Okla. Stat. tit. 68, § 68-2357.204

Election and allocation against capital account – Definitions.

Oklahoma Statutes - Title 68. Revenue and Taxation Page 877

A. A taxpayer may elect to treat one hundred percent (100%) of

the cost of a qualified refinery property as an expense that is not

chargeable to a capital account. Any cost so treated shall be

allowed as a deduction for the year in which the qualified refinery

property expense is incurred.

B. 1. An election under this section for any taxable year

shall be made on the taxpayer's return of the tax imposed by this

chapter for the taxable year. The election shall be made in a

manner as the Oklahoma Tax Commission may by rule prescribe.

2. An election made pursuant to this section shall not be

revoked except with the consent of the Tax Commission.

C. 1. As used in this section, the term “qualified refinery

property” means any portion of a qualified refinery:

a. the original use of which commences with the taxpayer,

b. which is placed in service by the taxpayer after the

effective date of this act and before January 1, 2012,

c. which meets the requirements of subsection E of this

section, other than a qualified refinery which is

separate from any existing refinery,

d. which meets all applicable environmental laws in

effect on the date the portion was placed in service,

e. for which no written binding contract for the

construction of was in effect on or before June 14,

2005, and

f. (1) the construction of which is subject to a written

binding construction contract entered into before

January 1, 2008,

(2) which is placed in service before January 1,

2008, or

(3) in the case of self-constructed property, the

construction of which began after June 14, 2005,

and before January 1, 2008.

2. For purposes of subparagraph a of paragraph 1 of this

subsection, if property is:

a. originally placed in service after the effective date

of this act by a person, and

b. sold and leased back to the person within three (3)

months after the date the property was originally

placed in service,

the property shall be treated as originally placed in service not

earlier than the date on which the property is used under the

leaseback provision referred to in subparagraph b of paragraph 1 of

this subsection.

3. A waiver under the federal Clean Air Act shall not be taken

into account in determining whether the requirements of subparagraph

d of paragraph 1 of this subsection are met.

Oklahoma Statutes - Title 68. Revenue and Taxation Page 878

D. For purposes of this section, the term “qualified refinery”

means any refinery located in the State of Oklahoma that is designed

to serve the primary purpose of processing liquid fuel from crude

oil or qualified fuels.

E. The requirements of this section shall be met if the portion

of the qualified refinery:

1. Enables the existing qualified refinery to increase total

volume output, determined without regard to asphalt or lube oil, by

five percent (5%) or more on an average daily basis; or

2. Enables the existing qualified refinery to process qualified

fuels at a rate that is equal to or greater than twenty-five percent

(25%) of the total throughput of such qualified refinery on an

average daily basis.

F. No deduction shall be allowed under this section for any

qualified refinery property the primary purpose of which is for use

as a topping plant, asphalt plant, lube oil facility, or crude or

product terminal.

G. 1. The taxpayer may elect to allocate all or a portion of

the deduction allowable under subsection A of this section to

qualified persons. The allocation shall be equal to the ratable

share of the total amount allocated for each qualified person,

determined on the basis of the ownership interest the person has in

the taxpayer. The taxable income of the taxpayer shall not be

reduced under Section 10 of this act by reason of any amount to

which this subsection applies.
able under subsection A of this section to

qualified persons. The allocation shall be equal to the ratable

share of the total amount allocated for each qualified person,

determined on the basis of the ownership interest the person has in

the taxpayer. The taxable income of the taxpayer shall not be

reduced under Section 10 of this act by reason of any amount to

which this subsection applies.

2. An election under paragraph 1 of this subsection for any

taxable year shall be made on a timely filed return for that year.

The election, once made, shall be irrevocable for the taxable year.

3. If any portion of the deduction available under subsection A

of this section is allocated to an owner under paragraph 1 of this

subsection, the cooperative shall provide the owner receiving the

allocation written notice of the amount of the allocation. Notice

shall be provided before the date on which the return described in

paragraph 2 of this subsection is due.

H. No deduction shall be allowed under subsection A of this

section to any taxpayer for any taxable year unless the taxpayer

files with the Tax Commission a report containing information with

respect to the operation of the refineries as shall be required by

the Tax Commission.

I. The provisions of this section shall apply to qualified

refinery properties placed in service after the effective date of

this act.