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ENGROSSED HOUSE
BILL NO. 3350 By: McCall and McDugle of the
House
and
Treat of the Senate
[ revenue and taxation - modifying income tax rates
for individuals - effective date ]
BE IT ENACTED BY THE PEOPLE OF THE STATE O F OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 2355, is
amended to read as follows:
Section 2355. A. Individuals. For all taxable years beginning
after December 31, 1998, a nd before January 1, 20 06, a tax is hereby
imposed upon the Oklahoma taxable income of every resident or
nonresident individual, w hich tax shall be computed at the option of
the taxpayer under one of the two following methods:
1. METHOD 1.
a. Single individuals and married indi viduals filing
separately not deducting federal income tax:
(1) 1/2% tax on first $1,000.00 or part thereof ,
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(2) 1% tax on next $1,500.00 or part thereof,
(3) 2% tax on next $1,250.00 or part thereof,
(4) 3% tax on next $1,150.00 or part thereof,
(5) 4% tax on next $1,300.00 or part thereof,
(6) 5% tax on next $1,500.00 or part thereof,
(7) 6% tax on next $2,30 0.00 or part thereof, and
(8) (a) for taxable years beginning after December
31, 1998, and before January 1, 2002, 6.75%
tax on the remainder,
(b) for taxable years beginni ng on or after
January 1, 2002, and before January 1, 2004,
7% tax on the remainder, and
(c) for taxable years beginning on or after
January 1, 2004, 6.65% tax o n the remainder.
b. Married individuals filing jo intly and surviving
spouse to the extent and i n the manner that a
surviving spouse is permitted to file a joint return
under the provisions of the Internal Revenue Code and
heads of households as defined in the Internal Revenue
Code not deducting federal i ncome tax:
(1) 1/2% tax on first $2,000.00 or part thereof,
(2) 1% tax on next $3,000.00 or part thereof,
(3) 2% tax on next $2,50 0.00 or part thereof,
(4) 3% tax on next $2,300.00 or part thereof,
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(5) 4% tax on next $2,400.00 or part thereof,
(6) 5% tax on next $2,800.00 or par t thereof,
(7) 6% tax on next $6,000.00 or part thereof, and
(8) (a) for taxable years beginning after Dece mber
31, 1998, and before January 1, 2002 , 6.75%
tax on the remainder,
(b) for taxable years beginning on or after
January 1, 2002, and before Januar y 1, 2004,
7% tax on the remainder, and
(c) for taxable years beginning on or after
January 1, 2004, 6.65% tax on the remainder.
2. METHOD 2.
a. Single individuals and married individ uals filing
separately deducting federal income t ax:
(1) 1/2% tax on first $1,000.00 or part th ereof,
(2) 1% tax on next $1,500.00 or part thereof,
(3) 2% tax on next $1,250.00 or part thereof,
(4) 3% tax on next $1,150.00 or part thereof,
(5) 4% tax on next $1,200.00 or part thereof,
(6) 5% tax on next $1,400.00 or part there of,
(7) 6% tax on next $1,500.00 or part thereof,
(8) 7% tax on next $1,500.00 or part thereof,
(9) 8% tax on next $2,000.00 or part th ereof,
(10) 9% tax on next $3,500.00 or part ther eof, and
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(11) 10% tax on the remainder.
b. Married individuals filing jo intly and surviving
spouse to the extent and in the manner that a
surviving spouse is permitted to file a j oint return
under the provisions of the Internal Revenue Code and
heads of households as defined in the Internal Revenue
Code deducting federal incom e tax:
(1) 1/2% tax on the first $2,000.00 or part thereof,
(2) 1% tax on the next $3,000.00 or part thereo f,
(3) 2% tax on the next $2,500.00 or part thereof,
(4) 3% tax on the next $ 1,400.00 or part thereof,
(5) 4% tax on the next $1,500.00 or part there of,
(6) 5% tax on the next $1,600.00 or part thereof,
(7) 6% tax on the next $1,250.00 or part thereof,
(8) 7% tax on the next $1,750.00 or part thereof,
(9) 8% tax on the next $3,000. 00 or part thereof,
(10) 9% tax on the next $6,00 0.00 or part thereof, a nd
(11) 10% tax on the remainder.
B. Individuals. For all taxable years beginning on or after
January 1, 2008, and ending any tax year which begins after December
31, 2015, for which the determination required pursuant to Sections
4 and 5 of this act is made by the State Board of Equalization, a
tax is hereby imposed upon the Oklahoma taxable income of every
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resident or nonresident individual, which tax shall be computed as
follows:
1. Single individuals and married individuals fil ing
separately:
(a) 1/2% tax on first $1,000.0 0 or part thereof,
(b) 1% tax on next $1,500.00 or part thereof,
(c) 2% tax on next $1,250.00 or part thereof,
(d) 3% tax on next $1,150.00 or part thereof,
(e) 4% tax on next $2,300.00 or part thereof,
(f) 5% tax on next $1,500.00 o r part thereof,
(g) 5.50% tax on the remainder for the 2008 tax year and
any subsequent tax year unless the rate prescribed by
subparagraph (h) of this paragraph is in effect, and
(h) 5.25% tax on the remainder for the 2009 and subse quent
tax years. The decrease in the top marg inal
individual income tax rate otherwise authorized by
this subparagraph shall be c ontingent upon the
determination required to be made by the State Board
of Equalization pursuant to Section 2355.1A of this
title.
2. Married individuals filing jointly an d surviving spouse to
the extent and in the manner that a surviving spouse is permit ted to
file a joint return under the provisions of the Internal Revenue
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Code and heads of households as defined in the Interna l Revenue
Code:
(a) 1/2% tax on first $2,000.0 0 or part thereof,
(b) 1% tax on next $3,000.00 or part thereof,
(c) 2% tax on next $2,500.00 or part thereof,
(d) 3% tax on next $2,300.00 or part thereof,
(e) 4% tax on next $2,400.00 or part thereof,
(f) 5% tax on next $2,800.00 o r part thereof,
(g) 5.50% tax on the remainder for the 2008 tax year and
any subsequent tax year unless the rate prescribed by
subparagraph (h) of this paragraph is in effect, and
(h) 5.25% tax on the remainder for the 2009 and subse quent
tax years. The decrease in the top marg inal
individual income tax rate otherwise authorized by
this subparagraph shall be contingent upon the
determination required to be made by the State Board
of Equalization pursuant to Section 2355.1A of this
title.
C. Individuals. For all taxable years b eginning on or after
January 1, 2022 2023, a tax is hereby imposed upon the Oklahom a
taxable income of every resident or nonresident individual, which
tax shall be computed as follows:
1. Single individuals an d married individuals f iling
separately:
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(a) 0.25% 0.0% tax on first $1,000.00 or part thereof,
(b) 0.75% 0.5% tax on next $1,500.00 o r part thereof,
(c) 1.75% 1.5% tax on next $1,250.00 or part thereof,
(d) 2.75% 2.5% tax on next $1,150.00 or part the reof,
(e) 3.75% 3.5% tax on next $2,300.00 or part thereof,
(f) 4.75% 4.5% tax on the remainder .
2. Married individuals filing jointly and surviving spouse to
the extent and in the manner that a surviving spouse is permitted to
file a joint return under the provisions of the Internal Revenue
Code and heads of households as defined in the Internal Revenue
Code:
(a) 0.25% 0.0% tax on first $2,000.00 or par t thereof,
(b) 0.75% 0.5% tax on next $3,000.00 or part thereof,
(c) 1.75% 1.5% tax on next $2,500.00 or part thereof,
(d) 2.75% 2.5% tax on next $2,300.00 or part thereof,
(e) 3.75% 3.5% tax on next $2,400.00 or part thereof,
(f) 4.75% 4.5% tax on the remainder .
No deduction for federal in come taxes paid shall be allowed to
any taxpayer to arrive at taxable income.
D. Nonresident aliens. In lieu of the rates set forth in
subsection A above, there shall be imposed on nonresident aliens, as
defined in the Internal Reve nue Code, a tax of eig ht percent (8%)
instead of thirty percent (30%) as used in th e Internal Revenue
Code, with respect to the O klahoma taxable income of such
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nonresident aliens as determined under the provision of the Oklahoma
Income Tax Act.
Every payer of amounts covered by this subsection shall deduct
and withhold from such amounts paid each payee an amou nt equal to
eight percent (8%) thereof. Every payer required to deduct and
withhold taxes under this subsection shall for each quarterly period
on or before the last day o f the month following the close of each
such quarterly period , pay over the amount s o withheld as taxes to
the Tax Commission, and shall file a return with each such payment .
Such return shall be in such form as the Tax Commission s hall
prescribe. Every payer required under this subsection to deduct and
withhold a tax from a payee shall , as to the total amoun ts paid to
each payee during the calendar year, furnish to such payee, on or
before January 31, of the succeeding year, a writ ten statement
showing the name of the payer, the name of the payee and the payee 's
Social Security account number, if any, the tot al amount paid
subject to taxation, and the total amount deducted and withheld as
tax and such other information as the Tax Co mmission may require .
Any payer who fails to withhold or pay to the Tax Commission any
sums herein required to be withheld or pai d shall be personally and
individually liable therefor to the State of Oklahoma.
E. Corporations. For all taxable years beg inning after
December 31, 1989, a tax is hereby imposed upon the Oklahoma taxable
income of every corporatio n doing business within this state or
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deriving income from sources within this state in an amount equal to
six percent (6%) thereof.
There shall be no additional Oklahoma i ncome tax imposed on
accumulated taxable income or on undistr ibuted personal holding
company income as thos e terms are defined in the Internal Revenue
Code.
F. Certain foreign corporations . In lieu of the tax imposed in
the first paragraph of subsection D of this section, for all taxable
years beginning after Dece mber 31, 1989, there sh all be imposed on
foreign corporations, as defined in the Internal Revenue Code, a tax
of six percent (6%) instead of thirty percent (30%) as used in the
Internal Revenue Code, where such income is received from sources
within Oklahoma, in accordance with the provisions of the I nternal
Revenue Code and the Oklahoma Income Tax Act.
Every payer of amounts covered by this subsection shall deduct
and withhold from such amounts p aid each payee an amount equal to
six percent (6%) thereof . Every payer required to deduct and
withhold taxes under this subsection shall for each quarterly period
on or before the last day of the month following the close of ea ch
such quarterly period, p ay over the amount so withheld as taxes to
the Tax Commission, and shall file a retu rn with each such payme nt.
Such return shall be in such form as the Tax Commission shall
prescribe. Every payer required under this subsection to deduct and
withhold a tax from a payee shall, as to the total amounts paid to
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each payee during the calendar year, furnish to such payee, on or
before January 31, of the succeeding year, a written statement
showing the name of the payer, the name of the payee and the payee's
Social Security account number, if any, the total amounts paid
subject to taxation, the total amount deducted a nd withheld as tax
and such other information as the Tax Commission may require . Any
payer who fails to withhold or pay t o the Tax Commission any su ms
herein required to be withheld or paid shall be personally and
individually liable therefor to the State of Oklahoma.
G. Fiduciaries. A tax is hereby imposed upon the Oklahoma
taxable income of every trust and estate at the same rates as are
provided in subsection B or C of this section for single
individuals. Fiduciaries are not al lowed a deduction for a ny
federal income tax paid.
H. Tax rate tables. For all taxable years beginning after
December 31, 1991, in lieu of th e tax imposed by subsection A , B or
C of this section, as applicable there is hereby impos ed for each
taxable year on the taxable income of every individual, whose
taxable income for such taxable year does not exceed the ceiling
amount, a tax determined un der tables, applicable to suc h taxable
year which shall be prescribed by the Tax Commissio n and which shall
be in such form as it determ ines appropriate. In the table so
prescribed, the amounts of the tax shall be computed on the basis of
the rates prescribed by subsection A, B or C of this section. For
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purposes of this subsection, the term "ceiling amount" means, with
respect to any taxpayer, the amount determined by the Tax Commission
for the tax rate category in which such taxpayer falls.
SECTION 2. This act shall become effective January 1, 2023.
Passed the House of Representatives the 22nd day of March, 2022.
Presiding Officer of the House
of Representatives
Passed the Senate the ___ day of __________, 2022.
Presiding Officer of the Senate