Oklahoma § 68-2357.11 - Tax credit

§ 68-2357.11. Tax credit

A. For purposes of this section, the term "person" means any

legal business entity including limited and general partnerships,

corporations, sole proprietorships, and limited liability companies,

but does not include individuals.

B. 1. Except as otherwise provided by this section, for tax

years beginning on or after January 1, 1993, and ending on or before

December 31, 2021, there shall be allowed a credit against the tax

imposed by Section 1803 or Section 2355 of this title or Section 624

or 628 of Title 36 of the Oklahoma Statutes for every person in this

state furnishing water, heat, light or power to the state or its

citizens, or for every person in this state burning coal to generate

heat, light or power for use in manufacturing operations located in

this state.

2. For tax years beginning on or after January 1, 1993, and

ending on or before December 31, 2005, and for the period of January

1, 2006, through June 30, 2006, the credit shall be in the amount of

Two Dollars ($2.00) per ton for each ton of Oklahoma-mined coal

purchased by such person.

3. For the period of July 1, 2006, through December 31, 2006,

and, except as provided in subsection N of this section, for tax

years beginning on or after January 1, 2007, and ending on or before

Oklahoma Statutes - Title 68. Revenue and Taxation

December 31, 2021, the credit shall be in the amount of Two Dollars

and eighty-five cents ($2.85) per ton for each ton of Oklahoma-mined

coal purchased by such person.

4. In addition to the credit allowed pursuant to the provisions

of paragraph 3 of this subsection, for the period of July 1, 2006,

through December 31, 2006, and except as provided in subsections M

and N of this section, for tax years beginning on or after January

1, 2007, and ending on or before December 31, 2021, there shall be

allowed a credit in the amount of Two Dollars and fifteen cents

($2.15) per ton for each ton of Oklahoma-mined coal purchased by

such person. The credit allowed pursuant to the provisions of this

paragraph may not be claimed or transferred prior to January 1,

2008.

C. For tax years beginning on or after January 1, 1995, and

ending on or before December 31, 2005, and for the period beginning

January 1, 2006, through June 30, 2006, there shall be allowed, in

addition to the credits allowed pursuant to subsection B of this

section, a credit against the tax imposed by Section 1803 or Section

2355 of this title or Section 624 or 628 of Title 36 of the Oklahoma

Statutes for every person in this state which:

1. Furnishes water, heat, light or power to the state or its

citizens, or burns coal to generate heat, light or power for use in

manufacturing operations located in this state; and

2. Purchases at least seven hundred fifty thousand (750,000)

tons of Oklahoma-mined coal in the tax year.

The additional credit allowed pursuant to this subsection shall

be in the amount of Three Dollars ($3.00) per ton for each ton of

Oklahoma-mined coal purchased by such person.

D. Except as otherwise provided by this section, for tax years

beginning on or after January 1, 2001, and ending on or before

December 31, 2021, there shall be allowed a credit against the tax

imposed by Section 1803 or Section 2355 of this title or Section 624

or 628 of Title 36 of the Oklahoma Statutes for every person in this

state primarily engaged in mining, producing or extracting coal, and

holding a valid permit issued by the Oklahoma Department of Mines.

For tax years beginning on or after January 1, 2001, and ending on

or before December 31, 2005, and for the period beginning January 1,

2006, through June 30, 2006, the credit shall be in the amount of

ninety-five cents ($0.95) per ton and for the period of July 1,

2006, through December 31, 2006, and for tax years beginning on or

after January 1, 2007, except as provided in subsection N of this

section, the credit shall be in the amount of Five Dollars ($5.00)

for each ton of coal mined, produced or extracted in on, under or

through a permit in this state by such person.

E. In addition to the credit allowed pursuant to the provisions

of subsection D of this section and except as otherwise provided in

subsection F of this section, for tax years beginning on or after

Oklahoma Statutes - Title 68. Revenue and Taxation

January 1, 2001, and ending on or before December 31, 2005, and for

the period of January 1, 2006, through June 30, 2006, there shall be

allowed a credit against the tax imposed by Section 1803 or Section

2355 of this title or Section 624 or 628 of Title 36 of the Oklahoma

Statutes for every person in this state primarily engaged in mining,

producing or extracting coal, and holding a valid permit issued by

the Oklahoma Department of Mines in the amount of ninety-five cents

($0.95) per ton for each ton of coal mined, produced or extracted

from thin seams in this state by such person; provided, the credit

shall not apply to such coal sold to any consumer who purchases at

least seven hundred fifty thousand (750,000) tons of Oklahoma-mined

coal per year.

F. In addition to the credit allowed pursuant to the provisions

of subsection D of this section and except as otherwise provided in

subsection G of this section, for tax years beginning on or after

January 1, 2005, and ending on or before December 31, 2005, and for

the period of January 1, 2006, through June 30, 2006, there shall be

allowed a credit against the tax imposed by Section 1803 or Section

2355 of this title or that portion of the tax imposed by Section 624

or 628 of Title 36 of the Oklahoma Statutes, which is actually paid

to and placed into the General Revenue Fund, in the amount of

ninety-five cents ($0.95) per ton for each ton of coal mined,

produced or extracted from thin seams in this state by such person

on or after July 1, 2005.

G. The credits provided in subsections D and E of this section

shall not be allowed for coal mined, produced or extracted in any

month in which the average price of coal is Sixty-eight Dollars

($68.00) or more per ton, excluding freight charges, as determined

by the Tax Commission.

H. The additional credits allowed pursuant to subsections B, C,

D and E of this section but not used shall be freely transferable

after January 1, 2002, but not later than December 31, 2013, by

written agreement to subsequent transferees at any time during the

five (5) years following the year of qualification; provided, the

additional credits allowed pursuant to the provisions of paragraph 4

of subsection B of this section but not used shall be freely

transferable after January 1, 2008, but not later than December 31,

2013, by written agreement to subsequent transferees at any time

during the five (5) years following the year of qualification. An

eligible transferee shall be any taxpayer subject to the tax imposed

by Section 1803 or Section 2355 of this title or Section 624 or 628

of Title 36 of the Oklahoma Statutes. The person originally allowed

the credit and the subsequent transferee shall jointly file a copy

of the written credit transfer agreement with the Tax Commission

within thirty (30) days of the transfer. The written agreement

shall contain the name, address and taxpayer identification number

of the parties to the transfer, the amount of credit being

Oklahoma Statutes - Title 68. Revenue and Taxation

transferred, the year the credit was originally allowed to the

transferring person and the tax year or years for which the credit

may be claimed. The Tax Commission may promulgate rules to permit

verification of the validity and timeliness of a tax credit claimed

upon a tax return pursuant to this subsection but shall not

promulgate any rules which unduly restrict or hinder the transfers

of such tax credit.

I. The additional credit allowed pursuant to subsection F of

this section but not used shall be freely transferable on or after

July 1, 2006, but not later than December 31, 2013, by written

agreement to subsequent transferees at any time during the five (5)

years following the year of qualification. An eligible transferee

shall be any taxpayer subject to the tax imposed by Section 1803 or

Section 2355 of this title or Section 624 or 628 of Title 36 of the

Oklahoma Statutes. The person originally allowed the credit and the

subsequent transferee shall jointly file a copy of the written

credit transfer agreement with the Tax Commission within thirty (30)

days of the transfer. The written agreement shall contain the name,

address and taxpayer identification number of the parties to the

transfer, the amount of credit being transferred, the year the

credit was originally allowed to the transferring person and the tax

year or years for which the credit may be claimed. The Tax

Commission may promulgate rules to permit verification of the

validity and timeliness of a tax credit claimed upon a tax return

pursuant to this subsection but shall not promulgate any rules which

unduly restrict or hinder the transfers of such tax credit.

J. Any person receiving tax credits pursuant to the provisions

of this section shall apply the credits against taxes payable or,

subject to the limitation that credits earned after December 31,

2013, shall not be transferred, shall transfer the credits as

provided in this section or, for credits earned on or after January

1, 2014, shall receive a refund pursuant to the provisions of

subsection L of this section. Credits shall not be used to lower

the price of any Oklahoma-mined coal sold that is produced by a

subsidiary of the person receiving a tax credit under this section

to other buyers of the Oklahoma-mined coal.

K. Except as provided by paragraph 2 of subsection L of this

section, the credits allowed by subsections B, C, D, E and F of this

section, upon election of the taxpayer, shall be treated and may be

claimed as a payment of tax, a prepayment of tax or a payment of

estimated tax for purposes of Section 1803 or 2355 of this title or

Section 624 or 628 of Title 36 of the Oklahoma Statutes.

L. 1. With respect to credits allowed pursuant to the

provisions of subsections B, C, D, E and F of this section earned

prior to January 1, 2014, but not used in any tax year may be

carried over in order to each of the five (5) years following the

year of qualification.

Oklahoma Statutes - Title 68. Revenue and Taxation

2. With respect to credits allowed pursuant to the provisions

of subsections B, C, D, E and F of this section which are earned but

not used, based upon activity occurring on or after January 1, 2014,

the Oklahoma Tax Commission shall, at the taxpayer's election,

refund directly to the taxpayer eighty-five percent (85%) of the

face amount of such credits. The direct refund of the credits

pursuant to this paragraph shall be available to all taxpayers,

including, without limitation, pass-through entities and taxpayers

subject to Section 2355 of this title. The amount of any direct

refund of credits actually received at the eighty-five percent (85%)

level by the taxpayer pursuant to this paragraph shall not be

subject to the tax imposed by Section 2355 of this title. If the

pass-through entity does not file a claim for a direct refund, the

pass-through entity shall allocate the credit to one or more of the

shareholders, partners or members of the pass-through entity;

provided, the total of all credits refunded or allocated shall not

exceed the amount of the credit or refund to which the pass-through

entity is entitled. For the purposes of this paragraph, "passthrough entity" means a corporation that for the applicable tax year

is treated as an S corporation under the Internal Revenue Code of

1986, as amended, general partnership, limited partnership, limited

liability partnership, trust or limited liability company that for

the applicable tax year is not taxed as a corporation for federal

income tax purposes.

M. No credit otherwise authorized by the provisions of this

section may be claimed for any event, transaction, investment,

expenditure or other act occurring on or after July 1, 2010, for

which the credit would otherwise be allowable. The provisions of

this subsection shall cease to be operative on July 1, 2012.

Beginning July 1, 2012, the credit authorized by this section may be

claimed for any event, transaction, investment, expenditure or other

act occurring on or after July 1, 2012, according to the provisions

of this section.

N. Except as otherwise provided by this section, any credits

calculated pursuant to paragraphs 3 or 4 of subsection B or

subsection D of this section for activities occurring on or after

January 1, 2016, the amount of credit allowed shall be equal to

seventy-five percent (75%) of the amount otherwise provided.

O. For tax years beginning on or after January 1, 2018, the

total amount of credits authorized by this section used to offset

tax or paid as a refund shall be adjusted annually to limit the

annual amount of credits to Five Million Dollars ($5,000,000.00).

The Tax Commission shall annually calculate and publish a percentage

by which the credits authorized by this section shall be reduced so

the total amount of credits used to offset tax or paid as a refund

does not exceed Five Million Dollars ($5,000,000.00) per year. The

formula to be used for the percentage adjustment shall be Five

Oklahoma Statutes - Title 68. Revenue and Taxation

Million Dollars ($5,000,000.00) divided by the credits claimed in

the second preceding year.

P. Pursuant to subsection O of this section, in the event the

total tax credits authorized by this section exceed Five Million

Dollars ($5,000,000.00) in any calendar year, the Tax Commission

shall permit any excess over Five Million Dollars ($5,000,000.00)

but shall factor such excess into the percentage adjustment formula

for subsequent years.

Q. Any credits authorized by this section not used or unable to

be used because of the provisions of subsection O or P of this

section may be carried over until such credits are fully used.

Added by Laws 1988, c. 316, § 2, eff. Jan. 1, 1989. Amended by Laws

1992, c. 162, § 1, emerg. eff. May 5, 1992; Laws 1993, c. 138, § 1,

eff. Sept. 1, 1993; Laws 1994, c. 278, § 25, eff. Sept. 1, 1994;

Laws 1996, c. 360, § 4, eff. July 1, 1996; Laws 1999, c. 79, § 1,

eff. July 1, 1999; Laws 2001, c. 402, § 2, eff. July 1, 2001; Laws

2002, c. 170, § 1, emerg. eff. May 6, 2002; Laws 2002, c. 458, § 11,

eff. July 1, 2002; Laws 2005, c. 413, § 5, eff. July 1, 2005; Laws

2006, c. 272, § 13; Laws 2006, 2nd Ex. Sess., c. 44, § 9, eff. July

1, 2006; Laws 2010, c. 327, § 6, eff. July 1, 2010; Laws 2010, c.

361, § 1, eff. Nov. 1, 2010; Laws 2013, c. 371, § 1, eff. Jan. 1,

2014; Laws 2016, c. 390, § 1, eff. Nov. 1, 2016; Laws 2018, 2nd Ex.

Sess., c. 6, § 1, eff. Jan. 1, 2018.

§68-2357.11A. Task Force for the Study of Transferable Tax Credits.

A. There is hereby created the Task Force for the Study of

Transferable Tax Credits.

B. The Task Force shall consist of nine (9) members to be

appointed or selected as follows:

1. Three members to be appointed by the Governor at least one

of whom shall be a principal member of the Governor’s staff;

2. Three members, who shall be members of the Oklahoma House of

Representatives, to be appointed by the Speaker of the Oklahoma

House of Representatives, one of whom shall be the Chair of the

Revenue and Taxation Subcommittee of the Appropriations and Budget

Committee; and

3. Three members, who shall be members of the Oklahoma State

Senate, to be appointed by the President Pro Tempore of the State

Senate, one of whom shall be the Chair of the Senate Finance

Committee.

C. The Task Force shall conduct an organizational meeting not

later than September 30, 2009. A majority of the members present at

the organizational meeting or any subsequent meeting shall

constitute a quorum for the purpose of any action taken including

the preparation and approval of the final report required by

subsection I of this section.

Oklahoma Statutes - Title 68. Revenue and Taxation

D. The cochairs of the Task Force shall be the member who is

the Chair of the Revenue and Taxation Subcommittee of the

Appropriations and Budget Committee and the Chair of the Finance

Committee of the State Senate.

E. The Task Force shall be authorized to meet as necessary in

order to perform the duties imposed upon it. Legislative members of

the Task Force shall be reimbursed for travel expenses pursuant to

the provisions of Section 456 of Title 74 of the Oklahoma Statutes.

Other members of the Task Force shall be reimbursed as provided by

the appointing authority.

F. The Task Force shall conduct a study regarding all tax

credits that are transferable to any person or entity other than the

entity to whom or to which the credits are initially made available

pursuant to the statute creating the credit. The study shall

include, but shall not be limited to:

1. The justification for the enactment of transferable tax

credits based upon the relevant economics of the applicable industry

or economic sector affected;

2. The economic impact related to the utilization of

transferable tax credits;

3. Analysis of the utilization of the credits by tax credit

purchasers; and

4. Such other matters related to the tax credit as the Task

Force deems relevant.

G. The Task Force shall be subject to the provisions of:

1. The Oklahoma Open Meeting Act; and

2. The Oklahoma Open Records Act.

H. Staff assistance for the Task Force shall be provided by the

staff of the Oklahoma House of Representative and the State Senate.

I. The Task Force shall produce a final written report of its

findings and any recommendations regarding transferable tax credits.

The report shall be submitted to the Governor, the Speaker of the

Oklahoma House of Representatives and the President Pro Tempore of

the State Senate not later than December 31, 2009.

J. The provisions of this section shall cease to have the force

and effect of law and the Task Force shall terminate effective

January 1, 2010.

Added by Laws 2009, c. 325, § 1.