Oklahoma Administrative Code › Title 710 - Oklahoma Tax Commission › Chapter 90 - Withholding › Subchapter 1 - General Provisions › Section 710:90-1-2 - Definitions

Current through Vol. 41, No. 20, July 1, 2024
Oklahoma Statutes provide that any term used in the Oklahoma
				  Income Tax Code shall have the same meaning as when used in a comparable
				  context in the Internal Revenue Code, unless a different meaning is clearly
				  required. The terms used in this Chapter are subject to control by the Oklahoma
				  Statutes, and therefore subject to the interpretation and application provided
				  by the Internal Revenue Code. [
See:
68 O.S. Sections 2353, 2385.1]
				  In addition, the following words or terms, when used in this Chapter, shall
				  have the following meaning, unless the context clearly indicates otherwise:
"Employee"
, as described in this Section, means
				  a "resident individual," performing services for an employer whether such
				  services are performed within or without the State of Oklahoma, or both, and
				  any "nonresident individual" performing services within the State of Oklahoma.
(A) The term
"employee"
includes every
				  individual performing services if the relationship between him and the person
				  for whom services are performed is the legal relationship of employer and
				  employee, as follows:
(i) Generally, the relationship of employer and employee
				  exists when the person for whom services are performed has the right to control
				  and direct the individual who performs the services, not only as to the result
				  to be accomplished by the work but also as to the details and means by which
				  that result is accomplished.
(ii) An employee is subject to the will and control of the
				  employer, not only as to what shall be done, but how it shall be done. It is
				  not necessary that the employer actually direct or control the manner in which
				  the services are performed; it is sufficient if the employer has the right to
				  do so. In general, if the individual is subject to the control or direction of
				  another merely as to the result to be accomplished by the work, and not as to
				  the means and methods for accomplishing the result, he is not an
				  employee.
(iii) The existence of an employer-employee relationship
				  shall be determined, when in doubt, by an examination of the particular facts
				  of each case.
(iv) If an employer-employee relationship exists, the
				  designation or description of the relationship by the parties as anything other
				  than that of employer and employee is immaterial.
(v) It is of no consequence that an employee is designated as
				  a partner, coadventurer, agent, independent contractor, contract labor, or the
				  like. It also does not matter how payments are made, what they are called or
				  whether the service is performed full or part-time.
(B) Generally, persons who follow an independent trade,
				  business, or profession, in which they offer their services to the public, such
				  as physicians, attorneys, dentists, veterinarians, contractors and others, are
				  not "
employees.
"
(C) Generally, an officer of a corporation is an employee of
				  the corporation. However, an officer of a corporation who performs no services
				  in this capacity or only minor services, and who neither receives nor is
				  entitled to receive, directly or indirectly, any remuneration, is not
				  considered to be an employee of the corporation.
(D) All classifications or grades of employees are included
				  within the employer-employee relationship. Superintendents, managers and other
				  supervisory personnel are employees. A director of a corporation in his
				  capacity as such, is not an employee of the corporation. Officers of a
				  Subchapter S Corporation are subject to these same provisions.
(E) An officer, employee or elected official of the United
				  States, a state, a territory, the District of Columbia, or any agency,
				  instrumentality, or political subdivision is considered an employee subject to
				  Withholding Tax.
(F) Although an individual may be an employee, the services
				  performed may be of such a nature or be performed under such circumstance that
				  the remuneration paid does not constitute wages within the meaning of 68 O.S.
				  Section 2385.1(e) or the Internal Revenue Code.
"Employer"
means any person transacting business
				  or deriving any income from sources within the State of Oklahoma for whom an
				  individual performs or performed any services, of whatever nature, as the
				  employee of such person.
"Employer"
does not include nonresident
				  employers who have no place of business in Oklahoma and whose transactions are
				  limited to the solicitation of orders for merchandise filled outside Oklahoma
				  and shipped directly to a purchaser in Oklahoma.
(A) An
"Employer"
may be an individual, a
				  corporation, a partnership, a trust, a joint-stock company, an association; or
				  a syndicate, group, pool, joint venture, or other unincorporated organization,
				  group or entity.
(B) The term
"Employer"
means not only
				  individuals and organizations engaged in trade or business, but also
				  organizations exempt from Income Tax, such as religious and charitable
				  organizations, educational institutions, clubs, social organizations and
				  societies.
(C) The term
"Employer"
includes the governments
				  of the United States, the States, the Territories, the District of Columbia,
				  their agencies, instrumentalities and political subdivisions.
(D) If the person for whom the services are or were performed
				  does not have legal control of the payment of wages for such services, the term
"Employer"
means the person having such control.
(E) The term
"Employer"
includes an officer or
				  employee of a partnership who is under a duty to act for a corporation or
				  partnership to withhold and remit.
(F) The word
"Employer"
also means any person
				  paying wages on behalf of a nonresident alien individual as defined by the
				  Internal Revenue Code.
"Nonresident individual"
means any individual
				  other than a resident individual as defined by this Section. This includes
				  "nonresident aliens" as defined by the Internal Revenue Code.
"Resident individual"
means a natural person
				  domiciled in Oklahoma who spends a total of more than seven (7) months of the
				  taxable year within Oklahoma. Such person is presumed to be a resident in
				  absence of proof to the contrary.
"Wages"
means all remuneration (other than fees
				  to public officials) for services performed by an employee for his employer
				  unless specifically exempted.
(A) Generally, the medium in which remuneration is paid is
				  immaterial. The term
"wages"
includes the cash value of all
				  remuneration paid in any medium other than cash, such as stocks, bonds, or
				  tangible property.
(B) The name by which remuneration is designated is also
				  immaterial. Remuneration such as salaries, tips, fees, bonuses, commission on
				  sales or on insurance premiums, pensions, and retired pay are considered wages
				  if paid as compensation for services performed by the employee for his
				  employer, unless specifically exempted as wages not subject to Withholding Tax
				  by Oklahoma Statutes or the Internal Revenue Code.
(C) The basis upon which the remuneration is paid is
				  immaterial. It may be paid on the basis of piecework, or as a percentage of
				  profits, and may be paid hourly, daily, weekly, monthly, or annually.
(D) Remuneration for services performed constitutes wages
				  subject to Income Tax Withholding, even though paid at a time after the
				  employer-employee relationship no longer exists.
(E) Authorized fees to public officials such as notaries
				  public, clerks of courts, sheriffs, etc., for services rendered in the
				  performance of their official duties are not subject to Withholding Tax.
				  However salaries paid such officials by the government or by a government
				  agency or instrumentality are subject to withholding.
(F) The term
"wages"
does not include any
				  remuneration for services performed by an employee for his employer which is
				  specifically exempt from wages under 68 O.S. Section 2385.1(e) or the Internal
				  Revenue Code. Any exception attaches to the remuneration for services performed
				  by an employee and not to the employee as an individual. Remuneration for
				  services performed which is specifically excepted from the definition of wages
				  to which a voluntary withholding agreement is in effect are deemed to be wages
				  for purposes of administering the provisions of the Oklahoma Income Tax
				  Withholding Act.
(G) Oklahoma Statutes provide that any term used in the
				  Oklahoma Income Tax Code shall have the same meaning as when used in a
				  comparable context in the Internal Revenue Code, unless a different meaning is
				  clearly required. The terms used in this Chapter are subject to control by the
				  Oklahoma Statutes, and therefore subject to the interpretation and application
				  provided by the Internal Revenue Code. Therefore, any remuneration paid for
				  services performed by an employee for his employer not specifically exempted by
				  Oklahoma Statute or specifically named in this Section as wages shall be
				  subject to Oklahoma Income Tax Withholding if subject to Income Tax Withholding
				  as required by the Internal Revenue Code. [
See:
68 O.S. Section
				  2353]
Amended at 16 Ok Reg
				  2674, eff 6-25-99