Bill Text For HB1160 - Committee Substitute

 1|                          STATE OF OKLAHOMA                            |
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 2|             1st Session of the 57th Legislature (2019)                |
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 3|COMMITTEE SUBSTITUTE                                                   |
  |FOR                                                                    |
 4|HOUSE BILL NO. 1160                  By: Worthen                       |
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 7|                        COMMITTEE SUBSTITUTE                           |
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 8|       An Act relating to revenue and taxation; providing              |
  |       income tax credit for certain qualifying educational            |
 9|       expenses; imposing maximum amount on credit;                    |
  |       providing for carryover and specifying carryover                |
10|       period; prohibiting itemized deductions with respect            |
  |       to amounts used in credit computation; defining                 |
11|       terms; authorizing Oklahoma Tax Commission to require           |
  |       certain documentation; requiring promulgation of                |
12|       rules; providing certain schools or organizations not           |
  |       required to provide documents; stating legislative              |
13|       intent; requiring reports regarding credit usage by             |
  |       Tax Commission; requiring cabinet secretary to make             |
14|       report to chairs of specified legislative committees;           |
  |       providing for codification; and providing an                    |
15|       effective date.                                                 |
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18|BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:                  |
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19|    SECTION 1.     NEW LAW     A new section of law to be codified     |
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20|in the Oklahoma Statutes as Section 2357.207 of Title 68, unless       |
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21|there is created a duplication in numbering, reads as follows:         |
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22|    A.  For tax years beginning after December 31, 2020, there shall   |
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23|be allowed for any taxpayer a credit against the tax imposed by        |
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24|Section 2355 of Title 68 of the Oklahoma Statutes for qualifying       |
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   Req. No. 8356                                                   Page 1
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 1|educational expenses incurred during the tax year for any family       |
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 2|with a child who is eligible to be enrolled in a public school in      |
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 3|this state free of charge and who qualifies as the taxpayer's          |
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 4|dependent for federal tax purposes.                                    |
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 5|    B.  The maximum education expenses tax credit allowable for each   |
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 6|taxable year, including carryover credits allowed by subsection C of   |
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 7|this section, shall be Two Thousand Five Hundred Dollars               |
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 8|($2,500.00).                                                           |
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 9|    C.  If the amount of the allowable credit pursuant to subsection   |
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10|A of this section exceeds the maximum allowable credit pursuant to     |
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11|subsection B of this section, such excess may be carried over, in      |
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12|order, to each of the two (2) subsequent taxable years.                |
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13|    D.  Amounts claimed under this section shall not also be           |
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14|itemized as deductions for the same tax year when computing Oklahoma   |
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15|taxable income.                                                        |
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16|    E.  As used in this section:                                       |
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17|    1.  "Academic instruction" means instruction in reading,           |
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18|writing, mathematics, science, history, art, music, geography,         |
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19|civics, economics, literature, philosophy, religion, foreign           |
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20|languages and related subjects;                                        |
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21|    2.  "Close relatives" refers to a person's children,               |
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22|grandchildren, mother, father, brothers, sisters, aunts or uncles      |
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23|whether by blood, marriage or adoption;                                |
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24|    3.  "Qualifying educational expenses" include:                     |
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   Req. No. 8356                                                   Page 2
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 1|         a.    tuition and fees for concurrent enrollment as           |
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 2|              described in Section 628.13 of Title 70 of the           |
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 3|              Oklahoma Statutes for a student who meets the            |
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 4|              requirements set forth in subsection C of that           |
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 5|              section,                                                 |
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 6|         b.    tuition and other instructional fees charged by a       |
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 7|              qualified school,                                        |
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 8|         c.    costs associated with activities at a qualified         |
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 9|              school, including the cost of fees, clothing and         |
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10|              equipment required to participate in athletic teams,     |
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11|              musical groups, clubs or similar school activities,      |
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12|         d.    tuition and other instructional fees charged for        |
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13|              tutoring, private instruction or remedial education      |
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14|              services for the purposes of academic instruction and    |
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15|              not provided by a close relative,                        |
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16|         e.    costs associated with the provision of instruction by   |
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17|              other means in prekindergarten through grade twelve      |
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18|              directed by the parent or guardian including the cost    |
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19|              of computer equipment, software, online instruction,     |
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20|              cooperative educational programs, textbooks,             |
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21|              workbooks, curricula and other written materials used    |
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22|              primarily for academic instruction, and                  |
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23|         f.    costs associated with activities comparable to those    |
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24|              defined in subparagraph c of this paragraph for a        |
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   Req. No. 8356                                                   Page 3
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 1|              student being educated by other means in                 |
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 2|              prekindergarten through grade twelve directed by the     |
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 3|              parent or guardian; and                                  |
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 4|    4.  "Qualified school" means either a public elementary or         |
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 5|secondary school or a private educational program that can be used     |
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 6|to satisfy the state's compulsory school attendance requirements.      |
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 7|    SECTION 2.     NEW LAW     A new section of law to be codified     |
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 8|in the Oklahoma Statutes as Section 2357.208 of Title 68, unless       |
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 9|there is created a duplication in numbering, reads as follows:         |
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10|    A.  The Oklahoma Tax Commission is authorized to require the       |
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11|taxpayer to submit with the tax return copies of such receipts or      |
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12|similar financial documentation as may be necessary to confirm the     |
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13|taxpayer's statement of the allowable credit.                          |
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14|    B.  The Oklahoma Tax Commission shall promulgate rules and         |
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15|develop tax forms, directions and worksheets as necessary to           |
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16|effectuate the intent of this act.  The rules shall modify the state   |
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17|tax forms, directions and worksheets to provide a convenient way for   |
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18|taxpayers to claim a credit under this act.                            |
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19|    C.  Regardless of what documentation the Oklahoma Tax Commission   |
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20|may require for purposes of allowing credit for payments of            |
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21|qualifying expenses, no school or other organization shall be          |
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22|required to provide such documentation or otherwise act to             |
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23|facilitate taxpayers' access to credits under this act.                |
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   Req. No. 8356                                                   Page 4
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 1|    SECTION 3.     NEW LAW     A new section of law to be codified     |
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 2|in the Oklahoma Statutes as Section 2357.209 of Title 68, unless       |
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 3|there is created a duplication in numbering, reads as follows:         |
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 4|    The intent of the Legislature is that tax credits authorized       |
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 5|pursuant to this act not result in any additional regulation of        |
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 6|public or private schools or of parents' education decisions,          |
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 7|including educating their children by other means.                     |
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 8|    SECTION 4.     NEW LAW     A new section of law to be codified     |
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 9|in the Oklahoma Statutes as Section 2357.210 of Title 68, unless       |
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10|there is created a duplication in numbering, reads as follows:         |
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11|    A.  The Oklahoma Tax Commission shall determine annually by        |
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12|credit type the total amount of credits claimed under this act on      |
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13|all state income tax returns and shall report the same to the          |
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14|cabinet secretary with applicable authority.                           |
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15|    B.  Within sixty (60) days prior to the start of each              |
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16|legislative session, the cabinet secretary with applicable authority   |
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17|shall present a report to the Chair of the Senate Finance Committee    |
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18|and the Chair of the House Appropriations and Budget Committee         |
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19|projecting the total dollar amount of credits expected to be claimed   |
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20|under this act on returns for the current tax year and the following   |
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21|tax year as of the date of the report.                                 |
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22|    SECTION 5.  This act shall become effective November 1, 2019.      |
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24|    57-1-8356      MAH    02/28/19                                     |
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   Req. No. 8356                                                   Page 5
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