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STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
HOUSE BILL 2087 By: Echols
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 taxation of
individuals and entities; reducing certain income tax
rates with respect to designa ted tax year; providing
for further reduction of c ertain income tax rates
based upon determination of revenu e growth by the
State Board of Equalization; prescribing procedures
for determination of revenue growth ; providing for
implementation of further income tax rate reduction;
providing for codifica tion; 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 income of every resident or
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nonresident individual, w hich 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 filing
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 th ereof,
(6) 5% tax on next $1,50 0.00 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 o r after
January 1, 2002, and be fore January 1, 2004,
7% tax on the remainder, and
(c) for taxable years beginni ng on or after
January 1, 2004, 6.65% tax on the remainder.
b. Married individuals filing jointly and surviving
spouse to the extent and in the m anner that a
surviving spouse is permitted to file a joint return
under the provisions of the Internal Revenue Code and
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heads of households as defined in t he Internal Revenue
Code not deducting federal income tax:
(1) 1/2% tax on first $2,000.00 or part th ereof,
(2) 1% tax on next $3,00 0.00 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 there of,
(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 a fter
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 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,
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(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
(11) 10% tax on the remainder.
b. Married individuals filing jointly and surviving
spouse to the extent and in the manner th at 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 Intern al 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 $3,000.0 0 or part thereof,
(10) 9% tax on the next $6,000.00 or part thereof, and
(11) 10% tax on the remaind er.
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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 determination required pursu ant to Sections
4 and 5 of this act is made by the State Board of Equ alization, 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:
(a) 1/2% tax on first $1,000.00 or pa rt 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 t ax 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 th e 2009 and subsequent
tax years. The decrease in the top marginal
individual income tax rate otherw ise authorized by
this subparagraph shall be c ontingent upon the
determination required to be made by the State Board
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of Equalization pursuant to Section 23 55.1A of this
title.
2. Married individuals filing jointly and survi ving spouse to
the extent and in the manner that a surviving spouse is permit ted to
file a joint return under t he provisions of the Internal Revenue
Code and heads of households as define d in the Internal Revenue
Code:
(a) 1/2% tax on first $2,000.00 or pa rt 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 t ax 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 th e 2009 and subsequent
tax years. The decrease in the top marginal
individual income tax rate otherw ise authorized by
this subparagraph shall be contingent upon the
determination required to be made by the State Board
of Equalization pursuant to Section 23 55.1A of this
title.
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C. Individuals. For Except as otherwise provided by subsection
D or subsection E of this section, for all taxable years beginnin g
on or after January 1, 2022, and ending not later than December 31 ,
2023, a tax is hereby imposed upon the Oklahom a taxable income of
every resident or no nresident individual, which tax shall be
computed as follows:
1. Single individuals and married individuals filing
separately:
(a) 0.25% tax on first $1,000.00 or part ther eof,
(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 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 manner that a surviving spouse is permitted to
file a joint return under the provisions of the In ternal Revenue
Code and heads of households as defined in the Internal Revenue
Code:
(a) 0.25% tax on first $2,000.00 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,
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(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.
D. Individuals. Except as otherwise provide by subsection E of
this section, for all taxable years beginning on or after January 1,
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:
1. Single individuals and married individuals filing
separately:
(a) 0.00% tax on first $1,000.00 or part thereo f,
(b) 0.50% tax on next $1,500.00 or part thereof,
(c) 1.50% tax on next $1,250.00 or part thereof,
(d) 2.50% tax on next $1,150.00 or part thereof,
(e) 3.50% tax on next $2,300.00 or part thereof,
(f) 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) 0.00% tax on first $2,000.00 or part thereof,
(b) 0.50% tax on next $3,000.00 or part thereof,
(c) 1.50% tax on next $2,500.00 or part thereof,
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(d) 2.50% tax on next $2,300.00 or part thereof,
(e) 3.50% tax on next $2,400.00 or part thereof,
(f) 4.50% tax on the remainder.
No deduction for federal income taxes paid shall be allowed to
any taxpayer to arrive at taxable income.
E. Individuals. Contingent upon the determin ation by the State
Board of Equalization as provided in Section 2 of this act, for all
taxable years beginning on or after January 1, 2025, a tax is hereby
imposed upon the Oklahom a taxable income of every resident or
nonresident individual, which tax shall be computed as follows:
1. Single individuals and married individuals filing
separately:
(a) 0.00% tax on first $1,000.00 or part thereo f,
(b) 0.25% tax on next $1,500.00 or part thereof,
(c) 1.25% tax on next $1,250.00 or part thereof,
(d) 2.25% tax on next $1,150.00 or part thereof,
(e) 3.25% tax on next $2,300.00 or part thereof,
(f) 4.25% 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 th e Internal Revenue
Code:
(a) 0.00% tax on first $2,000.00 or part thereof,
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(b) 0.25% tax on next $3,000.00 or part thereof,
(c) 1.25% tax on next $2,500.00 or part thereof,
(d) 2.25% tax on next $2,300.00 or part thereof,
(e) 3.25% tax on next $2,400.00 or part thereof,
(f) 4.25% tax on the remainder.
No deduction for federal income taxes paid shall be allowed to
any taxpayer to arrive at taxable income.
F. 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 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 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, 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
sums herein required to be withheld or paid shall be perso nally and
individually liable therefor to the State of Oklahoma.
E. G. Corporations. For all taxable years beginning after
December 31, 2021, 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.
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 Revenue
Code.
F. H. Certain foreign corporatio ns. In lieu of the tax
imposed in the first paragraph of subsection D F 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
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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 each 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
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 amounts paid
subject to taxation, the total amount deducted and wit hheld 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 Ok lahoma.
G. I. Fiduciaries. A tax is hereby imposed upon the Oklahoma
taxable income of every trust and estate at the same rates as are
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provided in subsection B, or C, D or E of this section for single
individuals. Fiduciaries are not allowed a deduction for any
federal income tax paid.
H. J. 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, D or E 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, D or E of this
section. For purposes of this subsection, the term "ceiling amount"
means, with respect to any taxpayer, the amount determined by the
Tax Commission for the tax rate category in which such taxpay er
SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 2355.1J of Title 68, unless
there is created a duplication in numbering, reads as follo ws:
Beginning with the February, 2025, meeting of the State Board of
Equalization, and at each successive F ebruary meeting of the State
Board of Equalization that may require it, the State Board of
Equalization shall make a finding regarding the ninety-five percent
(95%) appropriation authority amount , as provided by Section 23 of
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Article X of the Oklahoma Constitution , certified at the immediately
preceding February meeting of t he State Board of Equalization
compared to the same ninety-five percent (95%) appropriation
authority amount determined at the February meeting at which the
finding required by this section is made. If there is an increase
of five percent (5%) or more between the two appropriation authority
amounts, the State Board of Equalization shall make a specific
finding of this determination and include it in its report to the
Governor, the Speaker of the Oklahoma House of Representatives, the
President Pro Tempore of the Oklahoma State Senate, and to the
Oklahoma Tax Commission. For the individual income tax year which
begins on the January 1 date immediately following the calendar year
during which the computation required by this section is made and
which results in the finding of a five percent (5%) or greater
increase as described by this section , there shall be implemented a
reduction of 0.25 percentage points in each income tax bracket for
persons subject to Oklahoma income tax in the manner speci fied in
Section 2355 of Title 68 of the Oklahoma Statutes which is dependent
on the finding by the State Board of Equalization required by this
section.
SECTION 3. This act shall become effective November 1, 2023.
59-1-6061 MAH 01/11/23