Bill No. 1200 proposes significant amendments to Oklahoma's tax law, focusing on the calculation of taxable income and adjusted gross income for both corporations and individuals. The bill introduces new provisions for the apportionment of net income or loss from unitary business enterprises, allowing qualifying corporations—defined as those with a cumulative investment cost of at least $100 million over three years, made on or after January 1, 2018—to choose between a three-factor apportionment method or a single sales factor apportionment. Additionally, the bill modifies the treatment of net operating losses and income allocation, aligning state tax calculations with federal guidelines while providing specific adjustments. Notably, for taxable years beginning on or after January 1, 2026, all corporations will be required to use a single sales factor for apportionment.

The bill also includes various tax exemptions and deductions for individuals, establishing qualifying income thresholds and introducing exemptions for retirement benefits from military service and federal civil service, which will gradually increase to 100% over several years. It allows deductions for contributions to the Oklahoma College Savings Plan and the Achieving a Better Life Experience (ABLE) Program, as well as for organ donations and certain payments from livestock show events. Furthermore, the bill clarifies the definition of "association taxable as a corporation," particularly regarding real estate investment trusts (REITs), and sets criteria for their tax treatment. Overall, the legislation aims to refine Oklahoma's tax framework, incentivize investment, and provide financial relief to taxpayers through various benefits and exemptions.

Statutes affected:
Introduced: 68-2358
Senate Committee Substitute for House Bill: 68-2355, 68-2358
Floor (House): 68-2358
Floor (Senate): 68-2355
Engrossed: 68-2358