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STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
SENATE BILL 327 By: Kirt
AS INTRODUCED
An Act relating to tax; amending 68 O.S. 2021,
Section 2355, as last amended by Section 1, Chapter
27, 1st Extraordinary Session, O.S.L. 20 23 (68 O.S.
Supp. 2024, Section 2355), which relates to income
tax; modifying certain income tax rate for certain
tax years; modifying certain withholding requirement
for certain tax years; updating statutory references;
updating statutory language; and pr oviding an
effective date.
BE IT ENACTED BY THE PEOPLE OF THE STA TE OF OKLAHOMA:
SECTION 1. AMENDATORY 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), 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 o r
nonresident individual, which tax shall be computed at the option of
the taxpayer under one of the two following methods:
1. METHOD 1.
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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 thereof,
(6) 5% tax on next $1,500.00 or part thereo f,
(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, 200 4,
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 of
1986, as amended, and heads of households as defined
in the Internal Revenue Code of 1986, as amended, not
deducting federal income tax:
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(1) 1/2% tax on first $2,000.00 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 $6,000.0 0 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, an d
(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 the reof,
(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 pa rt 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 retu rn
under the provisions of the Internal Revenue Code of
1986, as amended, and heads of households as defined
in the Internal Revenue Code of 1986, as amended,
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 t hereof,
(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 thereo f, and
(11) 10% tax on the remainder.
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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 pursuant to Sections
4 and 5 2355.1F of this act title is made by the State Board of
Equalization, a tax is hereby imp osed 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 authorized by
this subparagraph shall be contingent upon the
determination required to be made by the State Board
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of Equalization pursuant to Section 2355.1A 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 Internal Revenue
Code of 1986, as amended, and heads of households as define d in the
Internal Revenue Code of 1986, as amended:
(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 authorized 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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C. Individuals. For all taxable years beginning on or after
January 1, 2024 tax year 2024, a tax is hereby imposed upon the
Oklahoma taxable income of every resident or nonresident individual,
which tax shall be c omputed as follows:
1. Single individuals and married individuals filing
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 thereof, 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 of 1986, as amended, and heads of households as defined in the
Internal Revenue Code of 1986, as amended:
(a) 0.25% tax on first $2,000.00 or part thereof,
(b) 0.75% tax on next $3,000.00 or part th ereof,
(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.
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No deduction for federal income taxes paid shall be allowed to
any taxpayer to arrive at taxable income.
D. Individuals. For tax year 2025 and subsequent tax years, 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) 0.00% tax on first $2 5,000.00 or part thereof,
(b) 1.00% tax on next $15,000.00 or part thereof,
(c) 2.00% tax on next $15,000.00 or part thereof,
(d) 3.00% tax on next $15,000.00 or part thereof,
(e) 4.00% tax on next $15,000.00 or part thereof, 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 of 1986, as amended, and heads of households as defined in the
Internal Revenue Code of 1986, as amended:
(a) 0.00% tax on first $50,000.00 or part thereof,
(b) 1.00% tax on next $30,000.00 or part thereof,
(c) 2.00% tax on next $30,000.00 or part thereof,
(d) 3.00% tax on next $30,000.00 or part thereof,
(e) 4.00% tax on next $30,000.00 or part thereof, and
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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.
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 of 1986, as amended, a tax of
eight percent (8%) instead of thirty percent (30%) as used in the
Internal Revenue Code of 1986, as amended, 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 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. Every payer require d 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 th e payer, the name of the payee and
the payee’s Social Security account number, if any, the total amount
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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.
E. F. 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 of 1986, as amended.
F. G. 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 Revenue
Code of 1986, as amended, a tax of four percent (4%) instead of
thirty percent (30%) as used in the Internal Revenue Code of 1986,
as amended, where such income is received from sources within
Oklahoma this state, in accordance with the provisions of the
Internal Revenue Code of 1986, as amended, and the Oklahoma Income
Tax Act.
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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 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 Commissio n 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 w ritten 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 C ommission 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 subsections B through D of this
section for single individuals. Fiduciaries are not allowed a
deduction for any federal income tax paid.
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H. I. Tax rate tables. For all taxable years beginning after
December 31, 1991, in lieu of the tax imposed by subsection A, B or
C subsections A through D 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 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
subsections A through 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 2. This act shall become effective November 1, 2025.
60-1-635 QD 12/31/2024 12:42:59 PM