Bill > HB2745

This bill modifies Oklahoma's banking privilege tax law to introduce new deduction provisions for financial institutions with main offices in the state. Specifically, for tax years 2025 through 2027, banks and lending institutions can deduct net interest income from qualified agricultural real estate loans, agricultural operating loans, and single-family residence loans located in rural areas. The bill caps these deductions at $500,000 for institutions with Oklahoma-based deposits over $750 million and $250,000 for smaller institutions. Starting in tax year 2027, the total annual deductions will be limited to $5 million, with the Oklahoma Tax Commission calculating a proportional reduction percentage if total claimed deductions exceed this amount. The bill defines specific criteria for qualifying loans, including loan purpose, maturity, loan-to-value ratios, and geographic restrictions. The deductions are calculated based on the ratio of interest income from qualifying loans to the institution's total interest income. The new provisions aim to support agricultural and rural residential lending by providing tax incentives to financial institutions. The bill will become effective on November 1, 2025.

Budget and Finance, Business and Industry

http://www.oklegislature.gov/BillInfo.aspx?Bill=hb2745&Session=2600