HB 3806 Oklahoma House · 2026 Regular Session

Revenue and taxation; Oklahoma Revenue and Taxation Act of 2026; effective date.

HB 3806 creates a tax credit for Oklahoma businesses that accept credit or debit card payments. It allows eligible businesses to claim a credit equal to 100% of their credit card processing fees that exceed 2% of total transaction volume. The credit reduces state income tax liability but cannot lower it below zero, and unused portions may be carried forward for up to five years. This applies to taxable years beginning January 1, 2027, and affects businesses like retailers, restaurants, and service providers processing card payments. The credit is allocated to business owners (e.g., partners, shareholders) if the business is treated as a partnership for federal tax purposes.

Issues: ✓ Budget & Taxes

Bill status in committee 1 of 4 stages cleared

Introduction

Feb 2026

Committee Review

Floor Vote

Governor

Introduced Feb 2, 2026 Last action Feb 3, 2026

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What changed between versions

Introduced → Proposed Committee Substitute (full committee) 1 · 9 edits

MAJOR

The bill was amended from its original introduced version to a proposed committee substitute version. The primary change is that the entire bill text was replaced with a new version that significantly expands the scope of the legislation. The original bill was a general revenue and taxation act, while the new version specifically creates an income tax credit for eligible business entities to offset credit card processing fees that exceed 2% of gross transaction amounts.

Scope change

The bill's scope changed from a general revenue and taxation act to a specific income tax credit program for business entities processing credit card transactions.

SCOPE

The bill title and purpose changed from creating a general Oklahoma Revenue and Taxation Act to creating a specific income tax credit for credit card processing fees.

ELIGIBILITY

New eligibility criteria were added for 'eligible business entities' including partnerships, LLCs, corporations, trusts, estates, and other entities that accept credit or debit card payments.

DEFINITION

A new definition was added for 'credit card processing fee' as the total percentage rate charged by payment processors for processing credit or debit card transactions.

REQUIREMENT

A new tax credit provision was added allowing eligible businesses to claim a 100% credit against income tax for credit card processing fees exceeding 2% of gross transaction amounts.

New provisions were added allowing the credit to be carried over for up to five taxable years if not fully used in the current year.

New restrictions were added preventing the credit from reducing an eligible business entity's income tax liability below zero.

TIMELINE

The effective date was changed from November 1, 2026 to January 1, 2027, and the credit applies to taxable years beginning on or after January 1, 2027.

FISCAL

New allocation provisions were added allowing the credit to be distributed to partners, shareholders, members, or equity owners of eligible business entities treated as partnerships for federal income tax purposes.

TECHNICAL

The bill was changed from noncodified to codified status, meaning it will be added to the Oklahoma Statutes as Section 2357.701 of Title 68.

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Committee

Feb 2, 2026

Introduced

First Reading

lower

1 primary · 0 co-sponsors