Current through Vol. 42, No. 1, September 16, 2024
(a)
General
provisions applicable to qualifying business entities purchasing Oklahoma-mined
coal. There shall be allowed a credit against the tax imposed by
Sections
1803
and
2355
of Title 68 or Sections
624
and
628 of
Title 36 of the Oklahoma Statutes for legal business entities purchasing
Oklahoma-mined coal for qualifying purposes. In order to qualify for the
Oklahoma Coal Credit, the business entity must either furnish water, heat,
light, or power to the citizens or to the State of Oklahoma, or burn coal to
generate heat, light, or power for use in manufacturing operations in Oklahoma.
[See: 68 O.S. § 2357.11; Wyoming v. Oklahoma,
112 S.Ct. 789 (1992)]
(1)
Basic
credit. For tax years beginning on or after January 1, 1993, and ending
on or before December 31, 2005 and for the period beginning January 1, 2006
through June 30, 2006, the credit shall be Two Dollars ($2.00) per ton of
Oklahoma-mined coal purchased. For the period July 1, 2006 through December 31,
2006 and for tax years beginning on or after January 1, 2007 and ending on or
before December 31, 2021, the credit shall be Two Dollars and eighty-five cents
($2.85) per ton of Oklahoma-mined coal purchased, except as provided in (h) of
this Section.
(2)
Extended
basic credit. For the period July 1, 2006 through December 31, 2006 and
for tax years beginning on or after January 1, 2007 and ending on or before
December 31, 2021, the credit shall be Two Dollars and fifteen cents ($2.15)
per ton of Oklahoma-mined coal purchased. The extended basic credit may not be
claimed or transferred prior to January 1, 2008, except as provided in (h) of
this Section.
(3)
Additional
credit for large quantity purchasers. For tax years beginning on or
after January 1, 1995, and ending on or before December 31, 2005 and for the
period beginning January 1, 2006 through June 30, 2006, there shall be allowed,
in addition to the credit described in (1) of this subsection, a
supplemental credit of Three Dollars ($3.00) per ton of
Oklahoma-mined coal purchased. However, to obtain the credit described in this
paragraph, purchases must total at least Seven Hundred Fifty Thousand (750,000)
tons of Oklahoma-mined coal in the tax year for which credit is sought.
(b)
General
provisions applicable to qualifying business entities that mine, produce, or
extract coal. For tax years beginning on or after January 1, 2001, and
ending on or before December 31, 2021, there shall be allowed a credit against
the tax imposed by Sections
1803
and
2355
of Title 68 or Sections
624
and
628 of
Title 36 of the Oklahoma Statutes for every business entity in this state
primarily engaged in mining, production, or extraction of coal, and holding a
valid permit issued by the Oklahoma Department of Mines, so long
as the average price of coal mined, produced, or extracted in any month
for which credits are claimed is less than Sixty-eight Dollars ($68.00) per
ton.
(1)
Basic credit. For tax
years beginning on or after January 1, 2001 and ending on or before December
31, 2005, and for the period beginning January 1, 2006 through June 30, 2006,
the credit shall be Ninety-five Cents ($0.95) per ton and for the period of
July 1, 2006 through December 31, 2006, and for tax years beginning on or after
January 1, 2007 and ending on or before December 31, 2021, the credit shall be
Five Dollars ($5.00) for each ton of coal mined, produced, or extracted in, on,
under, or through a permit in this state, except as provided in (h) of this
Section.
(2)
Additional
credit for thin seam coal. For tax years beginning on or after January
1, 2001 and ending on or before December 31, 2005, and for the period of
January 1, 2006 through June 30, 2006, there shall be allowed, in addition to
that described in (1) of this subsection, a supplemental credit in
the amount of Ninety-five Cents ($0.95) per ton of coal mined, produced, or
extracted from thin seams in this state, so long as
the purchaser of the thin seam coal purchases less than Seven Hundred Fifty
Thousand (750,000) tons of Oklahoma coal per year.
(3)
Extended credit for thin seam
coal. For tax years beginning on or after January 1, 2005 and ending on
or before December 31, 2005, for the period of January 1, 2006, through June
30, 2006, there shall be allowed, in addition to that described in (1) and (2)
of this subsection, a supplemental credit in the amount of
Ninety-five Cents ($0.95) per ton of coal mined, produced, or extracted from
thin seams in this state on or after July 1, 2005.
(c)
Transferability.
The coal credits allowed, but not used, shall be freely transferable by written
agreement to subsequent transferees, at any time during the five (5) years
following the year of qualification.
(1)
"Eligible transferee" defined. For purposes of this subsection, an
"eligible transferee" means any taxpayer subject to the
tax imposed by Section
1803
or
2355
of Title 68 or Section
624
or
628 of
Title 36 of the Oklahoma Statutes. [See: 68 O.S. §
2357.11(H)] Pursuant to the statutory definition, an "eligible transferee"
taxpayer may be an individual, as well as a legal business entity.
(2)
Written transfer agreement
requirements. The business entity which originally earned the credit and
the subsequent transferee must jointly file a copy of the written transfer
agreement with the Commission, within thirty (30) days of the transfer. The
written agreement must contain the name, address, and taxpayer identification
number of the parties to the transfer, the amount of credit being transferred,
the year the credit was originally allowed to the transferring entity, and the
tax year or years for which the credit may be claimed.
(3)
Claiming transferred credit.
A copy of OTC Form 572 must be attached to any tax return on which a taxpayer
claims a transferred credit.
(4)
Limitation of transferability. Credits earned after December 31,
2013, shall not be transferable.
(d)
Application of credit
election. Any coal credit may, upon the election of the taxpayer, be
claimed as a payment of tax, a prepayment of tax, or a payment of estimated tax
for purposes of Section
1803
or
2355
of Title 68 or Section
624
or
628 of
Title 36. In no event shall the credit reduce the tax below zero, and as such,
this credit is non-refundable. Coal credits shall not be used to lower the
price of any Oklahoma-mined coal sold that is produced by a subsidiary of the
person receiving a tax credit under this Section to other buyers of the
Oklahoma-mined coal.
(e)
Carryover provisions. Any coal credit earned prior to January 1,
2014, to the extent not used, may be carried over in order to each of the five
(5) years following the year of qualification. However, at no time may the
credit claimed exceed the tax liability for credits earned prior to January 1,
2014.
(f)
Refund of tax
credits. Credits earned on or after January 1, 2014, but not used, shall
be refunded to the taxpayer at eighty-five percent (85%) of the face amount of
the credits. If the taxpayer is a pass-through entity and does not file a claim
for a direct refund, the pass-through entity shall allocate the credit to one
or more of the shareholders, partners or members of the pass-through entity.
The total amount of credits refunded or allocated shall not exceed the amount
of the credit or refund to which the pass-through entity is entitled.
(g)
Tax credit
moratorium. No credit may be claimed for coal purchased, mined, produced
or extracted during the period of July 1, 2010 through June 30, 2012, for which
the credit would otherwise be allowable. This credit may be claimed for tax
year 2012 and subsequent tax years, for Oklahoma-mined coal for qualifying
purposes purchased, mined, produced or extracted on or after July 1, 2012.
(h)
Tax credit
limitation.
(1) For any credits
calculated pursuant to (a)(1) or (a)(2), or (b)(1) of this Section for
activities occurring on or after January 1, 2016, the amount of credit allowed
shall be equal to seventy-five percent (75%) of the amount otherwise provided.
[68 O.S. § 2357.11(N)]
(2) For
tax years beginning on or after January 1, 2018, the total amount of credits
authorized by this Section used to offset tax or paid as a refund shall be
adjusted annually to limit the annual amount of credits to Five Million Dollars
($5,000,000.00). The Tax Commission shall annually calculate and publish a
percentage by which the credits authorized by this Section shall be reduced so
the total amount of credits used to offset tax or paid as a refund does not
exceed Five Million Dollars ($5,000,000.00) per year.
Amended at 10 Ok Reg
3837, eff 7-12-93; Amended at 11 Ok Reg 555, eff 11-10-93 (emergency); Amended
at 11 Ok Reg 3497, eff 6-26-94; Amended at 14 Ok Reg 2699, eff 6-26-97; Amended
at 17 Ok Reg 2669, eff 6-25-00; Amended at 20 Ok Reg 2165, eff 6-26-03; Amended
at 23 Ok Reg 2824, eff 6-25-06; Amended at 24 Ok Reg 2359, eff 6-25-07; Amended
at 28 Ok Reg 18, eff 8-9-10 (emergency); Amended at 28 Ok Reg 935, eff
6-1-11
