Bill No. 1200 proposes significant amendments to the Oklahoma tax code, focusing on the calculation of taxable income and adjusted gross income for both corporations and individuals. The bill introduces a new method for apportioning net income or loss from unitary business enterprises, which will now be based on an arithmetical average of three factors: property, payroll, and sales. Qualifying corporations can opt for a single sales factor apportionment, effective for tax years beginning on or after January 1, 2026, with the threshold for qualifying corporations lowered from $200 million to $100 million in cumulative investment over three years. The bill also clarifies the language of the tax code by removing the previous requirement for a weighted average of the three factors, thus simplifying the apportionment process for qualifying corporations.

In addition to corporate tax provisions, the bill addresses individual taxpayer adjustments to Oklahoma adjusted gross income, including personal exemptions and standard deductions that differ from federal guidelines. It introduces new definitions for ownership of assets, specifies conditions for claiming deductions on capital gains, and outlines various exemptions for specific groups such as seniors and military personnel. The bill also includes tax exemptions for retirement benefits from the Armed Forces and federal civil service, as well as deductions for contributions to college savings plans. Overall, the bill aims to streamline tax calculations, provide incentives for investment and specific industries, and ensure compliance with federal tax regulations, with an effective date set for November 1, 2025.

Statutes affected:
Introduced: 68-2358
Floor (House): 68-2358
Engrossed: 68-2358