Bill No. 1200 proposes significant amendments to Oklahoma's tax laws, particularly concerning 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, utilizing an arithmetical average of three factors: property, payroll, and sales. Corporations can opt for a single sales factor apportionment, and the criteria for qualifying corporations are modified, reducing the initial cumulative investment cost from $200 million to $100 million over three years, with investments required to be made on or after January 1, 2018. The bill also includes various deletions and insertions to clarify tax code language, streamline tax calculations, and encourage investment in Oklahoma, with an effective date for these changes set for taxable years beginning on or after January 1, 2026.

Additionally, the bill outlines tax exemptions and deductions for individuals, establishing qualifying income thresholds and gradually increasing exemptions for retirement benefits from military service and federal civil service. It introduces deductions related to contributions to Oklahoma College Savings Plan accounts and the Achieving a Better Life Experience (ABLE) Program, as well as provisions for organ donation deductions and adjustments based on state and local taxes. The bill also clarifies the definition of "association taxable as a corporation," particularly regarding real estate investment trusts (REITs), and incorporates constructive ownership rules from the Internal Revenue Code. The effective date for these provisions is set for November 1, 2025. Overall, the bill aims to refine tax calculations and provide targeted incentives to stimulate economic activity in Oklahoma.

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