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STATE OF OKLAHOMA
2nd Session of the 59th Legislature (2024)
SENATE BILL 1263 By: Daniels
AS INTRODUCED
An Act relating to income tax; amending 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), which relates to tax imposed on
classes of taxpayers; modifying income tax rate for
certain tax years; updating statutory re ferences;
updating statutory language; providing an effective
date; and declaring an em ergency.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. 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 shall be computed at the option of
the taxpayer under one of the tw o following methods:
1. METHOD 1.
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a. Single individuals and married ind ividuals filing
separately not deducting federal income tax:
(1) 1/2% tax on first $1,000.00 or part ther eof,
(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,
(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 beginning on or after
January 1, 2002, and before January 1, 2004,
7% tax on the remaind er, 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 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,
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(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
(8) (a) for taxable years beginning after D ecember
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 Janua ry 1, 2004,
7% tax on the remainder, and
(c) for taxable years beginning on or after
January 1, 2004, 6.6 5% 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 $1,200.00 or part thereof,
(6) 5% tax on next $1,400.00 or part ther eof,
(7) 6% tax on next $1,500.00 or part thereof,
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(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
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 inco me 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 the reof,
(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 December
31, 2015, for which the determination required pursuant to Sections
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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 or nonresident individual,
which tax shall be computed as follows:
1. Single individuals and married individ uals 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 t hereof,
(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 prescribed by
subparagraph (h) of this p aragraph is in effect, and
(h) 5.25% tax on the remainder for the 2009 a nd subsequent
tax years. The decrease in the top marginal
individual income tax rate otherwise authorize d 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.
2. Married individuals filing jointly and surviving spouse to
the extent and in the manner that a surviving spouse is permitted to
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file a joint return under the provision s of the Internal 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,
(d) 3% tax on next $2,300.00 or part t hereof,
(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 prescribed by
subparagraph (h) of this p aragraph is in effect, and
(h) 5.25% tax on the remainder for the 2009 a nd subsequent
tax years. The decrease in the top marginal
individual income tax rate otherwise authorize d 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.
C. Individuals. For all taxable years beginning on or after
January 1, 2024, a tax is hereby imposed upon the Oklahoma taxable
income of every resident or nonresident in dividual, which tax shall
be computed as follows:
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1. Single individuals and married individuals filing
separately:
(a) 0.25% 0.0% 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 there of,
(d) 2.75% 2.5% tax on next $1,150.00 or p art thereof,
(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 is permitted to
file a joint return unde r the provisions of the Internal Revenue
Code and heads of households as defined in the Internal Revenue
Code:
(a) 0.25% 0.0% 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 thereof,
(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. Nonresident aliens. In lieu of the rates set forth in
subsection A above, there shal l be imposed on nonresident aliens, as
defined in the Internal Revenue Code, a tax of eight percen t (8%)
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instead of thirty percent (30%) as used in the Internal Revenue
Code, with respect to the Oklahoma taxable income of such
nonresident aliens as determi ned under the provision o f the Oklahoma
Income Tax Act.
Every payer of amounts covered by this subsection shall deduct
and withhold from such amounts p aid each payee an amount equal to
eight percent (8%) 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 mon th following the close of each
such quarterly period, pay over the amount so withheld as taxes to
the Oklahoma Tax Commission, and shall file a return with ea ch such
payment. Such return shall be in such form as t he 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 calend ar 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 a mount deducted and withheld
as tax and such other inform ation as the Tax Commis sion may require.
Any payer who fails to withhold or pay to the Tax Commis sion any
sums herein required to be withheld or paid shall be personally and
individually liable therefor to the State of Oklahoma this state.
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E. Corporations. For all taxable years beginning after
December 31, 2021, a tax is hereby imposed upon the Oklaho ma taxable
income of every corporation doing busi ness within this state or
deriving income from sour ces within this state in an amount equal to
four percent (4%) thereof.
There shall be no additional Oklahoma income tax imposed on
accumulated taxable inc ome 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%) a s used in the
Internal Revenue Code, where such income is received from sou rces
within Oklahoma this state, in accordance with the provisions of the
Internal Revenue Code and th e 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 requ ired to deduct and
withhold taxes under this subsection shall for each quarterly period
on or before the last day of the month followin g 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.
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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 t otal 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 the payee ’s
Social Security account number, if any, the total amounts paid
subject to taxation, 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 .
G. Fiduciaries. A tax is hereby imposed upon the Oklahoma
taxable income of every trust a nd 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 the ta x imposed by subsection A, B or
C of this section, as applicable there is hereby imposed for each
taxable year on the taxabl e income of every individual, whos e
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 p rescribed by the Tax Commission and which shall
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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 of this section. For
purposes of this subsection, the term “ceiling amount” means, with
respect to any taxpayer, the amount determin ed by the Tax Commission
for the tax rate category in which such taxpayer falls .
SECTION 2. This act shall become effective July 1, 2024.
SECTION 3. It being immediately necessary for the preservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof thi s act shall take effect and
be in full force from and after its passage and approval.
59-2-2812 QD 12/8/2023 12:02:19 PM