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An Act
ENROLLED HOUSE
BILL NO. 4028 By: Caldwell (Trey) and Kane of
the House
and
Hall and Haste of the
Senate
An Act relating to revenue and taxation; amending 68
O.S. 2021, Section 2358.110, as amended by Section 4,
Chapter 375, O.S.L. 2024 (68 O.S. Supp. 2025, Section
2358.110), which relates to certain income tax
deduction; modifying taxable years for which
deduction allowable; and providing an effective date.
SUBJECT: Revenue and taxation
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 2358.110, as
amended by Section 4, Chapter 375, O.S.L. 2024 (68 O.S. Supp. 2025,
Section 2358.110), is amended to read as follows:
Section 2358.110. A. As used in this section:
1. "Accredited investor" means a person or entity as defined
pursuant to Section 230.501 of Title 17 of the Code of Federal
Regulations;
2. "Eligible Oklahoma business venture" means a lawful business
entity that is determined by the Oklahoma Center for the Advancement
of Science and Technology (OCAST) for receipt of an equity
investment by an eligible Oklahoma venture capital company. In
determining whether an investment is a qualified equity investment,
OCAST shall consider the potential impact the investment would have
ENR. H. B. NO. 4028 Page 2
on the local and state economy and shall consider the following
factors:
a. the primary location of the entity,
b. the number of employees located or to be located in
this state,
c. state and local revenues generated from the
investment,
d. the economic benefits to the state,
e. the type and amount of the investment,
f. the current capitalization level and strategy, and
g. the industry classification of the entity;
3. "Eligible Oklahoma venture capital company" means a lawfully
recognized business entity the primary business purpose of which is
to accumulate funds for making investments in lawful for profit
business entities and which is organized in any of the following
forms:
a. general partnership,
b. limited partnership,
c. limited liability partnership,
d. limited liability company,
e. corporation, or
f. other lawfully recognized business entity;
4. "Lawful business entity" means the following:
a. a person,
b. a general partnership,
c. a limited partnership,
ENR. H. B. NO. 4028 Page 3
d. a limited liability partnership,
e. a limited liability company, or
f. a corporation; and
5. "Qualified equity investment" means a transfer of cash or
its equivalent by an accredited investor to an eligible Oklahoma
venture capital company and for purposes of the deduction authorized
by this section in an amount not in excess of Twenty-five Million
Dollars ($25,000,000.00) by an accredited investor during a taxable
year.
B. For tax years 2022 through 2026 2031, there shall be allowed
a deduction from Oklahoma taxable income or Oklahoma adjusted gross
income as determined pursuant to Section 2358 of this title equal to
the amount of qualified equity investment in an eligible Oklahoma
venture capital entity made by an accredited investor.
C. The maximum amount of qualified equity investment made by an
accredited investor for purposes of the deduction authorized by this
section shall not exceed Twenty-five Million Dollars
($25,000,000.00) for any taxable year of the investor.
D. Any qualified equity investment made for purposes of the
deduction authorized by this section shall be documented by the
issuance of shares of stock, membership interest or other evidence
of the equity interest acquired by the accredited investor. Such
evidence may take the form of physical shares or the electronic
equivalent of physical shares.
E. Records of the equity interest acquired by an accredited
investor shall be maintained by the accredited investor and the
eligible Oklahoma venture capital company for a period of at least
five (5) years from the date the equity investment is made by an
accredited investor.
F. A qualified equity investment made by an accredited investor
for purposes of the deduction authorized by this section shall not
be returned by the eligible Oklahoma venture capital company to the
accredited investor, if the accredited investor is a natural person,
or to any person related to such natural person within the third
degree of consanguinity or affinity, for a period of three (3) years
from the date of the qualified equity investment unless the return
is in the form of a dividend or other payment agreed to prior to or
ENR. H. B. NO. 4028 Page 4
simultaneously with the equity investment transfer from the
accredited investor to the eligible Oklahoma venture capital company
and only if the return of some part of the qualified equity
investment is based on the financial performance of either the
eligible Oklahoma venture capital company or the financial
performance of one or more for profit business entities in which the
accumulated equity funds of the eligible Oklahoma venture capital
company are further invested or both such measures of financial
performance.
G. A qualified equity investment made by an accredited investor
for purposes of the deduction authorized by this section shall not
be returned by the eligible Oklahoma venture capital company to the
accredited investor if the accredited investor is a lawful business
entity, or to any entity which owns fifty-one percent (51%) or more
of the voting equity interest of the accredited investor or to any
lawful business entity with respect to which the accredited investor
owns fifty-one percent (51%) or more of the voting equity interest,
within a period of five (5) years from the date of the equity
investment unless the return is in the form of a dividend or other
payment agreed to prior to or simultaneously with the equity
investment transfer from the accredited investor to the eligible
Oklahoma venture capital company and only if the return of some part
of the qualified equity investment is based on the financial
performance of either the eligible Oklahoma venture capital company
or the financial performance of one or more for profit business
entities in which the accumulated equity funds of the eligible
Oklahoma venture capital company are further invested or both such
measures of financial performance.
H. The deduction authorized by the provisions of this section
shall not be used to reduce the Oklahoma taxable income amount or
the Oklahoma adjusted gross income amount to less than zero (0).
There shall not be any carryover with respect to a deduction
authorized by the provisions of this section.
I. If the Oklahoma Tax Commission determines, either from
information accompanying any applicable income tax return or
schedule, form or supporting documentation filed in order to claim
the deduction authorized by this section, that the requirements of
this section were not fulfilled, the Oklahoma Tax Commission shall
notify the taxpayer claiming the deduction that the deduction has
been disallowed and the income tax liability for the taxpayer shall
be recalculated. The taxpayer shall retain all rights authorized
pursuant to the provisions of the Uniform Tax Procedure Code and the
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Oklahoma Income Tax Code in order to contest the disallowance of
part or all of such deductions.
J. OCAST may promulgate rules to enforce the provisions of this
act. OCAST shall annually publish a report on the program created
in this section.
SECTION 2. This act shall become effective January 1, 2027.
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Passed the House of Representatives the 21st day of April, 2026.
Presiding Officer of the House
of Representatives
Passed the Senate the 27th day of April, 2026.
Presiding Officer of the Senate
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this ____________________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________
Approved by the Governor of the State of Oklahoma this _________
day of ___________________, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this __________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________