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STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
COMMITTEE SUBSTITUTE
FOR
SENATE BILL 736 By: Deevers
COMMITTEE SUBSTITUTE
An Act relating to income tax; creating the Health
Care Sharing Ministry Tax Parity Act; providing short
title; defining terms; providing income tax
deduction; providing procedure for claiming deduction
on certain payments; requiring Oklahoma Tax
Commission to prescribe forms and guidelines; making
certain income nontaxable; providing Oklahoma Tax
Commission with administrative oversight; providing
penalties for fraudulent claims; providing for
noncodification; providing for codification; and
providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law not to be
codified in the Oklahoma Statutes reads as follows:
This act shall be known and may be cited as the “Health Care
Sharing Ministry Tax Parity Act”.
SECTION 2. NEW LAW A new section of law not to be
codified in the Oklahoma Statutes reads as follows:
The Legislature finds and declares that:
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1. Health care sharing ministries (HCSMs) play a significant
role in addressing medical needs for individuals and families,
providing financial and emotional support outside of health
insurance;
2. HCSMs enable their members to share health care costs in a
voluntary and community-focused manner consistent with their ethical
and religious beliefs;
3. Despite their critical function, HCSM contributions and
payments are not currently afforded the same tax treatment as health
insurance premiums under state law; and
4. To ensure fairness and eliminate financial discrimination,
this act allows HCSM members to deduct qualifying expenses and
contributions on their state income tax returns, achieving tax
parity with health insurance plans.
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 2358.111 of Title 68, unless
there is created a duplication in numbering, reads as follows:
A. As used in this act:
1. “Health care sharing ministry” (HCSM) means a not-for-profit
organization that is tax-exempt under Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended, and:
a. limits its members to those who share a common set of
ethical or religious beliefs,
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b. facilitates sharing of medical expenses between
members in accordance with its ethical or religious
beliefs,
c. requires regular contributions from members with no
assumption of risk or promise to pay for medical
expenses,
d. provides a quarterly report to members detailing the
amount of needs shared and contributions received,
e. conducts annual independent audits that are publicly
available, and
f. provides a disclaimer stating that it is not an
insurance company and participation is voluntary;
2. “Qualified health care sharing expenses” means amounts paid
by a qualified individual as a member of an HCSM; and
3. “Qualified individual” means any resident of Oklahoma who
has been an active member of an HCSM for at least one (1) month
during the applicable tax year.
B. 1. For tax year 2026 and subsequent tax years, the total
amount of qualified health care sharing expenses paid by a qualified
individual during the tax year may be deducted from Oklahoma
adjusted gross income.
2. The deduction allowed under this section shall be applicable
to:
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a. self-employed individuals, in the same manner as
deductions for health insurance premiums,
b. employer contributions toward HCSM membership for
employees, which shall be treated as nontaxable fringe
benefits, and
c. individuals paying amounts for HCSM membership for
themselves or their dependents.
C. 1. To claim the deduction, a qualified individual shall:
a. submit documentation of membership and contributions
to an HCSM, including any records issued by the
ministry, and
b. file any additional forms or information required by
the Oklahoma Tax Commission to verify eligibility.
2. The Oklahoma Tax Commission shall develop forms, guidelines,
and procedures for the implementation of this section.
D. For tax year 2026 and subsequent tax years, funds received
by a qualified individual from HCSM members to assist with medical
expenses shall not be considered taxable income.
E. The Oklahoma Tax Commission shall administer the provisions
of this act. The Tax Commission shall electronically submit an
annual report to the Legislature detailing the number of deductions
claimed, the total revenue impact, and any other relevant data.
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F. Any individual who knowingly submits false documentation to
claim the deductions or exemptions under this act shall be subject
to:
1. Repayment of any income tax amount attributable to
improperly claimed deductions;
2. A civil penalty of Five Hundred Dollars ($500.00) per
offense; and
3. Ineligibility to claim deductions under this act for a
period of three (3) years.
SECTION 4. This act shall become effective November 1, 2025.
60-1-1659 QD 2/13/2025 8:54:46 PM