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An Act
ENROLLED SENATE
BILL NO. 577 By: Rader of the Senate
and
Pae of the House
An Act relating to ad valorem tax; amending 68 O.S.
2021, Section 2902, as last amended by Section 1,
Chapter 390, O.S.L. 2022 (68 O.S. Supp. 2024, Section
2902), which relates to the exemption from ad valorem
tax for manufacturing facilities; requiring
facilities to provide certain information; requiring
the Oklahoma Tax Commission to provide certain data
to the Incentive Evaluation Commission; amending 68
O.S. 2021, Section 205, as last amended by Section 1,
Chapter 208, O.S.L. 2024 (68 O.S. Supp. 2024, Section
205), which relates to the confidential nature of
records and files of the Oklahoma Tax Commission;
excepting and requiring the disclosure of
information; updating statutory language; updating
statutory reference; and providing an effective date.
SUBJECT: Ad valorem tax exemption reports
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 2902, as
last amended by Section 1, Chapter 390, O.S.L. 2022 (68 O.S. Supp.
2024, Section 2902), is amended to read as follows:
Section 2902. A. Except as otherwise provided by subsection H
of Section 3658 of this title pursuant to which the exemption
authorized by this section may not be claimed, a qualifying
manufacturing concern, as defined by Section 6B of Article X of the
Oklahoma Constitution, and as further defined herein, shall be
ENR. S. B. NO. 577 Page 2
exempt from the levy of any ad valorem taxes upon new, expanded or
acquired manufacturing facilities including facilities engaged in
research and development, for a period of five (5) years. The
provisions of Section 6B of Article X of the Oklahoma Constitution
requiring an existing facility to have been unoccupied for a period
of twelve (12) months prior to acquisition shall be construed as a
qualification for a facility to initially receive an exemption, and
shall not be deemed to be a qualification for that facility to
continue to receive an exemption in each of the four (4) years
following the initial year for which the exemption was granted.
Such facilities are hereby classified for the purposes of taxation
as provided in Section 22 of Article X of the Oklahoma Constitution.
B. For purposes of this section, the following definitions
shall apply:
1. “Manufacturing facilities” means facilities engaged in the
mechanical or chemical transformation of materials or substances
into new products and except as provided by paragraph 6 of
subsection C of this section shall include:
a. establishments which have received a manufacturer
exemption permit pursuant to the provisions of Section
1359.2 of this title,
b. facilities including repair and replacement parts,
primarily engaged in aircraft repair, building and
rebuilding whether or not on a factory basis,
c. establishments primarily engaged in computer services
and data processing as defined under Industrial Group
Numbers 5112 and 5415, and U.S. Industry Number 334611
and 519130 of the NAICS Manual, latest revision, and
which derive at least fifty percent (50%) of their
annual gross revenues from the sale of a product or
service to an out-of-state buyer or consumer, and as
defined under Industrial Group Number 5182 of the
NAICS Manual, latest revision, which derive at least
eighty percent (80%) of their annual gross revenues
from the sale of a product or service to an out-of-
state buyer or consumer. Eligibility as a
manufacturing facility pursuant to this subparagraph
ENR. S. B. NO. 577 Page 3
shall be established, subject to review by the
Oklahoma Tax Commission, by annually filing an
affidavit with the Tax Commission stating that the
facility so qualifies and such other information as
required by the Tax Commission. For purposes of
determining whether annual gross revenues are derived
from sales to out-of-state buyers, all sales to the
federal government shall be considered to be an out-
of-state buyer,
d. facilities that the investment cost of the
construction, acquisition or expansion is Five Hundred
Thousand Dollars ($500,000.00) or more with respect to
assets placed into service during calendar year 2022.
For subsequent calendar years, the investment required
shall be increased annually by a percentage equal to
the previous year’s increase in the Consumer Price
Index-All Urban Consumers (“CPI-U”) and such adjusted
amount shall be the required investment cost in order
to qualify for the exemption authorized by this
section. The Oklahoma Department of Commerce shall
determine the amount of the increase, if any, on
January 1 of each year. The Oklahoma Tax Commission
shall publish on its website at least annually the
adjusted dollar amount in order to qualify for the
exemption authorized by this section and shall include
the adjusted dollar amount in any of its relevant
forms or publications with respect to the exemption.
Provided, “investment cost” shall not include the cost
of direct replacement, refurbishment, repair or
maintenance of existing machinery or equipment, except
that “investment cost” investment cost shall include
capital expenditures for direct replacement,
refurbishment, repair or maintenance of existing
machinery or equipment that qualifies for depreciation
and/or amortization pursuant to the Internal Revenue
Code of 1986, as amended, and such expenditures shall
be eligible as a part of an “expansion” expansion that
otherwise qualifies under this section,
e. establishments primarily engaged in distribution as
defined under Industry Numbers 49311, 49312, 49313 and
ENR. S. B. NO. 577 Page 4
49319 and Industry Sector Number 42 of the NAICS
Manual, latest revision, and which meet the following
qualifications:
(1) construction with an initial capital investment
of at least Five Million Dollars ($5,000,000.00),
(2) employment of at least one hundred (100) full-
time-equivalent employees, as certified by the
Oklahoma Employment Security Commission,
(3) payment of wages or salaries to its employees at
a wage which equals or exceeds the average wage
requirements in the Oklahoma Quality Jobs Program
Act for the year in which the real property was
placed into service, and
(4) commencement of construction on or after November
1, 2007, with construction to be completed within
three (3) years from the date of the commencement
of construction,
f. facilities engaged in the manufacturing, compounding,
processing or fabrication of materials into articles
of tangible personal property according to the special
order of a customer (custom order manufacturing) by
manufacturers classified as operating in North
American Industry Classification System (NAICS)
Sectors 32 and 33, but does not include such custom
order manufacturing by manufacturers classified in
other NAICS code sectors, and
g. with respect to any entity making an application for
the exemption authorized by this section on or after
January 1, 2023, the establishment making application
for exempt treatment of real or personal property
acquired or improved beginning January 1, 2022, and
for any calendar year thereafter, the entity shall be
required to pay new direct jobs, as defined by Section
3603 of this title for purposes of the Oklahoma
Quality Jobs Program Act, an average annualized wage
which equals or exceeds the average wage requirement
ENR. S. B. NO. 577 Page 5
in the Oklahoma Quality Jobs Program Act for the year
in which the real or personal property was placed into
service. The Oklahoma Tax Commission may request
verification from the Oklahoma Department of Commerce
that an establishment seeking an exemption for real or
personal property pays an average annualized wage that
equals or exceeds the average wage requirement in
effect for the year in which the real or personal
property was placed into service. For purposes of
this subparagraph, it shall not be necessary for the
establishment to qualify for incentive payments
pursuant to the Oklahoma Quality Jobs Program Act, but
the establishment shall be subject to the wage
requirements of the Oklahoma Quality Jobs Program Act
with respect to new direct jobs in order to qualify
for the exempt treatment authorized by this section.
Eligibility as a manufacturing facility pursuant to this
subparagraph shall be established, subject to review by the Tax
Commission, by annually filing an affidavit with the Tax Commission
stating that the facility so qualifies and containing such other
information as required by the Tax Commission.
Provided, eating and drinking places, as well as other retail
establishments, shall not qualify as manufacturing facilities for
purposes of this section, nor shall centrally assessed properties.
Eligibility as a manufacturing facility pursuant to this
subparagraph shall be established, subject to review by the Tax
Commission, by annually filing an application with the Tax
Commission stating that the facility so qualifies and containing
such other information as required by the Tax Commission;
2. “Facility” and “facilities”, except as otherwise provided by
this section, means and includes the land, buildings, structures and
improvements used directly and exclusively in the manufacturing
process. Effective January 1, 2022, and for each calendar year
thereafter, for establishments which have received a manufacturer
exemption permit pursuant to the provisions of Section 1359.2 of
this title, or facilities engaged in manufacturing activities
defined or classified in the NAICS Manual under Industry Nos. 311111
through 339999, inclusive, but for no other establishments, facility
ENR. S. B. NO. 577 Page 6
and facilities means and includes the land, buildings, structures,
improvements, machinery, fixtures, equipment and other personal
property used directly and exclusively in the manufacturing process;
and
3. “Research and development” means activities directly related
to and conducted for the purpose of discovering, enhancing,
increasing or improving future or existing products or processes or
productivity.
C. The following provisions shall apply:
1. A manufacturing concern shall be entitled to the exemption
herein provided for each new manufacturing facility constructed,
each existing manufacturing facility acquired and the expansion of
existing manufacturing facilities on the same site, as such terms
are defined by Section 6B of Article X of the Oklahoma Constitution
and by this section;
2. No manufacturing concern shall receive more than one five-
year exemption for any one manufacturing facility unless the
expansion which qualifies the manufacturing facility for an
additional five-year exemption meets the requirements of paragraph 4
of this subsection and the employment level established for any
previous exemption is maintained;
3. Any exemption as to the expansion of an existing
manufacturing facility shall be limited to the increase in ad
valorem taxes directly attributable to the expansion;
4. All initial applications for any exemption for a new,
acquired or expanded manufacturing facility shall be granted only
if:
a. there is a net increase in annualized base payroll
over the initial payroll of at least Two Hundred Fifty
Thousand Dollars ($250,000.00) if the facility is
located in a county with a population of fewer than
seventy-five thousand (75,000), according to the most
recent Federal Decennial Census, while maintaining or
increasing base payroll in subsequent years, or at
least One Million Dollars ($1,000,000.00) if the
ENR. S. B. NO. 577 Page 7
facility is located in a county with a population of
seventy-five thousand (75,000) or more, according to
the most recent Federal Decennial Census, while
maintaining or increasing base payroll in subsequent
years; provided, the payroll requirement of this
subparagraph shall be waived for claims for exemptions
including claims previously denied or on appeal on
March 3, 2010, for all initial applications for
exemption filed on or after January 1, 2004, and on or
before March 31, 2009, and all subsequent annual
exemption applications filed related to the initial
application for exemption, for an applicant, if the
facility has been located in Oklahoma for at least
fifteen (15) years engaged in marine engine
manufacturing as defined under U.S. Industry Number
333618 of the NAICS Manual, latest revision, and has
maintained an average employment of five hundred (500)
or more full-time-equivalent employees over a ten-year
period. Any applicant that qualifies for the payroll
requirement waiver as outlined in the previous
sentence and subsequently closes its Oklahoma
manufacturing plant prior to January 1, 2012, may be
disqualified for exemption and subject to recapture.
For an applicant engaged in paperboard manufacturing
as defined under U.S. Industry Number 322130 of the
NAICS Manual, latest revision, union master payouts
paid by the buyer of the facility to specified
individuals employed by the facility at the time of
purchase, as specified under the purchase agreement,
shall be excluded from payroll for purposes of this
section.
In order to provide certainty with respect to
investments in manufacturing facilities pertaining to
all initial applications for exemption filed on or
after January 1, 2016, the following definitions shall
apply:
(1) “base payroll” shall mean total payroll adjusted
for any nonrecurring bonuses, exercise of stock
option or stock rights and other nonrecurring,
ENR. S. B. NO. 577 Page 8
extraordinary items included in total payroll,
and
(2) “initial payroll” shall mean base payroll for the
year immediately preceding the initial
construction, acquisition or expansion.
The Tax Commission shall verify payroll
information through the Oklahoma Employment
Security Commission by using reports from the
Oklahoma Employment Security Commission for the
calendar year immediately preceding the year for
which initial application is made for base-line
payroll, which must be maintained or increased
for each subsequent year; provided, a
manufacturing facility shall have the option of
excluding from its payroll, for purposes of this
section:
i. payments to sole proprietors, members
of a partnership, members of a limited
liability company who own at least ten
percent (10%) of the capital of the
limited liability company or
stockholder-employees of a corporation
who own at least ten percent (10%) of
the stock in the corporation, and
ii. any nonrecurring bonuses, exercise of
stock option or stock rights or other
nonrecurring, extraordinary items
included in total payroll numbers as
reported by the Oklahoma Employment
Security Commission. A manufacturing
facility electing either option shall
indicate such election upon its
application for an exemption under this
section. Any manufacturing facility
electing either option shall submit
such information as the Tax Commission
may require in order to verify payroll
information. Payroll information
ENR. S. B. NO. 577 Page 9
submitted pursuant to the provisions of
this paragraph shall be submitted to
the Tax Commission and shall be subject
to the provisions of Section 205 of
this title, and
b. the facility offers, or will offer within one hundred
eighty (180) days of the date of employment, a basic
health benefits plan to the full-time-equivalent
employees of the facility, which is determined by the
Oklahoma Department of Commerce to consist of the
elements specified in subparagraph b of paragraph 1 of
subsection A of Section 3603 of this title or elements
substantially equivalent thereto.
For purposes of this section, calculation of the amount of
increased base payroll shall be measured from the start of initial
construction or expansion to the completion of such construction or
expansion or for three (3) years from the start of initial
construction or expansion, whichever occurs first. The amount of
increased base payroll shall include payroll for full-time-
equivalent employees in this state who are employed by an entity
other than the facility which has previously or is currently
qualified to receive an exemption pursuant to the provisions of this
section and who are leased or otherwise provided to the facility, if
such employment did not exist in this state prior to the start of
initial construction or expansion of the facility. The
manufacturing concern shall submit an affidavit to the Tax
Commission, signed by an officer, stating that the construction,
acquisition or expansion of the facility will result in a net
increase in the annualized base payroll as required by this
paragraph and that full-time-equivalent employees of the facility
are or will be offered a basic health benefits plan as required by
this paragraph. If, after the completion of such construction or
expansion or after three (3) years from the start of initial
construction or expansion, whichever occurs first, the construction,
acquisition or expansion has not resulted in a net increase in the
amount of annualized base payroll, if required, or any other
qualification specified in this paragraph has not been met, the
manufacturing concern shall pay an amount equal to the amount of any
exemption granted including penalties and interest thereon, to the
Tax Commission for deposit to the Ad Valorem Reimbursement Fund;
ENR. S. B. NO. 577 Page 10
5. Except as otherwise provided by this paragraph, any new,
acquired or expanded computer data processing, data preparation or
information processing services provider classified in U.S. Industry
Number 518210 of the North American Industrial Classification System
(NAICS) Manual, 2017 revision, may apply for exemptions under this
section for each year in which new, acquired, or expanded capital
improvements to the facility are made for assets placed in service
not later than December 31, 2021, if:
a. there is a net increase in annualized payroll of the
applicant at any facility or facilities of the
applicant in this state of at least Two Hundred Fifty
Thousand Dollars ($250,000.00), which is attributable
to the capital improvements, or a net increase of
Seven Million Dollars ($7,000,000.00) or more in
capital improvements, while maintaining or increasing
payroll at the facility or facilities in this state
which are included in the application, and
b. the facility offers, or will offer within one hundred
eighty (180) days of the date of employment of new
employees attributable to the capital improvements, a
basic health benefits plan to the full-time-equivalent
employees of the facility, which is determined by the
Oklahoma Department of Commerce to consist of the
elements specified in subparagraph b of paragraph 1 of
subsection A of Section 3603 of this title or elements
substantially equivalent thereto.
An establishment described by this paragraph, the primary
business activity of which is described by Industry No. 518210 of
the North American Industry Classification System (NAICS) Manual,
2017 revision, that has applied for and been granted an exemption
for personal property at any time within five (5) years prior to
November 1, 2021, may apply for exemptions for items of eligible
personal property to be located within improvements to real property
and such real property and improvements having been exempt from ad
valorem taxation prior to November 1, 2021, pursuant to the
provisions of this section if such personal property is placed in
service not later than December 31, 2036. No additional personal
property of such establishment placed in service after such date
ENR. S. B. NO. 577 Page 11
shall qualify for the exempt treatment otherwise authorized pursuant
to this paragraph;
6. Effective January 1, 2017, an entity engaged in electric
power generation by means of wind, as described by the North
American Industry Classification System, No. 221119, shall not be
defined as a qualifying manufacturing concern for purposes of the
exemption otherwise authorized pursuant to Section 6B of Article X
of the Oklahoma Constitution or qualify as a “manufacturing
facility” manufacturing facility as defined in this section. No
initial application for exemption shall be filed by or accepted from
an entity engaged in electric power generation by means of wind on
or after January 1, 2018;
7. An entity or applicant engaged in an industry as defined
under U.S. Industry Number 324110 of the NAICS Manual, latest
revision, which has applied for or been granted an exemption for a
time period which began on or after calendar year 2012 and before
calendar year 2016 but which did not meet the payroll requirements
of subparagraph a of paragraph 4 of this subsection because of
nonrecurring bonuses, exercise of stock option or stock rights or
other nonrecurring, extraordinary items included in total payroll in
the previous year, shall be allowed an exemption, beginning with
calendar year 2016, for the number of years including the calendar
year for which the exemption was denied, remaining in the entity’s
five-year exemption period, provided such entity attains or
increases payroll at or above the initial or base payroll
established for the exemption;
8. A facility engaged in manufacturing defined under U.S.
Industry Number 327310 of the NAICS Manual shall have the payroll
requirements of paragraph 4 of this subsection waived for tax year
2021, which is based in part on the 2020 calendar year payroll
reported to the Oklahoma Employment Security Commission, and may
continue to receive the exemption for the five-year period provided
in this section only if all other requirements of this section are
met; and
9. A facility engaged in manufacturing which otherwise
qualifies for the exemption or exemptions pursuant to the provisions
of this section shall have the payroll requirements of paragraph 4
of this subsection waived for tax year 2021, which is based in part
ENR. S. B. NO. 577 Page 12
on the 2020 calendar year payroll reported to the Oklahoma
Employment Security Commission, and for tax year 2022, which is
based in part on the 2021 calendar year payroll reported to the
Oklahoma Employment Security Commission, and may continue to receive
the exemption for the five-year period provided in this section only
if all other requirements of this section are met.
D. 1. Except as provided in paragraph 2 of this subsection,
the five-year period of exemption from ad valorem taxes for any
qualifying manufacturing facility property shall begin on January 1
following the initial qualifying use of the property in the
manufacturing process.
2. The five-year period of exemption from ad valorem taxes for
any qualifying manufacturing facility, as specified in subparagraphs
a and b of this paragraph, which is located within a tax incentive
district created pursuant to the Local Development Act by a county
having a population of at least five hundred thousand (500,000),
according to the most recent Federal Decennial Census, shall begin
on January 1 following the expiration or termination of the ad
valorem exemption, abatement, or other incentive provided through
the tax incentive district. Facilities qualifying pursuant to this
subsection shall include:
a. a manufacturing facility as defined in subparagraph c
of paragraph 1 of subsection B of this section, and
b. an establishment primarily engaged in distribution as
defined under Industry Number 49311 of the North
American Industry Classification System for which the
initial capital investment was at least One Hundred
Eighty Million Dollars ($180,000,000.00); provided,
that the qualifying job creation and depreciable
property investment occurred prior to calendar year
2017 but not earlier than calendar year 2013.
E. Any person, firm or corporation claiming the exemption
herein provided for shall file each year for which exemption is
claimed, an application therefor with the county assessor of the
county in which the new, expanded or acquired facility is located.
The application shall be on a form or forms prescribed by the Tax
Commission, and shall be filed on or before March 15, except as
ENR. S. B. NO. 577 Page 13
provided in Section 2902.1 of this title, of each year in which the
facility desires to take the exemption or within thirty (30) days
from and after receipt by such person, firm or corporation of notice
of valuation increase, whichever is later. In a case where
completion of the facility or facilities will occur after January 1
of a given year, a facility may apply to claim the ad valorem tax
exemption for that year. If such facility is found to be qualified
for exemption, the ad valorem tax exemption provided for herein
shall be granted for that entire year and shall apply to the ad
valorem valuation as of January 1 of that given year. For
applicants who qualify under the provisions of subparagraph b of
paragraph 1 of subsection B of this section, the application shall
include a copy of the affidavit and any other information required
to be filed with the Tax Commission.
F. The application shall be examined by the county assessor and
approved or rejected in the same manner as provided by law for
approval or rejection of claims for homestead exemptions. The
taxpayer shall have the same right of review by and appeal from the
county board of equalization, in the same manner and subject to the
same requirements as provided by law for review and appeals
concerning homestead exemption claims. Approved applications shall
be filed by the county assessor with the Tax Commission no later
than June 15, except as provided in Section 2902.1 of this title, of
the year in which the facility desires to take the exemption.
Incomplete applications and applications filed after June 15 will be
declared null and void by the Tax Commission. In the event that a
taxpayer qualified to receive an exemption pursuant to the
provisions of this section shall make payment of ad valorem taxes in
excess of the amount due, the county treasurer shall have the
authority to credit the taxpayer’s real or personal property tax
overpayment against current taxes due. The county treasurer may
establish a schedule of up to five (5) years of credit to resolve
the overpayment.
G. Nothing herein shall in any manner affect, alter or impair
any law relating to the assessment of property, and all property,
real or personal, which may be entitled to exemption hereunder shall
be valued and assessed as is other like property and as provided by
law. The valuation and assessment of property for which an
exemption is granted hereunder shall be performed by the Tax
Commission using one or more of the cost, income and expense and
ENR. S. B. NO. 577 Page 14
sales comparison approaches to estimate fair cash value in
accordance with the Uniform Standards of Professional Appraisal
Practice.
H. For each year that a new, expanded, or acquired
manufacturing facility receives an exemption pursuant to Section 6B
of Article X of the Oklahoma Constitution, the entity shall provide
to the Tax Commission a report detailing the number of new jobs
created and the payroll data for new jobs created since the
exemption was provided. The Tax Commission shall provide the data
collected pursuant to this subsection to the Incentive Evaluation
Commission for only evaluation purposes by the Commission or a
designee.
I. The Tax Commission shall have the authority and duty to
prescribe forms and to promulgate rules as may be necessary to carry
out and administer the terms and provisions of this section.
SECTION 2. AMENDATORY 68 O.S. 2021, Section 205, as last
amended by Section 1, Chapter 208, O.S.L. 2024 (68 O.S. Supp. 2024,
Section 205), is amended to read as follows:
Section 205. A. The records and files of the Oklahoma Tax
Commission concerning the administration of the Uniform Tax
Procedure Code or of any state tax law shall be considered
confidential and privileged, except as otherwise provided for by
law, and neither the Tax Commission nor any employee engaged in the
administration of the Tax Commission or charged with the custody of
any such records or files nor any person who may have secured
information from the Tax Commission shall disclose any information
obtained from the records or files or from any examination or
inspection of the premises or property of any person.
B. Except as provided in paragraph 26 of subsection C of this
section, neither the Tax Commission nor any employee engaged in the
administration of the Tax Commission or charged with the custody of
any such records or files shall be required by any court of this
state to produce any of the records or files for the inspection of
any person or for use in any action or proceeding, except when the
records or files or the facts shown thereby are directly involved in
an action or proceeding pursuant to the provisions of the Uniform
Tax Procedure Code or of the state tax law, or when the
ENR. S. B. NO. 577 Page 15
determination of the action or proceeding will affect the validity
or the amount of the claim of the state pursuant to any state tax
law, or when the information contained in the records or files
constitutes evidence of violation of the provisions of the Uniform
Tax Procedure Code or of any state tax law.
C. The provisions of this section shall not prevent the Tax
Commission, or with respect to the Oklahoma Department of Commerce
in administration of the Oklahoma Rural Jobs Act as provided by
paragraph 22 of this subsection, from disclosing the following
information and no liability whatsoever, civil or criminal, shall
attach to any member of the Tax Commission, or the Oklahoma
Department of Commerce as applicable, or any employee thereof for
any error or omission in the disclosure of such information:
1. The delivery to a taxpayer or a duly authorized
representative of the taxpayer of a copy of any report or any other
paper filed by the taxpayer pursuant to the provisions of the
Uniform Tax Procedure Code or of any state tax law;
2. The exchange of information that is not protected by the
federal Privacy Protection Act, 42 U.S.C., Section 2000aa et seq.,
pursuant to reciprocal agreements entered into by the Tax Commission
and other state agencies or agencies of the federal government;
3. The publication of statistics so classified as to prevent
the identification of a particular report and the items thereof;
4. The examination of records and files by the State Auditor
and Inspector or the duly authorized agents of the State Auditor and
Inspector;
5. The disclosing of information or evidence to the Oklahoma
State Bureau of Investigation, Attorney General, Oklahoma State
Bureau of Narcotics and Dangerous Drugs Control, any district
attorney or agent of any federal law enforcement agency when the
information or evidence is to be used by such officials to
investigate or prosecute violations of the criminal provisions of
the Uniform Tax Procedure Code or of any state tax law or of any
federal crime committed against this state. Any information
disclosed to the Oklahoma State Bureau of Investigation, Attorney
General, Oklahoma State Bureau of Narcotics and Dangerous Drugs
ENR. S. B. NO. 577 Page 16
Control, any district attorney or agent of any federal law
enforcement agency shall be kept confidential by such person and not
be disclosed except when presented to a court in a prosecution for
violation of the tax laws of this state or except as specifically
authorized by law, and a violation by the Oklahoma State Bureau of
Investigation, Attorney General, Oklahoma State Bureau of Narcotics
and Dangerous Drugs Control, district attorney or agent of any
federal law enforcement agency by otherwise releasing the
information shall be a felony;
6. The use by any division of the Tax Commission of any
information or evidence in the possession of or contained in any
report or return filed with any other division of the Tax
Commission;
7. The furnishing, at the discretion of the Tax Commission, of
any information disclosed by its records or files to any official
person or body of this state, any other state, the United States or
foreign country who is concerned with the administration or
assessment of any similar tax in this state, any other state or the
United States. The provisions of this paragraph shall include the
furnishing of information by the Tax Commission to a county assessor
to determine the amount of gross household income pursuant to the
provisions of Section 8C of Article X of the Oklahoma Constitution
or Section 2890 of this title. The Tax Commission shall promulgate
rules to give guidance to the county assessors regarding the type of
information which may be used by the county assessors in determining
the amount of gross household income pursuant to Section 8C of
Article X of the Oklahoma Constitution or Section 2890 of this
title. The provisions of this paragraph shall also include the
furnishing of information to the State Treasurer for the purpose of
administration of the Uniform Unclaimed Property Act;
8. The furnishing of information to other state agencies for
the limited purpose of aiding in the collection of debts owed by
individuals to such requesting agencies;
9. The furnishing of information requested by any member of the
general public and stated in the sworn lists or schedules of taxable
property of public service corporations organized, existing, or
doing business in this state which are submitted to and certified by
the State Board of Equalization pursuant to the provisions of
ENR. S. B. NO. 577 Page 17
Section 2858 of this title and Section 21 of Article X of the
Oklahoma Constitution, provided such information would be a public
record if filed pursuant to Sections 2838 and 2839 of this title on
behalf of a corporation other than a public service corporation;
10. The furnishing of information requested by any member of
the general public and stated in the findings of the Tax Commission
as to the adjustment and equalization of the valuation of real and
personal property of the counties of the state, which are submitted
to and certified by the State Board of Equalization pursuant to the
provisions of Section 2865 of this title and Section 21 of Article X
of the Oklahoma Constitution;
11. The furnishing of information as to the issuance or
revocation of any tax permit, license or exemption by the Tax
Commission as provided for by law. Such information shall be
limited to the name of the person issued the permit, license or
exemption, the name of the business entity authorized to engage in
business pursuant to the permit, license or exemption, the address
of the business entity and the grounds for revocation;
12. The posting of notice of revocation of any tax permit or
license upon the premises of the place of business of any business
entity which has had any tax permit or license revoked by the Tax
Commission as provided for by law. Such notice shall be limited to
the name of the person issued the permit or license, the name of the
business entity authorized to engage in business pursuant to the
permit or license, the address of the business entity and the
grounds for revocation;
13. The furnishing of information upon written request by any
member of the general public as to the outstanding and unpaid amount
due and owing by any taxpayer of this state for any delinquent tax,
together with penalty and interest, for which a tax warrant or a
certificate of indebtedness has been filed pursuant to law;
14. After the filing of a tax warrant pursuant to law, the
furnishing of information upon written request by any member of the
general public as to any agreement entered into by the Tax
Commission concerning a compromise of tax liability for an amount
less than the amount of tax liability stated on such warrant;
ENR. S. B. NO. 577 Page 18
15. The disclosure of information necessary to complete the
performance of any contract authorized by this title to any person
with whom the Tax Commission has contracted;
16. The disclosure of information to any person for a purpose
as authorized by the taxpayer pursuant to a waiver of
confidentiality. The waiver shall be in writing and shall be made
upon such form as the Tax Commission may prescribe;
17. The disclosure of information required in order to comply
with the provisions of Section 2369 of this title;
18. The disclosure to an employer, as defined in Sections
2385.1 and 2385.3 of this title, of information required in order to
collect the tax imposed by Section 2385.2 of this title;
19. The disclosure to a plaintiff of a corporation’s last-known
address shown on the records of the Franchise Tax Division of the
Tax Commission in order for such plaintiff to comply with the
requirements of Section 2004 of Title 12 of the Oklahoma Statutes;
20. The disclosure of information directly involved in the
resolution of the protest by a taxpayer to an assessment of tax or
additional tax or the resolution of a claim for refund filed by a
taxpayer, including the disclosure of the pendency of an
administrative proceeding involving such protest or claim, to a
person called by the Tax Commission as an expert witness or as a
witness whose area of knowledge or expertise specifically addresses
the issue addressed in the protest or claim for refund. Such
disclosure to a witness shall be limited to information pertaining
to the specific knowledge of that witness as to the transaction or
relationship between taxpayer and witness;
21. The disclosure of information necessary to implement an
agreement authorized by Section 2702 of this title when such
information is directly involved in the resolution of issues arising
out of the enforcement of a municipal sales tax ordinance. Such
disclosure shall be to the governing body or to the municipal
attorney, if so designated by the governing body;
22. The furnishing of information regarding incentive payments
made pursuant to the provisions of Sections 3601 through 3609 of
ENR. S. B. NO. 577 Page 19
this title, incentive payments made pursuant to the provisions of
Sections 3501 through 3508 of this title, or tax credits claimed
pursuant to the provisions of Sections 1 through 8 of this act
Sections 3930 through 3937 of this title;
23. The furnishing to a prospective purchaser of any business,
or his or her authorized representative, of information relating to
any liabilities, delinquencies, assessments or warrants of the
prospective seller of the business which have not been filed of
record, established or become final and which relate solely to the
seller’s business. Any disclosure under this paragraph shall only
be allowed upon the presentment by the prospective buyer, or the
buyer’s authorized representative, of the purchase contract and a
written authorization between the parties;
24. The furnishing of information as to the amount of state
revenue affected by the issuance or granting of any tax permit,
license, exemption, deduction, credit or other tax preference by the
Tax Commission as provided for by law. Such information shall be
limited to the type of permit, license, exemption, deduction, credit
or other tax preference issued or granted, the date and duration of
such permit, license, exemption, deduction, credit or other tax
preference and the amount of such revenue. The provisions of this
paragraph shall not authorize the disclosure of the name of the
person issued such permit, license, exemption, deduction, credit or
other tax preference, or the name of the business entity authorized
to engage in business pursuant to the permit, license, exemption,
deduction, credit or other tax preference;
25. The examination of records and files of a person or entity
by the Oklahoma State Bureau of Narcotics and Dangerous Drugs
Control, district attorney or the Attorney General pursuant to a
court order by a magistrate in whose territorial jurisdiction the
person or entity resides, or where the Tax Commission records and
files are physically located. Such an order may only be issued upon
a sworn application by an agent of the Oklahoma State Bureau of
Narcotics and Dangerous Drugs Control or the Attorney General,
certifying that the person or entity whose records and files are to
be examined is the target of an ongoing investigation of a felony
violation of the Uniform Controlled Dangerous Substances Act and
that information resulting from such an examination would likely be
relevant to that investigation. Any records or information obtained
ENR. S. B. NO. 577 Page 20
pursuant to such an order may only be used by the Oklahoma State
Bureau of Narcotics and Dangerous Drugs Control, district attorney
or the Attorney General in the investigation and prosecution of a
felony violation of the Uniform Controlled Dangerous Substances Act
or money laundering pursuant to Section 2001 of Title 21 of the
Oklahoma Statutes. Any such order issued pursuant to this
paragraph, along with the underlying application, shall be sealed
and not disclosed to the person or entity whose records were
examined, for a period of ninety (90) days. The issuing magistrate
may grant extensions of such period upon a showing of good cause in
furtherance of the investigation. Upon the expiration of ninety
(90) days and any extensions granted by the magistrate, a copy of
the application and order shall be served upon the person or entity
whose records were examined, along with a copy of the records or
information actually provided by the Tax Commission;
26. The disclosure of information, as prescribed by this
paragraph, which is related to the proposed or actual usage of tax
credits pursuant to Section 2357.7 of this title, the Small Business
Capital Formation Incentive Act or the Rural Venture Capital
Formation Incentive Act. Unless the context clearly requires
otherwise, the terms used in this paragraph shall have the same
meaning as defined by Section 2357.7, 2357.61 or 2357.72 of this
title. The disclosure of information authorized by this paragraph
shall include:
a. the legal name of any qualified venture capital
company, qualified small business capital company or
qualified rural small business capital company,
b. the identity or legal name of any person or entity
that is a shareholder or partner of a qualified
venture capital company, qualified small business
capital company or qualified rural small business
capital company,
c. the identity or legal name of any Oklahoma business
venture, Oklahoma small business venture or Oklahoma
rural small business venture in which a qualified
investment has been made by a capital company, or
ENR. S. B. NO. 577 Page 21
d. the amount of funds invested in a qualified venture
capital company, the amount of qualified investments
in a qualified small business capital company or
qualified rural small business capital company and the
amount of investments made by a qualified venture
capital company, qualified small business capital
company, or qualified rural small business capital
company;
27. The disclosure of specific information as required by
Section 46 of Title 62 of the Oklahoma Statutes;
28. The disclosure of specific information as required by
Section 205.5 of this title;
29. The disclosure of specific information as required by
Section 205.6 of this title;
30. The disclosure of information to the State Treasurer
necessary to implement Section 2368.27 of this title;
31. The disclosure of specific information to the Oklahoma
Health Care Authority for purposes of determining eligibility for
current or potential recipients of assistance from the Oklahoma
Medicaid Program;
32. The disclosure of information to the Oklahoma Department of
Veterans Affairs including but not limited to the name and basis for
eligibility of each individual who qualifies for the sales tax
exemption authorized in paragraph 34 of Section 1357 of this title;
or
33. The disclosure of information to the Oklahoma Medical
Marijuana Authority for the purposes of compliance with the Oklahoma
Medical Marijuana and Patient Protection Act or Section 420 et seq.
of Title 63 of the Oklahoma Statutes; or
34. The disclosure of information required in order to comply
with the provisions of subsection H of Section 2902 of this title.
D. The Tax Commission shall cause to be prepared and made
available for public inspection in the office of the Tax Commission
ENR. S. B. NO. 577 Page 22
in such manner as it may determine an annual list containing the
name and post office address of each person, whether individual,
corporate or otherwise, making and filing an income tax return with
the Tax Commission.
It is specifically provided that no liability whatsoever, civil
or criminal, shall attach to any member of the Tax Commission or any
employee thereof for any error or omission of any name or address in
the preparation and publication of the list.
E. The Tax Commission shall prepare or cause to be prepared a
report on all provisions of state tax law that reduce state revenue
through exclusions, deductions, credits, exemptions, deferrals or
other preferential tax treatments. The report shall be prepared not
later than October 1 of each even-numbered year and shall be
submitted to the Governor, the President Pro Tempore of the Senate
and the Speaker of the House of Representatives. The Tax Commission
may prepare and submit supplements to the report at other times of
the year if additional or updated information relevant to the report
becomes available. The report shall include, for the previous
fiscal year, the Tax Commission’s best estimate of the amount of
state revenue that would have been collected but for the existence
of each such exclusion, deduction, credit, exemption, deferral or
other preferential tax treatment allowed by law. The Tax Commission
may request the assistance of other state agencies as may be needed
to prepare the report. The Tax Commission is authorized to require
any recipient of a tax incentive or tax expenditure to report to the
Tax Commission such information as requested so that the Tax
Commission may fulfill its obligations as required by this
subsection. The Tax Commission may require this information to be
submitted in an electronic format. The Tax Commission may disallow
any claim of a person for a tax incentive due to its failure to file
a report as required under the authority of this subsection.
F. It is further provided that the provisions of this section
shall be strictly interpreted and shall not be construed as
permitting the disclosure of any other information contained in the
records and files of the Tax Commission relating to income tax or to
any other taxes.
G. Unless otherwise provided for in this section, any violation
of the provisions of this section shall constitute a misdemeanor and
ENR. S. B. NO. 577 Page 23
shall be punishable by the imposition of a fine not exceeding One
Thousand Dollars ($1,000.00) or by imprisonment in the county jail
for a term not exceeding one (1) year, or by both such fine and
imprisonment, and the offender shall be removed or dismissed from
office.
H. Offenses described in Section 2376 of this title shall be
reported to the appropriate district attorney of this state by the
Tax Commission as soon as the offenses are discovered by the Tax
Commission or its agents or employees. The Tax Commission shall
make available to the appropriate district attorney or to the
authorized agent of the district attorney its records and files
pertinent to prosecutions, and such records and files shall be fully
admissible as evidence for the purpose of such prosecutions.
SECTION 3. This act shall become effective November 1, 2025.
ENR. S. B. NO. 577 Page 24
Passed the Senate the 11th day of March, 2025.
Presiding Officer of the Senate
Passed the House of Representatives the 6th day of May, 2025.
Presiding Officer of the House
of Representatives
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: _________________________________