Okla. Admin. Code § 710:50-15-62

Current through Vol. 42, No. 1, September 16, 2024

Section 710:50-15-62 - Agricultural commodity processing facility income/investment exclusion

(a)General provisions. Owners of agricultural commodity processing facilities may exclude from Oklahoma Taxable Income, or in the case of individuals, from Oklahoma Adjusted Gross Income, a portion of their investment costs in any new or expanded agricultural commodity processing facility located in this state.

(1)For investments made on or after January 1, 1997, but before December 31, 1998. Owners of agricultural commodity processing facilities may exclude fifteen percent (15%), of their investment cost in a new or expanded agricultural commodity processing facility located in Oklahoma.

(2)For investments made on or after January 1, 1999. If the exclusion for investment in agricultural processing facilities results in the reduction in total Oklahoma Income Tax in excess of one million dollars ($1,000,000.00) in any previous calendar year, the percentage of investment subject to exclusion will be adjusted. The adjusted percentage allowable will be determined by dividing $1,000,000.00 by six percent, then further dividing the result by the total previous year's investment subject to exclusion.

(b)Definitions. For purposes of this Section, the following words and terms, shall have the following meaning, unless the context clearly indicates otherwise:

(1)"Agricultural commodities" means a farm or ranch product, including but not limited to, wheat, corn, soybeans, cotton, timber, cattle, hogs, sheep, horses, poultry, animals of the families bovidae, cervidae, and antilocapridae, or birds of the ratite group, produced in farming or ranching operations, or a product of such crop or livestock in its unmanufactured state, such as ginned cotton, wool-dip, maple syrup, milk, and eggs, or any other commodity listed under any Industry Group Number under Major Group 20, Division D, of the Standard Industrial Classification Manual.

(2)"Agricultural commodity processing facility" means building, structures, fixtures and improvements used or operated primarily for the processing or production of marketable products from agricultural commodities. Effective November 1, 2000, the term shall also mean a dairy operation that requires a depreciable investment of at least Two Hundred Fifty Thousand Dollars ($250,000.00) and which produces milk from dairy cows. The term does not include a facility that provides only, and nothing more than, storage, cleaning, drying or transportation of agricultural commodities. [See: 68 O.S. § 2358(A)(6)(a) ]

(3) "Facility" means each part of the facility which is used in a process primarily for:

(A) The processing of agricultural commodities, including receiving or storing agricultural commodities, or, effective November 1, 2000, the production of milk at a dairy operation, [See: 68 O.S. § 2358(A)(6)(b) ]

(B) Transporting the agricultural commodities or product before, during or after the processing, or

(C) Packaging or otherwise preparing the product for sale or shipment.

(c)Qualification. In order to qualify for the exclusion, the agricultural commodity processing facility must be operated primarily for the processing or production of agricultural commodities to marketable products.

(d)Limitations. This exclusion from income is to be taken in the taxable year when the investment is made. For purposes of this exclusion, the investment is deemed to be made when the property is placed in service. Under no circumstances shall this exclusion from income lower claimant's Oklahoma Taxable Income below zero. In the event the exclusion does exceed income, any unused portion may be carried forward for a period not to exceed six (6) years from the initial year of qualification. If the exclusion from income amount is determined based on the percentage allowable but not used, the amount shall not change based on subsequent change in percentage allowable to be excluded. In no event will the exclusion percentage exceed fifteen percent (15%).

(e)Information return required. Owners who intend to claim the exclusion for investment costs described in this Section must file, on a form prescribed by the Commission, an information return, reporting the amount of qualified property placed in service during the preceding calendar year. The information return must be submitted by January 31.

Okla. Admin. Code § 710:50-15-62

Added at 14 Ok Reg 2699, eff 6-26-97; Amended at 18 Ok Reg 2810, eff 6-25-01

Amended by Oklahoma Register, Volume 34, Issue 24, September 1, 2017, eff. 9/11/2017