1 STATE OF OKLAHOMA
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2 2nd Session of the 59th Legislature (2024)
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3 SENATE BILL 1452 By: Dahm
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6 AS INTRODUCED
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7 An Act relating to income tax; amending 68 O.S. 2021,
7 Section 2358, as last amended by Section 1, Chapter
8 377, O.S.L. 2022 (68 O.S. Supp. 2023, Section 2358),
8 which relates to adjustments; providing exemption
9 from taxable income for employer providing certain
9 leave for employee volunteering for poll work; and
10 providing an effective date.
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13 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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14 SECTION 1. AMENDATORY 68 O.S. 2021, Section 2358, as
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15 last amended by Section 1, Chapter 377, O.S.L. 2022 (68 O.S. Supp.
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16 2023, Section 2358), is amended to read as follows:
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17 Section 2358. For all tax years beginning after December 31,
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18 1981, taxable income and adjusted gross income shall be adjusted to
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19 arrive at Oklahoma taxable income and Oklahoma adjusted gross income
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20 as required by this section.
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21 A. The taxable income of any taxpayer shall be adjusted to
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22 arrive at Oklahoma taxable income for corporations and Oklahoma
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23 adjusted gross income for individuals, as follows:
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 1 1. There shall be added interest income on obligations of any
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2 state or political subdivision thereto which is not otherwise
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3 exempted pursuant to other laws of this state, to the extent that
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4 such interest is not included in taxable income and adjusted gross
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5 income.
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6 2. There shall be deducted amounts included in such income that
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7 the state is prohibited from taxing because of the provisions of the
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8 Federal Constitution, the State Constitution, federal laws or laws
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9 of Oklahoma.
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10 3. The amount of any federal net operating loss deduction shall
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11 be adjusted as follows:
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12 a. For carryovers and carrybacks to taxable years
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13 beginning before January 1, 1981, the amount of any
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14 net operating loss deduction allowed to a taxpayer for
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15 federal income tax purposes shall be reduced to an
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16 amount which is the same portion thereof as the loss
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17 from sources within this state, as determined pursuant
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18 to this section and Section 2362 of this title, for
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19 the taxable year in which such loss is sustained is of
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20 the total loss for such year;
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21 b. For carryovers and carrybacks to taxable years
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22 beginning after December 31, 1980, the amount of any
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23 net operating loss deduction allowed for the taxable
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24 year shall be an amount equal to the aggregate of the
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 1 Oklahoma net operating loss carryovers and carrybacks
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2 to such year. Oklahoma net operating losses shall be
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3 separately determined by reference to Section 172 of
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4 the Internal Revenue Code, 26 U.S.C., Section 172, as
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5 modified by the Oklahoma Income Tax Act, Section 2351
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6 et seq. of this title, and shall be allowed without
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7 regard to the existence of a federal net operating
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8 loss. For tax years beginning after December 31,
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9 2000, and ending before January 1, 2008, the years to
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10 which such losses may be carried shall be determined
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11 solely by reference to Section 172 of the Internal
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12 Revenue Code, 26 U.S.C., Section 172, with the
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13 exception that the terms “net operating loss” and
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14 “taxable income” shall be replaced with “Oklahoma net
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15 operating loss” and “Oklahoma taxable income”. For
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16 tax years beginning after December 31, 2007, and
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17 ending before January 1, 2009, years to which such
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18 losses may be carried back shall be limited to two (2)
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19 years. For tax years beginning after December 31,
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20 2008, the years to which such losses may be carried
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21 back shall be determined solely by reference to
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22 Section 172 of the Internal Revenue Code, 26 U.S.C.,
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23 Section 172, with the exception that the terms “net
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24 operating loss” and “taxable income” shall be replaced
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 1 with “Oklahoma net operating loss” and “Oklahoma
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2 taxable income”.
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3 4. Items of the following nature shall be allocated as
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4 indicated. Allowable deductions attributable to items separately
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5 allocable in subparagraphs a, b and c of this paragraph, whether or
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6 not such items of income were actually received, shall be allocated
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7 on the same basis as those items:
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8 a. Income from real and tangible personal property, such
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9 as rents, oil and mining production or royalties, and
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10 gains or losses from sales of such property, shall be
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11 allocated in accordance with the situs of such
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12 property;
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13 b. Income from intangible personal property, such as
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14 interest, dividends, patent or copyright royalties,
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15 and gains or losses from sales of such property, shall
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16 be allocated in accordance with the domiciliary situs
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17 of the taxpayer, except that:
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18 (1) where such property has acquired a nonunitary
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19 business or commercial situs apart from the
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20 domicile of the taxpayer such income shall be
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21 allocated in accordance with such business or
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22 commercial situs; interest income from
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23 investments held to generate working capital for
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24 a unitary business enterprise shall be included
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 1 in apportionable income; a resident trust or
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2 resident estate shall be treated as having a
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3 separate commercial or business situs insofar as
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4 undistributed income is concerned, but shall not
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5 be treated as having a separate commercial or
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6 business situs insofar as distributed income is
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7 concerned,
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8 (2) for taxable years beginning after December 31,
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9 2003, capital or ordinary gains or losses from
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10 the sale of an ownership interest in a publicly
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11 traded partnership, as defined by Section 7704(b)
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12 of the Internal Revenue Code, shall be allocated
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13 to this state in the ratio of the original cost
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14 of such partnership’s tangible property in this
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15 state to the original cost of such partnership’s
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16 tangible property everywhere, as determined at
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17 the time of the sale; if more than fifty percent
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18 (50%) of the value of the partnership’s assets
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19 consists of intangible assets, capital or
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20 ordinary gains or losses from the sale of an
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21 ownership interest in the partnership shall be
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22 allocated to this state in accordance with the
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23 sales factor of the partnership for its first
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24 full tax period immediately preceding its tax
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 1 period during which the ownership interest in the
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2 partnership was sold; the provisions of this
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3 division shall only apply if the capital or
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4 ordinary gains or losses from the sale of an
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5 ownership interest in a partnership do not
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6 constitute qualifying gain receiving capital
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7 treatment as defined in subparagraph a of
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8 paragraph 2 of subsection F of this section,
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9 (3) income from such property which is required to be
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10 allocated pursuant to the provisions of paragraph
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11 5 of this subsection shall be allocated as herein
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12 provided;
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13 c. Net income or loss from a business activity which is
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14 not a part of business carried on within or without
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15 the state of a unitary character shall be separately
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16 allocated to the state in which such activity is
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17 conducted;
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18 d. In the case of a manufacturing or processing
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19 enterprise the business of which in Oklahoma this
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20 state consists solely of marketing its products by:
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21 (1) sales having a situs without this state, shipped
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22 directly to a point from without the state to a
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23 purchaser within the state, commonly known as
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24 interstate sales,
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 1 (2) sales of the product stored in public warehouses
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2 within the state pursuant to “in transit”
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3 tariffs, as prescribed and allowed by the
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4 Interstate Commerce Commission, to a purchaser
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5 within the state,
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6 (3) sales of the product stored in public warehouses
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7 within the state where the shipment to such
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8 warehouses is not covered by “in transit”
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9 tariffs, as prescribed and allowed by the
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10 Interstate Commerce Commission, to a purchaser
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11 within or without the state,
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12 the Oklahoma net income shall, at the option of the
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13 taxpayer, be that portion of the total net income of
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14 the taxpayer for federal income tax purposes derived
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15 from the manufacture and/or processing and sales
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16 everywhere as determined by the ratio of the sales
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17 defined in this section made to the purchaser within
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18 the state to the total sales everywhere. The term
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19 “public warehouse” as used in this subparagraph means
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20 a licensed public warehouse, the principal business of
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21 which is warehousing merchandise for the public;
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22 e. In the case of insurance companies, Oklahoma taxable
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23 income shall be taxable income of the taxpayer for
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24 federal tax purposes, as adjusted for the adjustments
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 1 provided pursuant to the provisions of paragraphs 1
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2 and 2 of this subsection, apportioned as follows:
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3 (1) except as otherwise provided by division (2) of
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4 this subparagraph, taxable income of an insurance
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5 company for a taxable year shall be apportioned
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6 to this state by multiplying such income by a
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7 fraction, the numerator of which is the direct
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8 premiums written for insurance on property or
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9 risks in this state, and the denominator of which
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10 is the direct premiums written for insurance on
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11 property or risks everywhere. For purposes of
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12 this subsection, the term “direct premiums
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13 written” means the total amount of direct
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14 premiums written, assessments and annuity
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15 considerations as reported for the taxable year
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16 on the annual statement filed by the company with
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17 the Insurance Commissioner in the form approved
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18 by the National Association of Insurance
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19 Commissioners, or such other form as may be
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20 prescribed in lieu thereof,
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21 (2) if the principal source of premiums written by an
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22 insurance company consists of premiums for
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23 reinsurance accepted by it, the taxable income of
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24 such company shall be apportioned to this state
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 1 by multiplying such income by a fraction, the
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2 numerator of which is the sum of (a) direct
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3 premiums written for insurance on property or
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4 risks in this state, plus (b) premiums written
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5 for reinsurance accepted in respect of property
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6 or risks in this state, and the denominator of
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7 which is the sum of (c) direct premiums written
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8 for insurance on property or risks everywhere,
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9 plus (d) premiums written for reinsurance
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10 accepted in respect of property or risks
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11 everywhere. For purposes of this paragraph,
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12 premiums written for reinsurance accepted in
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13 respect of property or risks in this state,
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14 whether or not otherwise determinable, may at the
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15 election of the company be determined on the
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16 basis of the proportion which premiums written
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17 for insurance accepted from companies
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18 commercially domiciled in Oklahoma this state
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19 bears to premiums written for reinsurance
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20 accepted from all sources, or alternatively in
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21 the proportion which the sum of the direct
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22 premiums written for insurance on property or
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23 risks in this state by each ceding company from
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24 which reinsurance is accepted bears to the sum of
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 1 the total direct premiums written by each such
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2 ceding company for the taxable year.
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3 5. The net income or loss remaining after the separate
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4 allocation in paragraph 4 of this subsection, being that which is
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5 derived from a unitary business enterprise, shall be apportioned to
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6 this state on the basis of the arithmetical average of three factors
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7 consisting of property, payroll and sales or gross revenue
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8 enumerated as subparagraphs a, b and c of this paragraph. Net
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9 income or loss as used in this paragraph includes that derived from
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10 patent or copyright royalties, purchase discounts, and interest on
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11 accounts receivable relating to or arising from a business activity,
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12 the income from which is apportioned pursuant to this subsection,
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13 including the sale or other disposition of such property and any
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14 other property used in the unitary enterprise. Deductions used in
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15 computing such net income or loss shall not include taxes based on
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16 o