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Oklahoma Senate Bill SB322

Oklahoma 2025 Regular Session

Oklahoma Senate Bill SB322 Compare Versions

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5353 STATE OF OKLAHOMA
5454
5555 1st Session of the 60th Legislature (2025)
5656
5757 SENATE BILL 322 By: Deevers
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6363 AS INTRODUCED
6464
6565 An Act relating to tax; amending 68 O.S. 2021,
6666 Section 2355, as last amended by Section 1, Chapter
6767 27, 1st Extraordinary Session, O.S.L. 2023 (68 O.S.
6868 Supp. 2024, Section 2355), which relates to income
6969 tax; modifying certain income tax rate for certain
7070 tax years; modifying certain withholding requirement
7171 for certain tax years; amending 68 O.S. 2021, Section
7272 2370, which relates to the banki ng privilege tax;
7373 limiting tax to certain tax years; updating statutory
7474 references; updating statutory language; and
7575 providing an effective date .
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8181 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
8282 SECTION 1. AMENDATORY 68 O.S. 2021, Section 2355, as
8383 last amended by Section 1, Chapter 27, 1st Extraordinary Session,
8484 O.S.L. 2023 (68 O.S. Supp. 2024, Section 2355), is amended to read
8585 as follows:
8686 Section 2355. A. Individuals. For all taxable years beginning
8787 after December 31, 1998, and before January 1, 2006, a tax is hereby
8888 imposed upon the Oklahoma taxable income of every resident or
8989 nonresident individual, which tax shall be computed at the option of
9090 the taxpayer under one of the two following methods:
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142142 1. METHOD 1.
143143 a. Single individuals and married individuals filing
144144 separately not deducting federal income tax:
145145 (1) 1/2% tax on first $1,000.00 or part thereof,
146146 (2) 1% tax on next $1,500.00 or part thereof,
147147 (3) 2% tax on next $1,250.00 or part thereof,
148148 (4) 3% tax on next $1,150.00 or part thereof,
149149 (5) 4% tax on next $1,300.00 or part thereof,
150150 (6) 5% tax on next $1,500.00 or part thereof,
151151 (7) 6% tax on next $2,300.00 or part thereof, and
152152 (8) (a) for taxable years beginning after December
153153 31, 1998, and before January 1, 2 002, 6.75%
154154 tax on the remainder,
155155 (b) for taxable years beginning on or after
156156 January 1, 2002, and before January 1, 2004,
157157 7% tax on the remainder, and
158158 (c) for taxable years beginning on or after
159159 January 1, 2004, 6.65% tax on the remainder.
160160 b. Married individuals filing jointly and surviving
161161 spouse to the extent and in the manner tha t a
162162 surviving spouse is permitted to file a joint return
163163 under the provisions of the Internal Revenue Code of
164164 1986, as amended, and heads of households as defined
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216216 in the Internal Revenue Code of 1986, as amended, not
217217 deducting federal income tax:
218218 (1) 1/2% tax on first $2,000.00 or part thereof,
219219 (2) 1% tax on next $3,000.00 or part thereof,
220220 (3) 2% tax on next $2,500.00 or part thereof,
221221 (4) 3% tax on next $2,300.00 or part thereof,
222222 (5) 4% tax on next $2,400.00 or part thereof,
223223 (6) 5% tax on next $2,800.00 or part thereof,
224224 (7) 6% tax on next $6,000.00 or part thereof, and
225225 (8) (a) for taxable years beginning after December
226226 31, 1998, and before January 1, 2002, 6.75%
227227 tax on the remainder,
228228 (b) for taxable years beginning on or after
229229 January 1, 2002, and before January 1, 2004,
230230 7% tax on the remainder, and
231231 (c) for taxable years beginning on or after
232232 January 1, 2004, 6.65% tax on the remainder.
233233 2. METHOD 2.
234234 a. Single individuals and marrie d individuals filing
235235 separately deducting federal income tax:
236236 (1) 1/2% tax on first $1,000.00 or part thereof,
237237 (2) 1% tax on next $1,500.00 or part thereof,
238238 (3) 2% tax on next $1,250.00 or part thereof,
239239 (4) 3% tax on next $1,150.00 or part thereof,
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291291 (5) 4% tax on next $1,200.00 or part thereof,
292292 (6) 5% tax on next $1,400.00 or part thereof,
293293 (7) 6% tax on next $1,500.00 or part thereof,
294294 (8) 7% tax on next $1,500.00 or part thereof,
295295 (9) 8% tax on next $2,000.00 or part thereof,
296296 (10) 9% tax on next $3,500.00 or part thereof, and
297297 (11) 10% tax on the remainder.
298298 b. Married individuals filing jointly and surviving
299299 spouse to the extent and in the manner that a
300300 surviving spouse is permitted to file a joint return
301301 under the provisions of the Internal Revenue Code of
302302 1986, as amended, and heads of households as defined
303303 in the Internal Revenue Code of 1986, as amended,
304304 deducting federal income tax:
305305 (1) 1/2% tax on the first $2,000.00 or part thereof,
306306 (2) 1% tax on the next $3,000.00 or part thereof,
307307 (3) 2% tax on the next $2,500.00 or part thereof,
308308 (4) 3% tax on the next $1,400.00 or part thereof,
309309 (5) 4% tax on the next $1,500.00 or part thereof,
310310 (6) 5% tax on the next $1,600.00 or part thereof,
311311 (7) 6% tax on the next $1,250.00 or part thereof,
312312 (8) 7% tax on the next $1,750 .00 or part thereof,
313313 (9) 8% tax on the next $3,000.00 or part thereof,
314314 (10) 9% tax on the next $6,000.00 or part thereof, and
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366366 (11) 10% tax on the remainder.
367367 B. Individuals. For all taxable years beginning on or after
368368 January 1, 2008, and ending any tax y ear which begins after December
369369 31, 2015, for which the determination required pursuant to Sections
370370 4 2355.1F and 5 2355.1G of this act title is made by the State Board
371371 of Equalization, a tax is hereby imposed upon the Oklahoma taxable
372372 income of every resi dent or nonresident individual, which tax shall
373373 be computed as follows:
374374 1. Single individuals and married individuals filing
375375 separately:
376376 (a) 1/2% tax on first $1,000.00 or part thereof,
377377 (b) 1% tax on next $1,500.00 or part thereof,
378378 (c) 2% tax on next $1,250.00 or part thereof,
379379 (d) 3% tax on next $1,150.00 or part thereof,
380380 (e) 4% tax on next $2,300.00 or part thereof,
381381 (f) 5% tax on next $1,500.00 or part thereof,
382382 (g) 5.50% tax on the remainder for the 2008 tax year and
383383 any subsequent tax year unless the rat e prescribed by
384384 subparagraph (h) of this paragraph is in effect, and
385385 (h) 5.25% tax on the remainder for the 2009 and subsequent
386386 tax years. The decrease in the top marginal
387387 individual income tax rate otherwise authorized by
388388 this subparagraph shall be conti ngent upon the
389389 determination required to be made by the State Board
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441441 of Equalization pursuant to Section 2355.1A of this
442442 title.
443443 2. Married individuals filing jointly and surviving spouse to
444444 the extent and in the manner that a surviving spouse is permitted to
445445 file a joint return under the provisions of the Internal Revenue
446446 Code of 1986, as amended, and heads of households as defined in the
447447 Internal Revenue Code of 1986, as amended:
448448 (a) 1/2% tax on first $2,000.00 or part thereof,
449449 (b) 1% tax on next $3,000.00 or part thereof,
450450 (c) 2% tax on next $2,500.00 or part thereof,
451451 (d) 3% tax on next $2,300.00 or part thereof,
452452 (e) 4% tax on next $2,400.00 or part thereof,
453453 (f) 5% tax on next $2,800.00 or part thereof,
454454 (g) 5.50% tax on the remainder for the 2008 tax year a nd
455455 any subsequent tax year unless the rate prescribed by
456456 subparagraph (h) of this paragraph is in effect, and
457457 (h) 5.25% tax on the remainder for the 2009 and subsequent
458458 tax years. The decrease in the top marginal
459459 individual income tax rate otherwise autho rized by
460460 this subparagraph shall be contingent upon the
461461 determination required to be made by the State Board
462462 of Equalization pursuant to Section 2355.1A of this
463463 title.
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515515 C. Individuals. For all taxable years beginning on or after
516516 January 1, 2024, a tax is hereby imposed upon the Oklahoma taxable
517517 income of every resident or nonresident individual, which tax shall
518518 be computed as follows:
519519 1. Single individuals and married individuals filing
520520 separately:
521521 (a) 0.25% tax on first $1,000.00 or part thereof,
522522 (b) 0.75% tax on next $1,500.00 or part thereof,
523523 (c) 1.75% tax on next $1,250.00 or p art thereof,
524524 (d) 2.75% tax on next $1,150.00 or part thereof,
525525 (e) 3.75% tax on next $2,300.00 or part thereof, and
526526 (f) 4.75% tax on the remainder.
527527 2. Married individuals filing jointly and surviving spouse to
528528 the extent and in the manner that a surviving spouse is permitted to
529529 file a joint return under the provisions of the Internal Revenue
530530 Code of 1986, as amended, and heads of households as defined in the
531531 Internal Revenue Code of 1986, as amended:
532532 (a) 0.25% tax on first $2,000.00 or part thereof,
533533 (b) 0.75% tax on next $3,000.00 or part thereof,
534534 (c) 1.75% tax on next $2,500.00 or part thereof,
535535 (d) 2.75% tax on next $2,300.00 or part thereof,
536536 (e) 3.75% tax on next $4,600.00 or par t thereof, and
537537 (f) 4.75% tax on the remainder.
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589589 No deduction for federal income taxes paid shall be allowed to
590590 any taxpayer to arrive at taxable income.
591591 D. Nonresident aliens. In lieu of the rates set forth in
592592 subsection A above, there shall be imposed on nonresident aliens, as
593593 defined in the Internal Revenue Code of 1986, as amended, a tax of
594594 eight percent (8%) instead of thirty percent (30%) as used in the
595595 Internal Revenue Code of 1986, as amended, with respect to the
596596 Oklahoma taxable income of such nonr esident aliens as determined
597597 under the provision of the Oklahoma Income Tax Act.
598598 Every payer of amounts covered by this subsection shall deduct
599599 and withhold from such amounts paid each payee an amount equal to
600600 eight percent (8%) thereof. Every payer requi red to deduct and
601601 withhold taxes under this subsection shall for each quarterl y period
602602 on or before the last day of the month following the close of each
603603 such quarterly period, pay over the amount so withheld as taxes to
604604 the Oklahoma Tax Commission, and sh all file a return with each such
605605 payment. Such return shall be in such form as the Tax Commission
606606 shall prescribe. Every payer required under this subsection to
607607 deduct and withhold a tax from a payee shall, as to the total
608608 amounts paid to each payee duri ng the calendar year, furnish to such
609609 payee, on or before January 31 , of the succeeding year, a written
610610 statement showing the name of the payer, the name of the payee and
611611 the payee’s Social Security account number, if any, the total amount
612612 paid subject to taxation, and the total amount deducted and withheld
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664664 as tax and such other information as the Tax Commission may require.
665665 Any payer who fails to withhold or pay to the Tax Commission any
666666 sums herein required to be withheld or paid shall be personally and
667667 individually liable therefor to the State of Oklahoma.
668668 E. Corporations. For all taxable years beginning after
669669 December 31, 2021 tax years 2022 through 2024 , a tax is hereby
670670 imposed upon the Oklahoma taxable income of every corporation doing
671671 business within this state or deriving income from sources within
672672 this state in an amount equal to four percent (4%) thereof. For tax
673673 year 2025 and subsequent tax years, there shall be no income tax
674674 imposed upon the Oklahoma taxable income of every corporation doing
675675 business within this state or deriving income from sources within
676676 this state.
677677 There shall be no additional Oklahoma income tax imposed on
678678 accumulated taxable income or on undistributed personal holding
679679 company income as those terms are defined in the Intern al Revenue
680680 Code of 1986, as amended.
681681 F. Certain foreign corporations. In lieu of the tax imposed in
682682 the first paragraph of subsection D of this section, for all taxable
683683 years beginning after December 31, 2021 , there shall be imposed on
684684 foreign corporations, as defined in the Internal Revenue Code of
685685 1986, as amended, a tax of four percent (4%) instead of thirty
686686 percent (30%) as used in the Internal Revenue Code of 1986, as
687687 amended, where such income is received from sources within Oklahoma
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739739 this state, in accordance with the provisions of the Internal
740740 Revenue Code of 1986, as amended, and the Oklahoma Income Tax Act.
741741 Every payer of amounts covered by this subsection shall deduct
742742 and withhold from such amounts paid each payee an amount equal to
743743 four percent (4%) thereof. Every payer required to deduct and
744744 withhold taxes under this su bsection shall for each quarterly period
745745 on or before the last day of the month following the close of each
746746 such quarterly period, pay over the amount so withheld as taxes to
747747 the Tax Commission, and shall file a return with each such payment.
748748 Such return shall be in such form as the Tax Commission shall
749749 prescribe. Every payer required under this subsection to deduct and
750750 withhold a tax from a payee shall, as to the total amounts paid to
751751 each payee during the calendar year, furnish to such payee, on or
752752 before January 31, of the succeeding year, a written statement
753753 showing the name of the payer, the name of the payee and the payee ’s
754754 Social Security account number, if any, the total amounts paid
755755 subject to taxation, the total amount deducted and withheld as tax ,
756756 and such other information as the Tax Commission may require. Any
757757 payer who fails to withhold or pay to the Tax Commission any sums
758758 herein required to be withheld or paid sha ll be personally and
759759 individually liable therefor to the State of Oklahoma.
760760 G. Fiduciaries. A tax is hereby imposed upon the Oklahoma
761761 taxable income of every trust and estate at the same rates as are
762762 provided in subsection B or C of this section for sing le
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814814 individuals. Fiduciaries are not allowed a deduction for any
815815 federal income tax paid.
816816 H. Tax rate tables. For all taxable years beginning after
817817 December 31, 1991, in lieu of the tax imposed by subsection A, B or
818818 C of this section, as applicable there is hereby imposed for each
819819 taxable year on the taxable income of every indivi dual, whose
820820 taxable income for such taxable year does not exceed the ceiling
821821 amount, a tax determined under tables, applicable to such taxable
822822 year which shall be prescribed by t he Tax Commission and which shall
823823 be in such form as it determines appropriate. In the table so
824824 prescribed, the amounts of the tax shall be computed on the basis of
825825 the rates prescribed by subsection A, B or C of this section. For
826826 purposes of this subsec tion, the term “ceiling amount” means, with
827827 respect to any taxpayer, the amoun t determined by the Tax Commission
828828 for the tax rate category in which such taxpayer falls.
829829 SECTION 2. AMENDATORY 68 O.S. 2021, Section 2370, is
830830 amended to read as follows:
831831 Section 2370. A. For taxable years beginning after December
832832 31, 2021 tax years 2022 through 2024 , for the privilege of doing
833833 business within this state, every state banking association,
834834 national banking association and credit union or ganized under the
835835 laws of this state, located or doing business within the lim its of
836836 the State of Oklahoma this state shall annually pay to this state a
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888888 privilege tax at the rate of four percent (4%) of the amount of the
889889 taxable income as provided in this section.
890890 B. 1. The privilege tax levied by this section shall be in
891891 addition to the Business Activity Tax levied in Section 1218 of this
892892 title and the franchise tax levied in Article 12 of this title and
893893 in lieu of the tax levied by Section 2355 of this title and in lieu
894894 of all taxes levied by the State of Oklahoma this state, or any
895895 subdivision thereof, upon the shares of stock or personal property
896896 of any banking association or credit union subject to taxation under
897897 this section.
898898 2. Nothing in this sect ion shall be construed to exempt the
899899 real property of any banking associations or credit unions from
900900 taxation to the same extent, according to its value, as other real
901901 property is taxed. Nothing herein shall be construed to exempt an
902902 association from paym ent of any fee or tax authorized or levied
903903 pursuant to the banking laws.
904904 3. Personal property which is subject to a lease agreement
905905 between a bank or credit union, as lessor, and a nonbanking business
906906 entity or individual, as lessee, is not exempt from pe rsonal
907907 property ad valorem taxation. Provided further, that it shall be
908908 the duty of the lessee of such personal property to return sworn
909909 lists or schedules of their taxable property within each county to
910910 the county assessor of such county as provided in S ections 2433 and
911911 2434 of this title.
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963963 C. Any tax levied under this section sha ll accrue on the last
964964 day of the taxable year and be payable as provided in Section 2375
965965 of this title. The accrual of such tax for the first taxable year
966966 to which this act the Oklahoma Income Tax Act applies, shall apply
967967 notwithstanding the prior accrual of a tax in the same taxable year
968968 based upon the net income of the next preceding taxable year;
969969 provided, however, any additional deduction enuring to the benefit
970970 of the taxpayer shall be deducted in accordance with the optional
971971 transitional deduction pro cedures in Section 2354 of this title.
972972 D. The basis of the tax shall be United States taxable income
973973 as defined in paragraph 10 of Section 2353 of this title and any
974974 adjustments thereto under the provisions of Section 2358 of this
975975 title with the following adjustments:
976976 1. There shall be deducted all interest income on obligations
977977 of the United States government and agencies thereof not otherwise
978978 exempted and all interest income o n obligations of the State of
979979 Oklahoma this state or political subdivisions th ereof, including
980980 public trust authorities, not otherwise exempted under the laws of
981981 this state; and
982982 2. Expense deductions claimed in arriving at taxable income
983983 under paragraph 10 of Section 2353 of this title shall be reduced by
984984 an amount equal to fifty percent (50%) of excluded interest income
985985 on obligations of the United States government or agencies thereof
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10371037 and obligations of the State of Oklahoma this state or political
10381038 subdivisions thereof.
10391039 E. 1. Except as otherwise provided in paragraph 2 of this
10401040 subsection, before January 1, 2017, there shall be allowed a credit
10411041 against the tax levied in subsection A of this section in an amount
10421042 equal to the amount of taxable income recei ved by a participating
10431043 financial institution as defined in Section 90.2 of Title 62 of the
10441044 Oklahoma Statutes pursuant to a loan made under the Rural Economic
10451045 Development Loan Act. Such credit shall be limited each year to
10461046 five percent (5%) of the amount o f annual payroll certified by the
10471047 Oklahoma Rural Economic Development Loan Pro gram Review Board
10481048 pursuant to the provisions of paragraph 3 of subsection B of Section
10491049 90.4 of Title 62 of the Oklahoma Statutes with respect to the loan
10501050 made by the participatin g financial institution and may be claimed
10511051 for any number of years necessary until the amount of total credits
10521052 claimed is equal to the total amount of taxable income received by
10531053 the participating financial institution pursuant to the loan. Any
10541054 credit allowed but not used in a taxable year may be carried forward
10551055 for a period not to exceed five (5) taxable years. In no event
10561056 shall a credit allowed pursuant to the provisions of this subsection
10571057 be transferable or refundable.
10581058 2. No credit otherwise authorized by the provisions of this
10591059 subsection may be claimed for any event, transaction, investment,
10601060 expenditure or other act occurring on or after July 1, 2010, for
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11121112 which the credit would otherwise be allowable. The provisions of
11131113 this paragraph shall cease to be operative on July 1, 2012.
11141114 Beginning July 1, 2012, the credit authorized by this subsection may
11151115 be claimed for any event, transaction, investment, expenditure or
11161116 other act occurring on or after July 1, 2012, according to the
11171117 provisions of this subsection .
11181118 SECTION 3. This act shall become effective November 1, 2025.
11191119
11201120 60-1-1408 QD 12/31/2024 12:15:39 PM