtherance of the enterprise by such employees;

3 c.

The sales factor is a fraction, the numerator of which is the total sales or gross revenue of the taxpayer in 5 this state during the tax period, and the denominator 6 of which is the total sales or gross revenue of the 7 taxpayer everywhere during the tax period.

“Sales”, as used in this subsection, does not include sales or 9 gross revenue which are separately allocated in paragraph 4 of this subsection.

(2) In the case of a railroad or interurban railway enterprise, the numerator of the fraction shall not be less than the allocation of revenues to Req.SENATE FLOOR VERSION - SB60 SFLR Page 14 (Bold face denotes Committee Amendments) this state as shown in its annual report to the Corporation Commission.

No.(3) In the case of an airline, truck or bus enterprise or freight car, tank car, refrigerator car or other railroad equipment enterprise, the numerator of the fraction shall include a portion of revenue from interstate transportation in the proportion that interstate mileage traveled in Oklahoma this state bears to total interstate mileage traveled.

73 Page 14 this state as shown in its annual report to the 2 Corporation Commission.

3 (3) In the case of an airline, truck or bus enterprise or freight car, tank car, refrigerator 5 car or other railroad equipment enterprise, the 6 numerator of the fraction shall include a portion 7 of revenue from interstate transportation in the proportion that interstate mileage traveled in 9 Oklahoma this state bears to total interstate mileage traveled.

A “traffic unit” is hereby defined as the transportation for a distance of one (1) mile of one (1) barrel of oil, one (1) gallon of gasoline or one thousand (1,000) cubic Req.SENATE FLOOR VERSION - SB60 SFLR Page 15 (Bold face denotes Committee Amendments) feet of natural or casinghead gas, as the case may be.

No.(5) In the case of a telephone or telegraph or other communication enterprise, the numerator of the fraction shall include that portion of the interstate revenue as is allocated pursuant to the accounting procedures prescribed by the Federal Communications Commission;

73provided Pagethat 15in feetrespect ofto naturaleach corporation or casingheadbusiness gas,entity asrequired by the caseFederal 2Communications mayCommission be.to keep its books and records in accordance with a uniform system of accounts prescribed by such Commission, the intrastate net income shall be determined separately in the manner provided by such uniform system of accounts and only the interstate income shall be subject to allocation pursuant to the provisions of this subsection.

3 (5) In the case of a telephone or telegraph or other communication enterprise, the numerator of the 5 fraction shall include that portion of the 6 interstate revenue as is allocated pursuant to 7 the accounting procedures prescribed by the Federal Communications Commission;

provided that 9 in respect to each corporation or business entity required by the Federal Communications Commission to keep its books and records in accordance with a uniform system of accounts prescribed by such Commission, the intrastate net income shall be determined separately in the manner provided by such uniform system of accounts and only the interstate income shall be subject to allocation pursuant to the provisions of this subsection.

In any case where the apportionment of the three factors prescribed in this paragraph attributes to Oklahoma this state a portion of net income of the enterprise out of all appropriate Req.SENATE FLOOR VERSION - SB60 SFLR Page 16 (Bold face denotes Committee Amendments) proportion to the property owned and/or business transacted within this state, because of the fact that one or more of the factors so prescribed are not employed to any appreciable extent in furtherance of the enterprise;

No.or because one or more factors not so prescribed are employed to a considerable extent in furtherance of the enterprise;

73or Pagebecause 16of proportionother toreasons, the propertyTax ownedCommission and/oris businessempowered transactedto withinpermit, 2after thisa state,showing becauseby taxpayer that an excessive portion of thenet factincome thathas onebeen attributed to Oklahoma this state, or morerequire, when in its judgment an insufficient portion of net income has been attributed to Oklahoma this state, the factorselimination, sosubstitution, 3or prescribeduse areof notadditional employedfactors, toor anyreduction appreciableor extentincrease in furtherancethe weight of thesuch enterprise;prescribed factors.

or because one or more factors not so prescribed 5 are employed to a considerable extent in furtherance of the 6 enterprise;

or because of other reasons, the Tax Commission is 7 empowered to permit, after a showing by taxpayer that an excessive portion of net income has been attributed to Oklahoma this state, or 9 require, when in its judgment an insufficient portion of net income has been attributed to Oklahoma this state, the elimination, substitution, or use of additional factors, or reduction or increase in the weight of such prescribed factors.

For calendar year 1999, Req.SENATE FLOOR VERSION - SB60 SFLR Page 17 (Bold face denotes Committee Amendments) and all subsequent years, the percentage, not to exceed fifteen percent (15%), available to the owner of a new or expanded agricultural commodity processing facility in this state claiming the exemption shall be adjusted annually so that the total estimated reduction in tax liability does not exceed One Million Dollars ($1,000,000.00) annually.

No.The Tax Commission shall promulgate rules for determining the percentage of the investment which each eligible taxpayer may exclude.

73The Pageexclusion 17provided andby all subsequent years, the percentage, not to exceed fifteen 2 percent (15%), available to the owner of a new or expanded 3 agricultural commodity processing facility in this stateparagraph claiming the exemption shall be adjustedtaken annuallyin so that the totaltaxable estimatedyear 5when reductionthe ininvestment taxis liabilitymade. does not exceed One Million Dollars 6 ($1,000,000.00) annually.

The Tax Commission shall promulgate rules 7 for determining the percentage of the investment which each eligible taxpayer may exclude.

The exclusion provided by this paragraph 9 shall be taken in the taxable year when the investment is made.

“Agricultural commodity processing facility” means building buildings, structures, fixtures and improvements used or operated primarily for the processing or production of marketable products from Req.SENATE FLOOR VERSION - SB60 SFLR Page 18 (Bold face denotes Committee Amendments) agricultural commodities.

No.The term shall also mean a dairy operation that requires a depreciable investment of at least Two Hundred Fifty Thousand Dollars ($250,000.00) and which produces milk from dairy cows.

73The Pageterm 18does not include a facility that provides only, and nothing more than, storage, cleaning, drying or transportation of agricultural commodities.commodities, and b.

The“Facility” termmeans shalleach alsopart meanof athe 2facility dairywhich operationis thatused requiresin a depreciableprocess investmentprimarily 3for: of at least Two Hundred Fifty Thousand Dollars ($250,000.00) and which produces milk from dairy cows.

5 The term does not include a facility that provides 6 only, and nothing more than, storage, cleaning, drying 7 or transportation of agricultural commodities, and b.

“Facility” means each part of the facility which is 9 used in a process primarily for:

However, the Req.SENATE FLOOR VERSION - SB60 SFLR Page 19 (Bold face denotes Committee Amendments) amount of the net operating loss carryback shall not exceed the lesser of:

No.a.

73 Page 19 amount of the net operating loss carryback shall not exceed the 2 lesser of:

3 a.

the loss properly shown on Schedule F of the Internal 5 Revenue Service Form 1040 reduced by one-half (1/2) of 6 the income from all other sources other than reflected 7 on Schedule F.

In taxable years beginning after December 31, 1995, all 9 qualified wages equal to the federal income tax credit set forth in 26 U.S.C.A., Section 45A, shall be deducted from taxable income.

For taxable years beginning on or after January 1, 2010, there shall be added to Oklahoma taxable income an amount equal to the amount of deferred income not included in such taxable income Req.SENATE FLOOR VERSION - SB60 SFLR Page 20 (Bold face denotes Committee Amendments) pursuant to Section 108(i)(1) of the Internal Revenue Code of 1986 as amended by Section 1231 of the American Recovery and Reinvestment Act of 2009 (P.L.

73 Page 20 pursuant to Section 108(i)(1) of the Internal Revenue Code of 1986 2 as amended by Section 1231 of the American Recovery and Reinvestment 3 Act of 2009 (P.L.

No.

There shall be subtracted from Oklahoma taxable income an amount equal to the amount of deferred 5 income included in such taxable income pursuant to Section 108(i)(1) 6 of the Internal Revenue Code of 1986 as amended by Section 1231 of 7 the American Recovery and Reinvestment Act of 2009 (P.L.

For taxable years beginning on or after January 1, 2019, 9 there shall be subtracted from Oklahoma taxable income or adjusted gross income any item of income or gain, and there shall be added to Oklahoma taxable income or adjusted gross income any item of loss or deduction that in the absence of an election pursuant to the provisions of the Pass-Through Entity Tax Equity Act of 2019 would be allocated to a member or to an indirect member of an electing pass-through entity pursuant to Section 2351 et seq.

As used in this paragraph, “electing pass-through entity”, “indirect member”, and “member” shall be defined in the same manner as prescribed by Req.SENATE FLOOR VERSION - SB60 SFLR Page 21 (Bold face denotes Committee Amendments) Section 2355.1P-2 of this title.

No.Notwithstanding the application of this paragraph, the adjusted tax basis of any ownership interest in a pass-through entity for purposes of Section 2351 et seq.

73of Pagethis 21title Sectionshall 2355.1P-2be ofequal thisto title.its adjusted tax basis for federal income tax purposes.

NotwithstandingB. the application of 2 this paragraph, the adjusted tax basis of any ownership interest in 3 a pass-through entity for purposes of Section 2351 et seq.

of this title shall be equal to its adjusted tax basis for federal income 5 tax purposes.

6 B.

The taxable income of any corporation shall be further 7 adjusted to arrive at Oklahoma taxable income, except those corporations electing treatment as provided in subchapter S of the 9 Internal Revenue Code of 1986, as amended, 26 U.S.C., Section 1361 et seq., and Section 2365 of this title, deductions pursuant to the provisions of the Accelerated Cost Recovery System as defined provided and allowed in the Economic Recovery Tax Act of 1981, Public Law 97-34, 26 U.S.C., Section 168, for depreciation of assets placed into service after December 31, 1981, shall not be allowed in calculating Oklahoma taxable income.

Req.SENATE FLOOR VERSION - SB60 SFLR Page 22 (Bold face denotes Committee Amendments) Notwithstanding any other provisions of the Oklahoma Income Tax Act, Section 2351 et seq.

No.of this title, or of the Internal Revenue Code of 1986, as amended, to the contrary, this subsection shall control calculation of depreciation of assets placed into service after December 31, 1981, and before January 1, 1983.

73For Pageassets 22placed Notwithstandingin anyservice otherand provisionsheld by a corporation in which accelerated cost recovery system the Accelerated Cost Recovery System was previously disallowed, an adjustment to taxable income is required in the first taxable year beginning after December 31, 1982, to reconcile the basis of such assets to the Oklahomabasis Incomeallowed Taxin 2the Act,Internal SectionRevenue 2351Code etof seq.1986, as amended.

of this title, or of the Internal Revenue 3 Code of 1986, as amended, to the contrary, this subsection shall control calculation of depreciation of assets placed into service 5 after December 31, 1981, and before January 1, 1983.

6 For assets placed in service and held by a corporation in which 7 accelerated cost recovery system the Accelerated Cost Recovery System was previously disallowed, an adjustment to taxable income is 9 required in the first taxable year beginning after December 31, 1982, to reconcile the basis of such assets to the basis allowed in the Internal Revenue Code of 1986, as amended.

For taxable years beginning after December 31, 1987, the taxable income of any corporation shall be further adjusted to arrive at Oklahoma taxable income for transfers of technology to Req.SENATE FLOOR VERSION - SB60 SFLR Page 23 (Bold face denotes Committee Amendments) qualified small businesses located in Oklahoma this state.

No.Such transferor corporation shall be allowed an exemption from taxable income of an amount equal to the amount of royalty payment received as a result of such transfer;

73provided, Pagehowever, 23such qualifiedamount smallshall businessesnot locatedexceed inten Oklahomapercent this(10%) state.of the amount of gross proceeds received by such transferor corporation as a result of the technology transfer.

Such 2exemption transferor corporation shall be allowed anfor exemptiona fromperiod taxablenot 3to incomeexceed often an(10) amountyears equalfrom to the amountdate of royaltyreceipt paymentof receivedthe asfirst aroyalty resultpayment ofaccruing from such transfer;transfer.

provided, however, such amount shall 5 not exceed ten percent (10%) of the amount of gross proceeds 6 received by such transferor corporation as a result of the 7 technology transfer.

Such exemption shall be allowed for a period not to exceed ten (10) years from the date of receipt of the first 9 royalty payment accruing from such transfer.

Req.SENATE FLOOR VERSION - SB60 SFLR Page 24 (Bold face denotes Committee Amendments) b.

No.“Technology” means a proprietary process, formula, pattern, device or compilation of scientific or technical information which is not in the public domain;

73c. Page 24 b.

“Technology”“Transferor corporation” means a proprietarycorporation process,which formula,is 2the pattern,exclusive deviceand orundisputed compilationowner of scientificthe ortechnology 3at technicalthe informationtime which is not in the publictransfer domain;is made;

5 c.

“Transferor corporation” means a corporation which is 6 the exclusive and undisputed owner of the technology 7 at the time the transfer is made;

“Gross proceeds” means the total amount of 9 consideration for the transfer of technology, whether the consideration is in money or otherwise.

Req.SENATE FLOOR VERSION - SB60 SFLR Page 25 (Bold face denotes Committee Amendments) (1) the sale of real property or tangible personal property located within Oklahoma this state that has been directly or indirectly owned by the corporation, estate or trust for a holding period of at least five (5) years prior to the date of the transaction from which such net capital gains arise, (2) the sale of stock or on the sale of an ownership interest in an Oklahoma company, limited liability company, or partnership where such stock or ownership interest has been directly or indirectly owned by the corporation, estate or trust for a holding period of at least three (3) years prior to the date of the transaction from which the net capital gains arise, or (3) the sale of real property, tangible personal property or intangible personal property located within Oklahoma this state as part of the sale of all or substantially all of the assets of an Oklahoma company, limited liability company, or partnership where such property has been directly or indirectly owned by such entity owned by the owners of such entity, and used in or derived from such entity for a period of at least three SENATE FLOOR VERSION - SB60 SFLR Page 26 (Bold face denotes Committee Amendments) (3) years prior to the date of the transaction from which the net capital gains arise, b.

No.

73 Page 25 (1) the sale of real property or tangible personal 2 property located within Oklahoma this state that 3 has been directly or indirectly owned by the corporation, estate or trust for a holding period 5 of at least five (5) years prior to the date of 6 the transaction from which such net capital gains 7 arise, (2) the sale of stock or on the sale of an ownership 9 interest in an Oklahoma company, limited liability company, or partnership where such stock or ownership interest has been directly or indirectly owned by the corporation, estate or trust for a holding period of at least three (3) years prior to the date of the transaction from which the net capital gains arise, or (3) the sale of real property, tangible personal property or intangible personal property located within Oklahoma this state as part of the sale of all or substantially all of the assets of an Oklahoma company, limited liability company, or partnership where such property has been directly or indirectly owned by such entity owned by the owners of such entity, and used in or derived from such entity for a period of at least three Req.

No.

73 Page 26 (3) years prior to the date of the transaction 2 from which the net capital gains arise, 3 b.

The holding period shall include any additional 5 period when the property was held by another 6 individual or entity, if such additional period is 7 included in the taxpayer’s holding period for the asset pursuant to the Internal Revenue Code of 1986, 9 as amended, c.

(1) With respect to sales of real property or tangible personal property located within Oklahoma this state, the deduction described in Req.SENATE FLOOR VERSION - SB60 SFLR Page 27 (Bold face denotes Committee Amendments) this subsection shall not apply unless the pass- through entity that makes the sale has held the property for not less than five (5) uninterrupted years prior to the date of the transaction that created the capital gain, and each pass-through entity included in the chain of ownership has been a member, partner, or shareholder of the pass-through entity in the tier immediately below it for an uninterrupted period of not less than five (5) years.

No.(2) With respect to sales of stock or ownership interest in or sales of all or substantially all of the assets of an Oklahoma company, limited liability company, or partnership, the deduction described in this subsection shall not apply unless the pass-through entity that makes the sale has held the stock or ownership interest or the assets for not less than three (3) uninterrupted years prior to the date of the transaction that created the capital gain, and each pass-through entity included in the chain of ownership has been a member, partner or shareholder of the pass-through entity in the SENATE FLOOR VERSION - SB60 SFLR Page 28 (Bold face denotes Committee Amendments) tier immediately below it for an uninterrupted period of not less than three (3) years.

73E. Page 27 this subsection shall not apply unless the pass- 2 through entity that makes the sale has held the 3 property for not less than five (5) uninterrupted years prior to the date of the transaction that 5 created the capital gain, and each pass-through 6 entity included in the chain of ownership has 7 been a member, partner, or shareholder of the pass-through entity in the tier immediately below 9 it for an uninterrupted period of not less than five (5) years.

(2)The WithOklahoma respectadjusted togross salesincome of stockany orindividual ownershiptaxpayer interest in or sales of all or substantially all of the assets of an Oklahoma company, limited liability company, or partnership, the deduction described in this subsection shall notbe applyfurther unlessadjusted theas pass-throughfollows entity that makes the sale has held the stock or ownership interest or the assets for not less than three (3) uninterrupted years prior to thearrive dateat ofOklahoma thetaxable transactionincome: that created the capital gain, and each pass-through entity included in the chain of ownership has been a member, partner or shareholder of the pass-through entity in the Req.

No.1.

73 Page 28 tier immediately below it for an uninterrupted 2 period of not less than three (3) years.

3 E.

The Oklahoma adjusted gross income of any individual taxpayer shall be further adjusted as follows to arrive at Oklahoma 5 taxable income:

6 1.

In the case of individuals, there shall be added or 7 deducted, as the case may be, the difference necessary to allow personal exemptions of One Thousand Dollars 9 ($1,000.00) in lieu of the personal exemptions allowed by the Internal Revenue Code of 1986, as amended.

There shall be allowed an additional exemption of One Thousand Dollars ($1,000.00) for each taxpayer or spouse who is sixty-five (65) years of age or older at Req.SENATE FLOOR VERSION - SB60 SFLR Page 29 (Bold face denotes Committee Amendments) the close of the tax year based upon the filing status and federal adjusted gross income of the taxpayer.

No.Taxpayers with the following filing status may claim this exemption if the federal adjusted gross income does not exceed:

73(1) PageTwenty-five 29Thousand theDollars close($25,000.00) ofif themarried taxand yearfiling basedjointly, upon(2) theTwelve Thousand Five Hundred Dollars ($12,500.00) if married and filing statusseparately, 2(3) Fifteen Thousand Dollars ($15,000.00) if single, and federal(4) adjustedNineteen grossThousand incomeDollars of($19,000.00) theif taxpayer.a qualifying head of household.

3 Taxpayers with the following filing status may claim this exemption if the federal adjusted gross income 5 does not exceed:

6 (1) Twenty-five Thousand Dollars ($25,000.00) if 7 married and filing jointly, (2) Twelve Thousand Five Hundred Dollars ($12,500.00) 9 if married and filing separately, (3) Fifteen Thousand Dollars ($15,000.00) if single, and (4) Nineteen Thousand Dollars ($19,000.00) if a qualifying head of household.

For taxable years beginning on or before December 31, 2005, in the case of individuals who use the standard deduction in determining taxable income, there shall Req.SENATE FLOOR VERSION - SB60 SFLR Page 30 (Bold face denotes Committee Amendments) be added or deducted, as the case may be, the difference necessary to allow a standard deduction in lieu of the standard deduction allowed by the Internal Revenue Code of 1986, as amended, in an amount equal to the larger of fifteen percent (15%) of the Oklahoma adjusted gross income or One Thousand Dollars ($1,000.00), but not to exceed Two Thousand Dollars ($2,000.00), except that in the case of a married individual filing a separate return such deduction shall be the larger of fifteen percent (15%) of such Oklahoma adjusted gross income or Five Hundred Dollars ($500.00), but not to exceed the maximum amount of One Thousand Dollars ($1,000.00).

No.

73 Page 30 be added or deducted, as the case may be, the 2 difference necessary to allow a standard deduction in 3 lieu of the standard deduction allowed by the Internal Revenue Code of 1986, as amended, in an amount equal 5 to the larger of fifteen percent (15%) of the Oklahoma 6 adjusted gross income or One Thousand Dollars 7 ($1,000.00), but not to exceed Two Thousand Dollars ($2,000.00), except that in the case of a married 9 individual filing a separate return such deduction shall be the larger of fifteen percent (15%) of such Oklahoma adjusted gross income or Five Hundred Dollars ($500.00), but not to exceed the maximum amount of One Thousand Dollars ($1,000.00).

(1) Three Thousand Dollars ($3,000.00), if the filing status is married filing joint, head of household or qualifying widow, or Req.SENATE FLOOR VERSION - SB60 SFLR Page 31 (Bold face denotes Committee Amendments) (2) Two Thousand Dollars ($2,000.00), if the filing status is single or married filing separate.

No.c.

73For Pagethe 31taxable (2)year Twobeginning Thousandon DollarsJanuary ($2,000.00),1, if2007, and ending December 31, 2007, in the filingcase 2of statusindividuals iswho singleuse the standard deduction in determining taxable income, there shall be added or marrieddeducted, filingas separate.the case may be, the difference necessary to allow a standard deduction in lieu of the standard deduction allowed by the Internal Revenue Code of 1986, as amended, in an amount equal to:

3 c.

For the taxable year beginning on January 1, 2007, and ending December 31, 2007, in the case of individuals 5 who use the standard deduction in determining taxable 6 income, there shall be added or deducted, as the case 7 may be, the difference necessary to allow a standard deduction in lieu of the standard deduction allowed by 9 the Internal Revenue Code of 1986, as amended, in an amount equal to:

For the taxable year beginning on January 1, 2008, and ending December 31, 2008, in the case of individuals who use the standard deduction in determining taxable income, there shall be added or deducted, as the case may be, the difference necessary to allow a standard deduction in lieu of the standard deduction allowed by Req.SENATE FLOOR VERSION - SB60 SFLR Page 32 (Bold face denotes Committee Amendments) the Internal Revenue Code of 1986, as amended, in an amount equal to:

No.(1) Six Thousand Five Hundred Dollars ($6,500.00), if the filing status is married filing joint or qualifying widow, (2) Four Thousand Eight Hundred Seventy-five Dollars ($4,875.00) for a head of household, or (3) Three Thousand Two Hundred Fifty Dollars ($3,250.00), if the filing status is single or married filing separate.

73 Page 32 the Internal Revenue Code of 1986, as amended, in an 2 amount equal to:

3 (1) Six Thousand Five Hundred Dollars ($6,500.00), if the filing status is married filing joint or 5 qualifying widow, 6 (2) Four Thousand Eight Hundred Seventy-five Dollars 7 ($4,875.00) for a head of household, or (3) Three Thousand Two Hundred Fifty Dollars 9 ($3,250.00), if the filing status is single or married filing separate.

(1) Eight Thousand Five Hundred Dollars ($8,500.00), if the filing status is married filing joint or qualifying widow, (2) Six Thousand Three Hundred Seventy-five Dollars ($6,375.00) for a head of household, or Req.SENATE FLOOR VERSION - SB60 SFLR Page 33 (Bold face denotes Committee Amendments) (3) Four Thousand Two Hundred Fifty Dollars ($4,250.00), if the filing status is single or married filing separate.

No.Oklahoma adjusted gross income shall be increased by any amounts paid for motor vehicle excise taxes which were deducted as allowed by the Internal Revenue Code of 1986, as amended.

73 Page 33 (3) Four Thousand Two Hundred Fifty Dollars 2 ($4,250.00), if the filing status is single or 3 married filing separate.

Oklahoma adjusted gross income shall be increased by 5 any amounts paid for motor vehicle excise taxes which 6 were deducted as allowed by the Internal Revenue Code 7 of 1986, as amended.

For taxable years beginning on or after January 1, 9 2010, and ending on December 31, 2016, in the case of individuals who use the standard deduction in determining taxable income, there shall be added or deducted, as the case may be, the difference necessary to allow a standard deduction equal to the standard deduction allowed by the Internal Revenue Code of 1986, as amended, based upon the amount and filing status prescribed by such Code for purposes of filing federal individual income tax returns.

Req.SENATE FLOOR VERSION - SB60 SFLR Page 34 (Bold face denotes Committee Amendments) (1) Six Thousand Three Hundred Fifty Dollars ($6,350.00) for single or married filing separately, (2) Twelve Thousand Seven Hundred Dollars ($12,700.00) for married filing jointly or qualifying widower with dependent child, and (3) Nine Thousand Three Hundred Fifty Dollars ($9,350.00) for head of household.

No.3.

73 Page 34 (1) Six Thousand Three Hundred Fifty Dollars 2 ($6,350.00) for single or married filing 3 separately, (2) Twelve Thousand Seven Hundred Dollars 5 ($12,700.00) for married filing jointly or 6 qualifying widower with dependent child, and 7 (3) Nine Thousand Three Hundred Fifty Dollars ($9,350.00) for head of household.

9 3.

Req.SENATE FLOOR VERSION - SB60 SFLR Page 35 (Bold face denotes Committee Amendments) b.

No.For taxable years beginning on or after January 1, 2018, the net amount of itemized deductions allowable on an Oklahoma income tax return, subject to the provisions of paragraph 24 of this subsection, shall not exceed Seventeen Thousand Dollars ($17,000.00).

73For Pagepurposes 35of b.this subparagraph, charitable contributions and medical expenses deductible for federal income tax purposes shall be excluded from the amount of Seventeen Thousand Dollars ($17,000.00) as specified by this subparagraph.

For taxable years beginning on or after January 1, 2 2018, the net amount of itemized deductions allowable 3 on an Oklahoma income tax return, subject to the provisions of paragraph 24 of this subsection, shall 5 not exceed Seventeen Thousand Dollars ($17,000.00).

6 For purposes of this subparagraph, charitable 7 contributions and medical expenses deductible for federal income tax purposes shall be excluded from the 9 amount of Seventeen Thousand Dollars ($17,000.00) as specified by this subparagraph.

Req.SENATE FLOOR VERSION - SB60 SFLR Page 36 (Bold face denotes Committee Amendments) 5.

No.

73 Page 36 5.

Before July 1, 2010, the first One Thousand Five 2 Hundred Dollars ($1,500.00) received by any person 3 from the United States as salary or compensation in any form, other than retirement benefits, as a member 5 of any component of the Armed Forces of the United 6 States shall be deducted from taxable income.

7 b.

On or after July 1, 2010, one hundred percent (100%) of the income received by any person from the United 9 States as salary or compensation in any form, other than retirement benefits, as a member of any component of the Armed Forces of the United States shall be deducted from taxable income.

(1) absence from the United States, which term includes only the states and the District of Columbia, (2) absence from the State of Oklahoma this state while on active duty, or (3) confinement in a hospital within the United States for treatment of wounds, injuries or disease, Req.SENATE FLOOR VERSION - SB60 SFLR Page 37 (Bold face denotes Committee Amendments) the time for filing a return and paying an income tax shall be and is hereby extended without incurring liability for interest or penalties, to the fifteenth day of the third month following the month in which:

No.(a) Such individual shall return to the United States if the extension is granted pursuant to subparagraph a division 1 of this paragraph subparagraph, return to the State of Oklahoma this state if the extension is granted pursuant to subparagraph b division 2 of this paragraph subparagraph or be discharged from such hospital if the extension is granted pursuant to subparagraph c division 3 of this paragraph subparagraph, or (b) An executor, administrator, or conservator of the estate of the taxpayer is appointed, whichever event occurs the earliest.

73 Page 37 the time for filing a return and paying an income tax 2 shall be and is hereby extended without incurring 3 liability for interest or penalties, to the fifteenth day of the third month following the month in which:

5 (a) Such individual shall return to the United 6 States if the extension is granted pursuant 7 to subparagraph a division 1 of this paragraph subparagraph, return to the State 9 of Oklahoma this state if the extension is granted pursuant to subparagraph b division 2 of this paragraph subparagraph or be discharged from such hospital if the extension is granted pursuant to subparagraph c division 3 of this paragraph subparagraph, or (b) An executor, administrator, or conservator of the estate of the taxpayer is appointed, whichever event occurs the earliest.

Such extension may be granted only when in the judgment of the Tax Commission a good cause exists therefor and may be for a period in Req.SENATE FLOOR VERSION - SB60 SFLR Page 38 (Bold face denotes Committee Amendments) excess of six (6) months.

No.A record of every such extension granted, and the reason therefor, shall be kept.

736. Page 38 excess of six (6) months.

ABefore recordJuly 1, 2010, the salary or any other form of everycompensation, suchreceived extensionfrom granted,the 2United andStates by a member of any component of the reasonArmed therefor,Forces of the United States, shall be kept.deducted from taxable income during the time in which the person is detained by the enemy in a conflict, is a prisoner of war or is missing in action and not deceased;

3provided, 6.after July 1, 2010, all such salary or compensation shall be subject to the deduction as provided pursuant to paragraph 5 of this subsection.

Before July 1, 2010, the salary or any other form of compensation, received from the United States by a member of any 5 component of the Armed Forces of the United States, shall be 6 deducted from taxable income during the time in which the person is 7 detained by the enemy in a conflict, is a prisoner of war or is missing in action and not deceased;

provided, after July 1, 2010, 9 all such salary or compensation shall be subject to the deduction as provided pursuant to paragraph 5 of this subsection.

Req.SENATE FLOOR VERSION - SB60 SFLR Page 39 (Bold face denotes Committee Amendments) c.

For the purpose of this paragraph, “federal income taxes paid” shall mean federal income taxes, surtaxes imposed on incomes or excess profits taxes, as though the taxpayer was on the accrual basis.

In determining the amount of deduction for federal income taxes for tax year 2001, the amount of the deduction shall not be adjusted by the amount of any accelerated ten percent (10%) tax rate bracket credit or advanced refund of the credit received during the tax year provided pursuant to the federal Economic Growth and Tax Relief Reconciliation Act of 2001, P.L.

73 Page 39 c.

For the purpose of this paragraph, “federal income 2 taxes paid” shall mean federal income taxes, surtaxes 3 imposed on incomes or excess profits taxes, as though the taxpayer was on the accrual basis.

In determining 5 the amount of deduction for federal income taxes for 6 tax year 2001, the amount of the deduction shall not 7 be adjusted by the amount of any accelerated ten percent (10%) tax rate bracket credit or advanced 9 refund of the credit received during the tax year provided pursuant to the federal Economic Growth and Tax Relief Reconciliation Act of 2001, P.L.

No.

Retirement benefits not to exceed Five Thousand Five Hundred Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Thousand Dollars ($10,000.00) for the 2006 tax year and all subsequent tax years, which are received by an individual from the civil service of the United States, the Oklahoma Public Employees Retirement System, the Teachers’ Retirement System of Oklahoma, the Oklahoma Law Enforcement Retirement System, the Oklahoma Firefighters Pension and Req.SENATE FLOOR VERSION - SB60 SFLR Page 40 (Bold face denotes Committee Amendments) Retirement System, the Oklahoma Police Pension and Retirement System, the employee retirement systems created by counties pursuant to Section 951 et seq.

No.of Title 19 of the Oklahoma Statutes, the The Uniform Retirement System for Justices and Judges, the Oklahoma Wildlife Conservation Department Retirement Fund, the Oklahoma Employment Security Commission Retirement Plan, or the employee retirement systems created by municipalities pursuant to Section 48- 101 et seq.

73of PageTitle 4011 Retirementof System, the Oklahoma PoliceStatutes Pensionshall andbe Retirementexempt 2from System,taxable theincome. employee retirement systems created by counties pursuant 3 to Section 951 et seq.

of Title 19 of the Oklahoma Statutes, the The Uniform Retirement System for Justices and Judges, the Oklahoma 5 Wildlife Conservation Department Retirement Fund, the Oklahoma 6 Employment Security Commission Retirement Plan, or the employee 7 retirement systems created by municipalities pursuant to Section 48- 101 et seq.

of Title 11 of the Oklahoma Statutes shall be exempt 9 from taxable income.

For taxable years beginning after December 31, 1994, lump- sum distributions from employer plans of deferred compensation, which are not qualified plans within the meaning of Section 401(a) of the Internal Revenue Code of 1986, as amended, 26 U.S.C., Section 401(a), and which are deposited in and accounted for within a separate bank account or brokerage account in a financial institution within this state, shall be excluded from taxable income in the same manner as a qualifying rollover contribution to an individual retirement account within the meaning of Section 408 of Req.SENATE FLOOR VERSION - SB60 SFLR Page 41 (Bold face denotes Committee Amendments) the Internal Revenue Code of 1986, as amended, 26 U.S.C., Section 408.

No.Amounts withdrawn from such bank or brokerage account, including any earnings thereon, shall be included in taxable income when withdrawn in the same manner as withdrawals from individual retirement accounts within the meaning of Section 408 of the Internal Revenue Code of 1986, as amended.

7311. Page 41 the Internal Revenue Code of 1986, as amended, 26 U.S.C., Section 2 408.

AmountsIn withdrawntaxable fromyears suchbeginning bankafter orDecember brokerage31, account,1995, 3contributions includingmade anyto earningsand thereon,interest shallreceived befrom includeda inmedical taxablesavings incomeaccount whenestablished withdrawnpursuant into theSections same2621 mannerthrough as2623 withdrawals from individual 5 retirement accounts within the meaning of SectionTitle 40863 of the 6Oklahoma InternalStatutes Revenueshall Codebe ofexempt 1986,from astaxable amended.income.

7 11.

In taxable years beginning after December 31, 1995, contributions made to and interest received from a medical savings 9 account established pursuant to Sections 2621 through 2623 of Title 63 of the Oklahoma Statutes shall be exempt from taxable income.

In taxable years beginning before January 1, 2005, retirement benefits not to exceed the amounts Req.SENATE FLOOR VERSION - SB60 SFLR Page 42 (Bold face denotes Committee Amendments) specified in this paragraph, which are received by an individual sixty-five (65) years of age or older and whose Oklahoma adjusted gross income is Twenty-five Thousand Dollars ($25,000.00) or less if the filing status is single, head of household, or married filing separate, or Fifty Thousand Dollars ($50,000.00) or less if the filing status is married filing joint or qualifying widow, shall be exempt from taxable income.

No.In taxable years beginning after December 31, 2004, retirement benefits not to exceed the amounts specified in this paragraph, which are received by an individual whose Oklahoma adjusted gross income is less than the qualifying amount specified in this paragraph, shall be exempt from taxable income.

73 Page 42 specified in this paragraph, which are received by an 2 individual sixty-five (65) years of age or older and 3 whose Oklahoma adjusted gross income is Twenty-five Thousand Dollars ($25,000.00) or less if the filing 5 status is single, head of household, or married filing 6 separate, or Fifty Thousand Dollars ($50,000.00) or 7 less if the filing status is married filing joint or qualifying widow, shall be exempt from taxable income.

9 In taxable years beginning after December 31, 2004, retirement benefits not to exceed the amounts specified in this paragraph, which are received by an individual whose Oklahoma adjusted gross income is less than the qualifying amount specified in this paragraph, shall be exempt from taxable income.

(1) in taxable years beginning after December 31, 2004, and prior to January 1, 2007, the qualifying amount shall be Thirty-seven Thousand Five Hundred Dollars ($37,500.00) or less if the filing status is single, head of household, or married filing separate, or Seventy-five Thousand Dollars ($75,000.00) or less if the filing status is married filing jointly or qualifying widow, Req.SENATE FLOOR VERSION - SB60 SFLR Page 43 (Bold face denotes Committee Amendments) (2) in the taxable year beginning January 1, 2007, the qualifying amount shall be Fifty Thousand Dollars ($50,000.00) or less if the filing status is single, head of household, or married filing separate, or One Hundred Thousand Dollars ($100,000.00) or less if the filing status is married filing jointly or qualifying widow, (3) in the taxable year beginning January 1, 2008, the qualifying amount shall be Sixty-two Thousand Five Hundred Dollars ($62,500.00) or less if the filing status is single, head of household, or married filing separate, or One Hundred Twenty- five Thousand Dollars ($125,000.00) or less if the filing status is married filing jointly or qualifying widow, (4) in the taxable year beginning January 1, 2009, the qualifying amount shall be One Hundred Thousand Dollars ($100,000.00) or less if the filing status is single, head of household, or married filing separate, or Two Hundred Thousand Dollars ($200,000.00) or less if the filing status is married filing jointly or qualifying widow, and SENATE FLOOR VERSION - SB60 SFLR Page 44 (Bold face denotes Committee Amendments) (5) in the taxable year beginning January 1, 2010, and subsequent taxable years, there shall be no limitation upon the qualifying amount.

No.

73 Page 43 (2) in the taxable year beginning January 1, 2007, 2 the qualifying amount shall be Fifty Thousand 3 Dollars ($50,000.00) or less if the filing status is single, head of household, or married filing 5 separate, or One Hundred Thousand Dollars 6 ($100,000.00) or less if the filing status is 7 married filing jointly or qualifying widow, (3) in the taxable year beginning January 1, 2008, 9 the qualifying amount shall be Sixty-two Thousand Five Hundred Dollars ($62,500.00) or less if the filing status is single, head of household, or married filing separate, or One Hundred Twenty- five Thousand Dollars ($125,000.00) or less if the filing status is married filing jointly or qualifying widow, (4) in the taxable year beginning January 1, 2009, the qualifying amount shall be One Hundred Thousand Dollars ($100,000.00) or less if the filing status is single, head of household, or married filing separate, or Two Hundred Thousand Dollars ($200,000.00) or less if the filing status is married filing jointly or qualifying widow, and Req.

No.

73 Page 44 (5) in the taxable year beginning January 1, 2010, 2 and subsequent taxable years, there shall be no 3 limitation upon the qualifying amount.

For purposes of this paragraph, “retirement benefits” 5 means the total distributions or withdrawals from the 6 following:

7 (1) an employee pension benefit plan which satisfies the requirements of Section 401 of the Internal 9 Revenue Code of 1986, as amended, 26 U.S.C., Section 401, (2) an eligible deferred compensation plan that satisfies the requirements of Section 457 of the Internal Revenue Code of 1986, as amended, 26 U.S.C., Section 457, (3) an individual retirement account, annuity or trust or simplified employee pension that satisfies the requirements of Section 408 of the Internal Revenue Code of 1986, as amended, 26 U.S.C., Section 408, (4) an employee annuity subject to the provisions of Section 403(a) or (b) of the Internal Revenue Code of 1986, as amended, 26 U.S.C., Section 403(a) or (b), Req.SENATE FLOOR VERSION - SB60 SFLR Page 45 (Bold face denotes Committee Amendments) (5) United States Retirement Bonds which satisfy the requirements of Section 86 of the Internal Revenue Code of 1986, as amended, 26 U.S.C., Section 86, or (6) lump-sum distributions from a retirement plan which satisfies the requirements of Section 402(e) of the Internal Revenue Code of 1986, as amended, 26 U.S.C., Section 402(e).

No.d.

73 Page 45 (5) United States Retirement Bonds which satisfy the 2 requirements of Section 86 of the Internal 3 Revenue Code of 1986, as amended, 26 U.S.C., Section 86, or 5 (6) lump-sum distributions from a retirement plan 6 which satisfies the requirements of Section 7 402(e) of the Internal Revenue Code of 1986, as amended, 26 U.S.C., Section 402(e).

9 d.

Req.SENATE FLOOR VERSION - SB60 SFLR Page 46 (Bold face denotes Committee Amendments) 14.

No.In taxable years beginning after December 31, 1999, for an individual engaged in production agriculture who has filed a Schedule F form with the taxpayer’s federal income tax return for such taxable year, there shall be excluded from taxable income any amount which was included as federal taxable income or federal adjusted gross income and which consists of the discharge of an obligation by a creditor of the taxpayer incurred to finance the production of agricultural products.

7315. Page 46 14.

In taxable years beginning after December 31, 1999, for an 2 individual engaged in production agriculture who has filed a 3 Schedule F form with the taxpayer’s federal income tax return for such taxable year, there shall be excluded from taxable income any 5 amount which was included as federal taxable income or federal 6 adjusted gross income and which consists of the discharge of an 7 obligation by a creditor of the taxpayer incurred to finance the production of agricultural products.

9 15.

In taxable years beginning after December 31, 2004, each taxpayer shall be allowed a deduction for Req.SENATE FLOOR VERSION - SB60 SFLR Page 47 (Bold face denotes Committee Amendments) contributions to accounts established pursuant to the Oklahoma College Savings Plan Act.

No.The maximum annual deduction shall equal the amount of contributions to all such accounts plus any contributions to such accounts by the taxpayer for prior taxable years after December 31, 2004, which were not deducted, but in no event shall the deduction for each tax year exceed Ten Thousand Dollars ($10,000.00) for each individual taxpayer or Twenty Thousand Dollars ($20,000.00) for taxpayers filing a joint return.

73 Page 47 contributions to accounts established pursuant to the 2 Oklahoma College Savings Plan Act.

The maximum annual 3 deduction shall equal the amount of contributions to all such accounts plus any contributions to such 5 accounts by the taxpayer for prior taxable years after 6 December 31, 2004, which were not deducted, but in no 7 event shall the deduction for each tax year exceed Ten Thousand Dollars ($10,000.00) for each individual 9 taxpayer or Twenty Thousand Dollars ($20,000.00) for taxpayers filing a joint return.

In taxable years beginning after December 31, 2006, deductions for contributions made pursuant to Req.SENATE FLOOR VERSION - SB60 SFLR Page 48 (Bold face denotes Committee Amendments) subparagraph b of this paragraph shall be limited as follows:

No.(1) for a taxpayer who qualified for the five-year carryforward election and who takes a rollover or nonqualified withdrawal during that period, the tax deduction otherwise available pursuant to subparagraph b of this paragraph shall be reduced by the amount which is equal to the rollover or nonqualified withdrawal, and (2) for a taxpayer who elects to take a rollover or nonqualified withdrawal within the same tax year in which a contribution was made to the taxpayer’s account, the tax deduction otherwise available pursuant to subparagraph b of this paragraph shall be reduced by the amount of the contribution which is equal to the rollover or nonqualified withdrawal.

73 Page 48 subparagraph b of this paragraph shall be limited as 2 follows:

3 (1) for a taxpayer who qualified for the five-year carryforward election and who takes a rollover or 5 nonqualified withdrawal during that period, the 6 tax deduction otherwise available pursuant to 7 subparagraph b of this paragraph shall be reduced by the amount which is equal to the rollover or 9 nonqualified withdrawal, and (2) for a taxpayer who elects to take a rollover or nonqualified withdrawal within the same tax year in which a contribution was made to the taxpayer’s account, the tax deduction otherwise available pursuant to subparagraph b of this paragraph shall be reduced by the amount of the contribution which is equal to the rollover or nonqualified withdrawal.

Req.SENATE FLOOR VERSION - SB60 SFLR Page 49 (Bold face denotes Committee Amendments) e.

No.If a taxpayer makes a nonqualified withdrawal of contributions for which a deduction was taken pursuant to subparagraph b of this paragraph, such nonqualified withdrawal and any earnings thereon shall be included in the adjusted gross income of the taxpayer in the taxable year of the nonqualified withdrawal.

73f. Page 49 e.

If a taxpayer makes a nonqualified withdrawal of 2 contributions for which a deduction was taken pursuant 3 to subparagraph b of this paragraph, such nonqualified withdrawal and any earnings thereon shall be included 5 in the adjusted gross income of the taxpayer in the 6 taxable year of the nonqualified withdrawal.

7 f.

(1) “non-qualified withdrawal” means a withdrawal 9 from an Oklahoma College Savings Plan account other than one of the following:

(a) a qualified withdrawal, (b) a withdrawal made as a result of the death or disability of the designated beneficiary of an account, (c) a withdrawal that is made on the account of a scholarship or the allowance or payment described in Section 135(d)(1)(B) or (C) or by the Internal Revenue Code of 1986, as amended, received by the designated beneficiary to the extent the amount of the refund does not exceed the amount of the scholarship, allowance, or payment, or (d) a rollover or change of designated beneficiary as permitted by subsection F of Req.SENATE FLOOR VERSION - SB60 SFLR Page 50 (Bold face denotes Committee Amendments) Section 3970.7 of Title 70 of the Oklahoma Statutes, and (2) “rollover” means the transfer of funds from the Oklahoma College Savings Plan to any other plan under Section 529 of the Internal Revenue Code of 1986, as amended.

No.17.

73For Pagetax 50years Section2006 3970.7through 2021, retirement benefits received by an individual from any component of Titlethe 70Armed Forces of the OklahomaUnited 2States Statutes,in andan 3amount (2)not “rollover”to meansexceed the transfergreater of fundsseventy- fromfive thepercent Oklahoma(75%) Collegeof Savingssuch Planbenefits toor anyTen otherThousand planDollars 5($10,000.00) undershall Sectionbe 529exempt from taxable income but in no case less than the amount of the Internalexemption Revenueprovided Codeby ofparagraph 613 1986,of asthis amended.subsection.

7 17.

For tax years 2006 through 2021, retirement benefits received by an individual from any component of the Armed Forces of 9 the United States in an amount not to exceed the greater of seventy- five percent (75%) of such benefits or Ten Thousand Dollars ($10,000.00) shall be exempt from taxable income but in no case less than the amount of the exemption provided by paragraph 13 of this subsection.

Req.SENATE FLOOR VERSION - SB60 SFLR Page 51 (Bold face denotes Committee Amendments) a.

No.in the taxable year beginning January 1, 2007, twenty percent (20%) of such benefits shall be exempt, b.

73in Pagethe 51taxable a.year beginning January 1, 2008, forty percent (40%) of such benefits shall be exempt, c.

in the taxable year beginning January 1, 2007,2009, twentysixty 2 percent (20%)(60%) of such benefits shall be exempt, 3d. b.

in the taxable year beginning January 1, 2008,2010, fortyeighty percent (40%)(80%) of such benefits shall be exempt, 5and c.e.

in the taxable year beginning January 1, 2009, sixty 6 percent (60%) of such benefits shall be exempt, 7 d.

in the taxable year beginning January 1, 2010, eighty percent (80%) of such benefits shall be exempt, and 9 e.

Req.SENATE FLOOR VERSION - SB60 SFLR Page 52 (Bold face denotes Committee Amendments) b.

No.An individual may claim this deduction only once, and the deduction may be claimed only for unreimbursed expenses that are incurred by the individual and related to the organ donation of the individual.

73c. Page 52 b.

AnThe individualOklahoma mayTax claimCommission thisshall deductionpromulgate onlyrules once,to andimplement 2 the deductionprovisions mayof bethis claimedparagraph onlywhich forshall unreimbursedcontain 3a expensesspecific thatlist areof incurredexpenses bywhich themay individualbe andpresumed related to thequalify organfor donation of the individual.deduction.

5The c.Tax Commission shall prescribe necessary requirements for verification.

The Oklahoma Tax Commission shall promulgate rules to 6 implement the provisions of this paragraph which shall 7 contain a specific list of expenses which may be presumed to qualify for the deduction.

The Tax 9 Commission shall prescribe necessary requirements for verification.

For purposes of this paragraph, the payment shall be treated as a Req.SENATE FLOOR VERSION - SB60 SFLR Page 53 (Bold face denotes Committee Amendments) scholarship amount paid by the entity sponsoring the event and the sponsoring entity shall cause the payment to be categorized as a scholarship in its books and records.

No.

73 Page 53 scholarship amount paid by the entity sponsoring the event and the 2 sponsoring entity shall cause the payment to be categorized as a 3 scholarship in its books and records.

For taxable years beginning on or after January 1, 2016, 5 taxable income shall be increased by any amount of state and local 6 sales or income taxes deducted under 26 U.S.C., Section 164 of the 7 Internal Revenue Code of 1986, as amended.

If the amount of state and local taxes deducted on the federal return is limited, taxable 9 income on the state return shall be increased only by the amount actually deducted after any such limitations are applied.

Req.SENATE FLOOR VERSION - SB60 SFLR Page 54 (Bold face denotes Committee Amendments) Provided, a deduction for the same contribution may not be taken in more than one (1) tax year.

No.F.

73 Page 54 Provided, a deduction for the same contribution may not be taken in 2 more than one (1) tax year.

3 F.

For taxable years beginning after December 31, 2004, a deduction from the Oklahoma adjusted gross income of any individual 5 taxpayer shall be allowed for qualifying gains receiving capital 6 treatment that are included in the federal adjusted gross income of 7 such individual taxpayer during the taxable year.

9 a.

(1) the sale of real property or tangible personal property located within Oklahoma this state that has been directly or indirectly owned by the individual taxpayer for a holding period of at least five (5) years prior to the date of the transaction from which such net capital gains arise, (2) the sale of stock or the sale of a direct or indirect ownership interest in an Oklahoma company, limited liability company, or partnership where such stock or ownership Req.SENATE FLOOR VERSION - SB60 SFLR Page 55 (Bold face denotes Committee Amendments) interest has been directly or indirectly owned by the individual taxpayer for a holding period of at least two (2) years prior to the date of the transaction from which the net capital gains arise, or (3) the sale of real property, tangible personal property or intangible personal property located within Oklahoma this state as part of the sale of all or substantially all of the assets of an Oklahoma company, limited liability company, or partnership or an Oklahoma proprietorship business enterprise where such property has been directly or indirectly owned by such entity or business enterprise or owned by the owners of such entity or business enterprise for a period of at least two (2) years prior to the date of the transaction from which the net capital gains arise, b.

No.

73 Page 55 interest has been directly or indirectly owned by 2 the individual taxpayer for a holding period of 3 at least two (2) years prior to the date of the transaction from which the net capital gains 5 arise, or 6 (3) the sale of real property, tangible personal 7 property or intangible personal property located within Oklahoma this state as part of the sale of 9 all or substantially all of the assets of an Oklahoma company, limited liability company, or partnership or an Oklahoma proprietorship business enterprise where such property has been directly or indirectly owned by such entity or business enterprise or owned by the owners of such entity or business enterprise for a period of at least two (2) years prior to the date of the transaction from which the net capital gains arise, b.

The holding period shall include any additional period when the property was held by another individual or entity, if such additional period is included in the taxpayer’s holding period for the Req.SENATE FLOOR VERSION - SB60 SFLR Page 56 (Bold face denotes Committee Amendments) asset pursuant to the Internal Revenue Code of 1986, as amended, c.

No.“Oklahoma company,” “limited liability company,” or “partnership” means an entity whose primary headquarters have been located in Oklahoma this state for at least three (3) uninterrupted years prior to the date of the transaction from which the net capital gains arise, d.

73 Page 56 asset pursuant to the Internal Revenue Code of 1986, 2 as amended, 3 c.

“Oklahoma company,” “limited liability company,” or “partnership” means an entity whose primary 5 headquarters have been located in Oklahoma this state 6 for at least three (3) uninterrupted years prior to 7 the date of the transaction from which the net capital gains arise, 9 d.

(1) With respect to sales of real property or tangible personal property located within Oklahoma this state, the deduction described in this subsection shall not apply unless the pass- through entity that makes the sale has held the property for not less than five (5) uninterrupted years prior to the date of the transaction that created the capital gain, and each pass-through entity included in the chain of ownership has been a member, partner, or shareholder of the Req.SENATE FLOOR VERSION - SB60 SFLR Page 57 (Bold face denotes Committee Amendments) pass-through entity in the tier immediately below it for an uninterrupted period of not less than five (5) years.

No.(2) With respect to sales of stock or ownership interest in or sales of all or substantially all of the assets of an Oklahoma company, limited liability company, partnership or Oklahoma proprietorship business enterprise, the deduction described in this subsection shall not apply unless the pass-through entity that makes the sale has held the stock or ownership interest for not less than two (2) uninterrupted years prior to the date of the transaction that created the capital gain, and each pass-through entity included in the chain of ownership has been a member, partner or shareholder of the pass- through entity in the tier immediately below it for an uninterrupted period of not less than two (2) years.

73For Pagepurposes 57of pass-throughthis entitydivision, uninterrupted ownership prior to July 1, 2007, shall be included in the tierdetermination immediatelyof belowthe 2required itholding forperiod anprescribed uninterruptedby periodthis ofdivision, notand lessSENATE thanFLOOR 3VERSION five- (5)SB60 years.SFLR Page 58 (Bold face denotes Committee Amendments) f.

(2)“Oklahoma Withproprietorship respectbusiness toenterprise” salesmeans ofa stockbusiness orenterprise ownershipwhose 5income interestand inexpenses orhave salesbeen ofreported allon orSchedule substantiallyC allor 6F of the assets of an Oklahomaindividual company,taxpayer’s limitedfederal 7income liabilitytax company,return, partnership or Oklahomaany proprietorshipsimilar businesssuccessor enterprise,schedule thepublished deductionby 9 described in this subsection shall not apply unless the pass-throughInternal entityRevenue thatService makesand thewhose saleprimary hasheadquarters heldhave thebeen stocklocated orin ownershipOklahoma interestthis state for notat lessleast thanthree two(3) (2) uninterrupted years prior to the date of the transaction thatfrom createdwhich the net capital gain,gains andarise. each pass-through entity included in the chain of ownership has been a member, partner or shareholder of the pass- through entity in the tier immediately below it for an uninterrupted period of not less than two (2) years.

For purposes of this division, uninterrupted ownership prior to July 1, 2007, shall be included in the determination of the required holding period prescribed by this division, and Req.

No.

73 Page 58 f.

“Oklahoma proprietorship business enterprise” means a 2 business enterprise whose income and expenses have 3 been reported on Schedule C or F of an individual taxpayer’s federal income tax return, or any similar 5 successor schedule published by the Internal Revenue 6 Service and whose primary headquarters have been 7 located in Oklahoma this state for at least three (3) uninterrupted years prior to the date of the 9 transaction from which the net capital gains arise.

the term “real estate investment trust” or “REIT” means the meaning ascribed to such term in Section 856 of the Internal Revenue Code of 1986, as amended, Req.SENATE FLOOR VERSION - SB60 SFLR Page 59 (Bold face denotes Committee Amendments) b.

No.the term “captive real estate investment trust” means a real estate investment trust, the shares or beneficial interests of which are not regularly traded on an established securities market and more than fifty percent (50%) of the voting power or value of the beneficial interests or shares of which are owned or controlled, directly or indirectly, or constructively, by a single entity that is:

73(1) Pagetreated 59as b.an association taxable as a corporation under the Internal Revenue Code of 1986, as amended, and (2) not exempt from federal income tax pursuant to the provisions of Section 501(a) of the Internal Revenue Code of 1986, as amended.

the term “captive real estate investment trust” means 2 a real estate investment trust, the shares or 3 beneficial interests of which are not regularly traded on an established securities market and more than 5 fifty percent (50%) of the voting power or value of 6 the beneficial interests or shares of which are owned 7 or controlled, directly or indirectly, or constructively, by a single entity that is:

9 (1) treated as an association taxable as a corporation under the Internal Revenue Code of 1986, as amended, and (2) not exempt from federal income tax pursuant to the provisions of Section 501(a) of the Internal Revenue Code of 1986, as amended.

Req.SENATE FLOOR VERSION - SB60 SFLR Page 60 (Bold face denotes Committee Amendments) (1) any real estate investment trust as defined in paragraph a of this subsection other than a “captive real estate investment trust” captive real estate investment trust, (2) any qualified real estate investment trust subsidiary under Section 856(i) of the Internal Revenue Code of 1986, as amended, other than a qualified REIT subsidiary of a “captive real estate investment trust” captive real estate investment trust, (3) any Listed Australian Property Trust listed Australian property trust (meaning an Australian unit trust registered as a “Managed Investment Scheme” “managed investment scheme” under the Australian Corporations Act 2001 in which the principal class of units is listed on a recognized stock exchange in Australia and is regularly traded on an established securities market), or an entity organized as a trust, provided that a Listed Australian Property Trust listed Australian property trust owns or controls, directly or indirectly, seventy-five percent (75%) or more of the voting power or SENATE FLOOR VERSION - SB60 SFLR Page 61 (Bold face denotes Committee Amendments) value of the beneficial interests or shares of such trust, or (4) any Qualified Foreign Entity qualified foreign entity, meaning a corporation, trust, association or partnership organized outside the laws of the United States and which satisfies the following criteria:

No.(a) at least seventy-five percent (75%) of the entity’s total asset value at the close of its taxable year is represented by real estate assets, as defined in Section 856(c)(5)(B) of the Internal Revenue Code of 1986, as amended, thereby including shares or certificates of beneficial interest in any real estate investment trust, cash and cash equivalents, and U.S.

73Government Pagesecurities, 60(b) (1)the anyentity realreceives estatea investmentdividend-paid trustdeduction ascomparable definedto inSection 2561 paragraphof athe ofInternal thisRevenue subsectionCode otherof than1986, aas 3amended, “captiveor realis estateexempt investmentfrom trust”entity captivelevel realtax, estate(c) investmentthe trust,entity 5is (2)required anyto qualifieddistribute realat estateleast investmenteighty-five trustpercent 6(85%) subsidiaryof underits Sectiontaxable 856(i)income, ofas thecomputed Internalin 7the RevenueSENATE CodeFLOOR ofVERSION 1986,- asSB60 amended,SFLR otherPage than62 a(Bold qualifiedface REITdenotes subsidiaryCommittee ofAmendments) ajurisdiction “captivein realwhich 9it estateis investmentorganized, trust”to captivethe realholders estateof investmentits trust,shares (3)or anycertificates Listedof Australianbeneficial Propertyinterest Truston listedan Australianannual propertybasis, trust(d) (meaningnot anmore Australianthan unitten trustpercent registered(10%) asof athe “Managedvoting Investmentpower Scheme”or “managedvalue investmentin scheme”such underentity theis Australianheld Corporationsdirectly Actor 2001indirectly inor whichconstructively theby principala classsingle ofentity unitsor isindividual, listedor onthe ashares recognizedor stockbeneficial exchangeinterests inof Australiasuch andentity isare regularly traded on an established securities market),market, orand an(e) the entity is organized asin a trust,country providedwhich thathas a Listedtax Australiantreaty Propertywith Trust listed Australian property trust owns or controls, directly or indirectly, seventy-five percent (75%) or more of the votingUnited powerStates. or Req.

No.

73 Page 61 value of the beneficial interests or shares of 2 such trust, or 3 (4) any Qualified Foreign Entity qualified foreign entity, meaning a corporation, trust, association 5 or partnership organized outside the laws of the 6 United States and which satisfies the following 7 criteria:

(a) at least seventy-five percent (75%) of the 9 entity’s total asset value at the close of its taxable year is represented by real estate assets, as defined in Section 856(c)(5)(B) of the Internal Revenue Code of 1986, as amended, thereby including shares or certificates of beneficial interest in any real estate investment trust, cash and cash equivalents, and U.S.

Government securities, (b) the entity receives a dividend-paid deduction comparable to Section 561 of the Internal Revenue Code of 1986, as amended, or is exempt from entity level tax, (c) the entity is required to distribute at least eighty-five percent (85%) of its taxable income, as computed in the Req.

No.

73 Page 62 jurisdiction in which it is organized, to 2 the holders of its shares or certificates of 3 beneficial interest on an annual basis, (d) not more than ten percent (10%) of the 5 voting power or value in such entity is held 6 directly or indirectly or constructively by 7 a single entity or individual, or the shares or beneficial interests of such entity are 9 regularly traded on an established securities market, and (e) the entity is organized in a country which has a tax treaty with the United States.

A real estate investment trust that does not become regularly traded on an established securities market within one (1) year of the date on which it first becomes a real estate investment trust shall be deemed not to have been regularly traded on an established securities market, retroactive to the date it first became a real estate investment trust, and shall file an amended return reflecting such retroactive designation for any tax year or Req.SENATE FLOOR VERSION - SB60 SFLR Page 63 (Bold face denotes Committee Amendments) part year occurring during its initial year of status as a real estate investment trust.

No.For purposes of this subsection, a real estate investment trust becomes a real estate investment trust on the first day it has both met the requirements of Section 856 of the Internal Revenue Code of 1986, as amended, and has elected to be treated as a real estate investment trust pursuant to Section 856(c)(1) of the Internal Revenue Code of 1986, as amended.

73 Page 63 part year occurring during its initial year of status as a real 2 estate investment trust.

For purposes of this subsection, a real 3 estate investment trust becomes a real estate investment trust on the first day it has both met the requirements of Section 856 of the 5 Internal Revenue Code of 1986, as amended, and has elected to be 6 treated as a real estate investment trust pursuant to Section 7 856(c)(1) of the Internal Revenue Code of 1986, as amended.

9COMMITTEE 60-1-73REPORT QDBY: 1/19/2025 5:39:41 AM Req.

No.COMMITTEE ON APPROPRIATIONS March 5, 2025 - DO PASS AS AMENDED SENATE FLOOR VERSION - SB60 SFLR Page 64 (Bold face denotes Committee Amendments)

73 Page 64