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STATE OF OKLAHOMA
2nd Session of the 59th Legislature (2024)
SENATE BILL 1228 By: Bergstrom
AS INTRODUCED
An Act relating to taxation; amending 62 O.S. 2021,
Section 34.103, which relates to the duties of the
State Board of Equalizat ion; requiring certification
of certain collections in certain fiscal years;
amending 68 O.S. 2021, Section 2355, as amended by
Section 1, Chapter 27, 1st Extraordina ry Session,
O.S.L. 2023 (68 O.S. Supp. 2023, S ection 2355), which
relates to income tax ; modifying tax rates for
certain tax years; requiring the reduction of tax
rates for certain tax years upon certain
certification by the State Board of Equalization;
prohibiting reduction of certain rates upon
declaration of revenue failure; updating statutory
language and references; and declaring an emergency .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 62 O.S. 2021, Section 34.103, is
amended to read as follows:
Section 34.103. A. In addition to any other duties prescribed
by law, at the meeting required by Section 23 of Article X of the
Oklahoma Constitution to be held in February of 2017, and at the
February meeting of the State Board of Equalization each year
thereafter, the State Board of Equalization shall cer tify:
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1. For the revenue derived from the tax levied on oil pursuant
to Section 1001 of Title 68 of the Oklahoma Statutes, which would
otherwise be apportioned to the General Revenue Fund, the average
annual amount of actual revenue apportioned to the General Revenue
Fund for the immedia tely preceding five (5) complete fiscal years.
For any year after the first year during which a deposit to the
Revenue Stabilization Fund is made, the amount of any deposit to the
Revenue Stabilization Fund shall be disreg arded for purposes of this
paragraph and the average shall be computed using the total amount
of revenue that was available to be apportioned to the General
Revenue Fund for the appli cable period of time;
2. For the revenue derived from the tax levied on natural gas
pursuant to Section 1 001 of Title 68 of the Oklahoma Statutes, which
would otherwise be apportioned to the General Revenue Fund, the
average annual amount of actual revenue apportioned to the General
Revenue Fund for the previous five (5) fisca l years. For any year
after the first year during which a deposit to the Revenue
Stabilization Fund is made, the amount of any deposit to the Revenue
Stabilization Fund shall be disr egarded for purposes of this
paragraph and the ave rage shall be computed using the total amount
of revenue that was available to be apportioned to the General
Revenue Fund for the applicable period of time; and
3. For the revenue derived from the corporate income tax levied
pursuant to Section 2355 of Ti tle 68 the Oklahoma Sta tutes, which
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would otherwise be a pportioned to the General Revenue Fun d, the
average annual amount of actual revenue apportioned to the General
Revenue Fund for the previous five (5) fiscal years. For any year
after the first year d uring which a deposit to the Revenue
Stabilization Fund is made, the amount of any deposit to the Revenue
Stabilization Fund shall be disregarded for purposes of this
paragraph and the average shall be computed using the total amount
of revenue that was av ailable to be apportion ed to the General
Revenue Fund for the applicable period of time.
B. If the amount of revenue available for apportionment to the
General Revenue Fund for the next ensuing fiscal year exceeds the
amounts certified pursuant to paragra ph 1 or 2 of subsection A of
this section, with respect to each such revenue so urce, one hundred
percent (100%) of such amount in excess of the separately computed
five-year average, which would otherwise be apportioned to the
General Revenue Fund, shall b e deposited to the cred it of the
Revenue Stabilization Fund.
C. If the amount of revenue ava ilable for apportionment to the
General Revenue Fund for the next ensuing fiscal year exceeds the
amount certified pursuant to paragraph 3 of subsection A of this
section:
1. Twenty-five percent (25%) of such amount i n excess of the
five-year average, which would otherwise be apportioned to the
General Revenue Fund, shall be deposited to the credit of the
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Constitutional Reserve Fund unless such deposit would exceed the
maximum balance permitted pursuant to Section 23 o f Article X of the
Oklahoma Constitution and in such case the amount in excess of the
maximum balance shall be deposited to the credit of the Revenue
Stabilization Fund; and
2. Seventy-five percent (75%) of such amount in excess of the
five-year average, which would otherwise be apportioned to the
General Revenue Fund, shall be deposited to the credit of the
Revenue Stabilization Fund, together with any amount required for
deposit pursuant to the provi sions of paragraph 1 of this
subsection.
D. In addition to any other duties prescribed by la w, at the
meeting required by Section 23 of Article X of the Oklahoma
Constitution to be held in February of 20 25, and at the February
meeting of the State Board o f Equalization each year thereafter, the
State Board of Equalization shall cert ify:
1. For the revenue derived from all taxes levied by this state,
an itemized estimate of collections for the ensuing fiscal year ;
2. For the revenue derived from all taxes levied by this state ,
whether the difference between the itemized estimate certified
pursuant to paragraph 1 of this subsection and the actual
collections in fiscal year 2023 exceeds Four Hundred Million Do llars
($400,000,000.00) in growth, until a reduction in the marginal tax
rates occurs pursuant to subsection D of Section 2 of t his act; and
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3. For the revenue derived from all tax es levied by this state,
whether the difference between the itemized estimate certified
pursuant to paragraph 1 of this subs ection and the actual
collections in the latest full fiscal year before the most recent
reduction in the marginal tax rates pursuant to subsection D of
Section 2 of this act exceeds Four Hundred Million Dolla rs
($400,000,000.00) in growth .
SECTION 2. AMENDATORY 68 O.S. 2021, Section 2355, as
amended by Section 1, Chapter 27, 1st Extraordinary Session, O.S.L.
2023 (68 O.S. Supp. 2023, Section 2355), is amended to read as
follows:
Section 2355. A. Individuals. For all ta xable years beginning
after December 31, 1998, and before January 1, 2006, a tax is hereby
imposed upon the Oklahoma taxable income of every resi dent or
nonresident individual, which tax shal l 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 p art thereof,
(3) 2% tax on next $1,250.00 o r part thereof,
(4) 3% tax on next $1,150.00 or part thereof,
(5) 4% tax on next $1,300.00 or part thereof,
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(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 be ginning on or after
January 1, 2002, and before January 1, 2004,
7% tax on the remainder, and
(c) for taxable years beginnin g 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 manner that a
surviving spouse is permitted t o file a joint return
under the provisions of the Internal Revenue Code a nd
heads of households as defined in the Interna l Revenue
Code not deducting federal income tax:
(1) 1/2% tax on first $2,000.0 0 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,
(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
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(8) (a) for taxable years beginning after December
31, 1998, and before January 1, 200 2, 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 individuals 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,
(5) 4% tax on next $1,200.0 0 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 there of, and
(11) 10% tax on the remainder.
b. Married individuals filing jointly and surviving
spouse to the extent and in the manner that a
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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 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 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 thereof,
(8) 7% tax on the next $1,750.00 or part th ereof,
(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 December
31, 2015, for which the determination required pursuant to Sections
4 2355.1F and 5 Section 2355.1G of this act title is made by the
State Board of Equalization, a tax is hereby imposed upon the
Oklahoma taxable income of every resident o r nonresident individual,
which tax shall be com puted as follows:
1. Single individuals and married individuals filing
separately:
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(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 $1,500.0 0 or part thereof,
(g) 5.50% tax on the remainder for the 2008 tax year and
any subsequent tax year unless the rate pres cribed by
subparagraph (h) of this paragraph is in effect, and
(h) 5.25% tax on the remainder for the 2009 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 th e State Board
of Equalization pursuant to Section 23 55.1A 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 provisions of the Int ernal Revenue
Code and heads of households as defined in 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,
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(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 $2,800.0 0 or part thereof,
(g) 5.50% tax on the remainder for the 2008 tax year and
any subsequent tax year unless the rate pres cribed by
subparagraph (h) of this paragraph is in effect, and
(h) 5.25% tax on the remainder for the 2009 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 th e State Board
of Equalization pursuant to Section 23 55.1A of this
title.
C. Individuals. For Except as provided for in subsection D of
this section, for all taxable years beginnin g on or after January 1,
2024, a tax is hereby imposed upon the Oklahoma ta xable income of
every resident or nonresident individual, which tax shall be
computed as follows:
1. Single individuals and married individuals filing
separately:
(a) 0.25% 0% tax on first $1,000.00 or part thereof,
(b) 0.75% 0.5% tax on next $1,500.00 or part thereof,
(c) 1.75% 1.5% tax on next $1,250.00 or part thereof,
(d) 2.75% 2.5% tax on next $1,150.00 or part thereof,
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(e) 3.75% 3.5% tax on next $2,300.00 or part thereof, and
(f) 4.75% 4.5% tax on the remainder.
2. Married individuals filing jointly and surviving spouse to
the extent and in the manner that a surviving spouse i s 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% tax on first $2,000.00 or part thereof,
(b) 0.75% 0.5% tax on next $3,000.00 or part thereof,
(c) 1.75% 1.5% tax on next $2,500.00 or part thereof,
(d) 2.75% 2.5% tax on next $2,300.00 or part th ereof,
(e) 3.75% 3.5% tax on next $4,600.00 or part thereof, and
(f) 4.75% 4.5% tax on the remainder.
No deduction for federal income taxes paid shall be allowed to
any taxpayer to arrive at taxable income.
D. If the difference between collections exceeds Four Hundred
Million Dollars ($400,000,000.00) in growth , as certified by the
State Board of Equalization pursuant to paragraph 2 of subsection D
of Section 1 of this act , the marginal tax rates provided in
paragraphs 1 and 2 of subsection C of this section shall each be
reduced by twenty-five hundredths of a percentage point , unless the
rate equals zero percent (0%) , for the immediate succeeding tax year
and subsequent tax years. Each successive certification of growth
exceeding Four Hundred Million Doll ars ($400,000,000.00) by the
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Board, pursuant to paragraph 3 of subsection D of Section 1 of this
act, shall further reduce the marginal tax rates by twent y-five
hundredths of a percentage point, un til the rate equals zero percent
(0%), in the immediate succeeding tax year and subsequent tax years.
If a revenue failure is decl ared pursuant to the provisions of
Section 34.49 of Title 62 of the Oklahoma Statu tes, prior to the end
of the calendar year in which the Board makes a certification
pursuant to paragraphs 2 and 3 of subsection D of Section 1 of this
act, the reduction in marginal tax rates, as provided for in this
subsection, shall not occur until a s ubsequent certification is made
by the Board pursuant to paragraphs 2 and 3 of subsection D of
Section 1 of this act .
E. 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 deduc t
and withhold from such amounts paid each payee an amount equal to
eight percent (8%) thereof. Every payer r equired to deduct and
withhold taxes under this subsection shall for each quart erly period
on or before the last day of the month following the close of each
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such quarterly period, pay over the amount so withheld as taxes to
the Oklahoma Tax Commission, and shall file a return with each such
payment. Such return shall be in such form as the Tax Co mmission
shall prescribe. Every payer required unde r this subsection to
deduct and withhold a tax f rom 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 amount
paid subject to taxation, and the total amount deducted and withheld
as tax and such other information 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 personally and
individually liable therefor to the State of Oklahoma this state.
E. F. Corporations. For all taxable years beginning after
December 31, 2021, a tax is hereby imposed upon the Okl ahoma taxable
income of every corporation doing busi ness 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 incom e tax imposed on
accumulated taxable income or o n undistributed personal holding
company income as those terms are defined in the Internal Revenue
Code.
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F. G. Certain foreign corporations. In lieu of the tax imposed
in the first paragraph of subsection D E 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 this state, in accordance 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 su ch amounts paid each payee an amount equal to
four percent (4%) thereof. Every payer requ ired to deduct and
withhold taxes under this subsection shall for each 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 Com mission 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 c alendar 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 th e payee’s
Social Security account number, if any , the total amounts paid
subject to taxation, the total amount deducted and withheld as tax
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and such other information 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 personally and
individually liable therefor to the State of Oklahoma .
G. H. 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 allo wed a deduction for any
federal income tax paid.
H. I. Tax rate tables. For a ll taxable years beginning after
December 31, 1991, in lieu of the tax imposed by subsection A, B or,
C, or D of this section, as applicable there is hereby imposed for
each taxable year on the taxabl e income of every individual, whose
taxable income for such taxable year does not exceed the ceiling
amount, a tax determined under tables, applicable to such taxable
year which shall be prescribed by the Tax Commission and which sha ll
be in such form as it determines appropriate. 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, or D 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 taxpayer falls.
SECTION 3. It being immediately necessary for the preservation
of the public peace, health or safety, an emergency is hereby
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declared to exist, by reason whereof this act sh all take effect and
be in full force from and after its passage and approval.
59-2-2476 QD 12/6/2023 5:04:54 PM