Okla. Stat. tit. 68, § 68-2385.26

Exceptions.

A. Each remitter, except as otherwise provided in subsection B

of this section, shall deduct and withhold from each payment being

made to any royalty interest owner in respect to production of oil

and gas in this state, but not including that to which the remitter

is entitled, an amount equal to the highest Oklahoma marginal

individual income tax rate pursuant to Section 2355 of this title of

the gross amount which would have otherwise been payable to the

person entitled to the payment.

B. The obligation to deduct and withhold from payments as

provided in subsection A of this section does not apply to those

payments which are made to:

1. Current or permanent residents of Oklahoma;

2. The United States, this state or any state or federal agency

or political subdivision;

3. Any charitable institution;

4. Any federally recognized Indian tribe; or

5. A publicly-traded partnership as defined by Section 7704 (b)

of the Internal Revenue Code, 26 U.S. Code 7704 (b), that is treated

as a partnership for federal tax purposes under Section 7704 (c) of

the Internal Revenue Code, 26 U.S. Code 7704 (c), or its publicly-

traded partnership affiliates. As used in this paragraph,

"publicly-traded partnership affiliates" shall include any limited

liability company or limited partnership for which at least eighty

percent (80%) of the limited liability member interests or limited

partnership interests of which are owned directly or indirectly by

the publicly-traded partnership.

The obligation to deduct and withhold from payments as provided

in subsection A of this section does not apply if the remitter and

the royalty interest owner are the same person.

C. Any royalty interest owner from whom an amount is withheld

pursuant to the provisions of subsection A of this section, or if

the royalty interest owner is not liable to the State of Oklahoma

for income taxes, any person to whom a royalty interest owner

subsequently distributes royalty payments with respect to which an

amount is withheld pursuant to the provisions of subsection A of

Oklahoma Statutes - Title 68. Revenue and Taxation Page 1086

this section, and who files an income tax return with this state is

entitled to a credit against the tax as shown on the return for the

amount withheld by the remitter under subsection A of this section.

If the amount withheld is greater than the tax due on the return,

the person filing the return shall be entitled to a refund in the

amount of the overpayment.