Oklahoma Administrative Code › Title 710 - Oklahoma Tax Commission › Chapter 50 - Income › Subchapter 19 - Oklahoma Taxable Income for Partnerships › Section 710:50-19-1 - Partnership return

Current through Vol. 41, No. 20, July 1, 2024
(a)
General
				provisions.
The Oklahoma distributive share of partnership income shall
				be the same portion of that reported for Federal Income Tax purposes. OTC Form
				514 is used to report income. [See: 68 O.S. §§2358, 2362, 2363]
(1)
Oklahoma source income or
				loss.
When a partnership has source income or loss then that partnership
				must file a return showing the income or loss applicable to Oklahoma. The
				partnership shall also furnish a detailed schedule stating the amount of income
				distributable to each partner from Oklahoma sources.
(2)
Duty to file and report;
				determination of shares.
All resident partners must file individual
				income tax returns with Oklahoma if they are required to file individual
				Federal Income Tax Returns. All nonresident partners that have gross income of
				$1,000.00 must file an Oklahoma Return even though their net may actually be a
				loss. The partnership income for Oklahoma may be apportioned using the three
				factor formula unless its operations are from real and tangible personal
				property, such as rents, oil and mining production or royalties, and gains or
				losses from sales of such property; then the income or loss shall be allocated
				in accordance with the situs of such property. The partner's distributive share
				of Oklahoma income or loss shall be the same proportion to the partner's
				distributive share of income or loss shown on the Federal Partnership Return.
(3)
No credit for income
				taxes paid other jurisdictions.
Neither residents nor nonresidents are
				allowed a credit for income taxes paid to other jurisdictions on partnership
				income.
(4)
Composite
				returns.
For tax years beginning on or after January 1, 2013, Oklahoma
				will allow partnerships with two or more partners to file composite returns for
				nonresident partners as set forth in (A) through (D) of this paragraph.
(A)
Individual partners and trust
				partners.
Compute each nonresident individual or trust partner's share
				of Oklahoma distributive income and income tax as follows:
(i) Calculate the Oklahoma distributive share
				of each nonresident individual and trust partner's income as if all of the
				partnership income was earned in Oklahoma. In determining taxable income of
				individual partners filing a composite return, no deductions for the standard
				deduction, personal exemptions, federal income tax paid, or dependents is
				permitted.
(ii) Using the Oklahoma
				individual income tax rates for the applicable tax year, compute a
base
				tax
for each partner using the highest marginal tax rate, based on the
				taxable income from (i) of this subparagraph.
(iii) Calculate the actual Oklahoma
				distributive share of income of each partner.
(iv) The base tax determined from (ii) of
				this subparagraph is to be prorated to determine the Oklahoma income tax of
				each partner. Divide each partner's actual Oklahoma distributive share as
				determined in (iii) of this subparagraph, by each partner's distributive income
				from all sources as determined by (i) of this subparagraph. Multiply this
				percentage times the base tax to calculate the actual Oklahoma income tax of
				each partner. Nothing in this section shall be construed to allow for more than
				one hundred percent (100%) of a nonresident partner's income to be taxed.
(B)
Corporate
				partners, S Corporation partners and Partnership partners.
Compute each
				nonresident corporate, S corp or partnership partner's share of Oklahoma
				distributive income, using the partner's share of Oklahoma distributive income
				and the Oklahoma corporate income tax rates, to compute each partner's Oklahoma
				tax.
(C)
Form.
The
				income and tax of all partners included in the composite return must be
				combined on Oklahoma Tax Commission Form 514.
(D)
Schedule to be provided.
Oklahoma Tax Commission Form 514 PT must be enclosed with the Form 514 to show
				the computation of each nonresident partner's Oklahoma distributive income and
				Oklahoma tax. The schedule of nonresident partner's information may be provided
				on magnetic media, electronically, or in another format which meets Tax
				Commission guidelines.