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Oklahoma House Bill HB2087

Oklahoma 2024 Regular Session

Oklahoma House Bill HB2087 Compare Versions

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2828 STATE OF OKLAHOMA
2929
3030 1st Session of the 59th Legislature (2023)
3131
3232 HOUSE BILL 2087 By: Echols
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3838 AS INTRODUCED
3939
4040 An Act relating to revenue and taxation; amending 68
4141 O.S. 2021, Section 2355, as amended by Section 45,
4242 Chapter 228, O.S.L. 2022 (68 O.S. Supp. 2022, Section
4343 2355), which relates to income taxation of
4444 individuals and entities; reducing certain income tax
4545 rates with respect to designa ted tax year; providing
4646 for further reduction of c ertain income tax rates
4747 based upon determination of revenu e growth by the
4848 State Board of Equalization; prescribing procedures
4949 for determination of revenue growth ; providing for
5050 implementation of further income tax rate reduction;
5151 providing for codifica tion; and providing an
5252 effective date.
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6262 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
6363 SECTION 1. AMENDATORY 68 O.S. 2021, Section 2355, as
6464 amended by Section 45, Chapter 228, O.S.L. 2022 (68 O.S. Supp. 2022,
6565 Section 2355), is amended to read as follows:
6666 Section 2355. A. Individuals. For all taxable years beginning
6767 after December 31, 1998, and before January 1, 2006, a tax is hereby
6868 imposed upon the Oklahoma taxable income of every resident or
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9595 nonresident individual, w hich tax shall be computed at the option of
9696 the taxpayer under one of the two following methods:
9797 1. METHOD 1.
9898 a. Single individuals and married individuals filing
9999 separately not deducting federal income tax:
100100 (1) 1/2% tax on first $1,000.00 or part thereof ,
101101 (2) 1% tax on next $1,500.00 or part thereof,
102102 (3) 2% tax on next $1,250.00 or part thereof,
103103 (4) 3% tax on next $1,150.00 or part thereof,
104104 (5) 4% tax on next $1,300.00 or part th ereof,
105105 (6) 5% tax on next $1,50 0.00 or part thereof,
106106 (7) 6% tax on next $2,30 0.00 or part thereof, and
107107 (8) (a) for taxable years beginning after December
108108 31, 1998, and before January 1, 2002, 6.75%
109109 tax on the remainder,
110110 (b) for taxable years beginning on o r after
111111 January 1, 2002, and be fore January 1, 2004,
112112 7% tax on the remainder, and
113113 (c) for taxable years beginni ng on or after
114114 January 1, 2004, 6.65% tax on the remainder.
115115 b. Married individuals filing jointly and surviving
116116 spouse to the extent and in the m anner that a
117117 surviving spouse is permitted to file a joint return
118118 under the provisions of the Internal Revenue Code and
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145145 heads of households as defined in t he Internal Revenue
146146 Code not deducting federal income tax:
147147 (1) 1/2% tax on first $2,000.00 or part th ereof,
148148 (2) 1% tax on next $3,00 0.00 or part thereof,
149149 (3) 2% tax on next $2,50 0.00 or part thereof,
150150 (4) 3% tax on next $2,300.00 or part thereof,
151151 (5) 4% tax on next $2,400.00 or part there of,
152152 (6) 5% tax on next $2,800.00 or part thereof,
153153 (7) 6% tax on next $6,000.00 or part thereof, and
154154 (8) (a) for taxable years beginning after Dece mber
155155 31, 1998, and before January 1, 2002, 6.75%
156156 tax on the remainder,
157157 (b) for taxable years beginning on or a fter
158158 January 1, 2002, and before January 1, 2004,
159159 7% tax on the remainder, and
160160 (c) for taxable years beginning on or after
161161 January 1, 2004, 6.65% tax on the remainder.
162162 2. METHOD 2.
163163 a. Single individuals and married individu als filing
164164 separately deducting federal income tax:
165165 (1) 1/2% tax on first $1,000.00 or part thereof,
166166 (2) 1% tax on next $1,500.00 or part thereof,
167167 (3) 2% tax on next $1,250.00 or part thereof,
168168 (4) 3% tax on next $1,150.00 or part thereof,
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195195 (5) 4% tax on next $1,200.00 or part thereof,
196196 (6) 5% tax on next $1,400.00 or part thereof,
197197 (7) 6% tax on next $1,500. 00 or part thereof,
198198 (8) 7% tax on next $1,500.00 or part thereof,
199199 (9) 8% tax on next $2,000.00 or part thereof,
200200 (10) 9% tax on next $3,500.00 or part thereof, and
201201 (11) 10% tax on the remainder.
202202 b. Married individuals filing jointly and surviving
203203 spouse to the extent and in the manner th at a
204204 surviving spouse is permitted to file a j oint return
205205 under the provisions of the Internal Revenue Code and
206206 heads of households as defined in the Intern al Revenue
207207 Code deducting federal income tax:
208208 (1) 1/2% tax on the first $2,000.00 or part thereof,
209209 (2) 1% tax on the next $3,000.00 or part thereo f,
210210 (3) 2% tax on the next $2,500.00 or part thereof,
211211 (4) 3% tax on the next $1,400.00 or part thereof,
212212 (5) 4% tax on the next $1,500.00 or part thereof,
213213 (6) 5% tax on the next $1, 600.00 or part thereof,
214214 (7) 6% tax on the next $1,250.00 or part thereof,
215215 (8) 7% tax on the next $1,750.00 or part thereof,
216216 (9) 8% tax on the next $3,000.0 0 or part thereof,
217217 (10) 9% tax on the next $6,000.00 or part thereof, and
218218 (11) 10% tax on the remaind er.
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245245 B. Individuals. For all taxable years beginning on or after
246246 January 1, 2008, and ending any tax year which begins after December
247247 31, 2015, for which the determination required pursu ant to Sections
248248 4 and 5 of this act is made by the State Board of Equ alization, a
249249 tax is hereby imposed upon the Oklahoma taxable income of every
250250 resident or nonresident individual, which tax shall be computed as
251251 follows:
252252 1. Single individuals and married individuals filing
253253 separately:
254254 (a) 1/2% tax on first $1,000.00 or pa rt thereof,
255255 (b) 1% tax on next $1,500.00 or part thereof,
256256 (c) 2% tax on next $1,250.00 or part thereof,
257257 (d) 3% tax on next $1,150.00 or part thereof,
258258 (e) 4% tax on next $2,300.00 or part thereof,
259259 (f) 5% tax on next $1,500.00 or part thereof,
260260 (g) 5.50% tax on the remainder for the 2008 t ax year and
261261 any subsequent tax year unless the rate prescribed by
262262 subparagraph (h) of this paragraph is in effect, and
263263 (h) 5.25% tax on the remainder for th e 2009 and subsequent
264264 tax years. The decrease in the top marginal
265265 individual income tax rate otherw ise authorized by
266266 this subparagraph shall be c ontingent upon the
267267 determination required to be made by the State Board
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294294 of Equalization pursuant to Section 23 55.1A of this
295295 title.
296296 2. Married individuals filing jointly and survi ving spouse to
297297 the extent and in the manner that a surviving spouse is permit ted to
298298 file a joint return under t he provisions of the Internal Revenue
299299 Code and heads of households as define d in the Internal Revenue
300300 Code:
301301 (a) 1/2% tax on first $2,000.00 or pa rt thereof,
302302 (b) 1% tax on next $3,000.00 or part thereof,
303303 (c) 2% tax on next $2,500.00 or part thereof,
304304 (d) 3% tax on next $2,300.00 or part thereof,
305305 (e) 4% tax on next $2,400.00 or part thereof,
306306 (f) 5% tax on next $2,800.00 or part thereof,
307307 (g) 5.50% tax on the remainder for the 2008 t ax year and
308308 any subsequent tax year unless the rate prescribed by
309309 subparagraph (h) of this paragraph is in effect, and
310310 (h) 5.25% tax on the remainder for th e 2009 and subsequent
311311 tax years. The decrease in the top marginal
312312 individual income tax rate otherw ise authorized by
313313 this subparagraph shall be contingent upon the
314314 determination required to be made by the State Board
315315 of Equalization pursuant to Section 23 55.1A of this
316316 title.
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343343 C. Individuals. For Except as otherwise provided by subsection
344344 D or subsection E of this section, for all taxable years beginnin g
345345 on or after January 1, 2022, and ending not later than December 31 ,
346346 2023, a tax is hereby imposed upon the Oklahom a taxable income of
347347 every resident or no nresident individual, which tax shall be
348348 computed as follows:
349349 1. Single individuals and married individuals filing
350350 separately:
351351 (a) 0.25% tax on first $1,000.00 or part ther eof,
352352 (b) 0.75% tax on next $1,500.00 or part thereof,
353353 (c) 1.75% tax on next $1,250.00 or part thereof,
354354 (d) 2.75% tax on next $1,150.00 or part thereof,
355355 (e) 3.75% tax on next $2,300.00 or part thereof,
356356 (f) 4.75% tax on the remainder.
357357 2. Married individuals filing jointly and surviving spouse to
358358 the extent and in the manner that a surviving spouse is permitted to
359359 file a joint return under the provisions of the In ternal Revenue
360360 Code and heads of households as defined in the Internal Revenue
361361 Code:
362362 (a) 0.25% tax on first $2,000.00 or part thereof,
363363 (b) 0.75% tax on next $3,000.00 or part thereof,
364364 (c) 1.75% tax on next $2,500.00 or part thereof,
365365 (d) 2.75% tax on next $2,300.00 or part thereof,
366366 (e) 3.75% tax on next $2,400.00 or part thereof,
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393393 (f) 4.75% tax on the remainder.
394394 No deduction for federal income taxes paid shall be allowed to
395395 any taxpayer to arrive at taxable income.
396396 D. Individuals. Except as otherwise provide by subsection E of
397397 this section, for all taxable years beginning on or after January 1,
398398 2024, a tax is hereby imposed upon the Oklahom a taxable income of
399399 every resident or non resident individual, which tax shall be
400400 computed as follows:
401401 1. Single individuals and married individuals filing
402402 separately:
403403 (a) 0.00% tax on first $1,000.00 or part thereo f,
404404 (b) 0.50% tax on next $1,500.00 or part thereof,
405405 (c) 1.50% tax on next $1,250.00 or part thereof,
406406 (d) 2.50% tax on next $1,150.00 or part thereof,
407407 (e) 3.50% tax on next $2,300.00 or part thereof,
408408 (f) 4.50% tax on the remainder.
409409 2. Married individuals filing jointly and surviving spouse to
410410 the extent and in the manner that a surviving spouse is permitted to
411411 file a joint return under the provisions of the Internal Revenue
412412 Code and heads of households as defined in the Internal Revenue
413413 Code:
414414 (a) 0.00% tax on first $2,000.00 or part thereof,
415415 (b) 0.50% tax on next $3,000.00 or part thereof,
416416 (c) 1.50% tax on next $2,500.00 or part thereof,
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443443 (d) 2.50% tax on next $2,300.00 or part thereof,
444444 (e) 3.50% tax on next $2,400.00 or part thereof,
445445 (f) 4.50% tax on the remainder.
446446 No deduction for federal income taxes paid shall be allowed to
447447 any taxpayer to arrive at taxable income.
448448 E. Individuals. Contingent upon the determin ation by the State
449449 Board of Equalization as provided in Section 2 of this act, for all
450450 taxable years beginning on or after January 1, 2025, a tax is hereby
451451 imposed upon the Oklahom a taxable income of every resident or
452452 nonresident individual, which tax shall be computed as follows:
453453 1. Single individuals and married individuals filing
454454 separately:
455455 (a) 0.00% tax on first $1,000.00 or part thereo f,
456456 (b) 0.25% tax on next $1,500.00 or part thereof,
457457 (c) 1.25% tax on next $1,250.00 or part thereof,
458458 (d) 2.25% tax on next $1,150.00 or part thereof,
459459 (e) 3.25% tax on next $2,300.00 or part thereof,
460460 (f) 4.25% tax on the remainder.
461461 2. Married individuals filing jointly and surviving spouse to
462462 the extent and in the manner that a surviving spouse is permitted to
463463 file a joint return under the provisions of the Internal Revenue
464464 Code and heads of households as defined in th e Internal Revenue
465465 Code:
466466 (a) 0.00% tax on first $2,000.00 or part thereof,
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493493 (b) 0.25% tax on next $3,000.00 or part thereof,
494494 (c) 1.25% tax on next $2,500.00 or part thereof,
495495 (d) 2.25% tax on next $2,300.00 or part thereof,
496496 (e) 3.25% tax on next $2,400.00 or part thereof,
497497 (f) 4.25% tax on the remainder.
498498 No deduction for federal income taxes paid shall be allowed to
499499 any taxpayer to arrive at taxable income.
500500 F. Nonresident aliens. In lieu of the rates set forth in
501501 subsection A above this section, there shall be imposed on
502502 nonresident aliens, as defi ned in the Internal Revenue Code, a tax
503503 of eight percent (8%) instead of thirty percent (30%) as used in the
504504 Internal Revenue Code, with respect to the Oklahoma taxable income
505505 of such nonresident aliens as determined under the provision of the
506506 Oklahoma Income Tax Act.
507507 Every payer of amounts covered by this subsection shall deduct
508508 and withhold from such amounts paid each payee an amount equal to
509509 eight percent (8%) thereof . Every payer required to deduct and
510510 withhold taxes under this subsection shall for eac h quarterly period
511511 on or before the last day of the month following the close of each
512512 such quarterly period, pay over the amount so withheld as taxes to
513513 the Tax Commission, and shall file a return with each such payment.
514514 Such return shall be in such form as the Tax Commission shall
515515 prescribe. Every payer required under this subsection to deduct and
516516 withhold a tax from a payee shall, as to the total amounts paid to
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543543 each payee during the calendar year, furnish to such payee, on or
544544 before January 31, of the succeeding year, a written statement
545545 showing the name of the payer, the name of the payee and the payee 's
546546 Social Security account number, if any, the total amount paid
547547 subject to taxation, and the total amount deducted and withheld as
548548 tax and such other in formation as the Tax Commission may require.
549549 Any payer who fails to withhold or pay to the Tax Commission any
550550 sums herein required to be withheld or paid shall be perso nally and
551551 individually liable therefor to the State of Oklahoma.
552552 E. G. Corporations. For all taxable years beginning after
553553 December 31, 2021, a tax is hereby imposed upon the Oklahoma taxable
554554 income of every corporation doing business within this state or
555555 deriving income from sources within this state in an amount equal to
556556 four percent (4%) thereof.
557557 There shall be no additional Oklahoma income tax imposed on
558558 accumulated taxable income or on undistributed personal holding
559559 company income as those terms are defined in the Internal Revenue
560560 Code.
561561 F. H. Certain foreign corporatio ns. In lieu of the tax
562562 imposed in the first paragraph of subsection D F of this section,
563563 for all taxable years beginning after December 31, 2021, there shall
564564 be imposed on foreign corporations, as defined in the Internal
565565 Revenue Code, a tax of four percent (4%) instead of thirty percent
566566 (30%) as used in the Internal Revenue Code, where such income is
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593593 received from sources within Oklahoma, in accordanc e with the
594594 provisions of the Internal Revenue Code and the Oklahoma Income Tax
595595 Act.
596596 Every payer of amounts covered by this subsection shall deduct
597597 and withhold from such amounts paid each payee an amount equal to
598598 four percent (4%) thereof. Every payer required to deduct and
599599 withhold taxes under this subsection shall for each quarterly period
600600 on or before the last day of the month fo llowing the close of ea ch
601601 such quarterly period, pay over the amount so withheld as taxes to
602602 the Tax Commission, and shall file a return with each such payment .
603603 Such return shall be in such form as the Tax Commission shall
604604 prescribe. Every payer required under this subsection to deduct and
605605 withhold a tax from a payee shall, as to the total amounts paid to
606606 each payee during the calendar year, furnish to such payee, on or
607607 before January 31, of the succeeding year, a written statement
608608 showing the name of the payer, the name of the payee and the payee's
609609 Social Security account number, if any, the total amounts paid
610610 subject to taxation, the total amount deducted and wit hheld as tax
611611 and such other information as the Tax Commission may require . Any
612612 payer who fails to withhold or pay t o the Tax Commission any sums
613613 herein required to be withheld or paid shall be personal ly and
614614 individually liable therefor to the State of Ok lahoma.
615615 G. I. Fiduciaries. A tax is hereby imposed upon the Oklahoma
616616 taxable income of every trust and estate at the same rates as are
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643643 provided in subsection B, or C, D or E of this section for single
644644 individuals. Fiduciaries are not allowed a deduction for any
645645 federal income tax paid.
646646 H. J. Tax rate tables. For all taxable years beginning after
647647 December 31, 1991, in lieu of th e tax imposed by subsection A, B, or
648648 C, D or E of this section, as applicable there is hereby imp osed for
649649 each taxable year on the taxable income of every individual, whose
650650 taxable income for such taxable year does not exceed the ceiling
651651 amount, a tax determined un der tables, applicable to such taxable
652652 year which shall be prescribed by the Tax Commiss ion and which shall
653653 be in such form as it determines appropriate. In the table so
654654 prescribed, the amounts of the tax shall be computed on the ba sis of
655655 the rates prescribed by subsection A, B, or C, D or E of this
656656 section. For purposes of this subsection, the term "ceiling amount"
657657 means, with respect to any taxpayer, the amount determined by the
658658 Tax Commission for the tax rate category in which such taxpay er
659659 SECTION 2. NEW LAW A new section of law to be codified
660660 in the Oklahoma Statutes as Section 2355.1J of Title 68, unless
661661 there is created a duplication in numbering, reads as follo ws:
662662 Beginning with the February, 2025, meeting of the State Board of
663663 Equalization, and at each successive F ebruary meeting of the State
664664 Board of Equalization that may require it, the State Board of
665665 Equalization shall make a finding regarding the ninety-five percent
666666 (95%) appropriation authority amount , as provided by Section 23 of
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693693 Article X of the Oklahoma Constitution , certified at the immediately
694694 preceding February meeting of t he State Board of Equalization
695695 compared to the same ninety-five percent (95%) appropriation
696696 authority amount determined at the February meeting at which the
697697 finding required by this section is made. If there is an increase
698698 of five percent (5%) or more between the two appropriation authority
699699 amounts, the State Board of Equalization shall make a specific
700700 finding of this determination and include it in its report to the
701701 Governor, the Speaker of the Oklahoma House of Representatives, the
702702 President Pro Tempore of the Oklahoma State Senate, and to the
703703 Oklahoma Tax Commission. For the individual income tax year which
704704 begins on the January 1 date immediately following the calendar year
705705 during which the computation required by this section is made and
706706 which results in the finding of a five percent (5%) or greater
707707 increase as described by this section , there shall be implemented a
708708 reduction of 0.25 percentage points in each income tax bracket for
709709 persons subject to Oklahoma income tax in the manner speci fied in
710710 Section 2355 of Title 68 of the Oklahoma Statutes which is dependent
711711 on the finding by the State Board of Equalization required by this
712712 section.
713713 SECTION 3. This act shall become effective November 1, 2023.
714714
715715 59-1-6061 MAH 01/11/23