Oklahoma House Bill HB2028

Oklahoma 2024 Regular Session

• Introduced: 2/6/23
• Refer: 2/7/23

Caption

Revenue and taxation; income tax; standard deduction; Internal Revenue Code of 1986, as amended; effective date.

Impact

If enacted, this bill would have significant implications for how residents of Oklahoma calculate their state income tax. The proposed changes would simplify the process by synchronizing state deductions with federal deductions, potentially reducing confusion for taxpayers. It could lead to increased compliance due to the straightforward nature of the adjustments, thereby potentially improving state revenue collection as taxpayers find it easier to adhere to the tax laws.

Summary

House Bill 2028 seeks to amend the provisions relating to the computation of Oklahoma taxable income and adjusted gross income. It specifically proposes the adjustment of the standard deduction amount based on the federal Internal Revenue Code of 1986. This amendment is aimed at aligning state tax regulations with federal standards to ease the tax computation process for taxpayers. The substitute defines the income tax years to which these adjustments will apply, ensuring clarity and consistent implementation of the changes across different fiscal periods.

Contention

Despite these benefits, there could be points of contention surrounding the bill, notably among tax policy advocates and fiscal conservatives. Critics may argue that relying on federal standards could lead to greater dependency on federal tax policy, which can change and might not always align with the best interests of Oklahomans. Further, there may be concerns regarding the equity of income tax burdens, especially for lower-income individuals who may not benefit as significantly from standard deductions as higher-income earners.