1 STATE OF OKLAHOMA
2 3rd Extraordinary Session of the 58th Legislature (2022)
3 HOUSE BILL 1021 By: Wallace
4
5
6 AS INTRODUCED
7 An Act relating to revenue and taxation; amending 68
O.S. 2021, Sections 2355, as last amended by Section
8 45 of Enrolled Senate Bill No. 1802 of the 2nd
Session of the 58th Oklahoma Legislature, 2355.1P-4,
9 2370, and 2805, which relate to modification of the
corporate income tax rate; modifying rate of
10 corporate income tax; specifying tax rate by tax
year; providing for imposition of income tax rate
11 based upon certain corporate characteristics;
prohibiting acquisition of tax credits on or after
12 effective date; providing for inapplicability of
certain provisions to public service corporations;
13 providing for income tax rate after utilization of
tax credits; modifying provisions related to tax
14 levied upon certain pass-through entities; providing
for termination of tax levied on certain pass-through
15 entities; providing for filing of required returns by
pass-through entities and other entities; modifying
16 rate of tax imposed on certain financial institutions
in lieu of income tax; specifying rate of tax by
17 year; providing for payment of fee in lieu of
personal property tax beginning on or after specified
18 date; providing for apportionment of revenue to the
State Public Common School Building Equalization
19 Fund; and providing an effective date.
20
21
22 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
23 SECTION 1. AMENDATORY 68 O.S. 2021, Section 2355, as
24 last amended by Section 45 of Enrolled Senate Bill No. 1802 of the
Req. No. 70011 Page 1
1 2nd Session of the 58th Oklahoma Legislature, is amended to read as
2 follows:
3 Section 2355. A. Individuals. For all taxable years beginning
4 after December 31, 1998, and before January 1, 2006, a tax is hereby
5 imposed upon the Oklahoma taxable income of every resident or
6 nonresident individual, which tax shall be computed at the option of
7 the taxpayer under one of the two following methods:
8 1. METHOD 1.
9 a. Single individuals and married individuals filing
10 separately not deducting federal income tax:
11 (1) 1/2% tax on first $1,000.00 or part thereof,
12 (2) 1% tax on next $1,500.00 or part thereof,
13 (3) 2% tax on next $1,250.00 or part thereof,
14 (4) 3% tax on next $1,150.00 or part thereof,
15 (5) 4% tax on next $1,300.00 or part thereof,
16 (6) 5% tax on next $1,500.00 or part thereof,
17 (7) 6% tax on next $2,300.00 or part thereof, and
18 (8) (a) for taxable years beginning after December
19 31, 1998, and before January 1, 2002, 6.75%
20 tax on the remainder,
21 (b) for taxable years beginning on or after
22 January 1, 2002, and before January 1, 2004,
23 7% tax on the remainder, and
24
Req. No. 70011 Page 2
1 (c) for taxable years beginning on or after
2 January 1, 2004, 6.65% tax on the remainder.
3 b. Married individuals filing jointly and surviving
4 spouse to the extent and in the manner that a
5 surviving spouse is permitted to file a joint return
6 under the provisions of the Internal Revenue Code and
7 heads of households as defined in the Internal Revenue
8 Code not deducting federal income tax:
9 (1) 1/2% tax on first $2,000.00 or part thereof,
10 (2) 1% tax on next $3,000.00 or part thereof,
11 (3) 2% tax on next $2,500.00 or part thereof,
12 (4) 3% tax on next $2,300.00 or part thereof,
13 (5) 4% tax on next $2,400.00 or part thereof,
14 (6) 5% tax on next $2,800.00 or part thereof,
15 (7) 6% tax on next $6,000.00 or part thereof, and
16 (8) (a) for taxable years beginning after December
17 31, 1998, and before January 1, 2002, 6.75%
18 tax on the remainder,
19 (b) for taxable years beginning on or after
20 January 1, 2002, and before January 1, 2004,
21 7% tax on the remainder, and
22 (c) for taxable years beginning on or after
23 January 1, 2004, 6.65% tax on the remainder.
24 2. METHOD 2.
Req. No. 70011 Page 3
1 a. Single individuals and married individuals filing
2 separately deducting federal income tax:
3 (1) 1/2% tax on first $1,000.00 or part thereof,
4 (2) 1% tax on next $1,500.00 or part thereof,
5 (3) 2% tax on next $1,250.00 or part thereof,
6 (4) 3% tax on next $1,150.00 or part thereof,
7 (5) 4% tax on next $1,200.00 or part thereof,
8 (6) 5% tax on next $1,400.00 or part thereof,
9 (7) 6% tax on next $1,500.00 or part thereof,
10 (8) 7% tax on next $1,500.00 or part thereof,
11 (9) 8% tax on next $2,000.00 or part thereof,
12 (10) 9% tax on next $3,500.00 or part thereof, and
13 (11) 10% tax on the remainder.
14 b. Married individuals filing jointly and surviving
15 spouse to the extent and in the manner that a
16 surviving spouse is permitted to file a joint return
17 under the provisions of the Internal Revenue Code and
18 heads of households as defined in the Internal Revenue
19 Code deducting federal income tax:
20 (1) 1/2% tax on the first $2,000.00 or part thereof,
21 (2) 1% tax on the next $3,000.00 or part thereof,
22 (3) 2% tax on the next $2,500.00 or part thereof,
23 (4) 3% tax on the next $1,400.00 or part thereof,
24 (5) 4% tax on the next $1,500.00 or part thereof,
Req. No. 70011 Page 4
1 (6) 5% tax on the next $1,600.00 or part thereof,
2 (7) 6% tax on the next $1,250.00 or part thereof,
3 (8) 7% tax on the next $1,750.00 or part thereof,
4 (9) 8% tax on the next $3,000.00 or part thereof,
5 (10) 9% tax on the next $6,000.00 or part thereof, and
6 (11) 10% tax on the remainder.
7 B. Individuals. For all taxable years beginning on or after
8 January 1, 2008, and ending any tax year which begins after December
9 31, 2015, for which the determination required pursuant to Sections
10 4 and 5 of this act is made by the State Board of Equalization, a
11 tax is hereby imposed upon the Oklahoma taxable income of every
12 resident or nonresident individual, which tax shall be computed as
13 follows:
14 1. Single individuals and married individuals filing
15 separately:
16 (a) 1/2% tax on first $1,000.00 or part thereof,
17 (b) 1% tax on next $1,500.00 or part thereof,
18 (c) 2% tax on next $1,250.00 or part thereof,
19 (d) 3% tax on next $1,150.00 or part thereof,
20 (e) 4% tax on next $2,300.00 or part thereof,
21 (f) 5% tax on next $1,500.00 or part thereof,
22 (g) 5.50% tax on the remainder for the 2008 tax year and
23 any subsequent tax year unless the rate prescribed by
24 subparagraph (h) of this paragraph is in effect, and
Req. No. 70011 Page 5
1 (h) 5.25% tax on the remainder for the 2009 and subsequent
2 tax years. The decrease in the top marginal
3 individual income tax rate otherwise authorized by
4 this subparagraph shall be contingent upon the
5 determination required to be made by the State Board
6 of Equalization pursuant to Section 2355.1A of this
7 title.
8 2. Married individuals filing jointly and surviving spouse to
9 the extent and in the manner that a surviving spouse is permitted to
10 file a joint return under the provisions of the Internal Revenue
11 Code and heads of households as defined in the Internal Revenue
12 Code:
13 (a) 1/2% tax on first $2,000.00 or part thereof,
14 (b) 1% tax on next $3,000.00 or part thereof,
15 (c) 2% tax on next $2,500.00 or part thereof,
16 (d) 3% tax on next $2,300.00 or part thereof,
17 (e) 4% tax on next $2,400.00 or part thereof,
18 (f) 5% tax on next $2,800.00 or part thereof,
19 (g) 5.50% tax on the remainder for the 2008 tax year and
20 any subsequent tax year unless the rate prescribed by
21 subparagraph (h) of this paragraph is in effect, and
22 (h) 5.25% tax on the remainder for the 2009 and subsequent
23 tax years. The decrease in the top marginal
24 individual income tax rate otherwise authorized by
Req. No. 70011 Page 6
1 this subparagraph shall be contingent upon the
2 determination required to be made by the State Board
3 of Equalization pursuant to Section 2355.1A of this
4 title.
5 C. Individuals. For all taxable years beginning on or after
6 January 1, 2022, a tax is hereby imposed upon the Oklahoma taxable
7 income of every resident or nonresident individual, which tax shall
8 be computed as follows:
9 1. Single individuals and married individuals filing
10 separately:
11 (a) 0.25% tax on first $1,000.00 or part thereof,
12 (b) 0.75% tax on next $1,500.00 or part thereof,
13 (c) 1.75% tax on next $1,250.00 or part thereof,
14 (d) 2.75% tax on next $1,150.00 or part thereof,
15 (e) 3.75% tax on next $2,300.00 or part thereof,
16 (f) 4.75% tax on the remainder.
17 2. Married individuals filing jointly and surviving spouse to
18 the extent and in the manner that a surviving spouse is permitted to
19 file a joint return under the provisions of the Internal Revenue
20 Code and heads of households as defined in the Internal Revenue
21 Code:
22 (a) 0.25% tax on first $2,000.00 or part thereof,
23 (b) 0.75% tax on next $3,000.00 or part thereof,
24 (c) 1.75% tax on next $2,500.00 or part thereof,
Req. No. 70011 Page 7
1 (d) 2.75% tax on next $2,300.00 or part thereof,
2 (e) 3.75% tax on next $2,400.00 or part thereof,
3 (f) 4.75% tax on the remainder.
4 No deduction for federal income taxes paid shall be allowed to
5 any taxpayer to arrive at taxable income.
6 D. Nonresident aliens. In lieu of the rates set forth in
7 subsection A above, there shall be imposed on nonresident aliens, as
8 defined in the Internal Revenue Code, a tax of eight percent (8%)
9 instead of thirty percent (30%) as used in the Internal Revenue
10 Code, with respect to the Oklahoma taxable income of such
11 nonresident aliens as determined under the provision of the Oklahoma
12 Income Tax Act.
13 Every payer of amounts covered by this subsection shall deduct
14 and withhold from such amounts paid each payee an amount equal to
15 eight percent (8%) thereof. Every payer required to deduct and
16 withhold taxes under this subsection shall for each quarterly period
17 on or before the last day of the month following the close of each
18 such quarterly period, pay over the amount so withheld as taxes to
19 the Tax Commission, and shall file a return with each such payment.
20 Such return shall be in such form as the Tax Commission shall
21 prescribe. Every payer required under this subsection to deduct and
22 withhold a tax from a payee shall, as to the total amounts paid to
23 each payee during the calendar year, furnish to such payee, on or
24 before January 31, of the succeeding year, a written statement
Req. No. 70011 Page 8
1 showing the name of the payer, the name of the payee and the payee’s
2 Social Security account number, if any, the total amount paid
3 subject to taxation, and the total amount deducted and withheld as
4 tax and such other information as the Tax Commission may require.
5 Any payer who fails to withhold or pay to the Tax Commission any
6 sums herein required to be withheld or paid shall be personally and
7 individually liable therefor to the State of Oklahoma.
8 E. Corporations. For 1. Except as otherwise provided by
9 paragraph 2 of this subsection, for all taxable years beginning
10 after December 31, 2021, a tax is hereby imposed upon the Oklahoma
11 taxable income of every corporation doing business within this state
12 or deriving income from sources within this state in an amount equal
13 to four percent (4%) thereof.
14 2. Except as provided by paragraph 3 of this subsection, for
15 all taxable years beginning after December 31, 2022, a tax is hereby
16 imposed upon the Oklahoma taxable income of every corporation doing
17 business within this state or deriving income from sources within
18 this state in an amount as follows:
19 a. three and five-tenths percent (3.5%) for tax years
20 beginning not later than December 31, 2023,
21 b. three percent (3.0%) for tax years beginning not later
22 than December 31, 2024,
23 c. two and five-tenths percent (2.5%) for tax years
24 beginning not later than December 31, 2025,
Req. No. 70011 Page 9
1 d. two percent (2.0%) for tax years beginning not later
2 than December 31, 2026,
3 e. one and five-tenths percent (1.5%) for tax years
4 beginning not later than December 31, 2027,
5 f. one percent (1.0%) for tax years beginning not later
6 than December 31, 2028,
7 g. five-tenths percent (0.5%) for tax years beginning not
8 later than December 31, 2029, and
9 h. zero percent (0%) for tax years beginning on or after
10 January 1, 2030.
11 There shall be no additional Oklahoma income tax imposed on
12 accumulated taxable income or on undistributed personal holding
13 company income as those terms are defined in the Internal Revenue
14 Code.
15 3. Notwithstanding subsection I of this section and except as
16 provided by paragraph 5 or paragraph 6 of this subsection, unless
17 state General Revenue Fund revenue collections for the fiscal year
18 immediately preceding the current tax filing year exceed one hundred
19 two percent (102%) of General Revenue Fund revenue collections for
20 the second fiscal year preceding the current tax filing year, the tax
21 rate set forth in paragraph 1 of this subsection shall apply for a
22 corporation that:
23
24
Req. No. 70011 Page 10
1 a. participates in the filing of a publicly traded
2 company's financial statements prepared in accordance
3 with generally accepted accounting principles, and
4 b.
5 (1) the corporation has Oklahoma tax credit
6 carryforwards in excess of Fifty Million Dollars
7 ($50,000,000.00) that have an indefinite
8 carryforward period, as of the effective date of
9 this act, or
10 (2) is a component member of an affiliated group
11 filing a consolidated Oklahoma income tax return
12 under the provisions of Section 2367 of this
13 title, and the component members of such
14 affiliated group have, in the aggregate, Oklahoma
15 tax credit carryforwards in excess of Fifty
16 Million Dollars ($50,000,000.00) that have an
17 indefinite carryforward period, as of the
18 effective date of this act.
19 4. No corporation as described by paragraph 3 of this
20 subsection shall acquire any tax credit authorized pursuant to the
21 provisions of the Oklahoma Statutes on or after the effective date
22 of this act.
23 5. The provisions of paragraph 3 of this subsection shall not
24 be applicable to any public service corporation the rates of which
Req. No. 70011 Page 11
1 are subjec