SB 2063

1  ENGROSSED HOUSE AMENDMENT
          TO
2  ENGROSSED SENATE BILL NO. 2063  By: Murdock of the Senate
3and
4Archer of the House
5
6An Act relating to the Uniform Unclaimed Property
           Act; amending 60 O.S. 2021, Section 651, as amended
7by Section 1, Chapter 421, O.S.L. 2025 (60 O.S. Supp.
           2025, Section 651), which relates to definitions;
8modifying definition; amending 60 O.S. 2021, Section
           668, as last amended by Section 3, Chapter 421,
9O.S.L. 2025 (60 O.S. Supp. 2025, Section 668), which
           relates to the Unclaimed Property Fund; modifying
10required information to be filed with deposits;
           requiring certain information to be made available on
11a public website; permitting requests for certain
           information; requiring the State Treasurer make
12certain information available at the end of each
           fiscal year; amending 60 O.S. 2021, Section 674, as
13amended by Section 4, Chapter 421, O.S.L. 2025 (60
           O.S. Supp. 2025, Section 674), which relates to
14claims of abandoned property; authorizing the State
           Treasurer to request additional information in
15certain circumstances; authorizing claimants to
           request a hearing in certain circumstances; requiring
16the State Treasurer to respond to requests within
           certain time period; modifying permissible documents
17to be filed with a claim; updating statutory
           language; updating statutory references; and
18providing an effective date.
19
20 AUTHOR:    Remove Representative Archer as principal House author and
            substitute with Representative Maynard
21
22 AMENDMENT NO. 1.    Strike the title, enacting clause, and entire bill
                     and insert:
23
24
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1"An Act relating to entrepreneurial experience;
        enacting the Oklahoma Youth Entrepreneurs Promotion
2and Development Act of 2026; amending 68 O.S. 2021,
        Section 1357, as last amended by Section 1, Chapter
3391, O.S.L. 2025 (68 O.S. Supp. 2025, Section 1357),
        which relates to sales tax exemption; providing sales
4tax exemption for sales of tangible personal property
        and services by certain persons as sole proprietors;
5providing exemption for income derived by business
        activity conducted by certain persons; limiting
6business assistance from adults; placing gross
        revenue cap on the business; specifying where
7business is conducted to receive exemption;
        prohibiting exemption from applying if the business
8is materially operated for the benefit of an adult;
        amending 68 O.S. 2021, Section 2358, as last amended
9by Section 1, Chapter 166, O.S.L. 2024 (68 O.S. Supp.
        2025, Section 2358), which relates to Oklahoma
10taxable income and adjusted gross income; providing
        exemption for income derived by business activity
11conducted by certain persons; limiting business
        assistance from adults; placing gross revenue cap on
12the business; specifying where business is conducted
        to receive exemption; prohibiting exemption from
13applying if the business is materially operated for
        the benefit of an adult; exempting certain sole
14proprietors from state or local business licensing
        requirements; providing for noncodification;
15providing for codification; and providing an
        effective date.
16
17
18 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
19    SECTION 1.     NEW LAW     A new section of law not to be
20 codified in the Oklahoma Statutes reads as follows:
21    This act shall be known and may be cited as the "Oklahoma Youth
22 Entrepreneurs Promotion and Development Act of 2026".
23
24
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1      SECTION 2.      AMENDATORY      68 O.S. 2021, Section 1357, as
2  last amended by Section 1, Chapter 391, O.S.L. 2025 (68 O.S. Supp.
3  2025, Section 1357), is amended to read as follows:
4      Section 1357.   Exemptions – General.
5      There are hereby specifically exempted from the tax levied by
6  the Oklahoma Sales Tax Code:
7      1.   Transportation of school pupils to and from elementary
8  schools or high schools in motor or other vehicles;
9      2.   Transportation of persons where the fare of each person does
10 not exceed One Dollar ($1.00), or local transportation of persons
11 within the corporate limits of a municipality except by taxicabs;
12     3.   Sales for resale to persons engaged in the business of
13 reselling the articles purchased, whether within or without the
14 state, provided that such sales to residents of this state are made
15 to persons to whom sales tax permits have been issued as provided in
16 the Oklahoma Sales Tax Code.     This exemption shall not apply to the
17 sales of articles made to persons holding permits when such persons
18 purchase items for their use and which they are not regularly
19 engaged in the business of reselling; neither shall this exemption
20 apply to sales of tangible personal property to peddlers, solicitors
21 and other salespersons who do not have an established place of
22 business and a sales tax permit.     The exemption provided by this
23 paragraph shall apply to sales of motor fuel or diesel fuel to a
24 Group Five vendor, but the use of such motor fuel or diesel fuel by
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1  the Group Five vendor shall not be exempt from the tax levied by the
2  Oklahoma Sales Tax Code.   The purchase of motor fuel or diesel fuel
3  is exempt from sales tax when the motor fuel is for shipment outside
4  this state and consumed by a common carrier by rail in the conduct
5  of its business.   The sales tax shall apply to the purchase of motor
6  fuel or diesel fuel in Oklahoma by a common carrier by rail when
7  such motor fuel is purchased for fueling, within this state, of any
8  locomotive or other motorized flanged wheel equipment;
9     4.   Sales of advertising space in newspapers and periodicals;
10    5.   Sales of programs relating to sporting and entertainment
11 events, and sales of advertising on billboards (including signage,
12 posters, panels, marquees or on other similar surfaces, whether
13 indoors or outdoors) or in programs relating to sporting and
14 entertainment events, and sales of any advertising, to be displayed
15 at or in connection with a sporting event, via the Internet,
16 electronic display devices or through public address or broadcast
17 systems.   The exemption authorized by this paragraph shall be
18 effective for all sales made on or after January 1, 2001;
19    6.   Sales of any advertising, other than the advertising
20 described by paragraph 5 of this section, via the Internet,
21 electronic display devices or through the electronic media including
22 radio, public address or broadcast systems, television (whether
23 through closed circuit broadcasting systems or otherwise), and cable
24
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1  and satellite television, and the servicing of any advertising
2  devices;
3      7.   Eggs, feed, supplies, machinery, and equipment purchased by
4  persons regularly engaged in the business of raising worms, fish,
5  any insect, or any other form of terrestrial or aquatic animal life
6  and used for the purpose of raising same for marketing.    This
7  exemption shall only be granted and extended to the purchaser when
8  the items are to be used and in fact are used in the raising of
9  animal life as set out above.    Each purchaser shall certify, in
10 writing, on the invoice or sales ticket retained by the vendor that
11 the purchaser is regularly engaged in the business of raising such
12 animal life and that the items purchased will be used only in such
13 business.   The vendor shall certify to the Oklahoma Tax Commission
14 that the price of the items has been reduced to grant the full
15 benefit of the exemption.   Violation hereof by the purchaser or
16 vendor shall be a misdemeanor;
17     8.   Sale of natural or artificial gas and electricity, and
18 associated delivery or transmission services, when sold exclusively
19 for residential use.   Provided, this exemption shall not apply to
20 any sales tax levied by a city or town, or a county or any other
21 jurisdiction in this state;
22     9.   In addition to the exemptions authorized by Section 1357.6
23 of this title, sales of drugs sold pursuant to a prescription
24 written for the treatment of human beings by a person licensed to
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1  prescribe the drugs, and sales of insulin and medical oxygen.
2  Provided, this exemption shall not apply to over-the-counter drugs;
3      10.   Transfers of title or possession of empty, partially
4  filled, or filled returnable oil and chemical drums to any person
5  who is not regularly engaged in the business of selling, reselling
6  or otherwise transferring empty, partially filled or filled
7  returnable oil drums;
8      11.   Sales of one-way utensils, paper napkins, paper cups,
9  disposable hot containers, and other one-way carry out materials to
10 a vendor of meals or beverages;
11     12.   Sales of food or food products for home consumption which
12 are purchased in whole or in part with coupons issued pursuant to
13 the federal food stamp program as authorized by Sections 2011
14 through 2036d of Title 7 of the United States Code, as to that
15 portion purchased with such coupons.   The exemption provided for
16 such sales shall be inapplicable to such sales upon the effective
17 date of any federal law that removes the requirement of the
18 exemption as a condition for participation by the state in the
19 federal food stamp program;
20     13.   Sales of food or food products, or any equipment or
21 supplies used in the preparation of the food or food products to or
22 by an organization which:
23a.   is exempt from taxation pursuant to the provisions of
24Section 501(c)(3) of the Internal Revenue Code of
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11986, as amended, 26 U.S.C., Section 501(c)(3), and
2which provides and delivers prepared meals for home
3consumption to elderly or homebound persons as part of
4a program commonly known as "Meals on Wheels" or
5"Mobile Meals", or
6b.   is exempt from taxation pursuant to the provisions of
7Section 501(c)(3) of the Internal Revenue Code of
81986, as amended, 26 U.S.C., Section 501(c)(3), and
9which receives federal funding pursuant to the Older
10Americans Act of 1965, as amended, for the purpose of
11providing nutrition programs for the care and benefit
12of elderly persons;
13    14.   a.   Sales of tangible personal property or services to or
14by organizations which are exempt from taxation
15pursuant to the provisions of Section 501(c)(3) of the
16Internal Revenue Code of 1986, as amended, 26 U.S.C.,
17Section 501(c)(3), and:
18(1)   are primarily involved in the collection and
19distribution of food and other household products
20to other organizations that facilitate the
21distribution of such products to the needy and
22such distributee organizations are exempt from
23taxation pursuant to the provisions of Section
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1501(c)(3) of the Internal Revenue Code of 1986,
2as amended, 26 U.S.C., Section 501(c)(3), or
3(2)   facilitate the distribution of such products to
4the needy.
5b.   Sales made in the course of business for profit or
6savings, competing with other persons engaged in the
7same or similar business shall not be exempt under
8this paragraph;
9     15.   Sales of tangible personal property or services to
10 children's homes which are located on church-owned property and are
11 operated by organizations exempt from taxation pursuant to the
12 provisions of the Internal Revenue Code of 1986, as amended, 26
13 U.S.C., Section 501(c)(3);
14    16.   Sales of computers, data processing equipment, related
15 peripherals, and telephone, telegraph or telecommunications service
16 and equipment for use in a qualified aircraft maintenance or
17 manufacturing facility.   For purposes of this paragraph, "qualified
18 aircraft maintenance or manufacturing facility" means a new or
19 expanding facility primarily engaged in aircraft repair, building or
20 rebuilding, whether or not on a factory basis, whose total cost of
21 construction exceeds the sum of Five Million Dollars ($5,000,000.00)
22 and which employs at least two hundred fifty new full-time-
23 equivalent employees, as certified by the Oklahoma Employment
24 Security Commission, upon completion of the facility.   In order to
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1  qualify for the exemption provided for by this paragraph, the cost
2  of the items purchased by the qualified aircraft maintenance or
3  manufacturing facility shall equal or exceed the sum of Two Million
4  Dollars ($2,000,000.00);
5     17.   Sales of tangible personal property consumed or
6  incorporated in the construction or expansion of a qualified
7  aircraft maintenance or manufacturing facility as defined in
8  paragraph 16 of this section.   For purposes of this paragraph, sales
9  made to a contractor or subcontractor that has previously entered
10 into a contractual relationship with a qualified aircraft
11 maintenance or manufacturing facility for construction or expansion
12 of such a facility shall be considered sales made to a qualified
13 aircraft maintenance or manufacturing facility;
14    18.   Sales of the following telecommunications services:
15a.   interstate and international 800 service.    "800
16service" means a telecommunications service that
17allows a caller to dial a toll-free number without
18incurring a charge for the call.    The service is
19typically marketed under the name "800", "855", "866",
20"877" and "888" toll-free calling, and any subsequent
21numbers designated by the Federal Communications
22Commission,
23b.   interstate and international 900 service.    "900
24service" means an inbound toll telecommunications
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1service purchased by a subscriber that allows the
2subscriber's customers to call in to the subscriber's
3prerecorded announcement or live service.     900 service
4does not include the charge for:     collection services
5provided by the seller of the telecommunications
6services to the subscriber, or service or product sold
7by the subscriber to the subscriber's customer.       The
8service is typically marketed under the name "900"
9service, and any subsequent numbers designated by the
10Federal Communications Commission,
11c.   interstate and international private communications
12service.   "Private communications service" means a
13telecommunications service that entitles the customer
14to exclusive or priority use of a communications
15channel or group of channels between or among
16termination points, regardless of the manner in which
17such channel or channels are connected, and includes
18switching capacity, extension lines, stations and any
19other associated services that are provided in
20connection with the use of such channel or channels,
21d.   value-added nonvoice data service.     "Value-added
22nonvoice data service" means a service that otherwise
23meets the definition of telecommunications services in
24which computer processing applications are used to act
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1on the form, content, code or protocol of the
2information or data primarily for a purpose other than
3transmission, conveyance, or routing,
4e.   interstate and international telecommunications
5service which is:
6(1)   rendered by a company for private use within its
7organization, or
8(2)   used, allocated or distributed by a company to
9its affiliated group,
10f.   regulatory assessments and charges including charges
11to fund the Oklahoma Universal Service Fund, the
12Oklahoma Lifeline Fund and the Oklahoma High Cost
13Fund, and
14g.   telecommunications nonrecurring charges including but
15not limited to the installation, connection, change,
16or initiation of telecommunications services which are
17not associated with a retail consumer sale;
18    19.   Sales of railroad track spikes manufactured and sold for
19 use in this state in the construction or repair of railroad tracks,
20 switches, sidings, and turnouts;
21    20.   Sales of aircraft and aircraft parts provided such sales
22 occur at a qualified aircraft maintenance facility.   As used in this
23 paragraph, "qualified aircraft maintenance facility" means a
24 facility operated by an air common carrier including one or more
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1  component overhaul support buildings or structures in an area owned,
2  leased, or controlled by the air common carrier, at which there were
3  employed at least two thousand full-time-equivalent employees in the
4  preceding year as certified by the Oklahoma Employment Security
5  Commission and which is primarily related to the fabrication,
6  repair, alteration, modification, refurbishing, maintenance,
7  building, or rebuilding of commercial aircraft or aircraft parts
8  used in air common carriage.   For purposes of this paragraph, "air
9  common carrier" shall also include members of an affiliated group as
10 defined by Section 1504 of the Internal Revenue Code of 1986, as
11 amended, 26 U.S.C., Section 1504.     Beginning July 1, 2012, the
12 exemption shall include sales of machinery, tools, supplies,
13 equipment, and related tangible personal property and services used
14 or consumed in the repair, remodeling, or maintenance of aircraft,
15 aircraft engines or aircraft component parts which occur at a
16 qualified aircraft maintenance facility;
17    21.   Sales of machinery and equipment purchased and used by
18 persons and establishments primarily engaged in computer services
19 and data processing:
20a.   as defined under Industry Group Numbers 7372 and 7373
21of the Standard Industrial Classification (SIC)
22Manual, latest version, which derive at least fifty
23percent (50%) of their annual gross revenues from the
24
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1sale of a product or service to an out-of-state buyer
2or consumer, and
3b.   as defined under Industry Group Number 7374 of the SIC
4Manual, latest version, which derive at least eighty
5percent (80%) of their annual gross revenues from the
6sale of a product or service to an out-of-state buyer
7or consumer.
8      Eligibility for the exemption set out in this paragraph shall be
9  established, subject to review by the Tax Commission, by annually
10 filing an affidavit with the Tax Commission stating that the
11 facility so qualifies and such information as required by the Tax
12 Commission.    For purposes of determining whether annual gross
13 revenues are derived from sales to out-of-state buyers or consumers,
14 all sales to the federal government shall be considered to be to an
15 out-of-state buyer or consumer;
16     22.   Sales of prosthetic devices to an individual for use by
17 such individual.   For purposes of this paragraph, "prosthetic
18 device" shall have the same meaning as provided in Section 1357.6 of
19 this title, but shall not include corrective eye glasses, contact
20 lenses, or hearing aids;
21     23.   Sales of tangible personal property or services to a motion
22 picture or television production company to be used or consumed in
23 connection with an eligible production.   For purposes of this
24 paragraph, "eligible production" means a documentary, special, music
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1  video or a television commercial or television program that will
2  serve as a pilot for or be a segment of an ongoing dramatic or
3  situation comedy series filmed or taped for network or national or
4  regional syndication or a feature-length motion picture intended for
5  theatrical release or for network or national or regional
6  syndication or broadcast.   The provisions of this paragraph shall
7  apply to sales occurring on or after July 1, 1996.   In order to
8  qualify for the exemption, the motion picture or television
9  production company shall file any documentation and information
10 required to be submitted pursuant to rules promulgated by the Tax
11 Commission;
12     24.   Sales of diesel fuel sold for consumption by commercial
13 vessels, barges and other commercial watercraft;
14     25.   Sales of tangible personal property or services to tax-
15 exempt independent nonprofit biomedical research foundations that
16 provide educational programs for Oklahoma science students and
17 teachers and to tax-exempt independent nonprofit community blood
18 banks headquartered in this state;
19     26.   Effective May 6, 1992, sales of wireless telecommunications
20 equipment to a vendor who subsequently transfers the equipment at no
21 charge or for a discounted charge to a consumer as part of a
22 promotional package or as an inducement to commence or continue a
23 contract for wireless telecommunications services;
24
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1     27.   Effective January 1, 1991, leases of rail transportation
2  cars to haul coal to coal-fired plants located in this state which
3  generate electric power;
4     28.   Beginning July 1, 2005, sales of aircraft engine repairs,
5  modification, and replacement parts, sales of aircraft frame repairs
6  and modification, aircraft interior modification, and paint, and
7  sales of services employed in the repair, modification, and
8  replacement of parts of aircraft engines, aircraft frame and
9  interior repair and modification, and paint;
10    29.   Sales of materials and supplies to the owner or operator of
11 a ship, motor vessel, or barge that is used in interstate or
12 international commerce if the materials and supplies:
13a.   are loaded on the ship, motor vessel, or barge and
14used in the maintenance and operation of the ship,
15motor vessel, or barge, or
16b.   enter into and become component parts of the ship,
17motor vessel, or barge;
18    30.   Sales of tangible personal property made at estate sales at
19 which such property is offered for sale on the premises of the
20 former residence of the decedent by a person who is not required to
21 be licensed pursuant to the Transient Merchant Licensing Act, or who
22 is not otherwise required to obtain a sales tax permit for the sale
23 of such property pursuant to the provisions of Section 1364 of this
24 title; provided:
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1a.   such sale or event may not be held for a period
2exceeding three (3) consecutive days,
3b.   the sale must be conducted within six (6) months of
4the date of death of the decedent, and
5c.   the exemption allowed by this paragraph shall not be
6allowed for property that was not part of the
7decedent's estate;
8      31.   Beginning January 1, 2004, sales of electricity and
9  associated delivery and transmission services, when sold exclusively
10 for use by an oil and gas operator for reservoir dewatering projects
11 and associated operations commencing on or after July 1, 2003, in
12 which the initial water-to-oil ratio is greater than or equal to
13 five-to-one water-to-oil, and such oil and gas development projects
14 have been classified by the Corporation Commission as a reservoir
15 dewatering unit;
16     32.   Sales of prewritten computer software that is delivered
17 electronically.    For purposes of this paragraph, "delivered
18 electronically" means delivered to the purchaser by means other than
19 tangible storage media;
20     33.   Sales of modular dwelling units when built at a production
21 facility and moved in whole or in parts, to be assembled on-site,
22 and permanently affixed to the real property and used for
23 residential or commercial purposes.    The exemption provided by this
24 paragraph shall equal forty-five percent (45%) of the total sales
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1  price of the modular dwelling unit.   For purposes of this paragraph,
2  "modular dwelling unit" means a structure that is not subject to the
3  motor vehicle excise tax imposed pursuant to Section 2103 of this
4  title;
5     34.   Sales of tangible personal property or services to:
6a.   persons who are residents of Oklahoma and have been
7honorably discharged from active service in any branch
8of the Armed Forces of the United States or Oklahoma
9National Guard and who have been certified by the
10United States Department of Veterans Affairs or its
11successor to be in receipt of disability compensation
12at the one-hundred-percent rate and the disability
13shall be permanent and have been sustained through
14military action or accident or resulting from disease
15contracted while in such active service and registered
16with the veterans registry created by the Oklahoma
17Department of Veterans Affairs, or
18b.   the surviving spouse of the person in subparagraph a
19of this paragraph if the person is deceased and the
20spouse has not remarried and the surviving spouse of a
21person who is determined by the United States
22Department of Defense or any branch of the United
23States military to have died while in the line of duty
24if the spouse has not remarried.   Sales for the
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1benefit of an eligible person to a spouse of the
2eligible person or to a member of the household in
3which the eligible person resides and who is
4authorized to make purchases on the person's behalf,
5when such eligible person is not present at the sale,
6shall also be exempt for purposes of this paragraph.
7The Oklahoma Tax Commission shall issue a separate
8exemption card to a spouse of an eligible person or to
9a member of the household in which the eligible person
10resides who is authorized to make purchases on the
11person's behalf, if requested by the eligible person.
12Sales qualifying for the exemption authorized by this
13paragraph shall not exceed Twenty-five Thousand
14Dollars ($25,000.00) per year per individual while the
15disabled veteran is living.   Sales qualifying for the
16exemption authorized by this paragraph shall not
17exceed One Thousand Dollars ($1,000.00) per year for
18an unremarried surviving spouse.   Upon request of the
19Tax Commission, a person asserting or claiming the
20exemption authorized by this paragraph shall provide a
21statement, executed under oath, that the total sales
22amounts for which the exemption is applicable have not
23exceeded Twenty-five Thousand Dollars ($25,000.00) per
24year per living disabled veteran or One Thousand
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1Dollars ($1,000.00) per year for an unremarried
2surviving spouse.   If the amount of such exempt sales
3exceeds such amount, the sales tax in excess of the
4authorized amount shall be treated as a direct sales
5tax liability and may be recovered by the Tax
6Commission in the same manner provided by law for
7other taxes including penalty and interest.     The Tax
8Commission shall promulgate any rules necessary to
9implement the provisions of this paragraph, which
10shall include rules providing for the disclosure of
11information about persons eligible for the exemption
12authorized in this paragraph to the Oklahoma
13Department of Veterans Affairs, as authorized in
14Section 205 of this title.   For purposes of the
15exemption authorized by this subparagraph, if the
16disability determination that would have been made
17while the disabled veteran was still living is not
18made final until after the death of the disabled
19veteran, the exemption authorized by this subparagraph
20may still be claimed by the surviving spouse;
21    35.   Sales of electricity to the operator, specifically
22 designated by the Corporation Commission, of a spacing unit or lease
23 from which oil is produced or attempted to be produced using
24 enhanced recovery methods including, but not limited to, increased
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1  pressure in a producing formation through the use of water or
2  saltwater if the electrical usage is associated with and necessary
3  for the operation of equipment required to inject or circulate
4  fluids in a producing formation for the purpose of forcing oil or
5  petroleum into a wellbore for eventual recovery and production from
6  the wellhead.   In order to be eligible for the sales tax exemption
7  authorized by this paragraph, the total content of oil recovered
8  after the use of enhanced recovery methods shall not exceed one
9  percent (1%) by volume.   The exemption authorized by this paragraph
10 shall be applicable only to the state sales tax rate and shall not
11 be applicable to any county or municipal sales tax rate;
12    36.   Sales of intrastate charter and tour bus transportation.
13 As used in this paragraph, "intrastate charter and tour bus
14 transportation" means the transportation of persons from one
15 location in this state to another location in this state in a motor
16 vehicle which has been constructed in such a manner that it may
17 lawfully carry more than eighteen persons, and which is ordinarily
18 used or rented to carry persons for compensation.   Provided, this
19 exemption shall not apply to regularly scheduled bus transportation
20 for the general public;
21    37.   Sales of vitamins, minerals, and dietary supplements by a
22 licensed chiropractor to a person who is the patient of such
23 chiropractor at the physical location where the chiropractor
24 provides chiropractic care or services to such patient.    The
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1  provisions of this paragraph shall not be applicable to any drug,
2  medicine, or substance for which a prescription by a licensed
3  physician is required;
4      38.   Sales of goods, wares, merchandise, tangible personal
5  property, machinery, and equipment to a web search portal located in
6  this state which derives at least eighty percent (80%) of its annual
7  gross revenue from the sale of a product or service to an out-of-
8  state buyer or consumer.   For purposes of this paragraph, "web
9  search portal" means an establishment classified under North
10 American Industry Classification System (NAICS) code 519130 which
11 operates websites that use a search engine to generate and maintain
12 extensive databases of Internet addresses and content in an easily
13 searchable format;
14     39.   Sales of tangible personal property consumed or
15 incorporated in the construction or expansion of a facility for a
16 corporation organized under Section 437 et seq. of Title 18 of the
17 Oklahoma Statutes as a rural electric cooperative.   For purposes of
18 this paragraph, sales made to a contractor or subcontractor that has
19 previously entered into a contractual relationship with a rural
20 electric cooperative for construction or expansion of a facility
21 shall be considered sales made to a rural electric cooperative;
22     40.   Sales of tangible personal property or services to a
23 business primarily engaged in the repair of consumer electronic
24 goods including, but not limited to, cell phones, compact disc
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1  players, personal computers, MP3 players, digital devices for the
2  storage and retrieval of information through hard-wired or wireless
3  computer or Internet connections, if the devices are sold to the
4  business by the original manufacturer of such devices and the
5  devices are repaired, refitted or refurbished for sale by the entity
6  qualifying for the exemption authorized by this paragraph directly
7  to retail consumers or if the devices are sold to another business
8  entity for sale to retail consumers;
9     41.   On or after July 1, 2019, and prior to July 1, 2024, sales
10 or leases of rolling stock when sold or leased by the manufacturer,
11 regardless of whether the purchaser is a public services corporation
12 engaged in business as a common carrier of property or passengers by
13 railway, for use or consumption by a common carrier directly in the
14 rendition of public service.   For purposes of this paragraph,
15 "rolling stock" means locomotives, autocars, and railroad cars and
16 "sales or leases" includes railroad car maintenance and retrofitting
17 of railroad cars for their further use only on the railways;
18    42.   Sales of gold, silver, platinum, palladium or other bullion
19 items such as coins and bars and legal tender of any nation, which
20 legal tender is sold according to its value as precious metal or as
21 an investment.   As used in the paragraph, "bullion" means any
22 precious metal including, but not limited to, gold, silver,
23 platinum, and palladium, that is in such a state or condition that
24 its value depends upon its precious metal content and not its form.
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 22
1  The exemption authorized by this paragraph shall not apply to
2  fabricated metals that have been processed or manufactured for
3  artistic use or as jewelry;
4      43.   Recovery fees on the rental charge from any item of heavy
5  equipment property rental as provided for in Section 2807.11 of this
6  title; and
7      44.   Sales of firearm safety devices and gun safety devices.     As
8  used in this paragraph:
9a.   "firearm safety device" means a gun safe, gun case,
10gun lock box, trigger lock, barrel lock, or other
11device that is designed to be used to store a firearm
12and that is designed to be unlocked only by means of a
13key, combination, or other similar means, and
14b.   "gun safety device" means any integral device to be
15equipped or installed on a firearm that permits a user
16to program the firearm to operate only for specified
17persons designated by the user through computerized
18locking devices or other means integral to and
19permanently part of the firearm; and
20     45.   Sales of tangible personal property or services made by a
21 business that is owned and operated primarily by one or more
22 individuals who have not attained eighteen (18) years of age,
23 conducting such business as a sole proprietorship and not through
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 23
1  any other legal entity, shall be exempt from the tax levied by the
2  Oklahoma Sales Tax Code, so long as:
3a.      the business receives only limited assistance from
4adults in the form of supervision, transportation,
5safety oversight, or other incidental support that
6does not constitute material management or operation
7of the business,
8b.      the business generates gross revenue of less than One
9Thousand Dollars ($1,000.00) during the calendar year,
10and
11c.      the business operates only on private property with
12the consent of the owner or lawful possessor of the
13property, or as part of a community event that
14separately registers youth vendors.
15    This exemption shall not apply if an adult exercises primary
16 control over the business decisions, management, or operations, or
17 if the business is materially operated for the benefit of any adult.
18    SECTION 3.  AMENDATORY     68 O.S. 2021, Section 2358, as
19 last amended by Section 1, Chapter 166, O.S.L. 2024 (68 O.S. Supp.
20 2025, Section 2358), is amended to read as follows:
21    Section 2358.      For all tax years beginning after December 31,
22 1981, taxable income and adjusted gross income shall be adjusted to
23 arrive at Oklahoma taxable income and Oklahoma adjusted gross income
24 as required by this section.
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 24
1     A.     The taxable income of any taxpayer shall be adjusted to
2  arrive at Oklahoma taxable income for corporations and Oklahoma
3  adjusted gross income for individuals, as follows:
4     1.     There shall be added interest income on obligations of any
5  state or political subdivision thereto which is not otherwise
6  exempted pursuant to other laws of this state, to the extent that
7  such interest is not included in taxable income and adjusted gross
8  income.
9     2.     There shall be deducted amounts included in such income that
10 the state is prohibited from taxing because of the provisions of the
11 Federal Constitution, the State Constitution, federal laws or laws
12 of Oklahoma.
13    3.     The amount of any federal net operating loss deduction shall
14 be adjusted as follows:
15a.   For carryovers and carrybacks to taxable years
16beginning before January 1, 1981, the amount of any
17net operating loss deduction allowed to a taxpayer for
18federal income tax purposes shall be reduced to an
19amount which is the same portion thereof as the loss
20from sources within this state, as determined pursuant
21to this section and Section 2362 of this title, for
22the taxable year in which such loss is sustained is of
23the total loss for such year;
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 25
1b.   For carryovers and carrybacks to taxable years
2beginning after December 31, 1980, the amount of any
3net operating loss deduction allowed for the taxable
4year shall be an amount equal to the aggregate of the
5Oklahoma net operating loss carryovers and carrybacks
6to such year.    Oklahoma net operating losses shall be
7separately determined by reference to Section 172 of
8the Internal Revenue Code, 26 U.S.C., Section 172, as
9modified by the Oklahoma Income Tax Act, Section 2351
10et seq. of this title, and shall be allowed without
11regard to the existence of a federal net operating
12loss.    For tax years beginning after December 31,
132000, and ending before January 1, 2008, the years to
14which such losses may be carried shall be determined
15solely by reference to Section 172 of the Internal
16Revenue Code, 26 U.S.C., Section 172, with the
17exception that the terms "net operating loss" and
18"taxable income" shall be replaced with "Oklahoma net
19operating loss" and "Oklahoma taxable income".     For
20tax years beginning after December 31, 2007, and
21ending before January 1, 2009, years to which such
22losses may be carried back shall be limited to two (2)
23years.    For tax years beginning after December 31,
242008, the years to which such losses may be carried
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 26
1back shall be determined solely by reference to
2Section 172 of the Internal Revenue Code, 26 U.S.C.,
3Section 172, with the exception that the terms "net
4operating loss" and "taxable income" shall be replaced
5with "Oklahoma net operating loss" and "Oklahoma
6taxable income".
7     4.   Items of the following nature shall be allocated as
8  indicated.   Allowable deductions attributable to items separately
9  allocable in subparagraphs a, b and c of this paragraph, whether or
10 not such items of income were actually received, shall be allocated
11 on the same basis as those items:
12a.    Income from real and tangible personal property, such
13as rents, oil and mining production or royalties, and
14gains or losses from sales of such property, shall be
15allocated in accordance with the situs of such
16property;
17b.    Income from intangible personal property, such as
18interest, dividends, patent or copyright royalties,
19and gains or losses from sales of such property, shall
20be allocated in accordance with the domiciliary situs
21of the taxpayer, except that:
22(1)   where such property has acquired a nonunitary
23business or commercial situs apart from the
24domicile of the taxpayer such income shall be
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 27
1allocated in accordance with such business or
2commercial situs; interest income from
3investments held to generate working capital for
4a unitary business enterprise shall be included
5in apportionable income; a resident trust or
6resident estate shall be treated as having a
7separate commercial or business situs insofar as
8undistributed income is concerned, but shall not
9be treated as having a separate commercial or
10business situs insofar as distributed income is
11concerned,
12(2)   for taxable years beginning after December 31,
132003, capital or ordinary gains or losses from
14the sale of an ownership interest in a publicly
15traded partnership, as defined by Section 7704(b)
16of the Internal Revenue Code, shall be allocated
17to this state in the ratio of the original cost
18of such partnership's tangible property in this
19state to the original cost of such partnership's
20tangible property everywhere, as determined at
21the time of the sale; if more than fifty percent
22(50%) of the value of the partnership's assets
23consists of intangible assets, capital or
24ordinary gains or losses from the sale of an
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 28
1ownership interest in the partnership shall be
2allocated to this state in accordance with the
3sales factor of the partnership for its first
4full tax period immediately preceding its tax
5period during which the ownership interest in the
6partnership was sold; the provisions of this
7division shall only apply if the capital or
8ordinary gains or losses from the sale of an
9ownership interest in a partnership do not
10constitute qualifying gain receiving capital
11treatment as defined in subparagraph a of
12paragraph 2 of subsection F of this section,
13(3)   income from such property which is required to be
14allocated pursuant to the provisions of paragraph
155 of this subsection shall be allocated as herein
16provided;
17c.   Net income or loss from a business activity which is
18not a part of business carried on within or without
19the state of a unitary character shall be separately
20allocated to the state in which such activity is
21conducted;
22d.   In the case of a manufacturing or processing
23enterprise the business of which in this state
24consists solely of marketing its products by:
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 29
1(1)   sales having a situs without this state, shipped
2directly to a point from without the state to a
3purchaser within the state, commonly known as
4interstate sales,
5(2)   sales of the product stored in public warehouses
6within the state pursuant to "in transit"
7tariffs, as prescribed and allowed by the
8Interstate Commerce Commission, to a purchaser
9within the state,
10(3)   sales of the product stored in public warehouses
11within the state where the shipment to such
12warehouses is not covered by "in transit"
13tariffs, as prescribed and allowed by the
14Interstate Commerce Commission, to a purchaser
15within or without the state,
16the Oklahoma net income shall, at the option of the
17taxpayer, be that portion of the total net income of
18the taxpayer for federal income tax purposes derived
19from the manufacture and/or processing and sales
20everywhere as determined by the ratio of the sales
21defined in this section made to the purchaser within
22the state to the total sales everywhere.   The term
23"public warehouse" as used in this subparagraph means
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 30
1a licensed public warehouse, the principal business of
2which is warehousing merchandise for the public;
3e.   In the case of insurance companies, Oklahoma taxable
4income shall be taxable income of the taxpayer for
5federal tax purposes, as adjusted for the adjustments
6provided pursuant to the provisions of paragraphs 1
7and 2 of this subsection, apportioned as follows:
8(1)   except as otherwise provided by division (2) of
9this subparagraph, taxable income of an insurance
10company for a taxable year shall be apportioned
11to this state by multiplying such income by a
12fraction, the numerator of which is the direct
13premiums written for insurance on property or
14risks in this state, and the denominator of which
15is the direct premiums written for insurance on
16property or risks everywhere.   For purposes of
17this subsection, the term "direct premiums
18written" means the total amount of direct
19premiums written, assessments and annuity
20considerations as reported for the taxable year
21on the annual statement filed by the company with
22the Insurance Commissioner in the form approved
23by the National Association of Insurance
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 31
1Commissioners, or such other form as may be
2prescribed in lieu thereof,
3(2)   if the principal source of premiums written by an
4insurance company consists of premiums for
5reinsurance accepted by it, the taxable income of
6such company shall be apportioned to this state
7by multiplying such income by a fraction, the
8numerator of which is the sum of (a) direct
9premiums written for insurance on property or
10risks in this state, plus (b) premiums written
11for reinsurance accepted in respect of property
12or risks in this state, and the denominator of
13which is the sum of (c) direct premiums written
14for insurance on property or risks everywhere,
15plus (d) premiums written for reinsurance
16accepted in respect of property or risks
17everywhere.   For purposes of this paragraph,
18premiums written for reinsurance accepted in
19respect of property or risks in this state,
20whether or not otherwise determinable, may at the
21election of the company be determined on the
22basis of the proportion which premiums written
23for insurance accepted from companies
24commercially domiciled in this state bears to
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 32
1premiums written for reinsurance accepted from
2all sources, or alternatively in the proportion
3which the sum of the direct premiums written for
4insurance on property or risks in this state by
5each ceding company from which reinsurance is
6accepted bears to the sum of the total direct
7premiums written by each such ceding company for
8the taxable year.
9      5.   The net income or loss remaining after the separate
10 allocation in paragraph 4 of this subsection, being that which is
11 derived from a unitary business enterprise, shall be apportioned to
12 this state on the basis of the arithmetical average of three factors
13 consisting of property, payroll and sales or gross revenue
14 enumerated as subparagraphs a, b and c of this paragraph.      Net
15 income or loss as used in this paragraph includes that derived from
16 patent or copyright royalties, purchase discounts, and interest on
17 accounts receivable relating to or arising from a business activity,
18 the income from which is apportioned pursuant to this subsection,
19 including the sale or other disposition of such property and any
20 other property used in the unitary enterprise.   Deductions used in
21 computing such net income or loss shall not include taxes based on
22 or measured by income.   Provided, for corporations whose property
23 for purposes of the tax imposed by Section 2355 of this title has an
24 initial investment cost equaling or exceeding Two Hundred Million
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 33
1  Dollars ($200,000,000.00) and such investment is made on or after
2  July 1, 1997, or for corporations which expand their property or
3  facilities in this state and such expansion has an investment cost
4  equaling or exceeding Two Hundred Million Dollars ($200,000,000.00)
5  over a period not to exceed three (3) years, and such expansion is
6  commenced on or after January 1, 2000, the three factors shall be
7  apportioned with property and payroll, each comprising twenty-five
8  percent (25%) of the apportionment factor and sales comprising fifty
9  percent (50%) of the apportionment factor.   The apportionment
10 factors shall be computed as follows:
11a.   The property factor is a fraction, the numerator of
12which is the average value of the taxpayer's real and
13tangible personal property owned or rented and used in
14this state during the tax period and the denominator
15of which is the average value of all the taxpayer's
16real and tangible personal property everywhere owned
17or rented and used during the tax period.
18(1)   Property, the income from which is separately
19allocated in paragraph 4 of this subsection,
20shall not be included in determining this
21fraction.   The numerator of the fraction shall
22include a portion of the investment in
23transportation and other equipment having no
24fixed situs, such as rolling stock, buses, trucks
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 34
1and trailers, including machinery and equipment
2carried thereon, airplanes, salespersons'
3automobiles and other similar equipment, in the
4proportion that miles traveled in this state by
5such equipment bears to total miles traveled,
6(2)   Property owned by the taxpayer is valued at its
7original cost.     Property rented by the taxpayer
8is valued at eight times the net annual rental
9rate.   Net annual rental rate is the annual
10rental rate paid by the taxpayer, less any annual
11rental rate received by the taxpayer from
12subrentals,
13(3)   The average value of property shall be determined
14by averaging the values at the beginning and
15ending of the tax period but the Oklahoma Tax
16Commission may require the averaging of monthly
17values during the tax period if reasonably
18required to reflect properly the average value of
19the taxpayer's property;
20b.   The payroll factor is a fraction, the numerator of
21which is the total compensation for services rendered
22in the state during the tax period, and the
23denominator of which is the total compensation for
24services rendered everywhere during the tax period.
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 35
1"Compensation", as used in this subsection, means
2those paid-for services to the extent related to the
3unitary business but does not include officers'
4salaries, wages and other compensation.
5(1)   In the case of a transportation enterprise, the
6numerator of the fraction shall include a portion
7of such expenditure in connection with employees
8operating equipment over a fixed route, such as
9railroad employees, airline pilots, or bus
10drivers, in this state only a part of the time,
11in the proportion that mileage traveled in this
12state bears to total mileage traveled by such
13employees,
14(2)   In any case the numerator of the fraction shall
15include a portion of such expenditures in
16connection with itinerant employees, such as
17traveling salespersons, in this state only a part
18of the time, in the proportion that time spent in
19this state bears to total time spent in
20furtherance of the enterprise by such employees;
21c.   The sales factor is a fraction, the numerator of which
22is the total sales or gross revenue of the taxpayer in
23this state during the tax period, and the denominator
24of which is the total sales or gross revenue of the
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 36
1taxpayer everywhere during the tax period.   "Sales",
2as used in this subsection, does not include sales or
3gross revenue which are separately allocated in
4paragraph 4 of this subsection.
5(1)   Sales of tangible personal property have a situs
6in this state if the property is delivered or
7shipped to a purchaser other than the United
8States government, within this state regardless
9of the FOB point or other conditions of the sale;
10or the property is shipped from an office, store,
11warehouse, factory or other place of storage in
12this state and (a) the purchaser is the United
13States government or (b) the taxpayer is not
14doing business in the state of the destination of
15the shipment.
16(2)   In the case of a railroad or interurban railway
17enterprise, the numerator of the fraction shall
18not be less than the allocation of revenues to
19this state as shown in its annual report to the
20Corporation Commission.
21(3)   In the case of an airline, truck or bus
22enterprise or freight car, tank car, refrigerator
23car or other railroad equipment enterprise, the
24numerator of the fraction shall include a portion
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 37
1of revenue from interstate transportation in the
2proportion that interstate mileage traveled in
3this state bears to total interstate mileage
4traveled.
5(4)   In the case of an oil, gasoline or gas pipeline
6enterprise, the numerator of the fraction shall
7be either the total of traffic units of the
8enterprise within this state or the revenue
9allocated to this state based upon miles moved,
10at the option of the taxpayer, and the
11denominator of which shall be the total of
12traffic units of the enterprise or the revenue of
13the enterprise everywhere as appropriate to the
14numerator.   A "traffic unit" is hereby defined as
15the transportation for a distance of one (1) mile
16of one (1) barrel of oil, one (1) gallon of
17gasoline or one thousand (1,000) cubic feet of
18natural or casinghead gas, as the case may be.
19(5)   In the case of a telephone or telegraph or other
20communication enterprise, the numerator of the
21fraction shall include that portion of the
22interstate revenue as is allocated pursuant to
23the accounting procedures prescribed by the
24Federal Communications Commission; provided that
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 38
1in respect to each corporation or business entity
2required by the Federal Communications Commission
3to keep its books and records in accordance with
4a uniform system of accounts prescribed by such
5Commission, the intrastate net income shall be
6determined separately in the manner provided by
7such uniform system of accounts and only the
8interstate income shall be subject to allocation
9pursuant to the provisions of this subsection.
10Provided further, that the gross revenue factors
11shall be those as are determined pursuant to the
12accounting procedures prescribed by the Federal
13Communications Commission.
14     In any case where the apportionment of the three factors
15 prescribed in this paragraph attributes to this state a portion of
16 net income of the enterprise out of all appropriate proportion to
17 the property owned and/or business transacted within this state,
18 because of the fact that one or more of the factors so prescribed
19 are not employed to any appreciable extent in furtherance of the
20 enterprise; or because one or more factors not so prescribed are
21 employed to a considerable extent in furtherance of the enterprise;
22 or because of other reasons, the Tax Commission is empowered to
23 permit, after a showing by taxpayer that an excessive portion of net
24 income has been attributed to this state, or require, when in its
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 39
1  judgment an insufficient portion of net income has been attributed
2  to this state, the elimination, substitution, or use of additional
3  factors, or reduction or increase in the weight of such prescribed
4  factors.   Provided, however, that any such variance from such
5  prescribed factors which has the effect of increasing the portion of
6  net income attributable to this state must not be inherently
7  arbitrary, and application of the recomputed final apportionment to
8  the net income of the enterprise must attribute to this state only a
9  reasonable portion thereof.
10     6.   For calendar years 1997 and 1998, the owner of a new or
11 expanded agricultural commodity processing facility in this state
12 may exclude from Oklahoma taxable income, or in the case of an
13 individual, the Oklahoma adjusted gross income, fifteen percent
14 (15%) of the investment by the owner in the new or expanded
15 agricultural commodity processing facility.     For calendar year 1999,
16 and all subsequent years, the percentage, not to exceed fifteen
17 percent (15%), available to the owner of a new or expanded
18 agricultural commodity processing facility in this state claiming
19 the exemption shall be adjusted annually so that the total estimated
20 reduction in tax liability does not exceed One Million Dollars
21 ($1,000,000.00) annually.     The Tax Commission shall promulgate rules
22 for determining the percentage of the investment which each eligible
23 taxpayer may exclude.   The exclusion provided by this paragraph
24 shall be taken in the taxable year when the investment is made.     In
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 40
1  the event the total reduction in tax liability authorized by this
2  paragraph exceeds One Million Dollars ($1,000,000.00) in any
3  calendar year, the Tax Commission shall permit any excess over One
4  Million Dollars ($1,000,000.00) and shall factor such excess into
5  the percentage for subsequent years.   Any amount of the exemption
6  permitted to be excluded pursuant to the provisions of this
7  paragraph but not used in any year may be carried forward as an
8  exemption from income pursuant to the provisions of this paragraph
9  for a period not exceeding six (6) years following the year in which
10 the investment was originally made.
11    For purposes of this paragraph:
12a.   "Agricultural commodity processing facility" means
13buildings, structures, fixtures and improvements used
14or operated primarily for the processing or production
15of marketable products from agricultural commodities.
16The term shall also mean a dairy operation that
17requires a depreciable investment of at least Two
18Hundred Fifty Thousand Dollars ($250,000.00) and which
19produces milk from dairy cows.     The term does not
20include a facility that provides only, and nothing
21more than, storage, cleaning, drying or transportation
22of agricultural commodities, and
23b.   "Facility" means each part of the facility which is
24used in a process primarily for:
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 41
1(1)     the processing of agricultural commodities,
2including receiving or storing agricultural
3commodities, or the production of milk at a dairy
4operation,
5(2)     transporting the agricultural commodities or
6product before, during or after the processing,
7or
8(3)     packaging or otherwise preparing the product for
9sale or shipment.
10    7.   Despite any provision to the contrary in paragraph 3 of this
11 subsection, for taxable years beginning after December 31, 1999, in
12 the case of a taxpayer which has a farming loss, such farming loss
13 shall be considered a net operating loss carryback in accordance
14 with and to the extent of the Internal Revenue Code, 26 U.S.C.,
15 Section 172(b)(G).   However, the amount of the net operating loss
16 carryback shall not exceed the lesser of:
17a.   Sixty Thousand Dollars ($60,000.00), or
18b.   the loss properly shown on Schedule F of the Internal
19Revenue Service Form 1040 reduced by one-half (1/2) of
20the income from all other sources other than reflected
21on Schedule F.
22    8.   In taxable years beginning after December 31, 1995, all
23 qualified wages equal to the federal income tax credit set forth in
24 26 U.S.C.A., Section 45A, shall be deducted from taxable income.
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 42
1  The deduction allowed pursuant to this paragraph shall only be
2  permitted for the tax years in which the federal tax credit pursuant
3  to 26 U.S.C.A., Section 45A, is allowed.   For purposes of this
4  paragraph, "qualified wages" means those wages used to calculate the
5  federal credit pursuant to 26 U.S.C.A., Section 45A.
6      9.    In taxable years beginning after December 31, 2005, an
7  employer that is eligible for and utilizes the Safety Pays OSHA
8  Consultation Service provided by the Oklahoma Department of Labor
9  shall receive an exemption from taxable income in the amount of One
10 Thousand Dollars ($1,000.00) for the tax year that the service is
11 utilized.
12     10.   For taxable years beginning on or after January 1, 2010,
13 there shall be added to Oklahoma taxable income an amount equal to
14 the amount of deferred income not included in such taxable income
15 pursuant to Section 108(i)(1) of the Internal Revenue Code of 1986
16 as amended by Section 1231 of the American Recovery and Reinvestment
17 Act of 2009 (P.L. No. 111-5).    There shall be subtracted from
18 Oklahoma taxable income an amount equal to the amount of deferred
19 income included in such taxable income pursuant to Section 108(i)(1)
20 of the Internal Revenue Code by Section 1231 of the American
21 Recovery and Reinvestment Act of 2009 (P.L. No. 111-5).
22     11.    For taxable years beginning on or after January 1, 2019,
23 there shall be subtracted from Oklahoma taxable income or adjusted
24 gross income any item of income or gain, and there shall be added to
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 43
1  Oklahoma taxable income or adjusted gross income any item of loss or
2  deduction that in the absence of an election pursuant to the
3  provisions of the Pass-Through Entity Tax Equity Act of 2019 would
4  be allocated to a member or to an indirect member of an electing
5  pass-through entity pursuant to Section 2351 et seq. of this title,
6  if (i) the electing pass-through entity has accounted for such item
7  in computing its Oklahoma net entity income or loss pursuant to the
8  provisions of the Pass-Through Entity Tax Equity Act of 2019, and
9  (ii) the total amount of tax attributable to any resulting Oklahoma
10 net entity income has been paid.   The Oklahoma Tax Commission shall
11 promulgate rules for the reporting of such exclusion to direct and
12 indirect members of the electing pass-through entity.   As used in
13 this paragraph, "electing pass-through entity", "indirect member",
14 and "member" shall be defined in the same manner as prescribed by
15 Section 2355.1P-2 of this title.   Notwithstanding the application of
16 this paragraph, the adjusted tax basis of any ownership interest in
17 a pass-through entity for purposes of Section 2351 et seq. of this
18 title shall be equal to its adjusted tax basis for federal income
19 tax purposes.
20     12.   For tax year 2025 and subsequent tax years, an employer
21 providing paid leave to an employee for the purpose of volunteering
22 as a poll worker with a county election board in this state shall
23 receive an exemption from taxable income in the amount of One
24 Hundred Dollars ($100.00) for each day of leave provided in the tax
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 44
1  year.    The employer shall provide documentation from the applicable
2  county election board showing the employee volunteered, upon request
3  of the Oklahoma Tax Commission.
4      B.   1.   The taxable income of any corporation shall be further
5  adjusted to arrive at Oklahoma taxable income, except those
6  corporations electing treatment as provided in subchapter S of the
7  Internal Revenue Code, 26 U.S.C., Section 1361 et seq., and Section
8  2365 of this title, deductions pursuant to the provisions of the
9  Accelerated Cost Recovery System as defined and allowed in the
10 Economic Recovery Tax Act of 1981, Public Law 97-34, 26 U.S.C.,
11 Section 168, for depreciation of assets placed into service after
12 December 31, 1981, shall not be allowed in calculating Oklahoma
13 taxable income.    Such corporations shall be allowed a deduction for
14 depreciation of assets placed into service after December 31, 1981,
15 in accordance with provisions of the Internal Revenue Code, 26
16 U.S.C., Section 1 et seq., in effect immediately prior to the
17 enactment of the Accelerated Cost Recovery System.    The Oklahoma tax
18 basis for all such assets placed into service after December 31,
19 1981, calculated in this section shall be retained and utilized for
20 all Oklahoma income tax purposes through the final disposition of
21 such assets.
22     Notwithstanding any other provisions of the Oklahoma Income Tax
23 Act, Section 2351 et seq. of this title, or of the Internal Revenue
24 Code to the contrary, this subsection shall control calculation of
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 45
1  depreciation of assets placed into service after December 31, 1981,
2  and before January 1, 1983.
3     For assets placed in service and held by a corporation in which
4  the Accelerated Cost Recovery System was previously disallowed, an
5  adjustment to taxable income is required in the first taxable year
6  beginning after December 31, 1982, to reconcile the basis of such
7  assets to the basis allowed in the Internal Revenue Code.   The
8  purpose of this adjustment is to equalize the basis and allowance
9  for depreciation accounts between that reported to the Internal
10 Revenue Service and that reported to this state.
11    2.   For tax years beginning on or after January 1, 2009, and
12 ending on or before December 31, 2009, there shall be added to
13 Oklahoma taxable income any amount in excess of One Hundred Seventy-
14 five Thousand Dollars ($175,000.00) which has been deducted as a
15 small business expense under Internal Revenue Code, Section 179 as
16 provided in the American Recovery and Reinvestment Act of 2009.
17    C.   1.   For taxable years beginning after December 31, 1987, the
18 taxable income of any corporation shall be further adjusted to
19 arrive at Oklahoma taxable income for transfers of technology to
20 qualified small businesses located in this state.   Such transferor
21 corporation shall be allowed an exemption from taxable income of an
22 amount equal to the amount of royalty payment received as a result
23 of such transfer; provided, however, such amount shall not exceed
24 ten percent (10%) of the amount of gross proceeds received by such
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 46
1  transferor corporation as a result of the technology transfer.     Such
2  exemption shall be allowed for a period not to exceed ten (10) years
3  from the date of receipt of the first royalty payment accruing from
4  such transfer.   No exemption may be claimed for transfers of
5  technology to qualified small businesses made prior to January 1,
6  1988.
7     2.   For purposes of this subsection:
8a.   "Qualified small business" means an entity, whether
9organized as a corporation, partnership, or
10proprietorship, organized for profit with its
11principal place of business located within this state
12and which meets the following criteria:
13(1)    Capitalization of not more than Two Hundred Fifty
14Thousand Dollars ($250,000.00),
15(2)    Having at least fifty percent (50%) of its
16employees and assets located in this state at the
17time of the transfer, and
18(3)    Not a subsidiary or affiliate of the transferor
19corporation;
20b.   "Technology" means a proprietary process, formula,
21pattern, device or compilation of scientific or
22technical information which is not in the public
23domain;
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 47
1c.    "Transferor corporation" means a corporation which is
2the exclusive and undisputed owner of the technology
3at the time the transfer is made; and
4d.    "Gross proceeds" means the total amount of
5consideration for the transfer of technology, whether
6the consideration is in money or otherwise.
7     D.   1.   For taxable years beginning after December 31, 2005, the
8  taxable income of any corporation, estate or trust, shall be further
9  adjusted for qualifying gains receiving capital treatment.   Such
10 corporations, estates or trusts shall be allowed a deduction from
11 Oklahoma taxable income for the amount of qualifying gains receiving
12 capital treatment earned by the corporation, estate or trust during
13 the taxable year and included in the federal taxable income of such
14 corporation, estate or trust.
15    2.   As used in this subsection:
16a.    "qualifying gains receiving capital treatment" means
17the amount of net capital gains, as defined in Section
181222(11) of the Internal Revenue Code, included in the
19federal income tax return of the corporation, estate
20or trust that result from:
21(1)   the sale of real property or tangible personal
22property located within this state that has been
23directly or indirectly owned by the corporation,
24estate or trust for a holding period of at least
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 48
1five (5) years prior to the date of the
2transaction from which such net capital gains
3arise,
4(2)     the sale of stock or on the sale of an ownership
5interest in an Oklahoma company, limited
6liability company, or partnership where such
7stock or ownership interest has been directly or
8indirectly owned by the corporation, estate or
9trust for a holding period of at least three (3)
10years prior to the date of the transaction from
11which the net capital gains arise, or
12(3)     the sale of real property, tangible personal
13property or intangible personal property located
14within this state as part of the sale of all or
15substantially all of the assets of an Oklahoma
16company, limited liability company, or
17partnership where such property has been directly
18or indirectly owned by such entity owned by the
19owners of such entity, and used in or derived
20from such entity for a period of at least three
21(3) years prior to the date of the transaction
22from which the net capital gains arise,
23b.   "holding period" means an uninterrupted period of
24time.    The holding period shall include any additional
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 49
1period when the property was held by another
2individual or entity, if such additional period is
3included in the taxpayer's holding period for the
4asset pursuant to the Internal Revenue Code,
5c.   "Oklahoma company", "limited liability company", or
6"partnership" means an entity whose primary
7headquarters have been located in this state for at
8least three (3) uninterrupted years prior to the date
9of the transaction from which the net capital gains
10arise,
11d.   "direct" means the taxpayer directly owns the asset,
12and
13e.   "indirect" means the taxpayer owns an interest in a
14pass-through entity (or chain of pass-through
15entities) that sells the asset that gives rise to the
16qualifying gains receiving capital treatment.
17(1)   With respect to sales of real property or
18tangible personal property located within this
19state, the deduction described in this subsection
20shall not apply unless the pass-through entity
21that makes the sale has held the property for not
22less than five (5) uninterrupted years prior to
23the date of the transaction that created the
24capital gain, and each pass-through entity
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 50
1included in the chain of ownership has been a
2member, partner, or shareholder of the pass-
3through entity in the tier immediately below it
4for an uninterrupted period of not less than five
5(5) years.
6(2)   With respect to sales of stock or ownership
7interest in or sales of all or substantially all
8of the assets of an Oklahoma company, limited
9liability company, or partnership, the deduction
10described in this subsection shall not apply
11unless the pass-through entity that makes the
12sale has held the stock or ownership interest or
13the assets for not less than three (3)
14uninterrupted years prior to the date of the
15transaction that created the capital gain, and
16each pass-through entity included in the chain of
17ownership has been a member, partner or
18shareholder of the pass-through entity in the
19tier immediately below it for an uninterrupted
20period of not less than three (3) years.
21    E.   The Oklahoma adjusted gross income of any individual
22 taxpayer shall be further adjusted as follows to arrive at Oklahoma
23 taxable income:
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 51
1     1.   a.   In the case of individuals, there shall be added or
2deducted, as the case may be, the difference necessary
3to allow personal exemptions of One Thousand Dollars
4($1,000.00) in lieu of the personal exemptions allowed
5by the Internal Revenue Code.
6b.   There shall be allowed an additional exemption of One
7Thousand Dollars ($1,000.00) for each taxpayer or
8spouse who is blind at the close of the tax year.     For
9purposes of this subparagraph, an individual is blind
10only if the central visual acuity of the individual
11does not exceed 20/200 in the better eye with
12correcting lenses, or if the visual acuity of the
13individual is greater than 20/200, but is accompanied
14by a limitation in the fields of vision such that the
15widest diameter of the visual field subtends an angle
16no greater than twenty (20) degrees.
17c.   There shall be allowed an additional exemption of One
18Thousand Dollars ($1,000.00) for each taxpayer or
19spouse who is sixty-five (65) years of age or older at
20the close of the tax year based upon the filing status
21and federal adjusted gross income of the taxpayer.
22Taxpayers with the following filing status may claim
23this exemption if the federal adjusted gross income
24does not exceed:
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 52
1(1)   Twenty-five Thousand Dollars ($25,000.00) if
2married and filing jointly;
3(2)   Twelve Thousand Five Hundred Dollars ($12,500.00)
4if married and filing separately;
5(3)   Fifteen Thousand Dollars ($15,000.00) if single;
6and
7(4)   Nineteen Thousand Dollars ($19,000.00) if a
8qualifying head of household.
9Provided, for taxable years beginning after December
1031, 1999, amounts included in the calculation of
11federal adjusted gross income pursuant to the
12conversion of a traditional individual retirement
13account to a Roth individual retirement account shall
14be excluded from federal adjusted gross income for
15purposes of the income thresholds provided in this
16subparagraph.
17    2.   a.   For taxable years beginning on or before December 31,
182005, in the case of individuals who use the standard
19deduction in determining taxable income, there shall
20be added or deducted, as the case may be, the
21difference necessary to allow a standard deduction in
22lieu of the standard deduction allowed by the Internal
23Revenue Code, in an amount equal to the larger of
24fifteen percent (15%) of the Oklahoma adjusted gross
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 53
1income or One Thousand Dollars ($1,000.00), but not to
2exceed Two Thousand Dollars ($2,000.00), except that
3in the case of a married individual filing a separate
4return such deduction shall be the larger of fifteen
5percent (15%) of such Oklahoma adjusted gross income
6or Five Hundred Dollars ($500.00), but not to exceed
7the maximum amount of One Thousand Dollars
8($1,000.00).
9b.   For taxable years beginning on or after January 1,
102006, and before January 1, 2007, in the case of
11individuals who use the standard deduction in
12determining taxable income, there shall be added or
13deducted, as the case may be, the difference necessary
14to allow a standard deduction in lieu of the standard
15deduction allowed by the Internal Revenue Code, in an
16amount equal to:
17(1)   Three Thousand Dollars ($3,000.00), if the filing
18status is married filing joint, head of household
19or qualifying widow; or
20(2)   Two Thousand Dollars ($2,000.00), if the filing
21status is single or married filing separate.
22c.   For the taxable year beginning on January 1, 2007, and
23ending December 31, 2007, in the case of individuals
24who use the standard deduction in determining taxable
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 54
1income, there shall be added or deducted, as the case
2may be, the difference necessary to allow a standard
3deduction in lieu of the standard deduction allowed by
4the Internal Revenue Code, in an amount equal to:
5(1)   Five Thousand Five Hundred Dollars ($5,500.00),
6if the filing status is married filing joint or
7qualifying widow; or
8(2)   Four Thousand One Hundred Twenty-five Dollars
9($4,125.00) for a head of household; or
10(3)   Two Thousand Seven Hundred Fifty Dollars
11($2,750.00), if the filing status is single or
12married filing separate.
13d.   For the taxable year beginning on January 1, 2008, and
14ending December 31, 2008, in the case of individuals
15who use the standard deduction in determining taxable
16income, there shall be added or deducted, as the case
17may be, the difference necessary to allow a standard
18deduction in lieu of the standard deduction allowed by
19the Internal Revenue Code, in an amount equal to:
20(1)   Six Thousand Five Hundred Dollars ($6,500.00), if
21the filing status is married filing joint or
22qualifying widow, or
23(2)   Four Thousand Eight Hundred Seventy-five Dollars
24($4,875.00) for a head of household, or
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 55
1(3)   Three Thousand Two Hundred Fifty Dollars
2($3,250.00), if the filing status is single or
3married filing separate.
4e.   For the taxable year beginning on January 1, 2009, and
5ending December 31, 2009, in the case of individuals
6who use the standard deduction in determining taxable
7income, there shall be added or deducted, as the case
8may be, the difference necessary to allow a standard
9deduction in lieu of the standard deduction allowed by
10the Internal Revenue Code, in an amount equal to:
11(1)   Eight Thousand Five Hundred Dollars ($8,500.00),
12if the filing status is married filing joint or
13qualifying widow, or
14(2)   Six Thousand Three Hundred Seventy-five Dollars
15($6,375.00) for a head of household, or
16(3)   Four Thousand Two Hundred Fifty Dollars
17($4,250.00), if the filing status is single or
18married filing separate.
19Oklahoma adjusted gross income shall be increased by
20any amounts paid for motor vehicle excise taxes which
21were deducted as allowed by the Internal Revenue Code.
22f.   For taxable years beginning on or after January 1,
232010, and ending on December 31, 2016, in the case of
24individuals who use the standard deduction in
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 56
1determining taxable income, there shall be added or
2deducted, as the case may be, the difference necessary
3to allow a standard deduction equal to the standard
4deduction allowed by the Internal Revenue Code, based
5upon the amount and filing status prescribed by such
6Code for purposes of filing federal individual income
7tax returns.
8g.   For taxable years beginning on or after January 1,
92017, in the case of individuals who use the standard
10deduction in determining taxable income, there shall
11be added or deducted, as the case may be, the
12difference necessary to allow a standard deduction in
13lieu of the standard deduction allowed by the Internal
14Revenue Code, as follows:
15(1)   Six Thousand Three Hundred Fifty Dollars
16($6,350.00) for single or married filing
17separately,
18(2)   Twelve Thousand Seven Hundred Dollars
19($12,700.00) for married filing jointly or
20qualifying widower with dependent child, and
21(3)   Nine Thousand Three Hundred Fifty Dollars
22($9,350.00) for head of household.
23    3.   a.   In the case of resident and part-year resident
24individuals having adjusted gross income from sources
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 57
1both within and without the state, the itemized or
2standard deductions and personal exemptions shall be
3reduced to an amount which is the same portion of the
4total thereof as Oklahoma adjusted gross income is of
5adjusted gross income.   To the extent itemized
6deductions include allowable moving expense, proration
7of moving expense shall not be required or permitted
8but allowable moving expense shall be fully deductible
9for those taxpayers moving within or into this state
10and no part of moving expense shall be deductible for
11those taxpayers moving without or out of this state.
12All other itemized or standard deductions and personal
13exemptions shall be subject to proration as provided
14by law.
15b.   For taxable years beginning on or after January 1,
162018, the net amount of itemized deductions allowable
17on an Oklahoma income tax return, subject to the
18provisions of paragraph 24 of this subsection, shall
19not exceed Seventeen Thousand Dollars ($17,000.00).
20For purposes of this subparagraph, charitable
21contributions and medical expenses deductible for
22federal income tax purposes shall be excluded from the
23amount of Seventeen Thousand Dollars ($17,000.00) as
24specified by this subparagraph.
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 58
1     4.   A resident individual with a physical disability
2  constituting a substantial handicap to employment may deduct from
3  Oklahoma adjusted gross income such expenditures to modify a motor
4  vehicle, home or workplace as are necessary to compensate for his or
5  her handicap.    A veteran certified by the Department of Veterans
6  Affairs of the federal government as having a service-connected
7  disability shall be conclusively presumed to be an individual with a
8  physical disability constituting a substantial handicap to
9  employment.     The Tax Commission shall promulgate rules containing a
10 list of combinations of common disabilities and modifications which
11 may be presumed to qualify for this deduction.    The Tax Commission
12 shall prescribe necessary requirements for verification.
13    5.   a.      Before July 1, 2010, the first One Thousand Five
14Hundred Dollars ($1,500.00) received by any person
15from the United States as salary or compensation in
16any form, other than retirement benefits, as a member
17of any component of the Armed Forces of the United
18States shall be deducted from taxable income.
19b.      On or after July 1, 2010, one hundred percent (100%)
20of the income received by any person from the United
21States as salary or compensation in any form, other
22than retirement benefits, as a member of any component
23of the Armed Forces of the United States shall be
24deducted from taxable income.
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 59
1c.   Whenever the filing of a timely income tax return by a
2member of the Armed Forces of the United States is
3made impracticable or impossible of accomplishment by
4reason of:
5(1)   absence from the United States, which term
6includes only the states and the District of
7Columbia;
8(2)   absence from this state while on active duty; or
9(3)   confinement in a hospital within the United
10States for treatment of wounds, injuries or
11disease,
12the time for filing a return and paying an income tax
13shall be and is hereby extended without incurring
14liability for interest or penalties, to the fifteenth
15day of the third month following the month in which:
16(a)    Such individual shall return to the United
17States if the extension is granted pursuant
18to subparagraph a of this paragraph, return
19to this state if the extension is granted
20pursuant to subparagraph b of this paragraph
21or be discharged from such hospital if the
22extension is granted pursuant to
23subparagraph c of this paragraph; or
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 60
1(b)   An executor, administrator, or conservator
2of the estate of the taxpayer is appointed,
3whichever event occurs the earliest.
4     Provided, that the Tax Commission may, in its discretion, grant
5  any member of the Armed Forces of the United States an extension of
6  time for filing of income tax returns and payment of income tax
7  without incurring liabilities for interest or penalties.    Such
8  extension may be granted only when in the judgment of the Tax
9  Commission a good cause exists therefor and may be for a period in
10 excess of six (6) months.    A record of every such extension granted,
11 and the reason therefor, shall be kept.
12    6.   Before July 1, 2010, the salary or any other form of
13 compensation, received from the United States by a member of any
14 component of the Armed Forces of the United States, shall be
15 deducted from taxable income during the time in which the person is
16 detained by the enemy in a conflict, is a prisoner of war or is
17 missing in action and not deceased; provided, after July 1, 2010,
18 all such salary or compensation shall be subject to the deduction as
19 provided pursuant to paragraph 5 of this subsection.
20    7.   a.   An individual taxpayer, whether resident or
21nonresident, may deduct an amount equal to the federal
22income taxes paid by the taxpayer during the taxable
23year.
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 61
1b.   Federal taxes as described in subparagraph a of this
2paragraph shall be deductible by any individual
3taxpayer, whether resident or nonresident, only to the
4extent they relate to income subject to taxation
5pursuant to the provisions of the Oklahoma Income Tax
6Act.   The maximum amount allowable in the preceding
7paragraph shall be prorated on the ratio of the
8Oklahoma adjusted gross income to federal adjusted
9gross income.
10c.   For the purpose of this paragraph, "federal income
11taxes paid" shall mean federal income taxes, surtaxes
12imposed on incomes or excess profits taxes, as though
13the taxpayer was on the accrual basis.   In determining
14the amount of deduction for federal income taxes for
15tax year 2001, the amount of the deduction shall not
16be adjusted by the amount of any accelerated ten
17percent (10%) tax rate bracket credit or advanced
18refund of the credit received during the tax year
19provided pursuant to the federal Economic Growth and
20Tax Relief Reconciliation Act of 2001, P.L. No. 107-
2116, and the advanced refund of such credit shall not
22be subject to taxation.
23
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 62
1d.   The provisions of this paragraph shall apply to all
2taxable years ending after December 31, 1978, and
3beginning before January 1, 2006.
4      8.   Retirement benefits not to exceed Five Thousand Five Hundred
5  Dollars ($5,500.00) for the 2004 tax year, Seven Thousand Five
6  Hundred Dollars ($7,500.00) for the 2005 tax year and Ten Thousand
7  Dollars ($10,000.00) for the 2006 tax year and all subsequent tax
8  years, which are received by an individual from the civil service of
9  the United States, the Oklahoma Public Employees Retirement System,
10 the Teachers' Retirement System of Oklahoma, the Oklahoma Law
11 Enforcement Retirement System, the Oklahoma Firefighters Pension and
12 Retirement System, the Oklahoma Police Pension and Retirement
13 System, the employee retirement systems created by counties pursuant
14 to Section 951 et seq. of Title 19 of the Oklahoma Statutes, the
15 Uniform Retirement System for Justices and Judges, the Oklahoma
16 Wildlife Conservation Department Retirement Fund, the Oklahoma
17 Employment Security Commission Retirement Plan, or the employee
18 retirement systems created by municipalities pursuant to Section 48-
19 101 et seq. of Title 11 of the Oklahoma Statutes shall be exempt
20 from taxable income.
21     9.   In taxable years beginning after December 3l, 1984, Social
22 Security benefits received by an individual shall be exempt from
23 taxable income, to the extent such benefits are included in the
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 63
1  federal adjusted gross income pursuant to the provisions of Section
2  86 of the Internal Revenue Code, 26 U.S.C., Section 86.
3     10.   For taxable years beginning after December 31, 1994, lump-
4  sum distributions from employer plans of deferred compensation,
5  which are not qualified plans within the meaning of Section 401(a)
6  of the Internal Revenue Code, 26 U.S.C., Section 401(a), and which
7  are deposited in and accounted for within a separate bank account or
8  brokerage account in a financial institution within this state,
9  shall be excluded from taxable income in the same manner as a
10 qualifying rollover contribution to an individual retirement account
11 within the meaning of Section 408 of the Internal Revenue Code, 26
12 U.S.C., Section 408.   Amounts withdrawn from such bank or brokerage
13 account, including any earnings thereon, shall be included in
14 taxable income when withdrawn in the same manner as withdrawals from
15 individual retirement accounts within the meaning of Section 408 of
16 the Internal Revenue Code.
17    11.   In taxable years beginning after December 31, 1995,
18 contributions made to and interest received from a medical savings
19 account established pursuant to Sections 2621 through 2623 of Title
20 63 of the Oklahoma Statutes shall be exempt from taxable income.
21    12.   For taxable years beginning after December 31, 1996, the
22 Oklahoma adjusted gross income of any individual taxpayer who is a
23 swine or poultry producer may be further adjusted for the deduction
24 for depreciation allowed for new construction or expansion costs
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 64
1  which may be computed using the same depreciation method elected for
2  federal income tax purposes except that the useful life shall be
3  seven (7) years for purposes of this paragraph.     If depreciation is
4  allowed as a deduction in determining the adjusted gross income of
5  an individual, any depreciation calculated and claimed pursuant to
6  this section shall in no event be a duplication of any depreciation
7  allowed or permitted on the federal income tax return of the
8  individual.
9     13.   a.   In taxable years beginning after December 31, 2002,
10nonrecurring adoption expenses paid by a resident
11individual taxpayer in connection with:
12(1)   the adoption of a minor, or
13(2)   a proposed adoption of a minor which did not
14result in a decreed adoption,
15may be deducted from the Oklahoma adjusted gross
16income.
17b.   The deductions for adoptions and proposed adoptions
18authorized by this paragraph shall not exceed Twenty
19Thousand Dollars ($20,000.00) per calendar year.
20c.   The Tax Commission shall promulgate rules to implement
21the provisions of this paragraph which shall contain a
22specific list of nonrecurring adoption expenses which
23may be presumed to qualify for the deduction.    The Tax
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 65
1Commission shall prescribe necessary requirements for
2verification.
3d.   "Nonrecurring adoption expenses" means adoption fees,
4court costs, medical expenses, attorney fees and
5expenses which are directly related to the legal
6process of adoption of a child including, but not
7limited to, costs relating to the adoption study,
8health and psychological examinations, transportation
9and reasonable costs of lodging and food for the child
10or adoptive parents which are incurred to complete the
11adoption process and are not reimbursed by other
12sources.   The term nonrecurring adoption expenses
13shall not include attorney fees incurred for the
14purpose of litigating a contested adoption, from and
15after the point of the initiation of the contest,
16costs associated with physical remodeling, renovation
17and alteration of the adoptive parents' home or
18property, except for a special needs child as
19authorized by the court.
20    14.   a.   In taxable years beginning before January 1, 2005,
21retirement benefits not to exceed the amounts
22specified in this paragraph, which are received by an
23individual sixty-five (65) years of age or older and
24whose Oklahoma adjusted gross income is Twenty-five
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 66
1Thousand Dollars ($25,000.00) or less if the filing
2status is single, head of household, or married filing
3separate, or Fifty Thousand Dollars ($50,000.00) or
4less if the filing status is married filing joint or
5qualifying widow, shall be exempt from taxable income.
6In taxable years beginning after December 31, 2004,
7retirement benefits not to exceed the amounts
8specified in this paragraph, which are received by an
9individual whose Oklahoma adjusted gross income is
10less than the qualifying amount specified in this
11paragraph, shall be exempt from taxable income.
12b.   For purposes of this paragraph, the qualifying amount
13shall be as follows:
14(1)   in taxable years beginning after December 31,
152004, and prior to January 1, 2007, the
16qualifying amount shall be Thirty-seven Thousand
17Five Hundred Dollars ($37,500.00) or less if the
18filing status is single, head of household, or
19married filing separate, or Seventy-five Thousand
20Dollars ($75,000.00) or less if the filing status
21is married filing jointly or qualifying widow,
22(2)   in the taxable year beginning January 1, 2007,
23the qualifying amount shall be Fifty Thousand
24Dollars ($50,000.00) or less if the filing status
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 67
1is single, head of household, or married filing
2separate, or One Hundred Thousand Dollars
3($100,000.00) or less if the filing status is
4married filing jointly or qualifying widow,
5(3)   in the taxable year beginning January 1, 2008,
6the qualifying amount shall be Sixty-two Thousand
7Five Hundred Dollars ($62,500.00) or less if the
8filing status is single, head of household, or
9married filing separate, or One Hundred Twenty-
10five Thousand Dollars ($125,000.00) or less if
11the filing status is married filing jointly or
12qualifying widow,
13(4)   in the taxable year beginning January 1, 2009,
14the qualifying amount shall be One Hundred
15Thousand Dollars ($100,000.00) or less if the
16filing status is single, head of household, or
17married filing separate, or Two Hundred Thousand
18Dollars ($200,000.00) or less if the filing
19status is married filing jointly or qualifying
20widow, and
21(5)   in the taxable year beginning January 1, 2010,
22and subsequent taxable years, there shall be no
23limitation upon the qualifying amount.
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 68
1c.   For purposes of this paragraph, "retirement benefits"
2means the total distributions or withdrawals from the
3following:
4(1)   an employee pension benefit plan which satisfies
5the requirements of Section 401 of the Internal
6Revenue Code, 26 U.S.C., Section 401,
7(2)   an eligible deferred compensation plan that
8satisfies the requirements of Section 457 of the
9Internal Revenue Code, 26 U.S.C., Section 457,
10(3)   an individual retirement account, annuity or
11trust or simplified employee pension that
12satisfies the requirements of Section 408 of the
13Internal Revenue Code, 26 U.S.C., Section 408,
14(4)   an employee annuity subject to the provisions of
15Section 403(a) or (b) of the Internal Revenue
16Code, 26 U.S.C., Section 403(a) or (b),
17(5)   United States Retirement Bonds which satisfy the
18requirements of Section 86 of the Internal
19Revenue Code, 26 U.S.C., Section 86, or
20(6)   lump-sum distributions from a retirement plan
21which satisfies the requirements of Section
22402(e) of the Internal Revenue Code, 26 U.S.C.,
23Section 402(e).
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 69
1d.   The amount of the exemption provided by this paragraph
2shall be limited to Five Thousand Five Hundred Dollars
3($5,500.00) for the 2004 tax year, Seven Thousand Five
4Hundred Dollars ($7,500.00) for the 2005 tax year and
5Ten Thousand Dollars ($10,000.00) for the tax year
62006 and for all subsequent tax years.   Any individual
7who claims the exemption provided for in paragraph 8
8of this subsection shall not be permitted to claim a
9combined total exemption pursuant to this paragraph
10and paragraph 8 of this subsection in an amount
11exceeding Five Thousand Five Hundred Dollars
12($5,500.00) for the 2004 tax year, Seven Thousand Five
13Hundred Dollars ($7,500.00) for the 2005 tax year and
14Ten Thousand Dollars ($10,000.00) for the 2006 tax
15year and all subsequent tax years.
16    15.   In taxable years beginning after December 31, 1999, for an
17 individual engaged in production agriculture who has filed a
18 Schedule F form with the taxpayer's federal income tax return for
19 such taxable year, there shall be excluded from taxable income any
20 amount which was included as federal taxable income or federal
21 adjusted gross income and which consists of the discharge of an
22 obligation by a creditor of the taxpayer incurred to finance the
23 production of agricultural products.
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 70
1      16.   In taxable years beginning December 31, 2000, an amount
2  equal to one hundred percent (100%) of the amount of any scholarship
3  or stipend received from participation in the Oklahoma Police Corps
4  Program, as established in Section 2-140.3 of Title 47 of the
5  Oklahoma Statutes shall be exempt from taxable income.
6      17.   a.   In taxable years beginning after December 31, 2001,
7and before January 1, 2005, there shall be allowed a
8deduction in the amount of contributions to accounts
9established pursuant to the Oklahoma College Savings
10Plan Act.   The deduction shall equal the amount of
11contributions to accounts, but in no event shall the
12deduction for each contributor exceed Two Thousand
13Five Hundred Dollars ($2,500.00) each taxable year for
14each account.
15b.   In taxable years beginning after December 31, 2004,
16each taxpayer shall be allowed a deduction for
17contributions to accounts established pursuant to the
18Oklahoma College Savings Plan Act.   The maximum annual
19deduction shall equal the amount of contributions to
20all such accounts plus any contributions to such
21accounts by the taxpayer for prior taxable years after
22December 31, 2004, which were not deducted, but in no
23event shall the deduction for each tax year exceed Ten
24Thousand Dollars ($10,000.00) for each individual
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 71
1taxpayer or Twenty Thousand Dollars ($20,000.00) for
2taxpayers filing a joint return.     Any amount of a
3contribution that is not deducted by the taxpayer in
4the year for which the contribution is made may be
5carried forward as a deduction from income for the
6succeeding five (5) years.   For taxable years
7beginning after December 31, 2005, deductions may be
8taken for contributions and rollovers made during a
9taxable year and up to April 15 of the succeeding
10year, or the due date of a taxpayer's state income tax
11return, excluding extensions, whichever is later.
12Provided, a deduction for the same contribution may
13not be taken for two (2) different taxable years.
14c.   In taxable years beginning after December 31, 2006,
15deductions for contributions made pursuant to
16subparagraph b of this paragraph shall be limited as
17follows:
18(1)   for a taxpayer who qualified for the five-year
19carryforward election and who takes a rollover or
20nonqualified withdrawal during that period, the
21tax deduction otherwise available pursuant to
22subparagraph b of this paragraph shall be reduced
23by the amount which is equal to the rollover or
24nonqualified withdrawal, and
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 72
1(2)   for a taxpayer who elects to take a rollover or
2nonqualified withdrawal within the same tax year
3in which a contribution was made to the
4taxpayer's account, the tax deduction otherwise
5available pursuant to subparagraph b of this
6paragraph shall be reduced by the amount of the
7contribution which is equal to the rollover or
8nonqualified withdrawal.
9d.   If a taxpayer elects to take a rollover on a
10contribution for which a deduction has been taken
11pursuant to subparagraph b of this paragraph within
12one (1) year of the date of contribution, the amount
13of such rollover shall be included in the adjusted
14gross income of the taxpayer in the taxable year of
15the rollover.
16e.   If a taxpayer makes a nonqualified withdrawal of
17contributions for which a deduction was taken pursuant
18to subparagraph b of this paragraph, such nonqualified
19withdrawal and any earnings thereon shall be included
20in the adjusted gross income of the taxpayer in the
21taxable year of the nonqualified withdrawal.
22f.   As used in this paragraph:
23
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 73
1(1)   "non-qualified withdrawal" means a withdrawal
2from an Oklahoma College Savings Plan account
3other than one of the following:
4(a)   a qualified withdrawal,
5(b)   a withdrawal made as a result of the death
6or disability of the designated beneficiary
7of an account,
8(c)   a withdrawal that is made on the account of
9a scholarship or the allowance or payment
10described in Section 135(d)(1)(B) or (C) or
11by the Internal Revenue Code, received by
12the designated beneficiary to the extent the
13amount of the refund does not exceed the
14amount of the scholarship, allowance, or
15payment, or
16(d)   a rollover or change of designated
17beneficiary as permitted by subsection F of
18Section 3970.7 of Title 70 of the Oklahoma
19Statutes, and
20(2)   "rollover" means the transfer of funds from the
21Oklahoma College Savings Plan to any other plan
22under Section 529 of the Internal Revenue Code.
23    18.   For tax years 2006 through 2021, retirement benefits
24 received by an individual from any component of the Armed Forces of
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 74
1  the United States in an amount not to exceed the greater of seventy-
2  five percent (75%) of such benefits or Ten Thousand Dollars
3  ($10,000.00) shall be exempt from taxable income but in no case less
4  than the amount of the exemption provided by paragraph 14 of this
5  subsection.   For tax year 2022 and subsequent tax years, retirement
6  benefits received by an individual from any component of the Armed
7  Forces of the United States shall be exempt from taxable income.
8     19.   For taxable years beginning after December 31, 2006,
9  retirement benefits received by federal civil service retirees,
10 including survivor annuities, paid in lieu of Social Security
11 benefits shall be exempt from taxable income to the extent such
12 benefits are included in the federal adjusted gross income pursuant
13 to the provisions of Section 86 of the Internal Revenue Code, 26
14 U.S.C., Section 86, according to the following schedule:
15a.   in the taxable year beginning January 1, 2007, twenty
16percent (20%) of such benefits shall be exempt,
17b.   in the taxable year beginning January 1, 2008, forty
18percent (40%) of such benefits shall be exempt,
19c.   in the taxable year beginning January 1, 2009, sixty
20percent (60%) of such benefits shall be exempt,
21d.   in the taxable year beginning January 1, 2010, eighty
22percent (80%) of such benefits shall be exempt, and
23
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 75
1e.   in the taxable year beginning January 1, 2011, and
2subsequent taxable years, one hundred percent (100%)
3of such benefits shall be exempt.
4     20.   a.   For taxable years beginning after December 31, 2007, a
5resident individual may deduct up to Ten Thousand
6Dollars ($10,000.00) from Oklahoma adjusted gross
7income if the individual, or the dependent of the
8individual, while living, donates one or more human
9organs of the individual to another human being for
10human organ transplantation.   As used in this
11paragraph, "human organ" means all or part of a liver,
12pancreas, kidney, intestine, lung, or bone marrow.     A
13deduction that is claimed under this paragraph may be
14claimed in the taxable year in which the human organ
15transplantation occurs.
16b.   An individual may claim this deduction only once, and
17the deduction may be claimed only for unreimbursed
18expenses that are incurred by the individual and
19related to the organ donation of the individual.
20c.   The Oklahoma Tax Commission shall promulgate rules to
21implement the provisions of this paragraph which shall
22contain a specific list of expenses which may be
23presumed to qualify for the deduction.   The Tax
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 76
1Commission shall prescribe necessary requirements for
2verification.
3      21.   For taxable years beginning after December 31, 2009, there
4  shall be exempt from taxable income any amount received by the
5  beneficiary of the death benefit for an emergency medical technician
6  or a registered emergency medical responder provided by Section 1-
7  2505.1 of Title 63 of the Oklahoma Statutes.
8      22.   For taxable years beginning after December 31, 2008,
9  taxable income shall be increased by any unemployment compensation
10 exempted under Section 85(c) of the Internal Revenue Code, 26
11 U.S.C., Section 85(c)(2009).
12     23.   For taxable years beginning after December 31, 2008, there
13 shall be exempt from taxable income any payment in an amount less
14 than Six Hundred Dollars ($600.00) received by a person as an award
15 for participation in a competitive livestock show event.   For
16 purposes of this paragraph, the payment shall be treated as a
17 scholarship amount paid by the entity sponsoring the event and the
18 sponsoring entity shall cause the payment to be categorized as a
19 scholarship in its books and records.
20     24.   For taxable years beginning on or after January 1, 2016,
21 taxable income shall be increased by any amount of state and local
22 sales or income taxes deducted under 26 U.S.C., Section 164 of the
23 Internal Revenue Code.   If the amount of state and local taxes
24 deducted on the federal return is limited, taxable income on the
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 77
1  state return shall be increased only by the amount actually deducted
2  after any such limitations are applied.
3      25.   For taxable years beginning after December 31, 2020, each
4  taxpayer shall be allowed a deduction for contributions to accounts
5  established pursuant to the Achieving a Better Life Experience
6  (ABLE) Program as established in Section 4001.1 et seq. of Title 56
7  of the Oklahoma Statutes.     For any tax year, the deduction provided
8  for in this paragraph shall not exceed Ten Thousand Dollars
9  ($10,000.00) for an individual taxpayer or Twenty Thousand Dollars
10 ($20,000.00) for taxpayers filing a joint return.     Any amount of
11 contribution not deducted by the taxpayer in the tax year for which
12 the contribution is made may be carried forward as a deduction from
13 income for up to five (5) tax years.    Deductions may be taken for
14 contributions made during the tax year and through April 15 of the
15 succeeding tax year, or through the due date of a taxpayer's state
16 income tax return excluding extensions, whichever is later.
17 Provided, a deduction for the same contribution may not be taken in
18 more than one (1) tax year.
19     26.   a.   For taxable years beginning on or after January 1,
202027, there shall be exempt from Oklahoma adjusted
21gross income One Thousand Dollars ($1,000.00) derived
22from any lawful business activity conducted by a
23person less than eighteen (18) years of age,
24conducting the business as a sole proprietor and not
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 78
1through any other business entity or other legal
2entity.
3b.   The exemption provided for in this paragraph shall
4apply only to a business that is owned and operated
5primarily by one or more individuals who have not
6attained eighteen (18) years of age, who may receive
7only limited assistance from adults in the nature of
8supervision, transportation, safety oversight, or
9other incidental support that does not constitute
10material management or operation of the business.     The
11business shall not be eligible for the exemption if
12any adult exercises primary control over business
13decisions, management, or operations, or if the
14business is materially operated for the benefit of an
15adult.
16c.   To qualify for the exemption provided by this
17paragraph, the business activity shall:
18(1)   generate gross revenue of less than One Thousand
19Dollars ($1,000.00) during the calendar year, and
20(2)   be operated only on private property with the
21consent of the owner or lawful possessor of the
22property, or as part of a community event that
23separately registers youth vendors.
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 79
1      F.   1.   For taxable years beginning after December 31, 2004, a
2  deduction from the Oklahoma adjusted gross income of any individual
3  taxpayer shall be allowed for qualifying gains receiving capital
4  treatment that are included in the federal adjusted gross income of
5  such individual taxpayer during the taxable year.
6      2.   As used in this subsection:
7a.    "qualifying gains receiving capital treatment" means
8the amount of net capital gains, as defined in Section
91222(11) of the Internal Revenue Code, included in an
10individual taxpayer's federal income tax return that
11result from:
12(1)   the sale of real property or tangible personal
13property located within this state that has been
14directly or indirectly owned by the individual
15taxpayer for a holding period of at least five
16(5) years prior to the date of the transaction
17from which such net capital gains arise,
18(2)   the sale of stock or the sale of a direct or
19indirect ownership interest in an Oklahoma
20company, limited liability company, or
21partnership where such stock or ownership
22interest has been directly or indirectly owned by
23the individual taxpayer for a holding period of
24at least two (2) years prior to the date of the
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 80
1transaction from which the net capital gains
2arise, or
3(3)     the sale of real property, tangible personal
4property or intangible personal property located
5within this state as part of the sale of all or
6substantially all of the assets of an Oklahoma
7company, limited liability company, or
8partnership or an Oklahoma proprietorship
9business enterprise where such property has been
10directly or indirectly owned by such entity or
11business enterprise or owned by the owners of
12such entity or business enterprise for a period
13of at least two (2) years prior to the date of
14the transaction from which the net capital gains
15arise,
16b.   "holding period" means an uninterrupted period of
17time.    The holding period shall include any additional
18period when the property was held by another
19individual or entity, if such additional period is
20included in the taxpayer's holding period for the
21asset pursuant to the Internal Revenue Code,
22c.   "Oklahoma company," "limited liability company," or
23"partnership" means an entity whose primary
24headquarters have been located in this state for at
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 81
1least three (3) uninterrupted years prior to the date
2of the transaction from which the net capital gains
3arise,
4d.   "direct" means the individual taxpayer directly owns
5the asset,
6e.   "indirect" means the individual taxpayer owns an
7interest in a pass-through entity (or chain of pass-
8through entities) that sells the asset that gives rise
9to the qualifying gains receiving capital treatment.
10(1)   With respect to sales of real property or
11tangible personal property located within this
12state, the deduction described in this subsection
13shall not apply unless the pass-through entity
14that makes the sale has held the property for not
15less than five (5) uninterrupted years prior to
16the date of the transaction that created the
17capital gain, and each pass-through entity
18included in the chain of ownership has been a
19member, partner, or shareholder of the pass-
20through entity in the tier immediately below it
21for an uninterrupted period of not less than five
22(5) years.
23(2)   With respect to sales of stock or ownership
24interest in or sales of all or substantially all
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 82
1of the assets of an Oklahoma company, limited
2liability company, partnership or Oklahoma
3proprietorship business enterprise, the deduction
4described in this subsection shall not apply
5unless the pass-through entity that makes the
6sale has held the stock or ownership interest for
7not less than two (2) uninterrupted years prior
8to the date of the transaction that created the
9capital gain, and each pass-through entity
10included in the chain of ownership has been a
11member, partner or shareholder of the pass-
12through entity in the tier immediately below it
13for an uninterrupted period of not less than two
14(2) years.   For purposes of this division,
15uninterrupted ownership prior to July 1, 2007,
16shall be included in the determination of the
17required holding period prescribed by this
18division, and
19f.   "Oklahoma proprietorship business enterprise" means a
20business enterprise whose income and expenses have
21been reported on Schedule C or F of an individual
22taxpayer's federal income tax return, or any similar
23successor schedule published by the Internal Revenue
24Service and whose primary headquarters have been
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 83
1located in this state for at least three (3)
2uninterrupted years prior to the date of the
3transaction from which the net capital gains arise.
4     G.   1.    For purposes of computing its Oklahoma taxable income
5  under this section, the dividends-paid deduction otherwise allowed
6  by federal law in computing net income of a real estate investment
7  trust that is subject to federal income tax shall be added back in
8  computing the tax imposed by this state under this title if the real
9  estate investment trust is a captive real estate investment trust.
10    2.   For purposes of computing its Oklahoma taxable income under
11 this section, a taxpayer shall add back otherwise deductible rents
12 and interest expenses paid to a captive real estate investment trust
13 that is not subject to the provisions of paragraph 1 of this
14 subsection.    As used in this subsection:
15a.     the term "real estate investment trust" or "REIT"
16means the meaning ascribed to such term in Section 856
17of the Internal Revenue Code,
18b.     the term "captive real estate investment trust" means
19a real estate investment trust, the shares or
20beneficial interests of which are not regularly traded
21on an established securities market and more than
22fifty percent (50%) of the voting power or value of
23the beneficial interests or shares of which are owned
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 84
1or controlled, directly or indirectly, or
2constructively, by a single entity that is:
3(1)   treated as an association taxable as a
4corporation under the Internal Revenue Code, and
5(2)   not exempt from federal income tax pursuant to
6the provisions of Section 501(a) of the Internal
7Revenue Code.
8The term shall not include a real estate investment
9trust that is intended to be regularly traded on an
10established securities market, and that satisfies the
11requirements of Section 856(a)(5) and (6) of the U.S.
12Internal Revenue Code by reason of Section 856(h)(2)
13of the Internal Revenue Code,
14c.   the term "association taxable as a corporation" shall
15not include the following entities:
16(1)   any real estate investment trust as defined in
17paragraph a of this subsection other than a
18captive real estate investment trust, or
19(2)   any qualified real estate investment trust
20subsidiary under Section 856(i) of the Internal
21Revenue Code, other than a qualified REIT
22subsidiary of a captive real estate investment
23trust, or
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 85
1(3)   any listed Australian property trust (meaning an
2Australian unit trust registered as a "managed
3investment scheme" under the Australian
4Corporations Act 2001 in which the principal
5class of units is listed on a recognized stock
6exchange in Australia and is regularly traded on
7an established securities market), or an entity
8organized as a trust, provided that a listed
9Australian property trust owns or controls,
10directly or indirectly, seventy-five percent
11(75%) or more of the voting power or value of the
12beneficial interests or shares of such trust, or
13(4)   any qualified foreign entity, meaning a
14corporation, trust, association or partnership
15organized outside the laws of the United States
16and which satisfies the following criteria:
17(a)   at least seventy-five percent (75%) of the
18entity's total asset value at the close of
19its taxable year is represented by real
20estate assets, as defined in Section
21856(c)(5)(B) of the Internal Revenue Code,
22thereby including shares or certificates of
23beneficial interest in any real estate
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 86
1investment trust, cash and cash equivalents,
2and U.S. Government securities,
3(b)   the entity receives a dividend-paid
4deduction comparable to Section 561 of the
5Internal Revenue Code, or is exempt from
6entity level tax,
7(c)   the entity is required to distribute at
8least eighty-five percent (85%) of its
9taxable income, as computed in the
10jurisdiction in which it is organized, to
11the holders of its shares or certificates of
12beneficial interest on an annual basis,
13(d)   not more than ten percent (10%) of the
14voting power or value in such entity is held
15directly or indirectly or constructively by
16a single entity or individual, or the shares
17or beneficial interests of such entity are
18regularly traded on an established
19securities market, and
20(e)   the entity is organized in a country which
21has a tax treaty with the United States.
22    3.   For purposes of this subsection, the constructive ownership
23 rules of Section 318(a) of the Internal Revenue Code, as modified by
24 Section 856(d)(5) of the Internal Revenue Code, shall apply in
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 87
1  determining the ownership of stock, assets, or net profits of any
2  person.
3     4.     A real estate investment trust that does not become
4  regularly traded on an established securities market within one (1)
5  year of the date on which it first becomes a real estate investment
6  trust shall be deemed not to have been regularly traded on an
7  established securities market, retroactive to the date it first
8  became a real estate investment trust, and shall file an amended
9  return reflecting such retroactive designation for any tax year or
10 part year occurring during its initial year of status as a real
11 estate investment trust.      For purposes of this subsection, a real
12 estate investment trust becomes a real estate investment trust on
13 the first day it has both met the requirements of Section 856 of the
14 Internal Revenue Code and has elected to be treated as a real estate
15 investment trust pursuant to Section 856(c)(1) of the Internal
16 Revenue Code.
17    SECTION 4.       NEW LAW       A new section of law to be codified
18 in the Oklahoma Statutes as Section 20001 of Title 74, unless there
19 is created a duplication in numbering, reads as follows:
20    No person conducting a business as a sole proprietor who is less
21 than eighteen (18) years of age shall be required to obtain a
22 business license from any state or local government entity, and the
23 person shall not be subject to any fine or penalty as a result of
24 conducting such business for a period not in excess of ninety (90)
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 88
1  days during a calendar year; provided such person performing work
2  regulated by Title 59 of the Oklahoma Statutes or any other
3  applicable law in the Oklahoma Statutes shall comply with all
4  Oklahoma licensing and registration laws, including holding a
5  current license or registration in good standing.
6     SECTION 5.   This act shall become effective November 1, 2026."
7     Passed the House of Representatives the 7th day of May, 2026.
8
9
10Presiding Officer of the House of
                                                     Representatives
11
12    Passed the Senate the ____ day of __________, 2026.
13
14
15Presiding Officer of the Senate
16
17
18
19
20
21
22
23
24
 ENGR. H. A. to ENGR. S. B. NO. 2063  Page 89
1  ENGROSSED SENATE
 BILL NO. 2063  By: Murdock of the Senate
2
                                                 and
3
                                          Archer of the House
4
5
6An Act relating to the Uniform Unclaimed Property
        Act; amending 60 O.S. 2021, Section 651, as amended
7by Section 1, Chapter 421, O.S.L. 2025 (60 O.S. Supp.
        2025, Section 651), which relates to definitions;
8modifying definition; amending 60 O.S. 2021, Section
        668, as last amended by Section 3, Chapter 421,
9O.S.L. 2025 (60 O.S. Supp. 2025, Section 668), which
        relates to the Unclaimed Property Fund; modifying
10required information to be filed with deposits;
        requiring certain information to be made available on
11a public website; permitting requests for certain
        information; requiring the State Treasurer make
12certain information available at the end of each
        fiscal year; amending 60 O.S. 2021, Section 674, as
13amended by Section 4, Chapter 421, O.S.L. 2025 (60
        O.S. Supp. 2025, Section 674), which relates to
14claims of abandoned property; authorizing the State
        Treasurer to request additional information in
15certain circumstances; authorizing claimants to
        request a hearing in certain circumstances; requiring
16the State Treasurer to respond to requests within
        certain time period; modifying permissible documents
17to be filed with a claim; updating statutory
        language; updating statutory references; and
18providing an effective date.
19
20
21 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
22     SECTION 6.     AMENDATORY    60 O.S. 2021, Section 651, as
23 amended by Section 1, Chapter 421, O.S.L. 2025 (60 O.S. Supp. 2025,
24 Section 651), is amended to read as follows:
 ENGR. S. B. NO. 2063  Page 1
1      Section 651.   As used in the Uniform Unclaimed Property Act,
2  unless the context otherwise requires:
3      1.   “Apparent owner” means the person whose name appears on the
4  records of the holder as the person entitled to property held,
5  issued, or owing by the holder;
6      2.   “Attorney General” means the chief legal officer of this
7  state;
8      3.   “Banking organization” means any bank, trust company,
9  savings bank, safe deposit company, private banker, or any
10 organization defined by other law as a bank or banking organization;
11     4.   “Business association” means a non-public nonpublic
12 corporation, joint-stock company, investment company, business
13 trust, partnership, or association for business purposes of two or
14 more individuals whether or not for profit, including a banking
15 organization, financial organization, insurance company, or utility;
16     5.   “Claimant” means a person who claims an interest in
17 unclaimed property in the custody of the State Treasurer;
18     6.   “Claimant’s representative” means a person who has been
19 hired by a claimant to file an unclaimed property claim on behalf of
20 a claimant pursuant to a written agreement, including a duly
21 executed power of attorney;
22     7.   “Domicile” means the state of incorporation of a corporation
23 and the state of the principal place of business of an
24 unincorporated person;
 ENGR. S. B. NO. 2063  Page 2
1      8.    “Financial organization” means a savings and loan
2  association, building and loan association, or credit union;
3      9.    “Holder” means a person, wherever organized or domiciled,
4  who is:
5a.   in possession of property belonging to another,
6b.   a trustee, or
7c.   indebted to another on an obligation;
8      10.   “Insurance company” means an association, corporation,
9  fraternal or mutual benefit organization, whether or not for profit,
10 which is engaged in providing insurance coverage, including
11 accidental, burial, casualty, credit life, contract performance,
12 dental, fidelity, fire, health, hospitalization, illness, life
13 (including including endowments and annuities) annuities,
14 malpractice, marine, mortgage, surety, and wage protection
15 insurance;
16     11.   “Intangible property” includes:
17a.   money, checks, drafts, deposits, interest, dividends,
18and income,
19b.   credit balances, customer overpayments, security
20deposits, refunds, credit memos, unpaid wages, unused
21airline tickets, and unidentified remittances,
22c.   stocks and other intangible ownership interests in
23business associations,
24
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1d.   monies deposited to redeem stocks, bonds, coupons, and
2other securities, or to make distributions,
3e.   amounts due and payable under the terms of insurance
4policies, and
5f.   amounts distributable from a trust or custodial fund
6established under a plan to provide health, welfare,
7pension, vacation, severance, retirement, death, stock
8purchase, profit sharing, employee savings,
9supplemental unemployment insurance, education or
10similar benefits;
11     12.   “Last-known address” means a description of the location of
12 the apparent owner sufficient for the purpose of the delivery of
13 mail;
14     13.   “Memorandum” shall include a mark, symbol or statement
15 indicating knowledge of or interest in funds on deposit;
16     14.   “Mineral proceeds” includes:
17a.   all obligations to pay mineral proceeds resulting from
18the production and sale of minerals, including net
19revenue interest, royalties, overriding royalties,
20production payments, and payments under joint
21operating agreements, and
22b.   all obligations for the acquisition and retention of a
23mineral lease, including bonuses, delay rentals, shut-
24in royalties, and minimum royalties;
 ENGR. S. B. NO. 2063  Page 4
1     15.    “Museum” means an institution which is located in this
2  state and operated by a nonprofit corporation or a public agency
3  primarily for educational, scientific, historic preservation or
4  aesthetic purposes, and which owns, borrows, cares for, exhibits,
5  studies, archives, or catalogues property.   “Museum” Museum
6  includes, but is not limited to, historical societies, historical
7  sites or landmarks, parks, monuments and libraries;
8     16.    “Owner” means a depositor in the case of a deposit, a
9  beneficiary in case of a trust other than a deposit in trust, a
10 creditor, claimant, or payee in the case of other intangible
11 property, or a person having a legal or equitable interest in
12 property or the person’s legal representative.   Where more than one
13 person is an owner, the property shall not be presumed abandoned
14 unless it has remained unclaimed by all of its owners for the
15 periods hereinafter prescribed;
16    17.    “Person” means an individual, business association, state
17 or other government, governmental subdivision or agency, public
18 corporation, public authority, estate, trust, two or more persons
19 having a joint or common interest, or any other legal or commercial
20 entity;
21    18.    “State” means any state, district, commonwealth, territory,
22 insular possession, or other area subject to the legislative
23 authority of the United States;
24
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1      19.   “State Treasurer” or “Treasurer” means the duly elected and
2  acting State Treasurer of Oklahoma;
3      20.   “Tax Commission” or “Commission” means the Oklahoma Tax
4  Commission;
5      21.   “Utility” means a person who owns or operates for public
6  use any plant, equipment, property, franchise, or license for the
7  transmission of communications, or the production, storage,
8  transmission, sale, delivery, or furnishing of electricity, water,
9  steam, or gas; and
10     22.   “Written agreement” means a legally binding document
11 between a claimant and the claimant’s representative outlining the
12 terms and conditions of the agreement.     It provides a clear record
13 of the agreement, specifying each party’s rights, responsibilities,
14 and obligations, which authorizes the claimant’s representative to
15 claim and recover unclaimed property in the custody of the State
16 Treasurer on behalf of the claimant.     The agreement may include an
17 authorization that directs the State Treasurer to remit payment of
18 fees due to the claimant’s representative subject to the provisions
19 of this title.
20     SECTION 7.       AMENDATORY      60 O.S. 2021, Section 668, as last
21 amended by Section 3, Chapter 421, O.S.L. 2025 (60 O.S. Supp. 2025,
22 Section 668), is amended to read as follows:
23     Section 668.     A.   There is hereby created in the State Treasury
24 the “Unclaimed Property Fund”, the principal of which shall
 ENGR. S. B. NO. 2063  Page 6
1  constitute a trust fund for persons claiming any interest in any
2  property delivered to the state under the Uniform Unclaimed Property
3  Act and may be invested as provided in the Uniform Unclaimed
4  Property Act and shall not be expended except as provided in the
5  Uniform Unclaimed Property Act.   All funds received under the
6  Uniform Unclaimed Property Act, including the proceeds from the sale
7  of abandoned property under Section 667 of this title, shall
8  forthwith be deposited by the State Treasurer in the Unclaimed
9  Property Fund, except that the State Treasurer may before making any
10 deposit to the fund deduct:
11     1.   All costs in connection with the sale of abandoned property;
12     2.   All costs of mailing and publication in connection with any
13 abandoned property including the cost of custody services for
14 unclaimed securities;
15     3.   Reasonable service charges not to exceed four percent (4%)
16 of the monies accruing to the state under the Uniform Unclaimed
17 Property Act, which may be used to defray the administrative costs,
18 including costs necessary to retain legal counsel to ensure
19 compliance with the Uniform Unclaimed Property Act, or to acquire
20 computer hardware and software to be used exclusively to help
21 administer the unclaimed property program;
22     4.   An amount equal to fifteen percent (15%) of the funds
23 accruing to the state pursuant to a contract with the State
24 Treasurer providing information leading to the delivery of unclaimed
 ENGR. S. B. NO. 2063  Page 7
1  property held by a holder to the State Treasurer to be deposited in
2  the Unclaimed Property Clearinghouse Fund; and
3      5.    An amount not to exceed twenty-five percent (25%) of the
4  value of the funds in an action to enforce the Uniform Unclaimed
5  Property Act, which is to be used solely to pay attorney fees to any
6  person who was authorized by the State Treasurer to bring the
7  action.
8      B.    Before making a deposit to the Unclaimed Property Fund, the
9  State Treasurer shall record the for every deposit and for each
10 person appearing on the holders’ reports to be entitled to the
11 abandoned property:
12     1.    The name, last-known address of each person appearing from
13 the holders’ reports, property type, unclaimed property
14 identification code, relation code, date of last activity, reported
15 year, holder name, and amount, due;
16     2.    For securities, the number of shares of securities, and name
17 of the securities issuer or stock ticker symbol to be entitled to
18 the abandoned property and of the name and last-known address of
19 each; and
20     3.    For insurance and annuities, the information described in
21 paragraph 1 of this subsection shall be recorded for the insured
22 person or annuitant, and the beneficiary, if known, and include,
23 with respect to each policy or contract listed in the report of a
24 life insurance corporation, its number, the name of the corporation,
 ENGR. S. B. NO. 2063  Page 8
1  and the amount due.    After a period of twelve (12) months has
2  elapsed, the record
3      C.   Records created pursuant to subsection B of this section
4  shall be available for public inspection during normal business
5  hours.   All account information described in this section shall be
6  made available on the website described in subsection D of this
7  section immediately upon deposit.
8      D.   In addition to the report required by subsection B of this
9  section, the following unclaimed property information shall be made
10 available on a public website hosted by the State Treasurer for all
11 reported accounts that have not yet been returned for each person on
12 the holders’ reports appearing to have an interest in the abandoned
13 property:
14     1.   The name of the apparent owner;
15     2.   The complete last-known address of the apparent owner as
16 reported by the holder;
17     3.   The relationship code, if any;
18     4.   The type of property and the cash value of the property;
19     5.   If the property is securities or mutual fund shares, the
20 number of shares and the stock ticker symbol or fund name, if
21 reported;
22     6.   The year the property was reported to the State Treasurer;
23     7.   The name and contact information of the holder;
24
 ENGR. S. B. NO. 2063  Page 9
1      8.   If applicable, a general description of the safe deposit box
2  contents and the liquidation amount; and
3      9.     The last date of contact with the apparent owner.
4      E.   A copy of the information referenced in subsection D of this
5  section may be obtained in a searchable digital format from the
6  State Treasurer by written request or downloaded from the public
7  website.    Requests for information and downloads may be made at any
8  time.    The State Treasurer shall ensure that every searchable format
9  and every download from the public website contains all required
10 account information available at the time of the request.      At no
11 time shall the information provided by the State Treasurer be more
12 than fourteen (14) days old.
13     F.     At the end of each fiscal year, the State Treasurer shall
14 cause the total dollar amount of all property remitted to the State
15 Treasurer and the total dollar amount of all property returned to
16 owners to be posted to the public website described in subsection D
17 of this section.
18     G.     Subsections B and F of this section shall apply on or after
19 the effective date of this act and subsection D of this section
20 shall apply retroactively.
21     SECTION 8.       AMENDATORY     60 O.S. 2021, Section 674, as
22 amended by Section 4, Chapter 421, O.S.L. 2025 (60 O.S. Supp. 2025,
23 Section 674), is amended to read as follows:
24
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1     Section 674.     A.   A person, excluding another state, but
2  including a claimant’s representative, claiming an interest in any
3  property paid or delivered to the State Treasurer may file with the
4  State Treasurer a claim on a form prescribed by the State Treasurer
5  and verified by the claimant or the claimant’s representative.     The
6  date of filing of a claim shall be the date it is received by the
7  State Treasurer with all supporting documentation from the claimant
8  or the claimant’s representative.    Any information submitted by a
9  claimant which is required to be submitted to the State Treasurer to
10 establish a claim may be kept confidential by the State Treasurer if
11 it contains personal financial information of the claimant, personal
12 identifying information such as the address, date of birth,
13 telephone number or email electronic mail address of the claimant,
14 Social Security numbers, birth certificates or similar documents
15 related to the parentage of an individual, or any other document
16 which is confidential by statute if in the custody of another public
17 agency or person.   Failure to use the claim form prescribed by the
18 State Treasurer shall void the claim.    The claim form shall require
19 information the State Treasurer believes to be reasonably necessary
20 to administer the requirements of this section, including, but not
21 limited to:
22    1.   A legible copy of the claimant’s valid driver license;
23    2.   If the claimant has not been issued a valid driver license
24 at the time the original claim form is filed, a legible copy of a
 ENGR. S. B. NO. 2063  Page 11
1  photographic identification card of the claimant issued by the
2  United States or a state or territory of the United States, a valid
3  passport or national identification card issued by a foreign nation,
4  or other evidence deemed acceptable by the State Treasurer; and
5      3.   For claims submitted by a claimant’s representative, a duly
6  executed copy of the written agreement between the claimant and the
7  claimant’s representative, including a duly executed power of
8  attorney.
9      B.   The State Treasurer may waive the requirements in subsection
10 A of this section and may pay or deliver property directly to a
11 person if:
12     1.   The person receiving the payment or property is shown to be
13 the apparent owner included on a report filed under this title; and
14     2.   The State Treasurer reasonably believes the person is
15 entitled to receive the payment or property and has validated the
16 identity and address of the person receiving the payment or
17 property.
18     C.   The State Treasurer may request that the claimant or, if the
19 person is utilizing the services of a claimant’s representative, the
20 claimant’s representative provide additional information to support
21 a claim within ninety (90) days of receipt of a claim, or a claimant
22 or the claimant’s representative response to the State Treasurer’s
23 request for additional information, whichever is later.   The State
24 Treasurer shall consider determine each claim within ninety (90)
 ENGR. S. B. NO. 2063  Page 12
1  days after it is filed and give written notice of the claim
2  determination to the claimant and, if the person is utilizing the
3  service of a claimant’s representative, to the claimant’s
4  representative if the claim is denied in whole or in part.     The
5  notice may be given by email electronic mail notification or by
6  mailing it to the claimant’s representative, if any, and to the
7  claimant’s last-known address, if any, as stated in the claim as the
8  address to which notices are to be sent.   If no address for notices
9  is stated in the claim, the notice may be mailed to the last-known
10 address, if any, of the claimant as stated in the claim.    No notice
11 of denial need be given if the claim fails to state either the last-
12 known address to which notices are to be sent or the address of the
13 claimant.   A claimant or claimant’s representative may request a
14 hearing under the Administrative Procedures Act after a claim is
15 denied, ninety (90) days have passed after filing a claim if no
16 determination has been rendered, or a request for additional
17 information is received from the State Treasurer.   The State
18 Treasurer shall respond to any request for a hearing within thirty
19 (30) days of receipt of the request with a notice of rights under
20 the Administrative Procedures Act.
21     D.   If a claim submitted by the claimant is approved, the State
22 Treasurer shall pay over or deliver to the claimant the property or
23 the amount the State Treasurer actually received or the net proceeds
24 if it has been sold by the State Treasurer, together with any
 ENGR. S. B. NO. 2063  Page 13
1  additional amount required by Section 665 of this title, but no
2  person shall have any claim under this section against the state,
3  the holder, any transfer agent, registrar or other person acting for
4  or on behalf of the state or a holder, for any appreciation or
5  depreciation in the value of the property or any earnings that might
6  otherwise accrue, after sale of the property by the State Treasurer.
7      E.   1.   If a claim submitted by a claimant’s representative is
8  approved, the State Treasurer shall pay or deliver to the claimant
9  the balance remaining after deduction and payment of the amount due
10 to the claimant’s representative by the State Treasurer; provided,
11 however, that any payments made directly to the claimant’s
12 representative shall be made only pursuant to the terms of the
13 written agreement between the claimant and the claimant’s
14 representative that was submitted with the claim.
15     2.   The State Treasurer is authorized to make distribution of
16 the property or money in accordance with the terms of the agreement.
17     3.   Payments of fees and costs to the claimant’s representative
18 shall be made by paper check or other means approved by the State
19 Treasurer on such periodic schedule as the State Treasurer may
20 define; provided, however, payment for approved claims shall be made
21 to both the claimant and the claimant’s representative within sixty
22 (60) days of approval.
23     F.   The contents of safe deposit boxes shall be released
24 directly to the claimant, claimant’s representative, or to a
 ENGR. S. B. NO. 2063  Page 14
1  commercial carrier as provided in the written agreement if
2  authorized in writing by the claimant.    Any lien owed to the lessor
3  of the safe deposit box shall be satisfied before the contents of
4  the safe deposit box shall be released.    At the claimant or
5  claimant’s representative’s option, any lien owed to the lessor of
6  the safe deposit box shall be deducted from the value of the
7  contents of the safe deposit box obtained at the next scheduled
8  auction with the remaining value to be distributed in accordance
9  with this section.
10     G.   The State Treasurer shall maintain an electronic copy of all
11 records related to the property received by the State Treasurer.
12 Such records shall be retained pursuant to the State Treasurer’s
13 retention schedules as provided by Title 67 of the Oklahoma
14 Statutes.
15     H.   The State Treasurer shall consider any claim filed under
16 this act section and Sections 651, 657.3, 668, 674.1, and 674.2 of
17 this title and, in rendering a determination on the merits of any
18 such claim, shall rely on the applicable statutes, regulations, and
19 relevant court decisions and may hold a hearing and receive evidence
20 concerning the claim.   If a hearing is held, the State Treasurer
21 shall prepare a finding and a decision in writing on each claim
22 filed, stating the substance of any evidence heard and the reasons
23 for the decision.    The decision shall be a public record.
24
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1      I.   If the claim is approved, the State Treasurer shall make
2  payment pursuant to this section.    The claim shall be paid without
3  deduction for costs of notice.   If a claim is denied, the State
4  Treasurer may hold a hearing and receive evidence concerning any
5  unclaimed property claim filed under this act section and Sections
6  651, 657.3, 668, 674.1, and 674.2 of this title.    If a hearing is
7  held, the State Treasurer, or his or her representative, shall
8  consider evidence that would be admissible in contested cases under
9  the Administrative Procedures Act.    In any proceeding for
10 determination of a claim to property, the burden shall be upon the
11 claimant, or the claimant’s representative, including a claimant’s
12 representative, to establish entitlement to the property by a
13 preponderance of evidence.
14     J.   If a hearing is held, the State Treasurer, or his or her
15 representative, shall prepare a finding and a decision in writing on
16 each claim filed, stating the substance of any evidence heard by him
17 or her and the reasons for his or her decision.    The decision shall
18 be a public record and deemed the final agency decision.
19     K.   If the claim is approved, the State Treasurer shall make
20 payment pursuant to paragraph 2 of subsection E of this section.
21 Claims shall be paid without deduction for costs of notice.
22     SECTION 9.   This act shall become effective November 1, 2026.
23
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1     Passed the Senate the 23rd day of March, 2026.
2
3
                                   Presiding Officer of the Senate
4
5     Passed the House of Representatives the ____ day of __________,
6  2026.
7
8
                                    Presiding Officer of the House
9of Representatives
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