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STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022)
SENATE BILL 1489 By: Dahm
AS INTRODUCED
An Act relating to taxation; amending 68 O.S. 2 021,
Sections 2355, as amended by Section 1, Chapter 493,
O.S.L. 2021 and 2370, which relate to income tax and
privilege tax; eliminating individual and corporate
income tax for certain years; modifying rate of
corporate income tax for certain year; eliminating
privilege tax for certain years; an d providing an
effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 2355, as
amended by Section 1, Chapter 493, O .S.L. 2021, is amended to read
as follows:
Section 2355. A. Individuals. For all taxable years beginning
after December 31, 1998, and before J anuary 1, 2006, a tax is hereby
imposed upon the Oklahoma taxable income of every resident or
nonresident individual, w hich tax shall be computed at the op tion of
the taxpayer under one of the two followin g methods:
1. METHOD 1.
a. Single individuals and married individuals filing
separately not deducting federal income tax:
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(1) 1/2% tax on first $1,000.00 or part thereof ,
(2) 1% tax on next $1,500.00 or pa rt thereof,
(3) 2% tax on next $1,250.00 or part t hereof,
(4) 3% tax on next $1,150.00 or part thereo f,
(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 beginning 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 on the rem ainder.
b. Married individuals filing jointly and s urviving
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 Co de and
heads of households as defined in the Inter nal Revenue
Code not deducting federal income 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,
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(4) 3% tax on next $2,300.00 or part thereof,
(5) 4% tax on next $2,400.00 or part thereof,
(6) 5% tax on next $2,800.00 or part 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 b efore January 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 individuals fili ng
separately deducting federal income tax:
(1) 1/2% tax on first $1,000.00 or part thereof,
(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 o r part thereof,
(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,
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(10) 9% tax on next $3,500.00 or part thereof, and
(11) 10% tax on the remainder.
b. Married individuals filing jointly 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 income 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 o r part thereof,
(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 par t thereof,
(10) 9% tax on the next $6,000.00 or par t thereof, and
(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 dete rmination 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 filing
separately:
(a) 1/2% tax on first $1,000.00 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 or 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 subsequent
tax years. The decrease in the top marginal
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 and 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 Internal Revenue
Code:
(a) 1/2% tax on first $2,000.00 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 or 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 subsequent
tax years. The decrease in the top marginal
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 beginning on or after
January 1, 2022 taxable year 2022, a tax is hereby imposed upon the
Oklahoma taxable income of every resident or nonresident individual,
which tax shall be computed as follows:
1. Single individuals and married individuals filing
separately:
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(a) 0.25% tax on first $1,000.00 or part thereof,
(b) 0.75% tax on next $1,500.00 o r part thereof,
(c) 1.75% tax on next $1,250.00 or part thereof,
(d) 2.75% tax on next $1,150.00 or part thereof,
(e) 3.75% tax on next $2,300.00 or part thereof,
(f) 4.75% tax on the remainder .
2. Married individuals filing jointly and surviving spouse to
the extent and in the manne r that a surviving spouse is permitted to
file a joint return under the provisions of the Internal Re venue
Code and heads of households as defined in the Internal Revenue
Code:
(a) 0.25% tax on first $2,000.00 or par t thereof,
(b) 0.75% tax on next $3,000.00 or part thereof,
(c) 1.75% tax on next $2,500.0 0 or part thereof,
(d) 2.75% tax on next $2,300.00 or part thereof,
(e) 3.75% tax on next $2,400.00 or part thereof,
(f) 4.75% tax on the remainder .
No deduction for federal in come taxes paid shall be allow ed to
any taxpayer to arrive at taxable income.
D. For taxable year 2023 and subsequent taxa ble years no tax
shall be imposed upon the Oklahoma taxable income of every resident
or nonresident individual .
E. Nonresident aliens. In lieu of the rates set f orth in
subsection A above, for taxable years before 2023, there shall be
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imposed on nonresident alie ns, as defined in the Internal Reve nue
Code, a tax of eight percent (8%) instead of thirty percent (30%) as
used in the Internal Revenue Code, with respect to the Oklahoma
taxable income of such nonresiden t 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 amount equal to
eight percent (8%) thereof for taxable years before 2023. Every
payer required to deduct and withhold taxes under this subsection
shall for each quarterly period on o r before the last day o f the
month following the close of each such quarterly period, pay o ver
the amount so withheld as taxes to the Tax Com mission, and shall
file a return with each such pay ment. 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 fr om a payee
shall, as to the total amounts paid to each payee during the
calendar year, furnish to suc h payee, on or before January 31, of
the succeeding year, a writ ten statement showing t he name of the
payer, the name of the payee and the payee 's Social Security account
number, if any, the total amount p aid subject to taxation, and the
total amount deducted and withheld as tax and such other information
as the Tax Commission may require . Any payer who fails to withhold
or pay to the Tax Commission any sum s herein required to be withheld
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or paid shall be personally and individually liable therefor to the
State of Oklahoma.
E. F. Corporations.
1. For all taxable years beg inning after December 31 , 1989
taxable years 1990 through 2021 , a tax is hereby impose d upon the
Oklahoma taxable income of every corpor ation doing business within
this state or deriving income from sources within this state in an
amount equal to six percent (6%) thereof ;
2. For taxable year 2022, a tax is hereby imposed upon the
Oklahoma taxable income of every corporation doing business within
this state or deriving income from sources within this state in an
amount equal to four percent (4%) thereof; and
3. For taxable year 2023 and subsequent taxable years no tax
shall be imposed upon the Oklahoma taxable income of every
corporation doing business within t his state or deriving income from
sources within this state .
There shall be no additional Oklahoma i ncome tax imposed on
accumulated taxable income or on undistributed personal holding
company income as those terms are defined in the Internal Revenue
Code.
F. G. Certain foreign corpo rations. In lieu of the tax imposed
in the first paragraph of subsection D E of this section,:
1. for all taxable years beginning after December 31, 1989 For
taxable years 1990 through 2021 , there shall be imposed on foreign
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corporations, as defined in t he 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 fro m sources within
Oklahoma, in accordance with the provisions of the Internal Revenue
Code and the Oklahoma Income Tax Act ;
2. For taxable year 2022, there shall be imposed on foreign
corporations, as defined in the Internal Revenue Code, a tax of four
percent (4%) 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 Internal Revenue
Code and the Oklahoma Income Tax Act .
3. Every payer of amounts covered by this subsection shall
deduct and withhold from such amounts paid each payee an amount
equal to:
a. six percent (6%) thereof for taxable years 1990
through 2021, and
b. four percent (4%) thereof for taxable year 2022 .
Every payer required to deduct and withhold taxes under this
subsection shall for each quarterly period on or before the l ast 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 return with each such payment . Such return shall be in
such form as the Tax Commission shall prescribe . Every payer
required under this subsection to deduct and withhold a ta x from a
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payee shall, as to the total amounts paid to each payee during the
calendar year, furnish to such payee, on or before Janua ry 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, th e
total amount deducted and withheld as tax and su ch other information
as the Tax Commission may requ ire. Any payer who fails to withhold
or pay to the Tax Commission any su ms herein required to be withheld
or paid shall be personally and individually lia ble therefor to the
State of Oklahoma.
G. H. 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, or D of this section for single
individuals. Fiduciaries are not allowed a deduction for any
federal income tax paid.
H. I. 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, or D of this section, as applicable there is hereby impose d for
each taxable year on the taxable income of e very individual, whose
taxable income for such taxa ble 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 Commission and which shall
be in such form as it determines appropriate. In the table so
prescribed, the amoun ts of the tax shall be computed on the basis of
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the rates prescribed by subsection A, B, or C, or D of this section.
For purposes of this subsection, the term "ceiling amount" means,
with respect to any t axpayer, the amount determined by the Tax
Commission for the tax rate category in which such taxpayer falls.
SECTION 2. AMENDATORY 68 O.S. 2021, Section 2370, is
amended to read as follows:
Section 2370. A. For taxable years beginning after December
31, 2021 year 2022, for the privilege of doing business within this
state, every state banking association, national banking associat ion
and credit union organized under the laws of th is state, located or
doing business within the lim its of the State of Oklahoma shall
annually pay to this state a privilege tax at the rate o f four
percent (4%) of the amount of the taxable income as provi ded in this
section. For taxable year 2023 and sub sequent taxable years, no
privilege tax shall be levied.
B. 1. The privilege tax levied by this sec tion shall be in
addition to the Busin ess Activity Tax levied in Section 1218 of this
title and the franchise tax levied in Article 12 of this title and
in lieu of the tax levied by Section 2 355 of this title and in lieu
of all taxes levied by the State of Oklahoma, or any subdivision
thereof, upon the shares of stock or personal property of any
banking association or credit union subject to taxation under t his
section.
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2. Nothing in this section shall be construed to exempt the
real property of any bankin g associations or credit unions from
taxation to the same extent, according to its value, as other real
property is taxed. Nothing herein shall be constru ed to exempt an
association from pay ment of any fee or tax authorized or levied
pursuant to the banki ng laws.
3. Personal property which is subject to a lease agreement
between a bank or credit union, as lessor, and a nonbanking business
entity or individual, as lessee, is not exempt from p ersonal
property ad valorem taxation. Provided further, that it shall be
the duty of the lessee of s uch personal property to return sworn
lists or schedules of their taxable property within each county to
the county assessor of such county as provided in Sections 2433 and
2434 of this title.
C. Any tax levied under th is section shall accrue on the last
day of the taxable year and be payable as provided in Section 2375
of this title. The accrual of such tax for the firs t taxable year
to which this act app lies, shall apply notwithstanding the prior
accrual of a tax in t he same taxable year based upon the net income
of the next preceding taxable year; provided, however, any
additional deduction enuring to the benefit of th e taxpayer shall be
deducted in accordance with the optional transitional deduction
procedures in Section 2354 of this title.
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D. The basis of the tax shall be United States taxable income
as defined in paragraph 10 of Section 2353 of this title and any
adjustments thereto under the provisio ns of Section 2358 of this
title with the following adjustments:
1. There shall be deducted all i nterest income on obligations
of the United States government and agencies thereof not otherwise
exempted and all interest income on obligations of the State of
Oklahoma or political subdivisions thereof, including public t rust
authorities, not otherwise e xempted under the laws of this state;
and
2. Expense deductions claimed in arriving at taxable income
under paragraph 10 of Section 2353 of this title shall be reduced by
an amount equal to fifty percent (50%) of excluded interest income
on obligations of the United States government or agencies thereof
and obligations of the State of Oklahoma or political subdivisions
thereof.
E. 1. Except as otherwise prov ided in paragraph 2 of this
subsection, before January 1, 2017, t here shall be allowed a credit
against the tax levied in subsection A of this section in an amount
equal to the amount of taxable income received by a part icipating
financial institution as d efined in Section 90.2 of Title 62 of the
Oklahoma Statutes pursu ant to a loan made under the Ru ral Economic
Development Loan Act . Such credit shall be limited each year to
five percent (5%) of the amount of annual payr oll certified by the
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Oklahoma Rural Economic Development Loan Program Review Board
pursuant to the provisions of paragraph 3 of subs ection B of Section
90.4 of Title 62 of the Oklahoma Statutes with respect to the loan
made by the participating financial i nstitution and may be claimed
for any number of years necessary until the amount of total credits
claimed is equal to the total amou nt of taxable income received by
the participating financial institution pursuant to the loan . Any
credit allowed but not u sed in a taxable year may be carried forward
for a period not to exceed five (5) taxable years . In no event
shall a credit allowed pursuant to the provisions of this subsection
be transferable or refundable.
2. No credit otherwise authorized by the provi sions of this
subsection may be clai med for any event, transaction, investment,
expenditure or other act occurring on or after July 1, 2010, for
which the credit would otherwise be allowable . The provisions of
this paragraph shall cease to be operative on July 1, 2012.
Beginning July 1, 20 12, the credit authorized by this subsection may
be claimed for any event, transaction, investm ent, expenditure or
other act occurring on or after July 1, 2012, according to the
provisions of this subsection.
SECTION 3. This act shall become effective N ovember 1, 2022.
58-2-3140 QD 1/20/2022 8:03:54 AM