Req. No. 7139 Page 1 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
HOUSE BILL 2021 By: Wolfley
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; modifying income
tax rates with respect to certain amounts of taxable
income; and providing an effective da te.
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, Cha pter 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 i s 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.
Req. No. 7139 Page 2 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
a. Single individuals and married individuals fil ing
separately not 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 $1,300.00 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 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 federal income tax:
(1) 1/2% tax on first $2,000.00 or part thereof,
Req. No. 7139 Page 3 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
(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,
(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 afte r
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 fed eral income tax:
(1) 1/2% tax on first $1,000.0 0 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,
Req. No. 7139 Page 4 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
(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
(11) 10% tax on the remaind er.
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 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 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 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 $6,000.00 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 Sections
Req. No. 7139 Page 5 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
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
resident or nonresident individual, which tax shall be computed as
follows:
1. Single individuals and married in dividuals 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 the reof,
(f) 5% tax on next $1,500.00 or part ther eof,
(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 p aragraph is in effect, and
(h) 5.25% tax on the remainder for the 2 009 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 filin g jointly and surviving spouse to
the extent and in the manner that a surviving spouse is permit ted to
Req. No. 7139 Page 6 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
file a joint return under the provisi ons of the Internal Revenue
Code and heads of households as defined i n 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 the reof,
(f) 5% tax on next $2,800.00 or part ther eof,
(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 2 009 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 2024, a tax is hereby imposed upon the Oklahom a
taxable income of every resident or non resident individual, which
tax shall be computed as follows:
Req. No. 7139 Page 7 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1. Single individuals and married individuals filing
separately:
(a) 0.25% 0.00% tax on first $1,000.00 $7,200.00 or part
thereof,
(b) 0.75% tax on next $1,500.00 or part thereof,
(c) 1.75% tax on next $1,250.00 or part thereof,
(d) 2.75% tax on next $1,150.00 or par t 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 manner that a surviving spouse is permitted to
file a joint return under the pr ovisions 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 $14,400.00 or part
thereof,
(b) 0.75% tax on next $3,000.00 or part thereof,
(c) 1.75% tax on next $2,500.00 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 income taxes paid shall be allowed to
any taxpayer to arrive at taxable income.
Req. No. 7139 Page 8 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
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 Revenue 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
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 amount 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 w ithheld 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, a s 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 deducted 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
Req. No. 7139 Page 9 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
sums herein required t o be withheld or paid shall be perso nally and
individually liable therefor to the State 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 corporation d oing business within this state or
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 holding
company income as those terms are defined in the Internal Rev enue
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 Inte rnal 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 e ach quarterly period
on or before the last day of the month following the close of ea ch
Req. No. 7139 Page 10 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
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 for m 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
each payee during the calendar year, furnish to such payee, o n or
before January 31, of th e 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 information 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 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 of this section, as applicable there is hereby imp osed for each
taxable year on the taxable income of ever y individual, whose
taxable income for such taxable year does not exceed the ceiling
Req. No. 7139 Page 11 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
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 app ropriate. 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
purposes of this subsection, the term "ceiling amount" means, with
respect to any taxpayer, t he amount determined by the T ax Commission
for the tax rate category in which such taxpayer falls.
SECTION 2. This act shall become effective January 1, 2024.
59-1-7139 MAH 01/17/23