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STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
SENATE BILL 1 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 Equalization; requ iring certification
of certain collections in certain fiscal years;
amending 68 O.S. 2021, Section 2355, as last amended
by Section 1, Chapter 27, 1st Extraordinary Session,
O.S.L. 2023 (68 O.S. Supp. 2024, Section 2355), which
relates to income tax; modif ying 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 Sectio n 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 certify:
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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 reven ue apportioned to the General Revenue
Fund for the immediately preceding fiv e (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 disregarded 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 applicable period of time;
2. For the revenue derive d from the tax levied on natural gas
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 previous five (5) 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 disregarded for purposes of this
paragraph and the average shall be computed using the total amount
of revenue that was availabl e 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 Title 68 the Oklahoma Statutes, which
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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) fiscal years. For any year
after the first year during which a deposit to the Revenue
Stabilization Fund is made, the amoun t 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 available to be apportioned 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 parag raph 1 or 2 of subsection A of
this section, with respect to each such reven ue source, 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 be deposited to the credit of the
Revenue Stabilization Fund.
C. If the amount of revenue available 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 thi s
section:
1. Twenty-five percent (25%) 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
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Constitutional Reserve Fund unless such deposit would exce ed the
maximum balance permitted pursuant to Section 23 of 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 otherwi se 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 pro visions of paragraph 1 of this
subsection.
D. 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 2026, and at the February
meeting of the State Board of Equalization each year thereafter, the
State Board of Equalization shall certify:
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 tax es 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 2024 exceeds Four Hundred Million Dollars
($400,000,000.00) in growth, until a reduction in the marginal tax
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rates occurs pursuant to subsection D of Section 2 355 of Title 68 of
the Oklahoma Statutes; and
3. 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 the latest full fiscal year before the most recent
reduction in the marginal tax rates pursuant to subsection D of
Section 2355 of Title 68 of the Oklahoma Statutes exceeds Four
Hundred Million Dollars ($400,000,000.00) in growth.
On July 1, 2035, and every ten (10) years thereafter, the
threshold of Four Hundred Million Dollars ($400,000,000.00) provided
in paragraphs 2 and 3 of this subsection shall be adjusted for
inflation to reflect the percentage change in the Consumer Price
Index published by the Bureau of Labor Statistics of the United
States Department of Labor for that period.
SECTION 2. AMENDATORY 68 O.S. 2021, Section 2355, as
last amended by Section 1, C hapter 27, 1st Extraordinary Session,
O.S.L. 2023 (68 O.S. Supp. 2024, Secti on 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
nonresident individual, which tax shall be computed at the option of
the taxpayer under one of the two following methods:
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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 t hereof,
(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 pa rt 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 remainder, and
(c) for taxable years beginning 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 to 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:
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(1) 1/2% tax on first $2,000.00 or pa rt 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
(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 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 ther eof,
(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 thereof,
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(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 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 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 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
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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 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 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 .00 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 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 author ized by
this subparagraph shall be contingent upon the
determination required to be made by the State Board
of Equalization pursuant to Section 2355.1A of this
title.
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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) 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 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 tax 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 the 2009 and subsequent
tax years. The decrease in the top marginal
individual income tax rate otherwise author ized by
this subparagraph shall be contingent upon the
determination required to be made by the State Board
of Equalization pursuant to Section 2355.1A 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
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income of every resident or nonresident individual, which tax shall
be computed as follows:
1. Single individuals and married individuals f iling
separately:
(a) 0.25% tax on first $1,000.00 or part thereof,
(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 t hereof, and
(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 Internal 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 $4,600.00 or part thereof, and
(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.
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D. Individuals. Except as provided for in subsection E of this
section, for all taxable years beginning on or after January 1,
2025, 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 fi ling
separately:
(a) 0% tax on first $1,000.00 or part thereof,
(b) 0.5% tax on next $1,500.00 or part thereof,
(c) 1.5% tax on next $1,250.00 or part thereof,
(d) 2.5% tax on next $1,150.00 or part thereof,
(e) 3.5% tax on next $2,300.00 or part thereof, and
(f) 4.5% tax on the remainder.
2. Married individuals filing jointly an d 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 househ olds as defined in the Internal Revenue
Code:
(a) 0% tax on first $2,000.00 or part thereof,
(b) 0.5% tax on next $3,000.00 or part thereof,
(c) 1.5% tax on next $2,500.00 or part thereof,
(d) 2.5% tax on next $2,300.00 or part thereof,
(e) 3.5% tax on next $4,600.00 or part thereof, and
(f) 4.5% tax on the remainder.
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No deduction for federal income taxes paid shall be allowed to
any taxpayer to arrive at taxable income.
E. If the difference between collections exceeds Four Hundred
Million Dollars ($400,00 0,000.00) in growth, as adjusted for
inflation pursuant to subsection D of Section 34.103 of Title 62 of
the Oklahoma Statutes, and as certified by the State Board of
Equalization pursuant to paragraph 2 of subsection D of Section
34.103 of Title 62 of the Oklahoma Statutes, the marginal tax rates
provided in paragraphs 1 and 2 of subsection D of this section shall
each be reduced by twenty -five hundredths (0.25) 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 Dollars
($400,000,000.00) by the Board, as adjusted for inflation, shall
further reduce the marginal tax rates by twenty -five hundredths
(0.25) of a percentage point until the rate equals zero percent (0%)
in the immediate succe eding tax year and subsequent tax years. If a
revenue failure is declared pursuant to the provisions of Section
34.49 of Title 62 of the Oklahoma Statutes 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 34.103 of Title 62 of
the Oklahoma Statutes, the reduction in marginal tax rates, as
provided for in this subsection, shall not occur until a s ubsequent
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certification is made by the Board pursuant to paragraphs 2 and 3 of
subsection D of Section 34.103 of Title 62 of the Oklahoma Statutes.
F. Nonresident aliens. In lieu of the rates set forth in
subsection A above, there shall be imposed on non resident 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 provi sion 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 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 Oklahoma Tax Commission, and shall file a return with each such
payment. Such return shall be in such form as the Tax Commission
shall prescribe. Eve ry 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 amount
paid subject to taxation, and the total amount deducted and withheld
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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. 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 add itional 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 corporations. 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 Revenu e
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 such amounts paid each payee an amount equal to
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four percent (4%) thereof. Every payer required to deduct and
withhold taxes under this subsection shall for e ach quarterly period
on or before the last day of the month following the cl ose 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 for m 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 na me 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. I. Fiduciaries. A tax is hereby imposed upon the Oklahoma
taxable income of every trust and e state at the same rates as are
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 p aid.
H. J. Tax rate tables. For all taxable years beginning after
December 31, 1991, in lieu of the tax imposed by subsection A, B or,
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C, D, or E of this section, as applicable there is hereby imposed
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 under tables, applicable to such
taxable year which shall be prescribed by the Tax Commission and
which shall be in such form as it determines appro priate. 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, D, or E of
this section. For purposes of this subsection, the term “ceiling
amount” means, with respect to any tax payer, 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
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approval.
60-1-68 QD 11/15/2024 11:07:03 AM