Oklahoma § 68-2355.1

§ 68-2355.1.

10, 1980.

Repealed by Laws 1980, c. 68, § 1, emerg. eff. April

§68-2355.1A. Determinations by State Board of Equalization - Income

tax rate changes.

A. The provisions of this section shall be applicable with

respect to the implementation of the decreases in the top marginal

rate of individual income tax otherwise authorized pursuant to the

provisions of subparagraph (h) of paragraphs 1 and 2 of subsection B

of Section 2355 of this title which shall be contingent upon a

determination by the State Board of Equalization made by a

comparison of the revenue computations described by this section

which shall be conducted until the income tax rate of five and

twenty-five hundredths percent (5.25%) is effective.

B. In addition to any other duties prescribed by law, at the

meeting required by paragraph 1 of Section 23 of Article X of the

Oklahoma Constitution to be held in December 2008, and for any

subsequent December meeting of the State Board of Equalization if

the top marginal income tax rate prescribed by subparagraph (h) of

paragraphs 1 and 2 of subsection B of Section 2355 of this title has

not become effective, the State Board of Equalization shall

determine:

1. The amount of revenue growth in the General Revenue Fund of

the State Treasury by comparing the fiscal year General Revenue Fund

estimate for the fiscal year beginning on the next ensuing July 1

date to the revised General Revenue Fund estimate for the then

current fiscal year; and

2. The amount by which the income tax revenue for the tax year

which will begin on the second January 1 date following such

December meeting is estimated to be reduced by the increase in the

standard deduction provided in paragraph 2 of subsection E of

Section 2358 of this title, plus an amount equal to four percent

(4%) of the revised General Revenue Fund estimate for the then

current fiscal year in order for a top marginal income tax rate of

five and twenty-five hundredths percent (5.25%) to be effective.

If the amount determined pursuant to the provisions of paragraph

1 of this subsection is equal to or greater than the amount

determined pursuant to the provisions of paragraph 2 of this

subsection, the Board shall make a preliminary finding that the

Board anticipates that a finding will be made at the February

meeting immediately subsequent to the December meeting that

Oklahoma Statutes - Title 68. Revenue and Taxation

applicable revenue growth in the state will authorize the

implementation of the provisions of subparagraph (h) of paragraphs 1

and 2 of subsection B of Section 2355 of this title beginning on the

second January 1 following such December meeting.

If the amount determined pursuant to the provisions of paragraph

1 of this subsection is less than the amount determined pursuant to

the provisions of paragraph 2 of this subsection, the Board shall

make a preliminary finding that the Board anticipates that a finding

will be made at the February meeting immediately subsequent to the

December meeting that applicable revenue growth in the state will

not authorize the implementation of the provisions of subparagraph

(h) of paragraphs 1 and 2 of subsection B of Section 2355 of this

title beginning on the second January 1 following such December

meeting.

C. In addition to any other duties prescribed by law, at the

meeting required by paragraph 3 of Section 23 of Article X of the

Oklahoma Constitution to be held in February 2009, and for any

subsequent February meeting of the State Board of Equalization if

the top marginal income tax rate prescribed by subparagraph (h) of

paragraphs 1 and 2 of subsection B of Section 2355 of this title has

not become effective the State Board of Equalization shall

determine:

1. The amount of revenue growth in the General Revenue Fund of

the State Treasury by comparing the fiscal year General Revenue Fund

estimate for the fiscal year beginning on the next ensuing July 1

date to the revised General Revenue Fund estimate for the then

current fiscal year; and

2. The amount by which the income tax revenue for the tax year

which will begin on the January 1 date immediately following such

February meeting is estimated to be reduced by the increase in the

standard deduction provided in paragraph 2 of subsection E of

Section 2358 of this title plus an amount equal to four percent (4%)

of the revised General Revenue Fund estimate for the then current

fiscal year in order for a top marginal income tax rate of five and

twenty-five hundredths percent (5.25%) to be effective.

If the amount determined pursuant to the provisions of paragraph

1 of this subsection is equal to or greater than the amount

determined pursuant to the provisions of paragraph 2 of this

subsection, the Board shall make a finding that applicable revenue

growth in the state will authorize the implementation of the

provisions of subparagraph (h) of paragraphs 1 and 2 of subsection B

of Section 2355 of this title beginning on the January 1 date

immediately following such February meeting.

If the amount determined pursuant to the provisions of paragraph

1 of this subsection is less than the amount determined pursuant to

the provisions of paragraph 2 of this subsection, the Board shall

make a finding that applicable revenue growth in the state does not

Oklahoma Statutes - Title 68. Revenue and Taxation

authorize the implementation of the provisions of subparagraph (h)

of paragraphs 1 and 2 of subsection B of Section 2355 of this title

beginning with the January 1 date immediately following such

February meeting.

D. If the Board makes a finding that applicable revenue growth

in the state does not authorize the implementation of the provisions

of subparagraph (h) of paragraphs 1 and 2 of subsection B of Section

2355 of this title beginning with calendar year 2010 pursuant to the

provisions of subsection C of this section, the procedures

prescribed by subsection A, subsection B, and subsection C of this

section shall be repeated by the State Board of Equalization for

each successive two-year comparison. Once the income tax rate

otherwise authorized pursuant to subparagraph (h) of paragraphs 1

and 2 of subsection B of Section 2355 of this title has been

implemented as a result of the analysis of the General Revenue Fund

estimates together with the fiscal impact of the standard deduction

as authorized pursuant to paragraph 2 of subsection E of Section

2358 of this title, such income tax rate shall be in effect for the

tax years as prescribed by subparagraph (h) of paragraphs 1 and 2 of

subsection B of Section 2355 of this title.

Added by Laws 2006, 2nd Ex.Sess., c. 42, § 4, eff. Jan. 1, 2007.

Amended by Laws 2007, c. 346, § 2, eff. Nov. 1, 2007; Laws 2008, c.

378, § 13, emerg. eff. June 4, 2008.

§68-2355.1B. Determination of initial baseline amount of revenue

apportioned to teachers' retirement revolving fund - Annual review.

In addition to any other duties prescribed by law, at the

meeting required by paragraph 3 of Section 23 of Article X of the

Oklahoma Constitution to be held in February of the first calendar

year after an income tax rate reduction implemented pursuant to

Section 2355.1A of Title 68 of the Oklahoma Statutes has been in

place for twelve (12) months, the State Board of Equalization shall:

1. Determine an initial baseline amount of revenue which was

finally apportioned to the credit of the Teachers’ Retirement System

Dedicated Revenue Revolving Fund pursuant to Sections 1353, 1403 and

2352 of Title 68 of the Oklahoma Statutes for the most recent twelve

(12) months;

2. Beginning with the February meeting in the sixth year after

the Board determines an initial baseline amount, annually review

such amount to determine if it differs from the average annual

amount of revenue which was finally apportioned to the credit of the

Teachers’ Retirement System Dedicated Revenue Revolving Fund

pursuant to Sections 1353, 1403 and 2352 of Title 68 of the Oklahoma

Statutes over the most recent five (5) fiscal years. If the Board

determines that the initial baseline amount is less than the fiveyear average annual amount, a new baseline equal to the five-year

average annual amount shall be determined and applied as provided in

Oklahoma Statutes - Title 68. Revenue and Taxation

paragraph 5 of Section 1353, paragraph 5 of Section 1403 and

paragraph 3 of Section 2352 of Title 68 of the Oklahoma Statutes;

and

3. Determine the proportion of the baseline amount attributable

to each revenue source specified in paragraph 2 of this section

whenever the Board determines a baseline amount.

Added by Laws 2007, c. 105, § 2, eff. Nov. 1, 2007. Amended by Laws

2007, c. 366, § 2, eff. Nov. 1, 2007.

§68-2355.1C. Special Committee on Soldier Relief.

A. As used in this section:

1. “Revenue collections” means the amount of revenue estimated

to have been collected and expected to be collected by the state

beginning on July 1, 2010, and ending before January 1, 2015, from

sales tax, motor vehicle taxes and fees, vehicle excise tax and

motor fuel tax from all taxpayers who receive salary or compensation

in any form other than retirement benefits from the United States as

a member of any component of the Armed Forces of the United States

or as the dependent of such member;

2. “Revenue reductions” means the amount of income tax revenue

which is exempt pursuant to subparagraph b of paragraph 5 of

subsection E of Section 2358 of Title 68 of the Oklahoma Statutes.

B. 1. There is hereby created until December 1, 2014, the

Special Committee on Soldier Relief. The special committee shall

conduct a comprehensive multi-year review of the amount of state tax

revenue generated by members of the armed forces and their families

who are Oklahoma residents.

2. The special committee shall be comprised of the following:

a.

each of the members of the Veterans and Military

Affairs Committee of the Oklahoma House of

Representatives,

b.

each of the members of the Veterans and Military

Affairs Committee of the Oklahoma State Senate,

c.

two members of the Oklahoma Senate who do not serve on

the Senate Veterans and Military Affairs Committee,

appointed by the President Pro Tempore of the Senate,

d.

two members of the Oklahoma House of Representatives

who do not serve on the House Veterans and Military

Affairs Committee, appointed by the Speaker of the

Oklahoma House of Representatives,

e.

one member appointed by the President Pro Tempore of

the Senate who shall represent the United States Armed

Forces recruitment efforts in the State of Oklahoma,

and

f.

one member appointed by the Speaker of the Oklahoma

House of Representatives who shall represent the

Oklahoma Statutes - Title 68. Revenue and Taxation

Oklahoma Military Department, Oklahoma National Guard

or reserve forces serving in Oklahoma;

D. The task force shall:

1. Estimate the amount of revenue collected and expected to be

collected by the state beginning on July 1, 2010, and ending before

January 1, 2015, from sales tax, motor vehicle taxes and fees,

vehicle excise tax and motor fuel tax from all taxpayers who receive

salary or compensation in any form other than retirement benefits

from the United States as a member of any component of the Armed

Forces of the United States; provided, where such data has not yet

become available or is available only through projections, estimates

shall be provided and noted as such and methodology shall be

provided;

2. Review all available data from the United States Department

of Defense, the Oklahoma Tax Commission and any other governmentgenerated data on the number of individuals recruited in Oklahoma,

the number of such individuals who claim Oklahoma as their home of

record, and the number of those recruited here who do not claim

Oklahoma as their home of record;

3. Review any additional data and information which the

Committee considers relevant to the development of an estimate of

the amount of state tax revenue collected as the result of members

of any component of the Armed Forces of the United States claiming

Oklahoma as their home; and

4. Submit a report by December 1, 2014, to the State Board of

Equalization. The report shall include findings and recommendations

regarding the impact of members of any component of the Armed Forces

of the United States in Oklahoma on state tax revenue collections

and expected collections between July 1, 2010, and January 1, 2015.

E. Members of the task force shall receive no compensation for

serving on the task force, but shall receive travel reimbursement as

follows:

1. State employees who are members of the task force shall be

reimbursed for travel expenses incurred in the performance of their

duties by their respective agencies in accordance with the State

Travel Reimbursement Act;

2. All other task force members shall be reimbursed by the

appointing authority for travel expenses incurred in the performance

of their duties in accordance with the State Travel Reimbursement

Act; and

3. Legislative members shall be reimbursed in accordance with

Section 456 of Title 74 of the Oklahoma Statutes.

F. The Special Committee on Soldier Relief shall meet as often

as necessary to conduct business but shall meet no less than three

(3) times, with an organizational meeting to be held prior to

December 31, 2009. The organizational meeting shall be called by

the Chair of the Finance Committee of the Oklahoma State Senate. A

Oklahoma Statutes - Title 68. Revenue and Taxation

majority of members of the Special Committee shall constitute a

quorum.

G. Administrative support for the Special Committee shall be

provided by the State Senate, House of Representatives and the

Oklahoma Tax Commission.

Added by Laws 2009, c. 436, § 2, eff. July 1, 2010.

§68-2355.1D.

Repealed by Laws 2014, c. 138, § 2, eff. Nov. 1, 2014.

§68-2355.1E.

Repealed by Laws 2014, c. 195, § 3.

§68-2355.1F. Implementation of 5% top marginal rate.

A. The provisions of this section shall be applicable with

respect to the implementation of the five percent (5%) top marginal

rate of individual income tax otherwise authorized pursuant to the

provisions of subparagraph (f) of paragraphs 1 and 2 of subsection C

of Section 2355 of Title 68 of the Oklahoma Statutes, which shall be

contingent upon a determination by the State Board of Equalization

made by a comparison described by this section which shall be

conducted until the income tax rate of five percent (5%) is

effective.

B. In addition to any other duties prescribed by law, at the

meeting required by paragraph 1 of Section 23 of Article X of the

Oklahoma Constitution to be held in December 2014, and for any

subsequent December meeting of the State Board of Equalization, if

the five percent (5%) top marginal income tax rate prescribed by

subparagraph (f) of paragraphs 1 and 2 of subsection C of Section

2355 of Title 68 of the Oklahoma Statutes has not become effective,

the State Board of Equalization shall compare:

1. The total General Revenue Fund proposed estimate for fiscal

year 2014 which was certified at the State Board of Equalization

meeting held in February 2013; and

2. The total General Revenue Fund proposed estimate for fiscal

year 2016, or if the five percent (5%) top marginal income tax rate

prescribed by subparagraph (f) of paragraphs 1 and 2 of subsection C

of Section 2355 of Title 68 of the Oklahoma Statutes has not become

effective, the fiscal year for which the Board is certifying a

proposed estimate.

If the amount determined pursuant to the provisions of paragraph

2 of this subsection is equal to or greater than the amount

determined pursuant to the provisions of paragraph 1 of this

subsection, the Board shall make a finding that the revenue

computations required by this section will authorize the

implementation of the five percent (5%) top marginal income tax rate

prescribed by subparagraph (f) of paragraphs 1 and 2 of subsection C

of Section 2355 of Title 68 of the Oklahoma Statutes beginning on

the second January 1 following the December meeting.

Oklahoma Statutes - Title 68. Revenue and Taxation

If the amount determined pursuant to the provisions of paragraph

2 of this subsection is less than the amount determined pursuant to

the provisions of paragraph 1 of this subsection, the Board shall

make a finding that the revenue computations required by this

section will not authorize the implementation of the five percent

(5%) top marginal income tax rate prescribed by subparagraph (f) of

paragraphs 1 and 2 of subsection C of Section 2355 of Title 68 of

the Oklahoma Statutes beginning on the second January 1 following

the December meeting.

C. If the Board makes a finding that the revenue computations

required by this section do not authorize the implementation of the

5% top marginal income tax rate prescribed by of subparagraph (f) of

paragraphs 1 and 2 of subsection C of Section 2355 of Title 68 of

the Oklahoma Statutes beginning with calendar year 2016 pursuant to

the provisions of subsection B of this section, such procedures

shall be repeated by the State Board of Equalization for each

successive two-year comparison until the rate is implemented.

Added by Laws 2014, c. 195, § 4.

§68-2355.1G.

Repealed by Laws 2017, c. 267, § 2, eff. Nov. 1, 2017.

§68-2355.1P-1. Short title - Pass-Through Entity Tax Equity Act of

2019.

Sections 1 through 9 of this act shall be known and may be cited

as the "Pass-Through Entity Tax Equity Act of 2019".

Added by Laws 2019, c. 201, § 1, emerg. eff. April 29, 2019.

§68-2355.1P-2. Definitions.

As used in this act:

1. "Distributive share" means a member's percentage share of

Oklahoma net entity income or net entity loss;

2. "Electing pass-through entity" means any pass-through entity

as defined in paragraph 6 of this section that has made an election

pursuant to subsection F of Section 4 of this act to pay income tax

as computed pursuant to Section 2358 of Title 68 of the Oklahoma

Statutes;

3. "Indirect member" means, with respect to any particular

electing pass-through entity, an individual, fiduciary, or entity

that (i) owns an interest in a pass-through entity other than the

electing pass-through entity and (ii) has been allocated items of

Oklahoma income, gain, loss or deduction that the electing passthrough entity included in computing its tax pursuant to the

provisions of the Pass-Through Entity Tax Equity Act of 2019;

4. "Member" means any individual, fiduciary, or entity holding

an ownership interest in an electing pass-through entity;

5. "Oklahoma net entity income" or "Oklahoma net entity loss"

means the positive or negative sum of an electing pass-through

Oklahoma Statutes - Title 68. Revenue and Taxation

entity's items of Oklahoma income, gain, loss, and deduction

determined under Section 2351 et seq. of Title 68 of the Oklahoma

Statutes, regardless of whether any such items are required for

federal income tax purposes to be separately stated; and

6. "Pass-through entity" means a general partnership, a limited

partnership, a limited liability partnership, a limited liability

limited partnership, a limited liability company, or a corporation,

if any of the enumerated entity's items of income, gain, loss, and

deduction, as applicable, are subject to being included on another

person's return for federal income tax purposes under Subchapter K

or Subchapter S of the Internal Revenue Code.

Added by Laws 2019, c. 201, § 2, emerg. eff. April 29, 2019.

§68-2355.1P-3. Purpose - Apportionment.

A. It is hereby declared to be the purpose of the Pass-Through

Entity Tax Equity Act of 2019 to establish a revenue-neutral

mechanism to provide a more fair and simplified taxation of passthrough entities and their members in this state while maintaining

revenue levels for support of general governmental functions of the

State of Oklahoma.

B. All monies collected pursuant to the provisions of

subsection A of Section 2358 of Title 68 of the Oklahoma Statutes

shall be apportioned in the same manner as provided in paragraph 1

of Section 2352 of Title 68 of the Oklahoma Statutes if the tax is

computed based upon a distribution made to one or more individuals,

trusts and estates and shall be apportioned in the same manner as

provided in paragraph 2 of Section 2352 of Title 68 of the Oklahoma

Statutes if the tax is computed based upon a distribution to a

corporation or to a pass-through entity as such term is defined in

Section 2 of this act.

Added by Laws 2019, c. 201, § 3, emerg. eff. April 29, 2019.

§68-2355.1P-4. Calculation of tax.

A. For tax years beginning on or after January 1, 2022, there

is hereby levied on each electing pass-through entity the passthrough entity tax which shall be calculated as follows:

1. With regard to each member of an electing pass-through

entity, the electing pass-through entity shall multiply such

member's Oklahoma distributive share of the electing pass-through

entity's Oklahoma net entity income for the tax year by:

a.

the highest Oklahoma marginal income tax rate levied

on the taxable income of natural persons pursuant to

Section 2355 of this title if the member is an

individual, trust, or estate,

b.

four percent (4%) if the member is classified as a

corporation pursuant to the Internal Revenue Code, and

is not classified as an S corporation,

Oklahoma Statutes - Title 68. Revenue and Taxation

c.

four percent (4%) if the member is a pass-through

entity,

d.

four percent (4%) if the member is a financial

institution subject to tax imposed pursuant to the

provisions of Section 2370 of this title, and

e.

the highest Oklahoma marginal income tax rate that

would be applicable to any item of the electing passthrough entity's income or gain without the election

made pursuant to subsection F of this section, if the

member is an organization described in Section 2359 of

this title; and

2. The electing pass-through entity shall aggregate the amounts

determined with respect to all members pursuant to paragraph 1 of

this subsection and the pass-through entity tax for the applicable

tax year shall be equal to such aggregated tax amount for the tax

year with respect to which the election has been made.

B. Sections 2385.29, 2385.30 and 2385.31 of this title shall

not be applicable to an electing pass-through entity.

C. The pass-through entity tax shall be due and payable on the

same date as provided for the filing of the electing pass-through

entity's Oklahoma income tax return, and for tax years beginning on

or after January 1, 2020, estimated tax payments shall be required

as provided in Section 2385.9 of this title.

D. If the pass-through entity election results in a net entity

loss for Oklahoma income tax purposes in any tax year, the net

entity loss may be carried back and carried forward by the electing

pass-through entity for Oklahoma income tax purposes as set forth in

subparagraph b of paragraph 3 of subsection A of Section 2358 of

this title.

E. Notwithstanding paragraph 2 of subsection C of Section 2368

of this title, a nonresident individual who is a member of an

electing pass-through entity is not required to file an Oklahoma

income tax return, if, for the taxable year, the only source of

income allocable or apportionable to this state for the member, or,

if a joint income tax return is filed, the member and his or her

spouse, is from one or more electing pass-through entities, and each

electing pass-through entity files and pays the taxes due under this

section.

F. Any entity required to file an Oklahoma partnership income

tax return or an Oklahoma S corporation income tax return may elect

to become an electing pass-through entity. The election shall be

made on such form and in such manner as the Oklahoma Tax Commission

may prescribe, and any election under this subsection shall have

priority over and revoke any election to file a composite Oklahoma

partnership return or requirement of a Subchapter S corporation to

report and pay tax on behalf of a nonresident shareholder for the

same tax year. An election may also be made by filing an income tax

Oklahoma Statutes - Title 68. Revenue and Taxation

return prior to but not later than the due date of the applicable

income tax return, including any extension.

G. Pursuant to procedures prescribed by the Tax Commission, if

the amount of tax required to be paid by a pass-through entity

pursuant to the provisions of this section is not paid when due, the

Oklahoma Tax Commission may revoke the pass-through entity's

election under subsection F of this section effective for the first

year for which the tax is not paid.

H. The election authorized by the provisions of this section

shall be made pursuant to procedures prescribed by the Tax

Commission and shall be filed (i) within sixty (60) days of

enactment and pursuant to procedures prescribed by the Oklahoma Tax

Commission for any income tax year beginning on or after January 1,

2019, and prior to January 1, 2020, or (ii) for any income tax year

beginning on or after January 1, 2020, at any time during the

preceding tax year or two (2) months and fifteen (15) days after the

beginning of the tax year or by filing a timely income tax return as

authorized pursuant to subsection F of this section. Any such

election shall be binding until revoked pursuant to procedures

prescribed by the Tax Commission. The effective date of a

revocation (i) made within two (2) months and fifteen (15) days of

the electing pass-through entity's taxable year shall be the first

day of such taxable year and (ii) made during the electing passthrough entity's taxable year but after such fifteenth day shall be

effective on the first day of the following taxable year. No

election made by a pass-through entity with respect to income tax to

be paid by such entity using the calculations prescribed by this

section shall be binding on any other pass-through entity, and each

pass-through entity shall be able to make an election under the

provisions of this act independently.

Added by Laws 2019, c. 201, § 4, emerg. eff. April 29, 2019.

Amended by Laws 2021, c. 494, § 1, eff. Jan. 1, 2022; Laws 2024, c.

213, § 1.