1 STATE OF OKLAHOMA
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2 2nd Session of the 59th Legislature (2024)
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3 SENATE BILL 1477 By: Treat
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6 AS INTRODUCED
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7 An Act relating to income tax; amending Section 2,
7 Chapter 278, O.S.L. 2023 (70 O.S. Supp. 2023, Section
8 28-101), which relates to parental choice tax
8 credits; modifying definition; allowing certain
9 credit to qualifying students; prohibiting the use of
9 tax credit to offset certain accrued liabilities;
10 modifying frequency of payment for credits claimed;
10 requiring credits and payments to be allocated prior
11 to the school year; requiring certain notification;
11 allowing certain reallocation of credits; updating
12 statutory reference; amending 68 O.S. 2021, Section
12 2358, as last amended by Section 1, Chapter 377,
13 O.S.L. 2022 (68 O.S. Supp. 2023, Section 2358), which
13 relates to adjustments to arrive at taxable income;
14 providing exemption for certain tax credits received;
14 updating statutory language; and declaring an
15 emergency.
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18 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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19 SECTION 1. AMENDATORY Section 2, Chapter 278, O.S.L.
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20 2023 (70 O.S. Supp. 2023, Section 28-101), is amended to read as
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21 follows:
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22 Section 28-101. A. As used in the Oklahoma Parental Choice Tax
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23 Credit Act:
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24 1. “Commission” means the Oklahoma Tax Commission;
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 1 2. “Curriculum” means a complete course of study for a
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2 particular content area or grade level;
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3 3. “Department” means the State Department of Education;
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4 4. “Education service provider” means a person, business,
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5 public school district, public charter school, magnet school, or
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6 organization that provides educational goods and/or services to
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7 eligible students;
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8 5. “Eligible student” means a resident of this state who is
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9 eligible to enroll in a public school in this state. Eligible
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10 student shall include a student who is enrolled in and attends or is
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11 expected to enroll in a private school accredited by the State Board
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12 of Education or another accrediting association or a student who is
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13 educated pursuant to the other means of education exception provided
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14 for in subsection A of Section 10-105 of Title 70 of the Oklahoma
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15 Statutes;
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16 6. “Qualified expense” for the purpose of claiming the credit
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17 authorized by subparagraph a of paragraph 1 of subsection C of this
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18 section means tuition and fees at a private school accredited by the
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19 State Board of Education or another accrediting association;
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20 7. “Qualified expense” for the purpose of claiming the credit
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21 authorized by subparagraph b of paragraph 1 of subsection C of this
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22 section means the following expenditures:
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23 a. tuition and fees for nonpublic online learning
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24 programs, online or in person,
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 1 b. academic tutoring services provided by an individual
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2 or a private academic tutoring facility,
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3 c. textbooks, curriculum, or other instructional
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4 materials including, but not limited to, supplemental
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5 materials or associated online instruction required by
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6 an education service provider, and
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7 d. fees for nationally standardized assessments
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8 including, but not limited to, assessments used to
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9 determine college admission and advanced placement
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10 examinations as well as tuition and fees for tutoring
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11 or preparatory courses for the assessments; and
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12 8. “Taxpayer” means a biological or adoptive parent,
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13 grandparent, aunt, uncle, legal guardian, custodian, or other person
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14 with legal authority to act on behalf of an eligible student.
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15 B. There is hereby created the Oklahoma Parental Choice Tax
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16 Credit Program to provide an income tax credit to a taxpayer for
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17 qualified expenses to support the education of eligible students in
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18 this state.
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19 C. For the tax year 2024 and subsequent tax years, there shall
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20 be allowed against the tax imposed by Section 2355 of Title 68 of
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21 the Oklahoma Statutes a credit for any Oklahoma taxpayer who incurs
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22 a qualified expense on behalf of an eligible student, to be
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23 administered subject to the following amounts for each tax year:
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 1 1. If the eligible student attends a private school accredited
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2 by the State Board of Education or another accrediting association,
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3 the maximum credit amount shall be:
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4 a. (1) Seven Thousand Five Hundred Dollars ($7,500.00)
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5 or the amount of tuition and fees for the private
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6 school, whichever is less, if the eligible
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7 student is a member of a household in which the
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8 total adjusted gross income during the second
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9 preceding tax year does not exceed Seventy-five
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10 Thousand Dollars ($75,000.00),
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11 (2) Seven Thousand Dollars ($7,000.00) or the amount
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12 of tuition and fees for the private school,
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13 whichever is less, if the eligible student is a
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14 member of a household in which the total adjusted
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15 gross income during the second preceding tax year
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16 is more than Seventy-five Thousand Dollars
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17 ($75,000.00) but does not exceed One Hundred
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18 Fifty Thousand Dollars ($150,000.00),
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19 (3) Six Thousand Five Hundred Dollars ($6,500.00) or
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20 the amount of tuition and fees for the private
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21 school, whichever is less, if the eligible
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22 student is a member of a household in which the
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23 total adjusted gross income during the second
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24 preceding tax year is more than One Hundred Fifty
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 1 Thousand Dollars ($150,000.00) but does not
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2 exceed Two Hundred Twenty-five Thousand Dollars
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3 ($225,000.00),
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4 (4) Six Thousand Dollars ($6,000.00) or the amount of
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5 tuition and fees for the private school,
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6 whichever is less, if the eligible student is a
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7 member of a household in which the total adjusted
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8 gross income during the second preceding tax year
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9 is more than Two Hundred Twenty-five Thousand
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10 Dollars ($225,000.00) but does not exceed Two
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11 Hundred Fifty Thousand Dollars ($250,000.00), or
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12 (5) Five Thousand Dollars ($5,000.00) or the amount
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13 of tuition and fees for the private school,
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14 whichever is less, if the eligible student is a
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15 member of a household in which the total adjusted
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16 gross income during the second preceding tax year
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17 is more than Two Hundred Fifty Thousand Dollars
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18 ($250,000.00), and
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19 b. One Thousand Dollars ($1,000.00) in qualified expenses
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20 per eligible student in each tax year if the eligible
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21 student is educated pursuant to the other means of
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22 education exception provided for in subsection A of
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23 Section 10-105 of Title 70 of the Oklahoma Statutes.
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24 To claim the credit, the taxpayer shall submit to the
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 1 Commission receipts for qualified expenses as defined
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2 by paragraph 7 of subsection A of this section;
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3 2. If the eligible student attends a private school, accredited
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4 by the State Board of Education or another accrediting association,
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5 that exclusively serves students experiencing homelessness, the
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6 credit amount shall be Seven Thousand Five Hundred Dollars
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7 ($7,500.00) or the amount of the cost to educate the eligible
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8 student at the private school, whichever is less;
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9 2. 3. The taxpayer shall retain all receipts of qualified
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10 expenses as proof of the amounts paid each tax year the credit is
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11 claimed and shall submit them to the Commission upon request; and
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12 3. 4. If the credit exceeds the tax imposed by Section 2355 of
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13 Title 68 of the Oklahoma Statutes, the excess amount shall be
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14 refunded to the taxpayer; and
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15 5. Credits claimed by a taxpayer pursuant to the provisions of
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16 this section shall not be used to offset or pay the following:
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17 a. delinquent tax liability,
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18 b. accrued penalty or interest from the failure to file a
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19 report or return,
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20 c. accrued penalty or interest from the failure to pay a
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21 state tax within the statutory period allowed for its
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22 payment, or
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23 d. tax liability of the taxpayer from any prior tax year.
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 1 D. 1. a. For tax year 2024, the total amount of credits
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2 authorized by subparagraph a of paragraph 1 of
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3 subsection C of this section shall not exceed One
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4 Hundred Fifty Million Dollars ($150,000,000.00).
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5 b. For tax year 2025, the total amount of credits
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6 authorized by subparagraph a of paragraph 1 of
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7 subsection C of this section shall not exceed Two
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8 Hundred Million Dollars ($200,000,000.00).
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9 c. For tax year 2026, and subsequent tax years, the total
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10 amount of credits authorized by subparagraph a of
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11 paragraph 1 of subsection C of this section shall not
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12 exceed Two Hundred Fifty Million Dollars
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13 ($250,000,000.00).
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14 2. For tax year 2025, and subsequent tax years, the total
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15 amount of credits authorized by subparagraph b of paragraph 1 of
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16 subsection C of this section shall not exceed Five Million Dollars
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17 ($5,000,000.00).
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18 E. The Commission shall prescribe applications for the purposes
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19 of claiming the credits authorized by the Oklahoma Parental Choice
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20 Tax Credit Act and a deadline by which applications shall be
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21 submitted. A taxpayer claiming the credit authorized by
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22 subparagraph a of paragraph 1 of subsection C of this section shall
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23 submit an application prescribed by the Commission to receive the
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24 credit in two installments, each of which shall be half of equal to
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 1 the expected amount of tuition and fees for the private school year
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2 based on the affidavit enrollment verification form submitted
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3 pursuant to this subsection, but in no event shall an installment
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4 the payment exceed half the amount of the credit authorized by
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5 subparagraph a of paragraph 1 of subsection C of this section. A
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6 taxpayer claiming the credit authorized by subparagraph a of
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7 paragraph 1 of subsection C of this section shall submit to the
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8 Commission an affidavit enrollment verification form from the
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9 private school in which the eligible student is enrolled or is
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10 expected to enroll with the tuition and fees to be charged the
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11 taxpayer for the applicable school year. In reviewing applications
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12 submitted by eligible taxpayers to determine whether they qualify
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13 for a credit authorized by subparagraph a of paragraph 1 of
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14 subsection C of this section, the Commission shall give first
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15 preference in making installments to taxpayers who qualify pursuant
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16 to divisions (1) and (2) of subparagraph a of paragraph 1 of
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17 subsection C of this section. The Commission shall make the
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18 installments payment based on the expected amount of tuition and fee
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19 amounts on the affidavit enrollment verification form submitted
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20 pursuant to this subsection. Tax credits allowed and payments shall
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21 be allocated at the beginning of the school year.
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22 F. Taxpayers claiming the credit shall:
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 1 1. Only claim the credit for qualified expenses as defined in
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2 paragraphs 6 and 7 of subsection A of this section to provide an
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3 education for an eligible student;
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4 2. Ensure no other person is claiming a credit for the eligible
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5 student;
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6 3. Not claim the credit for an eligible student who enrolls as
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7 a full-time student in a public school district, public charter
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8 school, public virtual charter school, or magnet school; and
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9 4. Comply with rules and requirements established by the
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10 Commission for administration of the Oklahoma Parental Choice Tax
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11 Credit Program; and
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12 5. Notify the Commission not later than thirty (30) days after
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13 the date on which the eligible student:
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14 a. enrolls in a public school, including an open-
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15 enrollment charter school,
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16 b. graduates from high school, or
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17 c. is no longer participating in the program for any
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18 reason.
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19 G. Eligible students may accept a scholarship from the Lindsey
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20 Nicole Henry Scholarships for Students with Disabilities Program
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21 created by Section 13-101.2 of Title 70 of the Oklahoma Statutes
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22 while participating in the Oklahoma Parental Choice Tax Credit
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23 Program.
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 1 H. 1. The Commission shall have the authority to conduct an
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2 audit or contract for the auditing of receipts for qualified
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3 expenses submitted pursuant to subparagraph b of paragraph 1 of
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4 subsection C of this section.
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5 2. The Commission shall be authorized to recapture the credits
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6 otherwise authorized by the provisions of this act the Oklahoma
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7 Parental Choice Tax Credit Act on a prorated basis if an audit
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8 conducted pursuant to this subsection shows that the credit was
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9 claimed for expenditures that were not qualified expenses or it
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10 finds that the taxpayer has claimed an eligible student who no
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11 longer attends a private school or has enrolled in a public school
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12 in the state.
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13 3. The Commission shall be authorized to reallocate credits to
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14 the next eligible taxpayer in line when a taxpayer, on behalf of an
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15 eligible student in the program, chooses not to participate, is no
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16 longer eligible to participate, or chooses to forgo participation in
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17 the program for any reason.
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18 I. In the event of a failure of revenue pursuant to the
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19 Oklahoma State Finance Act, the tax credits otherwise authorized in
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20 subsection C of this section shall be reduced proportionately to the
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21 reduction in the amount of money appropriated to the State Board of
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22 Education for the financial support of public schools for the fiscal
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23 year in which the failure of revenue occurs.
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