2014 Oklahoma Statutes
Title 68. Revenue and Taxation
§68-1217. Definitions.

As used in the Oklahoma Business Activity Tax Code:

1. “Business activity” means and includes:

a.the conducting of an active trade or business if:

(1)the activities being carried on by a person include one or more active operations that form a part of the process of attempting to earn income or profit, and

(2)the person performs active management and operational functions, and

b.activities performed by other persons, including independent contractors, to the extent the activities performed are on behalf of the person and constitute all or part of the person’s trade or business. A person conducts an active trade or business if assets, including royalties, patents, trademarks, and other intangible assets, held by the person are used in the active trade or business of one or more related businesses. For purposes of this section:

(1)the ownership of a royalty interest or a working interest in mineral rights does not constitute conduct of an active trade or business,

(2)payment of compensation to employees or independent contractors for financial or legal services reasonably necessary for the operation of the entity does not constitute conduct of an active trade or business, and

(3)holding a seat on the board of directors of an entity does not by itself constitute conduct of an active trade or business;

2. “Charter” means a limited liability company's certificate of organization, a limited partnership's certificate of limited partnership, and the registration of a limited liability partnership;

3. “Doing business” means and includes each and every act, power or privilege exercised or enjoyed in this state, as an incident to, or by virtue of the powers and privileges acquired by individual persons or entities;

4. “Entity” means any person other than an individual;

5. “Internal Revenue Code” means the United States Internal Revenue Code, as the same may be amended or adopted from time to time applicable to the taxable year; and other provisions of the laws of the United States relating to federal income taxes, as the same may be or become effective at any time or from time to time applicable to the taxable year;

6. “Net revenue” means “total revenue” less all ordinary trade or business expenses other than interest, income taxes, depreciation and amortization. Deduction items allocated or apportioned to this state which are attributable to excluded revenues items shall not be deductible in arriving at net revenue;

7. “Person” means any natural person, firm, partnership, joint venture, association, limited liability company, corporation, state banking association, national banking association, credit union organized under the laws of this state, joint-stock company, business trust, estate, trust, and any other group or combination doing business as a unit;

8. “Tax Commission” or “Commission” means the Oklahoma Tax Commission;

9. “Tax year” means the calendar year on the basis of which a person is required to pay the tax levied or imposed under this act; and

10. “Total revenue” means all revenues reportable by a person on the federal income tax return filed by such person or if a federal income tax return is not required to be filed by a person and such nonfiling person is not otherwise exempt from ad valorem taxes on such person’s intangible personal property, such nonfiling person’s total income revenues received or accrued, without deduction for the cost of property sold, materials used, labor performed, or other costs incurred, unless otherwise specifically provided herein. The following revenues shall be excluded from the definition of “total revenue”:

a.interest, except interest from credit sales,

b.dividends and distributions received from corporations, and distributive or proportionate shares of total receipts and other income from a pass-through entity as defined under Section 2385.29 of Title 68 of the Oklahoma Statutes;

c.real estate rentals,

d.royalty interests or working interests in mineral rights,

e.net capital gains, as defined in Section 1222(11) of the Internal Revenue Code, included in the federal income tax return of a person, and

f.compensation, whether current or deferred, and whether in cash or in kind, received or to be received by an employee, former employee, or the employee’s legal successor for services rendered to or for an employer, including reimbursements received by or for an individual for medical or education expenses, health insurance premiums, or employee expenses, or on account of a dependent care spending account, legal services plan, any cafeteria plan described in section 125 of the Internal Revenue Code, or any similar employee reimbursement.

Added by Laws 2010, S.J.R. No. 61, § 4.