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1 STATE OF OKLAHOMA
1
2 1st Session of the 60th Legislature (2025)
2
3 SENATE BILL 1 By: Bergstrom
3
4
4
5
5
6 AS INTRODUCED
6
7 An Act relating to taxation; amending 62 O.S. 2021,
7 Section 34.103, which relates to the duties of the
8 State Board of Equalization; requiring certification
8 of certain collections in certain fiscal years;
9 amending 68 O.S. 2021, Section 2355, as last amended
9 by Section 1, Chapter 27, 1st Extraordinary Session,
10 O.S.L. 2023 (68 O.S. Supp. 2024, Section 2355), which
10 relates to income tax; modifying tax rates for
11 certain tax years; requiring the reduction of tax
11 rates for certain tax years upon certain
12 certification by the State Board of Equalization;
12 prohibiting reduction of certain rates upon
13 declaration of revenue failure; updating statutory
13 language and references; and declaring an emergency.
14
14
15
15
16 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
16
17 SECTION 1. AMENDATORY 62 O.S. 2021, Section 34.103, is
17
18 amended to read as follows:
18
19 Section 34.103. A. In addition to any other duties prescribed
19
20 by law, at the meeting required by Section 23 of Article X of the
20
21 Oklahoma Constitution to be held in February of 2017, and at the
21
22 February meeting of the State Board of Equalization each year
22
23 thereafter, the State Board of Equalization shall certify:
23
24
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Req. No. 68 Page 1
1 1. For the revenue derived from the tax levied on oil pursuant
1
2 to Section 1001 of Title 68 of the Oklahoma Statutes, which would
2
3 otherwise be apportioned to the General Revenue Fund, the average
3
4 annual amount of actual revenue apportioned to the General Revenue
4
5 Fund for the immediately preceding five (5) complete fiscal years.
5
6 For any year after the first year during which a deposit to the
6
7 Revenue Stabilization Fund is made, the amount of any deposit to the
7
8 Revenue Stabilization Fund shall be disregarded for purposes of this
8
9 paragraph and the average shall be computed using the total amount
9
10 of revenue that was available to be apportioned to the General
10
11 Revenue Fund for the applicable period of time;
11
12 2. For the revenue derived from the tax levied on natural gas
12
13 pursuant to Section 1001 of Title 68 of the Oklahoma Statutes, which
13
14 would otherwise be apportioned to the General Revenue Fund, the
14
15 average annual amount of actual revenue apportioned to the General
15
16 Revenue Fund for the previous five (5) fiscal years. For any year
16
17 after the first year during which a deposit to the Revenue
17
18 Stabilization Fund is made, the amount of any deposit to the Revenue
18
19 Stabilization Fund shall be disregarded for purposes of this
19
20 paragraph and the average shall be computed using the total amount
20
21 of revenue that was available to be apportioned to the General
21
22 Revenue Fund for the applicable period of time; and
22
23 3. For the revenue derived from the corporate income tax levied
23
24 pursuant to Section 2355 of Title 68 the Oklahoma Statutes, which
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Req. No. 68 Page 2
1 would otherwise be apportioned to the General Revenue Fund, the
1
2 average annual amount of actual revenue apportioned to the General
2
3 Revenue Fund for the previous five (5) fiscal years. For any year
3
4 after the first year during which a deposit to the Revenue
4
5 Stabilization Fund is made, the amount of any deposit to the Revenue
5
6 Stabilization Fund shall be disregarded for purposes of this
6
7 paragraph and the average shall be computed using the total amount
7
8 of revenue that was available to be apportioned to the General
8
9 Revenue Fund for the applicable period of time.
9
10 B. If the amount of revenue available for apportionment to the
10
11 General Revenue Fund for the next ensuing fiscal year exceeds the
11
12 amounts certified pursuant to paragraph 1 or 2 of subsection A of
12
13 this section, with respect to each such revenue source, one hundred
13
14 percent (100%) of such amount in excess of the separately computed
14
15 five-year average, which would otherwise be apportioned to the
15
16 General Revenue Fund, shall be deposited to the credit of the
16
17 Revenue Stabilization Fund.
17
18 C. If the amount of revenue available for apportionment to the
18
19 General Revenue Fund for the next ensuing fiscal year exceeds the
19
20 amount certified pursuant to paragraph 3 of subsection A of this
20
21 section:
21
22 1. Twenty-five percent (25%) of such amount in excess of the
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23 five-year average, which would otherwise be apportioned to the
23
24 General Revenue Fund, shall be deposited to the credit of the
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Req. No. 68 Page 3
1 Constitutional Reserve Fund unless such deposit would exceed the
1
2 maximum balance permitted pursuant to Section 23 of Article X of the
2
3 Oklahoma Constitution and in such case the amount in excess of the
3
4 maximum balance shall be deposited to the credit of the Revenue
4
5 Stabilization Fund; and
5
6 2. Seventy-five percent (75%) of such amount in excess of the
6
7 five-year average, which would otherwise be apportioned to the
7
8 General Revenue Fund, shall be deposited to the credit of the
8
9 Revenue Stabilization Fund, together with any amount required for
9
10 deposit pursuant to the provisions of paragraph 1 of this
10
11 subsection.
11
12 D. In addition to any other duties prescribed by law, at the
12
13 meeting required by Section 23 of Article X of the Oklahoma
13
14 Constitution to be held in February of 2026, and at the February
14
15 meeting of the State Board of Equalization each year thereafter, the
15
16 State Board of Equalization shall certify:
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17 1. For the revenue derived from all taxes levied by this state,
17
18 an itemized estimate of collections for the ensuing fiscal year;
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19 2. For the revenue derived from all taxes levied by this state,
19
20 whether the difference between the itemized estimate certified
20
21 pursuant to paragraph 1 of this subsection and the actual
21
22 collections in fiscal year 2024 exceeds Four Hundred Million Dollars
22
23 ($400,000,000.00) in growth, until a reduction in the marginal tax
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Req. No. 68 Page 4
1 rates occurs pursuant to subsection D of Section 2355 of Title 68 of
1
2 the Oklahoma Statutes; and
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3 3. For the revenue derived from all taxes levied by this state,
3
4 whether the difference between the itemized estimate certified
4
5 pursuant to paragraph 1 of this subsection and the actual
5
6 collections in the latest full fiscal year before the most recent
6
7 reduction in the marginal tax rates pursuant to subsection D of
7
8 Section 2355 of Title 68 of the Oklahoma Statutes exceeds Four
8
9 Hundred Million Dollars ($400,000,000.00) in growth.
9
10 On July 1, 2035, and every ten (10) years thereafter, the
10
11 threshold of Four Hundred Million Dollars ($400,000,000.00) provided
11
12 in paragraphs 2 and 3 of this subsection shall be adjusted for
12
13 inflation to reflect the percentage change in the Consumer Price
13
14 Index published by the Bureau of Labor Statistics of the United
14
15 States Department of Labor for that period.
15
16 SECTION 2. AMENDATORY 68 O.S. 2021, Section 2355, as
16
17 last amended by Section 1, Chapter 27, 1st Extraordinary Session,
17
18 O.S.L. 2023 (68 O.S. Supp. 2024, Section 2355), is amended to read
18
19 as follows:
19
20 Section 2355. A. Individuals. For all taxable years beginning
20
21 after December 31, 1998, and before January 1, 2006, a tax is hereby
21
22 imposed upon the Oklahoma taxable income of every resident or
22
23 nonresident individual, which tax shall be computed at the option of
23
24 the taxpayer under one of the two following methods:
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Req. No. 68 Page 5
1 1. METHOD 1.
1
2 a. Single individuals and married individuals filing
2
3 separately not deducting federal income tax:
3
4 (1) 1/2% tax on first $1,000.00 or part thereof,
4
5 (2) 1% tax on next $1,500.00 or part thereof,
5
6 (3) 2% tax on next $1,250.00 or part thereof,
6
7 (4) 3% tax on next $1,150.00 or part thereof,
7
8 (5) 4% tax on next $1,300.00 or part thereof,
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9 (6) 5% tax on next $1,500.00 or part thereof,
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10 (7) 6% tax on next $2,300.00 or part thereof, and
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11 (8) (a) for taxable years beginning after December
11
12 31, 1998, and before January 1, 2002, 6.75%
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13 tax on the remainder,
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14 (b) for taxable years beginning on or after
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15 January 1, 2002, and before January 1, 2004,
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16 7% tax on the remainder, and
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17 (c) for taxable years beginning on or after
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18 January 1, 2004, 6.65% tax on the remainder.
18
19 b. Married individuals filing jointly and surviving
19
20 spouse to the extent and in the manner that a
20
21 surviving spouse is permitted to file a joint return
21
22 under the provisions of the Internal Revenue Code and
22
23 heads of households as defined in the Internal Revenue
23
24 Code not deducting federal income tax:
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Req. No. 68 Page 6
1 (1) 1/2% tax on first $2,000.00 or part thereof,
1
2 (2) 1% tax on next $3,000.00 or part thereof,
2
3 (3) 2% tax on next $2,500.00 or part thereof,
3
4 (4) 3% tax on next $2,300.00 or part thereof,
4
5 (5) 4% tax on next $2,400.00 or part thereof,
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6 (6) 5% tax on next $2,800.00 or part thereof,
6
7 (7) 6% tax on next $6,000.00 or part thereof, and
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8 (8) (a) for taxable years beginning after December
8
9 31, 1998, and before January 1, 2002, 6.75%
9
10 tax on the remainder,
10
11 (b) for taxable years beginning on or after
11
12 January 1, 2002, and before January 1, 2004,
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13 7% tax on the remainder, and
13
14 (c) for taxable years beginning on or after
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15 January 1, 2004, 6.65% tax on the remainder.
15
16 2. METHOD 2.
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17 a. Single individuals and married individuals filing
17
18 separately deducting federal income tax:
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19 (1) 1/2% tax on first $1,000.00 or part thereof,
19
20 (2) 1% tax on next $1,500.00 or part thereof,
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21 (3) 2% tax on next $1,250.00 or part thereof,
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22 (4) 3% tax on next $1,150.00 or part thereof,
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23 (5) 4% tax on next $1,200.00 or part thereof,
23
24 (6) 5% tax on next $1,400.00 or part thereof,
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Req. No. 68 Page 7
1 (7) 6% tax on next $1,500.00 or part thereof,
1
2 (8) 7% tax on next $1,500.00 or part thereof,
2
3 (9) 8% tax on next $2,000.00 or part thereof,
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4 (10) 9% tax on next $3,500.00 or part thereof, and
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5 (11) 10% tax on the remainder.
5
6 b. Married individuals filing jointly and surviving
6
7 spouse to the extent and in the manner that a
7
8 surviving spouse is permitted to file a joint return
8
9 under the provisions of the Internal Revenue Code and
9
10 heads of households as defined in the Internal Revenue
10
11 Code deducting federal income tax:
11
12 (1) 1/2% tax on the first $2,000.00 or part thereof,
12
13 (2) 1% tax on the next $3,000.00 or part thereof,
13
14 (3) 2% tax on the next $2,500.00 or part thereof,
14
15 (4) 3% tax on the next $1,400.00 or part thereof,
15
16 (5) 4% tax on the next $1,500.00 or part thereof,
16
17 (6) 5% tax on the next $1,600.00 or part thereof,
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18 (7) 6% tax on the next $1,250.00 or part thereof,
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19 (8) 7% tax on the next $1,750.00 or part thereof,
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20 (9) 8% tax on the next $3,000.00 or part thereof,
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21 (10) 9% tax on the next $6,000.00 or part thereof, and
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22 (11) 10% tax on the remainder.
22
23 B. Individuals. For all taxable years beginning on or after
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24 January 1, 2008, and ending any tax year which begins after December
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Req. No. 68 Page 8
1 31, 2015, for which the determination required pursuant to Sections
1
2 4 2355.1F and 5 Section 2355.1G of this act title is made by the
2
3 State Board of Equalization, a tax is hereby imposed upon the
3
4 Oklahoma taxable income of every resident or nonresident individual,
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5 which tax shall be computed as follows:
5
6 1. Single individuals and married individuals filing
6
7 separately:
7
8 (a) 1/2% tax on first $1,000.00 or part thereof,
8
9 (b) 1% tax on next $1,500.00 or part thereof,
9
10 (c) 2% tax on next $1,250.00 or part thereof,
10
11 (d) 3% tax on next $1,150.00 or part thereof,
11
12 (e) 4% tax on next $2,300.00 or part thereof,
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13 (f) 5% tax on next $1,500.00 or part thereof,
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14 (g) 5.50% tax on the remainder for the 2008 tax year and
14
15 any subsequent tax year unless the rate prescribed by
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16 subparagraph (h) of this paragraph is in effect, and
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17 (h) 5.25% tax on the remainder for the 2009 and subsequent
17
18 tax years. The decrease in the top marginal
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19 individual income tax rate otherwise authorized by
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20 this subparagraph shall be contingent upon the
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21 determination required to be made by the State Board
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22 of Equalization pursuant to Section 2355.1A of this
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23 title.
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1 2. Married individuals filing jointly and surviving spouse to
1
2 the extent and in the manner that a surviving spouse is permitted to
2
3 file a joint return under the provisions of the Internal Revenue
3
4 Code and heads of households as defined in the Internal Revenue
4
5 Code:
5
6 (a) 1/2% tax on first $2,000.00 or part thereof,
6
7 (b) 1% tax on next $3,000.00 or part thereof,
7
8 (c) 2% tax on next $2,500.00 or part thereof,
8
9 (d) 3% tax on next $2,300.00 or part thereof,
9
10 (e) 4% tax on next $2,400.00 or part thereof,
10
11 (f) 5% tax on next $2,800.00 or part thereof,
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12 (g) 5.50% tax on the remainder for the 2008 tax year and
12
13 any subsequent tax year unless the rate prescribed by
13
14 subparagraph (h) of this paragraph is in effect, and
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15 (h) 5.25% tax on the remainder for the 2009 and subsequent
15
16 tax years. The decrease in the top marginal
16
17 individual income tax rate otherwise authorized by
17
18 this subparagraph shall be contingent upon the
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19 determination required to be made by the State Board
19
20 of Equalization pursuant to Section 2355.1A of this
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21 title.
21
22 C. Individuals. For all taxable years beginning on or after
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23 January 1, 2024, a tax is hereby imposed upon the Oklahoma taxable
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24
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Req. No. 68 Page 10
1 income of every resident or nonresident individual, which tax shall
1
2 be computed as follows:
2
3 1. Single individuals and married individuals filing
3
4 separately:
4
5 (a) 0.25% tax on first $1,000.00 or part thereof,
5
6 (b) 0.75% tax on next $1,500.00 or part thereof,
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7 (c) 1.75% tax on next $1,250.00 or part thereof,
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8 (d) 2.75% tax on next $1,150.00 or part thereof,
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9 (e) 3.75% tax on next $2,300.00 or part thereof, and
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10 (f) 4.75% tax on the remainder.
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11 2. Married individuals filing jointly and surviving spouse to
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12 the extent and in the manner that a surviving spouse is permitted to
12
13 file a joint return under the provisions of the Internal Revenue
13
14 Code and heads of households as defined in the Internal Revenue
14
15 Code:
15
16 (a) 0.25% tax on first $2,000.00 or part thereof,
16
17 (b) 0.75% tax on next $3,000.00 or part thereof,
17
18 (c) 1.75% tax on next $2,500.00 or part thereof,
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19 (d) 2.75% tax on next $2,300.00 or part thereof,
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20 (e) 3.75% tax on next $4,600.00 or part thereof, and
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21 (f) 4.75% tax on the remainder.
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22 No deduction for federal income taxes paid shall be allowed to
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23 any taxpayer to arrive at taxable income.
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24
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Req. No. 68 Page 11
1 D. Individuals. Except as provided for in subsection E of this
1
2 section, for all taxable years beginning on or after January 1,
2
3 2025, a tax is hereby imposed upon the Oklahoma taxable income of
3
4 every resident or nonresident individual, which tax shall be
4
5 computed as follows:
5
6 1. Single individuals and married individuals filing
6
7 separately:
7
8 (a) 0% tax on first $1,000.00 or part thereof,
8
9 (b) 0.5% tax on next $1,500.00 or part thereof,
9
10 (c) 1.5% tax on next $1,250.00 or part thereof,
10
11 (d) 2.5% tax on next $1,150.00 or part thereof,
11
12 (e) 3.5% tax on next $2,300.00 or part thereof, and
12
13 (f) 4.5% tax on the remainder.
13
14 2. Married individuals filing jointly and surviving spouse to
14
15 the extent and in the manner that a surviving spouse is permitted to
15
16 file a joint return under the provisions of the Internal Revenue
16
17 Code and heads of households as defined in the Internal Revenue
17
18 Code:
18
19 (a) 0% tax on first $2,000.00 or part thereof,
19
20 (b) 0.5% tax on next $3,000.00 or part thereof,
20
21 (c) 1.5% tax on next $2,500.00 or part thereof,
21
22 (d) 2.5% tax on next $2,300.00 or part thereof,
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23 (e) 3.5% tax on next $4,600.00 or part thereof, and
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24 (f) 4.5% tax on the remainder.
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Req. No. 68 Page 12
1 No deduction for federal income taxes paid shall be allowed to
1
2 any taxpayer to arrive at taxable income.
2
3 E. If the difference between collections exceeds Four Hundred
3
4 Million Dollars ($400,000,000.00) in growth, as adjusted for
4
5 inflation pursuant to subsection D of Section 34.103 of Title 62 of
5
6 the Oklahoma Statutes, and as certified by the State Board of
6
7 Equalization pursuant to paragraph 2 of subsection D of Section
7
8 34.103 of Title 62 of the Oklahoma Statutes, the marginal tax rates
8
9 provided in paragraphs 1 and 2 of subsection D of this section shall
9
10 each be reduced by twenty-five hundredths (0.25) of a percentage
10
11 point unless the rate equals zero percent (0%) for the immediate
11
12 succeeding tax year and subsequent tax years. Each successive
12
13 certification of growth exceeding Four Hundred Million Dollars
13
14 ($400,000,000.00) by the Board, as adjusted for inflation, shall
14
15 further reduce the marginal tax rates by twenty-five hundredths
15
16 (0.25) of a percentage point until the rate equals zero percent (0%)
16
17 in the immediate succeeding tax year and subsequent tax years. If a
17
18 revenue failure is declared pursuant to the provisions of Section
18
19 34.49 of Title 62 of the Oklahoma Statutes prior to the end of the
19
20 calendar year in which the Board makes a certification pursuant to
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21 paragraphs 2 and 3 of subsection D of Section 34.103 of Title 62 of
21
22 the Oklahoma Statutes, the reduction in marginal tax rates, as
22
23 provided for in this subsection, shall not occur until a subsequent
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Req. No. 68 Page 13
1 certification is made by the Board pursuant to paragraphs 2 and 3 of
1
2 subsection D of Section 34.103 of Title 62 of the Oklahoma Statutes.
2
3 F. Nonresident aliens. In lieu of the rates set forth in
3
4 subsection A above, there shall be imposed on nonresident aliens, as
4
5 defined in the Internal Revenue Code, a tax of eight percent (8%)
5
6 instead of thirty percent (30%) as used in the Internal Revenue
6
7 Code, with respect to the Oklahoma taxable income of such
7
8 nonresident aliens as determined under the provision of the Oklahoma
8
9 Income Tax Act.
9
10 Every payer of amounts covered by this subsection shall deduct
10
11 and withhold from such amounts paid each payee an amount equal to
11
12 eight percent (8%) thereof. Every payer required to deduct and
12
13 withhold taxes under this subsection shall for each quarterly period
13
14 on or before the last day of the month following the close of each
14
15 such quarterly period, pay over the amount so withheld as taxes to
15
16 the Oklahoma Tax Commission, and shall file a return with each such
16
17 payment. Such return shall be in such form as the Tax Commission
17
18 shall prescribe. Every payer required under this subsection to
18
19 deduct and withhold a tax from a payee shall, as to the total
19
20 amounts paid to each payee during the calendar year, furnish to such
20
21 payee, on or before January 31, of the succeeding year, a written
21
22 statement showing the name of the payer, the name of the payee and
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23 the payee's Social Security account number, if any, the total amount
23
24 paid subject to taxation, and the total amount deducted and withheld
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Req. No. 68 Page 14
1 as tax and such other information as the Tax Commission may require.
1
2 Any payer who fails to withhold or pay to the Tax Commission any
2
3 sums herein required to be withheld or paid shall be personally and
3
4 individually liable therefor to the State of Oklahoma this state.
4
5 E. G. Corporations. For all taxable years beginning after
5
6 December 31, 2021, a tax is hereby imposed upon the Oklahoma taxable
6
7 income of every corporation doing business within this state or
7
8 deriving income from sources within this state in an amount equal to
8
9 four percent (4%) thereof.
9
10 There shall be no additional Oklahoma income tax imposed on
10
11 accumulated taxable income or on undistributed personal holding
11
12 company income as those terms are defined in the Internal Revenue
12
13 Code.
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14 F. H. Certain foreign corporations. In lieu of the tax imposed
14
15 in the first paragraph of subsection D F of this section, for all
15
16 taxable years beginning after December 31, 2021, there shall be
16
17 imposed on foreign corporations, as defined in the Internal Revenue
17
18 Code, a tax of four percent (4%) instead of thirty percent (30%) as
18
19 used in the Internal Revenue Code, where such income is received
19
20 from sources within Oklahoma this state, in accordance with the
20
21 provisions of the Internal Revenue Code and the Oklahoma Income Tax
21
22 Act.
22
23 Every payer of amounts covered by this subsection shall deduct
23
24 and withhold from such amounts paid each payee an amount equal to
24
Req. No. 68 Page 15
1 four percent (4%) thereof. Every payer required to deduct and
1
2 withhold taxes under this subsection shall for each quarterly period
2
3 on or before the last day of the month following the close of each
3
4 such quarterly period, pay over the amount so withheld as taxes to
4
5 the Tax Commission, and shall file a return with each such payment.
5
6 Such return shall be in such form as the Tax Commission shall
6
7 prescribe. Every payer required under this subsection to deduct and
7
8 withhold a tax from a payee shall, as to the total amounts paid to
8
9 each payee during the calendar year, furnish to such payee, on or
9
10 before January 31, of the succeeding year, a written statement
10
11 showing the name of the payer, the name of the payee and the payee's
11
12 Social Security account number, if any, the total amounts paid
12
13 subject to taxation, the total amount deducted and withheld as tax,
13
14 and such other information as the Tax Commission may require. Any
14
15 payer who fails to withhold or pay to the Tax Commission any sums
15
16 herein required to be withheld or paid shall be personally and
16
17 individually liable therefor to the State of Oklahoma.
17
18 G. I. Fiduciaries. A tax is hereby imposed upon the Oklahoma
18
19 taxable income of every trust and estate at the same rates as are
19
20 provided in subsection B or, C, D, or E of this section for single
20
21 individuals. Fiduciaries are not allowed a deduction for any
21
22 federal income tax paid.
22
23 H. J. Tax rate tables. For all taxable years beginning after
23
24 December 31, 1991, in lieu of the tax imposed by subsection A, B or,
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Req. No. 68 Page 16
1 C, D, or E of this section, as applicable there is hereby imposed
1
2 for each taxable year on the taxable income of every individual,
2
3 whose taxable income for such taxable year does not exceed the
3
4 ceiling amount, a tax determined under tables, applicable to such
4
5 taxable year which shall be prescribed by the Tax Commission and
5
6 which shall be in such form as it determines appropriate. In the
6
7 table so prescribed, the amounts of the tax shall be computed on the
7
8 basis of the rates prescribed by subsection A, B or, C, D, or E of
8
9 this section. For purposes of this subsection, the term "ceiling
9
10 amount" means, with respect to any taxpayer, the amount determined
10
11 by the Tax Commission for the tax rate category in which such
11
12 taxpayer falls.
12
13 SECTION 3. It being immediately necessary for the preservation
13
14 of the public peace, health or safety, an emergency is hereby
14
15 declared to exist, by reason whereof this act shall take effect and
15
16 be in full force from and after its passage and approval.
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18 60-1-68 QD 11/15/2024 11:07:03 AM
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Req. No. 68 Page 17Every fact on this page links to its source, starting with the official bill record.