2Nd Session of the 53Rd Legislature (2012)

STATE OF OKLAHOMA

2nd Session of the 53rd Legislature (2012)

CONFERENCE COMMITTEE SUBSTITUTE

FOR ENGROSSED

SENATE BILL NO. 1230 By: Mazzei of the Senate

and

Dank, Enns and Cooksey of the House

CONFERENCE COMMITTEE SUBSTITUTE

<StartFT>An Act relating to income tax; amending 27A O.S. 2011, Section 2-11-303, which relates to income tax credit for investments related to recycling, reuse or reduction of hazardous waste; limiting ability to claim credits; amending 68 O.S. 2011, Section 2355, which relates to income tax rates; modifying rates and brackets for specified time period; amending 68 O.S. 2011, Sections 2357, 2357.4, 2357.6, 2357.11, 2357.25, 2357.26, 2357.27, 2357.30, 2357.32A, 2357.32B, 2357.33, 2357.41, 2357.43, 2357.45, 2357.46, 2357.47, 2357.59, 2357.81, 2357.100, 2357.101, 2357.102, 2357.104, 2357.203, 2357.206 and 2357.303, which relate to tax credits; limiting ability to claim credits for child care expenses, child tax credit, gas used in manufacturing, investment or increase in employment, certain contributions, for furnishing specified services, purchasing coal, engaging in certain activities, certain agricultural investments, certain expenses by employers related to child care and the business of child care, amounts paid as a guaranty fee, production and sale of zero-emission electricity, manufacture of wind turbines, certain immunizations, qualified rehabilitation expenditures, percentage of certain federal credits, certain donations, specified expenditures for construction, eligible wages, investment in certain recycling facility, location of a facility within a specified zone, purchase of poultry litter, investment in a film or music project, cost of certain equipment, railroad reconstruction or replacement expenditures, and expenses related to specially trained canines; amending 68 O.S. 2011, Section 2358, which relates to adjustments to income; limiting amount which may be exempted as a personal exemption, exemption for blindness, and exemption related to age; limiting deduction for expenditures related to specified physical disability; modifying application of certain provision and limiting amount which may be excluded from taxable income; limiting deduction for nonrecurring adoption expenses; limiting deduction for contributions to certain savings plan; requiring taxable income to be increased for certain deduction at specified amounts; amending 68 O.S. 2011, Section 2358.3, which relates to deductions; limiting amount of deduction for certain contributions; amending 68 O.S. 2011, Section 2358.7, which relates to tax credit; limiting amount of credit for certain certifications; amending 68 O.S. 2370, which relates to bank privilege tax; limiting amount of credit which may be claimed against tax; amending 68 O.S. 2011, Section 2370.3, which relates to bank privilege tax; limiting amount of credit which may be claimed against tax for amounts paid in origination fees; amending 68 O.S. 2011, Sections 2906 and 2907, which relate to property tax relief claimed as income tax credit; limiting ability to claim credit; amending 68 O.S. 2011, Section 3624, which relates to Oklahoma Film Enhancement Rebate Program; limiting ability to claim rebate; amending 68 O.S. 2011, Section 5011, which relates to the Sales Tax Relief Act; limiting ability to file claims and amount of such claims; amending 68 O.S. 2011, Section 54006, which relates to Oklahoma Research and Development Incentives Act; limiting ability to claim credit; repealing 68 O.S. 2011, Sections 1370.3, 2357.13, 2357.24, 2357.31, 2357.40 and 2357.402, which relate to income tax credits; repealing 74 O.S. 2011, Sections 5075 and 5078, which relate to income tax credits; providing an effective date; and declaring an emergency.<EndFT>

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:

SECTION . AMENDATORY 27A O.S. 2011, Section 2-11-303, is amended to read as follows:

Section 2-11-303. A. Except as otherwise provided in subsection C of this section, any person, firm, corporation or other legal entity engaged, or proposing to engage, in the recycling, reuse or source reduction of any hazardous waste, the processing of which is certified as provided in Section 2-11-305 of this title, shall be entitled to a one-time credit against its income tax liability, as provided in Section 2-11-304 of this title, of not to exceed twenty percent (20%) of the net investment cost of equipment and installation of processes used for the recycling, reuse, or source reduction of hazardous waste. Provided, that:

1. The credit allowed to be taken shall not exceed the income tax liability for such year for such person, firm, corporation or legal entity;

2. The tax credit to be allowed shall not extend to or include plant operating expenses;

3. The person, firm, corporation or other legal entity applying for such tax credit actually uses the recycling, reuse, or source reduction process;

4. The tax credit is taken within three (3) years of the installation and actual use of such process; and

5. The tax credit allowed by any person, firm, corporation or other legal entity for any three (3) consecutive tax years shall not exceed a total of Fifty Thousand Dollars ($50,000.00).

B. The investment cost of such process may be treated as a depreciable asset for income tax purposes.

C. No credit otherwise authorized by the provisions of this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2010, for which the credit would otherwise be allowable. The provisions of this subsection shall cease to be operative on July 1, 2012. Beginning July 1, 2012, the credit authorized by this section may be claimed for any event, transaction, investment, expenditure or other act occurring on or after July 1, 2012, according to the provisions of this section.

SECTION . AMENDATORY 68 O.S. 2011, Section 2355, is amended to read as follows:

Section 2355. A. Individuals. For all taxable years beginning after December 31, 1998 and before January 1, 2006, a tax is hereby imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed at the option of the taxpayer under one of the two following methods:

1. METHOD 1.

a. Single individuals and married individuals filing separately not deducting federal income tax:

(1) 1/2% tax on first $1,000.00 or part thereof,

(2) 1% tax on next $1,500.00 or part thereof,

(3) 2% tax on next $1,250.00 or part thereof,

(4) 3% tax on next $1,150.00 or part thereof,

(5) 4% tax on next $1,300.00 or part thereof,

(6) 5% tax on next $1,500.00 or part thereof,

(7) 6% tax on next $2,300.00 or part thereof, and

(8) (a) for taxable years beginning after December 31, 1998, and before January 1, 2002, 6.75% tax on the remainder,

(b) for taxable years beginning on or after January 1, 2002, and before January 1, 2004, 7% tax on the remainder, and

b. Married individuals filing jointly and surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code and heads of households as defined in the Internal Revenue Code not deducting federal income tax:

(1) 1/2% tax on first $2,000.00 or part thereof,

(2) 1% tax on next $3,000.00 or part thereof,

(3) 2% tax on next $2,500.00 or part thereof,

(4) 3% tax on next $2,300.00 or part thereof,

(5) 4% tax on next $2,400.00 or part thereof,

(6) 5% tax on next $2,800.00 or part thereof,

(7) 6% tax on next $6,000.00 or part thereof, and

(8) (a) for taxable years beginning after December 31, 1998, and before January 1, 2002, 6.75% tax on the remainder,

(b) for taxable years beginning on or after January 1, 2002, and before January 1, 2004, 7% tax on the remainder, and

2. METHOD 2.

a. Single individuals and married individuals filing separately deducting federal income tax:

(1) 1/2% tax on first $1,000.00 or part thereof,

(2) 1% tax on next $1,500.00 or part thereof,

(3) 2% tax on next $1,250.00 or part thereof,

(4) 3% tax on next $1,150.00 or part thereof,

(5) 4% tax on next $1,200.00 or part thereof,

(6) 5% tax on next $1,400.00 or part thereof,

(7) 6% tax on next $1,500.00 or part thereof,

(8) 7% tax on next $1,500.00 or part thereof,

(9) 8% tax on next $2,000.00 or part thereof,

(10) 9% tax on next $3,500.00 or part thereof, and

(11) 10% tax on the remainder.

(1) 1/2% tax on the first $2,000.00 or part thereof,

(2) 1% tax on the next $3,000.00 or part thereof,

(3) 2% tax on the next $2,500.00 or part thereof,

(4) 3% tax on the next $1,400.00 or part thereof,

(5) 4% tax on the next $1,500.00 or part thereof,

(6) 5% tax on the next $1,600.00 or part thereof,

(7) 6% tax on the next $1,250.00 or part thereof,

(8) 7% tax on the next $1,750.00 or part thereof,

(9) 8% tax on the next $3,000.00 or part thereof,

(10) 9% tax on the next $6,000.00 or part thereof, and

(11) 10% tax on the remainder.

B. 1. Individuals. For all taxable years beginning on or after January 1, 2008, and before January 1, 2012, a tax is hereby imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed as follows:

a. Single individuals and married individuals filing separately:

(a) (1) 1/2% tax on first $1,000.00 or part thereof,

(b) (2) 1% tax on next $1,500.00 or part thereof,

(d) (4) 3% tax on next $1,150.00 or part thereof,

(e) (5) 4% tax on next $2,300.00 or part thereof,

(f) (6) 5% tax on next $1,500.00 or part thereof, and

(g) (7) 5.50% tax on the remainder for the 2008 tax year and any subsequent through the 2011 tax year unless the rate prescribed by subparagraph (h) of this paragraph is in effect, and

(h) 5.25% tax on the remainder for the 2009 and subsequent tax years. The decrease in the top marginal individual income tax rate otherwise authorized by this subparagraph shall be contingent upon the determination required to be made by the State Board of Equalization pursuant to Section 2355.1A of this title.

(a) (1) 1/2% tax on first $2,000.00 or part thereof,

(b) (2) 1% tax on next $3,000.00 or part thereof,

(d) (4) 3% tax on next $2,300.00 or part thereof,

(e) (5) 4% tax on next $2,400.00 or part thereof,

(f) (6) 5% tax on next $2,800.00 or part thereof, and

(g) (7) 5.50% tax on the remainder for the 2008 tax year and any subsequent through the 2011 tax year unless the rate prescribed by subparagraph (h) of this paragraph is in effect, and

2. Individuals. For the taxable year beginning on January 1, 2012, a tax is hereby imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed as follows:

a. Single individuals and married individuals filing separately:

(1) 1/2% tax on first $1,000.00 or part thereof,

(2) 1% tax on next $1,500.00 or part thereof,

(3) 2% tax on next $1,250.00 or part thereof,

(4) 3% tax on next $1,150.00 or part thereof,

(5) 4% tax on next $2,300.00 or part thereof,

(6) 5% tax on next $1,500.00 or part thereof, and

(7) 5.25% tax on the remainder.

(1) 1/2% tax on first $2,000.00 or part thereof,

(2) 1% tax on next $3,000.00 or part thereof,

(3) 2% tax on next $2,500.00 or part thereof,

(4) 3% tax on next $2,300.00 or part thereof,

(5) 4% tax on next $2,400.00 or part thereof,

(6) 5% tax on next $2,800.00 or part thereof, and

(7) 5.25% tax on the remainder.

3. Individuals. For the taxable year beginning on January 1, 2013, a tax is hereby imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed as follows:

a. Single individuals and married individuals filing separately:

(1) 1/2% tax on first $1,000.00 or part thereof,

(2) 1% tax on next $1,500.00 or part thereof,

(3) 2% tax on next $1,250.00 or part thereof,

(4) 3% tax on next $1,150.00 or part thereof,

(5) 4% tax on next $2,300.00 or part thereof, and

(6) 5% tax on the remainder.

(1) 1/2% tax on first $2,000.00 or part thereof,

(2) 1% tax on next $3,000.00 or part thereof,

(3) 2% tax on next $2,500.00 or part thereof,

(4) 3% tax on next $2,300.00 or part thereof,

(5) 4% tax on next $2,400.00 or part thereof, and

(6) 5% tax on the remainder.

4. Individuals. For all taxable years beginning on or after January 1, 2014, a tax is hereby imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed as follows:

a. Single individuals and married individuals filing separately:

(1) 1/2% tax on first $1,000.00 or part thereof,

(2) 1% tax on next $1,500.00 or part thereof,

(3) 2% tax on next $1,250.00 or part thereof,

(4) 3% tax on next $1,150.00 or part thereof,

(5) 4% tax on next $2,300.00 or part thereof, and

(6) 4.75% tax on the remainder.