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STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
HOUSE BILL 1953 By: McCall
AS INTRODUCED
An Act relating to revenue and taxation; amending 68
O.S. 2021, Section 2355, as amended by Section 45,
Chapter 228, O.S.L. 2022 (68 O.S. Supp. 2022, Section
2355), which relates to income tax rates; modifying
income tax rates; and 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 45, Chapter 228, O.S.L. 2022 (68 O.S. Supp. 2022,
Section 2355), is amended to read as follows:
Section 2355. A. Individuals. For all taxable years beginning
after December 31, 1998 , and before January 1, 2006, a tax is hereby
imposed upon the Oklahoma taxable in come of every resident or
nonresident individual, which 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 individuals filin g
separately not deducting federal income t ax:
(1) 1/2% tax on first $1,000.00 or part t hereof,
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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 $2,300.00 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 remainde r.
b. 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 not deducting federa l 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 $2,500.00 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 part thereof,
(7) 6% tax on next $6,000.00 or part thereof, and
(8) (a) for taxable years beginning afte r 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 remainder.
2. METHOD 2.
a. Single individuals and married individu als filing
separately deducting federal incom e 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 or 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 thereof,
(10) 9% tax on next $3,500.00 or part thereof, and
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(11) 10% tax on the remainder.
b. Married individuals filing jointly and sur viving
spouse to the extent and in the mann er that a
surviving spouse is permitted to fi le a joint 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 there of,
(2) 1% tax on the next $3,000.00 or part thereof,
(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 thereof,
(6) 5% tax on the next $1,600.00 or part thereof,
(7) 6% tax on the next $1,250.00 or part thereo f,
(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 ,000.00 or part 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 Decem ber
31, 2015, for which the determination required pursuant to Sectio ns
4 and 5 of this act is made by the S tate 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 thereo f,
(g) 5.50% tax on the remainder for the 2 008 tax year and
any subsequent tax year unle ss the rate prescribed by
subparagraph (h) of this p aragraph is in effect, and
(h) 5.25% tax on the remainder for the 2009 and su bsequent
tax years. The decrease in the top marginal
individual income tax rate o therwise authorized by
this subparagraph shal l be contingent 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 permitted to
file a joint return under the provisi ons of the Internal Revenue
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Code and heads of households as defined in the Inte rnal 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 thereo f,
(g) 5.50% tax on the remainder for the 2 008 tax year and
any subsequent tax year unle ss the rate prescribed by
subparagraph (h) of this paragraph is in effect, and
(h) 5.25% tax on the remainder for the 2009 and su bsequent
tax years. The decrease in the top marginal
individual income tax rate o therwise authorized by
this subparagraph shal l 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 2024, a tax is hereby imposed upon the Oklahoma
taxable income of every resident or non resident individual, which
tax shall be computed as follows:
1. Single individuals and married individuals filing
separately:
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(a) 0.25% 0.00% tax on first $1,000.00 or part thereof,
(b) 0.75% 0.50% tax on next $1,500.00 or part thereof,
(c) 1.75% 1.50% tax on next $1,250.00 or part thereof,
(d) 2.75% 2.50% tax on next $1,150.00 or part thereof,
(e) 3.75% 3.50% tax on next $2,300.00 or part thereof,
(f) 4.75% 4.50% 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% 0.00% tax on first $2,000.00 or part thereof,
(b) 0.75% 0.50% tax on next $3,000.00 or part thereof,
(c) 1.75% 1.50% tax on next $2,500.00 or part thereof,
(d) 2.75% 2.50% tax on next $2,300.00 or part thereof,
(e) 3.75% 3.50% tax on next $2,400.00 or part thereof,
(f) 4.75% 4.50% tax on the remainder.
No deduction for federal income 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 this section, there shall be imposed on
nonresident aliens, as defi ned in the Internal Revenue Code, a tax
of eight percent (8%) instead of thirty percent (30%) as used in the
Internal Revenue Cod e, with respect to the Oklahoma taxable income
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of such 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 amo unt equal to
eight percent (8%) thereof . Every payer required to deduct and
withhold taxes under this subsection shall for eac h quarterly period
on or before the last day of the month following the close of each
such quarterly period, pay over the amount so withheld as taxes to
the Tax Commission, and shall file a return 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 shal l, as to the total amounts paid to
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 amount paid
subject to taxation, and the total amount deducte d and withheld as
tax and such other in formation as the Tax Commission may require.
Any payer who fails to withhold or pay to the Tax Commission any
sums herein required to be withheld or paid shall be perso nally and
individually liable therefor to the St ate of Oklahoma.
E. Corporations. For all taxable years beginning after
December 31, 2021, a tax is hereby imposed upon the Oklahoma taxable
income of every corporati on doing business within this state or
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deriving income from sources within this state in an amount equal to
four percent (4%) thereof.
There shall be no additional Oklahoma income tax imposed on
accumulated taxable income or on undistributed personal holdi ng
company income as those 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 December 31, 2021, 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 accordanc e with the provisions of the Internal
Revenue Code and 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
four percent (4%) thereof. Every payer required to deduct and
withhold taxes under this subsection shall for eac h quarterly period
on or before the last day of the month fo llowing the close of ea ch
such quarterly period, pay 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 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, o n 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 and withh eld as tax
and such other infor mation as the Tax Commission may require. Any
payer who fails to withhold or pay t o the Tax Commission any sums
herein required to be withheld or paid shall be personal ly and
individually liable therefor to the State of Okla homa.
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 or D of this section for single
individuals. Fiduciaries are not allowed a deduction for any
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 or D of this section, as applicable there is hereby imp osed 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 such taxable
year which shall be prescribed by the Tax Commiss ion and which shall
be in such form as it determines appropriate. In the table so
prescribed, the amounts of the tax shall be computed on the ba sis 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 taxpaye r, the amount determined by the Tax Commission
for the tax rate category in which such taxpay er falls.
SECTION 2. This act shall become effective January 1, 2024.
59-1-7151 MAH 01/18/23