Okla. Stat. tit. 68, § 68-2355.1P-4

A. For tax years beginning on or after January 1, 2022, there

is hereby levied on each electing pass-through entity the pass-

through entity tax which shall be calculated as follows:

1. With regard to each member of an electing pass-through

entity, the electing pass-through entity shall multiply such

member's Oklahoma distributive share of the electing pass-through

entity's Oklahoma net entity income for the tax year by:

a. the highest Oklahoma marginal income tax rate levied

on the taxable income of natural persons pursuant to

Section 2355 of this title if the member is an

individual, trust, or estate,

b. four percent (4%) if the member is classified as a

corporation pursuant to the Internal Revenue Code, and

is not classified as an S corporation,

Oklahoma Statutes - Title 68. Revenue and Taxation Page 759

c. four percent (4%) if the member is a pass-through

entity,

d. four percent (4%) if the member is a financial

institution subject to tax imposed pursuant to the

provisions of Section 2370 of this title, and

e. the highest Oklahoma marginal income tax rate that

would be applicable to any item of the electing pass-

through entity's income or gain without the election

made pursuant to subsection F of this section, if the

member is an organization described in Section 2359 of

this title; and

2. The electing pass-through entity shall aggregate the amounts

determined with respect to all members pursuant to paragraph 1 of

this subsection and the pass-through entity tax for the applicable

tax year shall be equal to such aggregated tax amount for the tax

year with respect to which the election has been made.

B. Sections 2385.29, 2385.30 and 2385.31 of this title shall

not be applicable to an electing pass-through entity.

C. The pass-through entity tax shall be due and payable on the

same date as provided for the filing of the electing pass-through

entity's Oklahoma income tax return, and for tax years beginning on

or after January 1, 2020, estimated tax payments shall be required

as provided in Section 2385.9 of this title.

D. If the pass-through entity election results in a net entity

loss for Oklahoma income tax purposes in any tax year, the net

entity loss may be carried back and carried forward by the electing

pass-through entity for Oklahoma income tax purposes as set forth in

subparagraph b of paragraph 3 of subsection A of Section 2358 of

this title.

E. Notwithstanding paragraph 2 of subsection C of Section 2368

of this title, a nonresident individual who is a member of an

electing pass-through entity is not required to file an Oklahoma

income tax return, if, for the taxable year, the only source of

income allocable or apportionable to this state for the member, or,

if a joint income tax return is filed, the member and his or her

spouse, is from one or more electing pass-through entities, and each

electing pass-through entity files and pays the taxes due under this

section.

F. Any entity required to file an Oklahoma partnership income

tax return or an Oklahoma S corporation income tax return may elect

to become an electing pass-through entity. The election shall be

made on such form and in such manner as the Oklahoma Tax Commission

may prescribe, and any election under this subsection shall have

priority over and revoke any election to file a composite Oklahoma

partnership return or requirement of a Subchapter S corporation to

report and pay tax on behalf of a nonresident shareholder for the

same tax year. An election may also be made by filing an income tax

Oklahoma Statutes - Title 68. Revenue and Taxation Page 760

return prior to but not later than the due date of the applicable

income tax return, including any extension.

G. Pursuant to procedures prescribed by the Tax Commission, if

the amount of tax required to be paid by a pass-through entity

pursuant to the provisions of this section is not paid when due, the
made by filing an income tax

Oklahoma Statutes - Title 68. Revenue and Taxation Page 760

return prior to but not later than the due date of the applicable

income tax return, including any extension.

G. Pursuant to procedures prescribed by the Tax Commission, if

the amount of tax required to be paid by a pass-through entity

pursuant to the provisions of this section is not paid when due, the

Oklahoma Tax Commission may revoke the pass-through entity's

election under subsection F of this section effective for the first

year for which the tax is not paid.

H. The election authorized by the provisions of this section

shall be made pursuant to procedures prescribed by the Tax

Commission and shall be filed (i) within sixty (60) days of

enactment and pursuant to procedures prescribed by the Oklahoma Tax

Commission for any income tax year beginning on or after January 1,

2019, and prior to January 1, 2020, or (ii) for any income tax year

beginning on or after January 1, 2020, at any time during the

preceding tax year or two (2) months and fifteen (15) days after the

beginning of the tax year or by filing a timely income tax return as

authorized pursuant to subsection F of this section. Any such

election shall be binding until revoked pursuant to procedures

prescribed by the Tax Commission. The effective date of a

revocation (i) made within two (2) months and fifteen (15) days of

the electing pass-through entity's taxable year shall be the first

day of such taxable year and (ii) made during the electing pass-

through entity's taxable year but after such fifteenth day shall be

effective on the first day of the following taxable year. No

election made by a pass-through entity with respect to income tax to

be paid by such entity using the calculations prescribed by this

section shall be binding on any other pass-through entity, and each

pass-through entity shall be able to make an election under the

provisions of this act independently.