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1 STATE OF OKLAHOMA
1
2 1st Session of the 60th Legislature (2025)
2
3 SENATE BILL 290 By: Jett
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4
4
5
5
6 AS INTRODUCED
6
7 An Act relating to tax; amending 68 O.S. 2021,
7 Section 2355, as last amended by Section 1, Chapter
8 27, 1st Extraordinary Session, O.S.L. 2023 (68 O.S.
8 Supp. 2024, Section 2355), which relates to income
9 tax; modifying certain income tax rates for certain
9 tax years; modifying certain withholding requirement
10 for certain tax years; amending 68 O.S. 2021, Section
10 2370, which relates to the banking privilege tax;
11 limiting tax to certain tax years; updating statutory
11 references; updating statutory language; and
12 providing an effective date.
12
13
13
14
14
15 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
15
16 SECTION 1. 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
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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
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23 nonresident individual, which tax shall be computed at the option of
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24 the taxpayer under one of the two following methods:
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Req. No. 1553 Page 1
1 1. METHOD 1.
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2 a. Single individuals and married individuals filing
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3 separately not deducting federal income tax:
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4 (1) 1/2% tax on first $1,000.00 or part thereof,
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5 (2) 1% tax on next $1,500.00 or part thereof,
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6 (3) 2% tax on next $1,250.00 or part thereof,
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7 (4) 3% tax on next $1,150.00 or part thereof,
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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
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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.
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19 b. Married individuals filing jointly and surviving
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20 spouse to the extent and in the manner that a
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21 surviving spouse is permitted to file a joint return
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22 under the provisions of the Internal Revenue Code of
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23 1986, as amended, and heads of households as defined
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Req. No. 1553 Page 2
1 in the Internal Revenue Code of 1986, as amended, not
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2 deducting federal income tax:
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3 (1) 1/2% tax on first $2,000.00 or part thereof,
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4 (2) 1% tax on next $3,000.00 or part thereof,
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5 (3) 2% tax on next $2,500.00 or part thereof,
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6 (4) 3% tax on next $2,300.00 or part thereof,
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7 (5) 4% tax on next $2,400.00 or part thereof,
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8 (6) 5% tax on next $2,800.00 or part thereof,
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9 (7) 6% tax on next $6,000.00 or part thereof, and
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10 (8) (a) for taxable years beginning after December
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11 31, 1998, and before January 1, 2002, 6.75%
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12 tax on the remainder,
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13 (b) for taxable years beginning on or after
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14 January 1, 2002, and before January 1, 2004,
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15 7% tax on the remainder, and
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16 (c) for taxable years beginning on or after
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17 January 1, 2004, 6.65% tax on the remainder.
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18 2. METHOD 2.
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19 a. Single individuals and married individuals filing
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20 separately deducting federal income tax:
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21 (1) 1/2% tax on first $1,000.00 or part thereof,
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22 (2) 1% tax on next $1,500.00 or part thereof,
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23 (3) 2% tax on next $1,250.00 or part thereof,
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24 (4) 3% tax on next $1,150.00 or part thereof,
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1 (5) 4% tax on next $1,200.00 or part thereof,
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2 (6) 5% tax on next $1,400.00 or part thereof,
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3 (7) 6% tax on next $1,500.00 or part thereof,
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4 (8) 7% tax on next $1,500.00 or part thereof,
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5 (9) 8% tax on next $2,000.00 or part thereof,
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6 (10) 9% tax on next $3,500.00 or part thereof, and
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7 (11) 10% tax on the remainder.
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8 b. Married individuals filing jointly and surviving
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9 spouse to the extent and in the manner that a
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10 surviving spouse is permitted to file a joint return
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11 under the provisions of the Internal Revenue Code of
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12 1986, as amended, and heads of households as defined
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13 in the Internal Revenue Code of 1986, as amended,
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14 deducting federal income tax:
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15 (1) 1/2% tax on the first $2,000.00 or part thereof,
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16 (2) 1% tax on the next $3,000.00 or part thereof,
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17 (3) 2% tax on the next $2,500.00 or part thereof,
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18 (4) 3% tax on the next $1,400.00 or part thereof,
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19 (5) 4% tax on the next $1,500.00 or part thereof,
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20 (6) 5% tax on the next $1,600.00 or part thereof,
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21 (7) 6% tax on the next $1,250.00 or part thereof,
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22 (8) 7% tax on the next $1,750.00 or part thereof,
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23 (9) 8% tax on the next $3,000.00 or part thereof,
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24 (10) 9% tax on the next $6,000.00 or part thereof, and
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1 (11) 10% tax on the remainder.
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2 B. Individuals. For all taxable years beginning on or after
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3 January 1, 2008, and ending any tax year which begins after December
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4 31, 2015, for which the determination required pursuant to Sections
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5 4 2355.1F and 5 2355.1G of this act title is made by the State Board
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6 of Equalization, a tax is hereby imposed upon the Oklahoma taxable
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7 income of every resident or nonresident individual, which tax shall
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8 be computed as follows:
8
9 1. Single individuals and married individuals filing
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10 separately:
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11 (a) 1/2% tax on first $1,000.00 or part thereof,
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12 (b) 1% tax on next $1,500.00 or part thereof,
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13 (c) 2% tax on next $1,250.00 or part thereof,
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14 (d) 3% tax on next $1,150.00 or part thereof,
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15 (e) 4% tax on next $2,300.00 or part thereof,
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16 (f) 5% tax on next $1,500.00 or part thereof,
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17 (g) 5.50% tax on the remainder for the 2008 tax year and
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18 any subsequent tax year unless the rate prescribed by
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19 subparagraph (h) of this paragraph is in effect, and
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20 (h) 5.25% tax on the remainder for the 2009 and subsequent
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21 tax years. The decrease in the top marginal
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22 individual income tax rate otherwise authorized by
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23 this subparagraph shall be contingent upon the
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24 determination required to be made by the State Board
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1 of Equalization pursuant to Section 2355.1A of this
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2 title.
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3 2. Married individuals filing jointly and surviving spouse to
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4 the extent and in the manner that a surviving spouse is permitted to
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5 file a joint return under the provisions of the Internal Revenue
5
6 Code of 1986, as amended, and heads of households as defined in the
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7 Internal Revenue Code of 1986, as amended:
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8 (a) 1/2% tax on first $2,000.00 or part thereof,
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9 (b) 1% tax on next $3,000.00 or part thereof,
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10 (c) 2% tax on next $2,500.00 or part thereof,
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11 (d) 3% tax on next $2,300.00 or part thereof,
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12 (e) 4% tax on next $2,400.00 or part thereof,
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13 (f) 5% tax on next $2,800.00 or part thereof,
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14 (g) 5.50% tax on the remainder for the 2008 tax year and
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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
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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 C. Individuals. For all taxable years beginning on or after
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2 January 1, 2024 tax year 2024, a tax is hereby imposed upon the
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3 Oklahoma taxable income of every resident or nonresident individual,
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4 which tax shall be computed as follows:
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5 1. Single individuals and married individuals filing
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6 separately:
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7 (a) 0.25% tax on first $1,000.00 or part thereof,
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8 (b) 0.75% tax on next $1,500.00 or part thereof,
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9 (c) 1.75% tax on next $1,250.00 or part thereof,
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10 (d) 2.75% tax on next $1,150.00 or part thereof,
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11 (e) 3.75% tax on next $2,300.00 or part thereof, and
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12 (f) 4.75% tax on the remainder.
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13 2. Married individuals filing jointly and surviving spouse to
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14 the extent and in the manner that a surviving spouse is permitted to
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15 file a joint return under the provisions of the Internal Revenue
15
16 Code of 1986, as amended, and heads of households as defined in the
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17 Internal Revenue Code of 1986, as amended:
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18 (a) 0.25% tax on first $2,000.00 or part thereof,
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19 (b) 0.75% tax on next $3,000.00 or part thereof,
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20 (c) 1.75% tax on next $2,500.00 or part thereof,
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21 (d) 2.75% tax on next $2,300.00 or part thereof,
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22 (e) 3.75% tax on next $4,600.00 or part thereof, and
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23 (f) 4.75% tax on the remainder.
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1 No deduction for federal income taxes paid shall be allowed to
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2 any taxpayer to arrive at taxable income.
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3 D. For tax year 2025 and subsequent tax years, there shall be
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4 no tax imposed upon the Oklahoma taxable income of any resident or
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5 nonresident individual.
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6 E. Nonresident aliens. In lieu of the rates set forth in
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7 subsection A above, there shall be imposed on nonresident aliens, as
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8 defined in the Internal Revenue Code of 1986, as amended, a tax of
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9 eight percent (8%) instead of thirty percent (30%) as used in the
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10 Internal Revenue Code of 1986, as amended, with respect to the
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11 Oklahoma taxable income of such nonresident aliens as determined
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12 under the provision of the Oklahoma Income Tax Act.
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13 Every payer of amounts covered by this subsection shall deduct
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14 and withhold from such amounts paid each payee an amount equal to
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15 eight percent (8%) thereof. Every payer required to deduct and
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16 withhold taxes under this subsection shall for each quarterly period
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17 on or before the last day of the month following the close of each
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18 such quarterly period, pay over the amount so withheld as taxes to
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19 the Oklahoma Tax Commission, and shall file a return with each such
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20 payment. Such return shall be in such form as the Tax Commission
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21 shall prescribe. Every payer required under this subsection to
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22 deduct and withhold a tax from a payee shall, as to the total
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23 amounts paid to each payee during the calendar year, furnish to such
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24 payee, on or before January 31, of the succeeding year, a written
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Req. No. 1553 Page 8
1 statement showing the name of the payer, the name of the payee and
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2 the payee's Social Security account number, if any, the total amount
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3 paid subject to taxation, and the total amount deducted and withheld
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4 as tax and such other information as the Tax Commission may require.
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5 Any payer who fails to withhold or pay to the Tax Commission any
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6 sums herein required to be withheld or paid shall be personally and
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7 individually liable therefor to the State of Oklahoma.
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8 E. F. Corporations. For all taxable years beginning after
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9 December 31, 2021 tax years 2022 through 2024, a tax is hereby
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10 imposed upon the Oklahoma taxable income of every corporation doing
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11 business within this state or deriving income from sources within
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12 this state in an amount equal to four percent (4%) thereof. For tax
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13 year 2025 and subsequent tax years, there shall be no income tax
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14 imposed upon the Oklahoma taxable income of any corporation doing
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15 business within this state or deriving income from sources within
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16 this state.
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17 There shall be no additional Oklahoma income tax imposed on
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18 accumulated taxable income or on undistributed personal holding
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19 company income as those terms are defined in the Internal Revenue
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20 Code of 1986, as amended.
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21 F. G. Certain foreign corporations. In lieu of the tax imposed
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22 in the first paragraph of subsection D F of this section, for all
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23 taxable years beginning after December 31, 2021 tax years 2022
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24 through 2024, there shall be imposed on foreign corporations, as
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Req. No. 1553 Page 9
1 defined in the Internal Revenue Code of 1986, as amended, a tax of
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2 four percent (4%) instead of thirty percent (30%) as used in the
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3 Internal Revenue Code of 1986, as amended, where such income is
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4 received from sources within Oklahoma this state, in accordance with
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5 the provisions of the Internal Revenue Code of 1986, as amended, and
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6 the Oklahoma Income Tax Act. For tax year 2025 and subsequent tax
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7 years, there shall be no tax imposed on foreign corporations, as
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8 defined in the Internal Revenue Code of 1986, as amended, where such
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9 income is received from sources within this state, in accordance
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10 with the provisions of the Internal Revenue Code of 1986, as
10
11 amended, and the Oklahoma Income Tax Act.
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12 Every For tax years 2022 through 2024, every payer of amounts
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13 covered by this subsection shall deduct and withhold from such
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14 amounts paid each payee an amount equal to four percent (4%)
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15 thereof. Every payer required to deduct and withhold taxes under
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16 this subsection shall for each quarterly period on or before the
16
17 last day of the month following the close of each such quarterly
17
18 period, pay over the amount so withheld as taxes to the Tax
18
19 Commission, and shall file a return with each such payment. Such
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20 return shall be in such form as the Tax Commission shall prescribe.
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21 Every payer required under this subsection to deduct and withhold a
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22 tax from a payee shall, as to the total amounts paid to each payee
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23 during the calendar year, furnish to such payee, on or before
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24 January 31, of the succeeding year, a written statement showing the
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Req. No. 1553 Page 10
1 name of the payer, the name of the payee and the payee's Social
1
2 Security account number, if any, the total amounts paid subject to
2
3 taxation, the total amount deducted and withheld as tax, and such
3
4 other information as the Tax Commission may require. Any payer who
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5 fails to withhold or pay to the Tax Commission any sums herein
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6 required to be withheld or paid shall be personally and individually
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7 liable therefor to the State of Oklahoma.
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8 G. H. Fiduciaries. A tax is hereby imposed upon the Oklahoma
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9 taxable income of every trust and estate at the same rates as are
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10 provided in subsection B or C subsections B through D of this
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11 section for single individuals. Fiduciaries are not allowed a
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12 deduction for any federal income tax paid.
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13 H. I. Tax rate tables. For all taxable years beginning after
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14 December 31, 1991, in lieu of the tax imposed by subsection A, B or
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15 C subsections A through D of this section, as applicable there is
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16 hereby imposed for each taxable year on the taxable income of every
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17 individual, whose taxable income for such taxable year does not
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18 exceed the ceiling amount, a tax determined under tables, applicable
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19 to such taxable year which shall be prescribed by the Tax Commission
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20 and which shall be in such form as it determines appropriate. In
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21 the table so prescribed, the amounts of the tax shall be computed on
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22 the basis of the rates prescribed by subsection A, B or C
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23 subsections A through D of this section. For purposes of this
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24 subsection, the term "ceiling amount" means, with respect to any
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Req. No. 1553 Page 11
1 taxpayer, the amount determined by the Tax Commission for the tax
1
2 rate category in which such taxpayer falls.
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3 SECTION 2. AMENDATORY 68 O.S. 2021, Section 2370, is
3
4 amended to read as follows:
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5 Section 2370. A. For taxable years beginning after December
5
6 31, 2021 tax years 2022 through 2024, for the privilege of doing
6
7 business within this state, every state banking association,
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8 national banking association and credit union organized under the
8
9 laws of this state, located or doing business within the limits of
9
10 the State of Oklahoma this state shall annually pay to this state a
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11 privilege tax at the rate of four percent (4%) of the amount of the
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12 taxable income as provided in this section.
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13 B. 1. The privilege tax levied by this section shall be in
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14 addition to the Business Activity Tax levied in Section 1218 of this
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15 title and the franchise tax levied in Article 12 of this title and
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16 in lieu of the tax levied by Section 2355 of this title and in lieu
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17 of all taxes levied by the State of Oklahoma this state, or any
17
18 subdivision thereof, upon the shares of stock or personal property
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19 of any banking association or credit union subject to taxation under
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20 this section.
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21 2. Nothing in this section shall be construed to exempt the
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22 real property of any banking associations or credit unions from
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23 taxation to the same extent, according to its value, as other real
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24 property is taxed. Nothing herein shall be construed to exempt an
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Req. No. 1553 Page 12
1 association from payment of any fee or tax authorized or levied
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2 pursuant to the banking laws.
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3 3. Personal property which is subject to a lease agreement
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4 between a bank or credit union, as lessor, and a nonbanking business
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5 entity or individual, as lessee, is not exempt from personal
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6 property ad valorem taxation. Provided further, that it shall be
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7 the duty of the lessee of such personal property to return sworn
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8 lists or schedules of their taxable property within each county to
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9 the county assessor of such county as provided in Sections 2433 and
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10 2434 of this title.
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11 C. Any tax levied under this section shall accrue on the last
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12 day of the taxable year and be payable as provided in Section 2375
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13 of this title. The accrual of such tax for the first taxable year
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14 to which this act the Oklahoma Income Tax Act applies, shall apply
14
15 notwithstanding the prior accrual of a tax in the same taxable year
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16 based upon the net income of the next preceding taxable year;
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17 provided, however, any additional deduction enuring to the benefit
17
18 of the taxpayer shall be deducted in accordance with the optional
18
19 transitional deduction procedures in Section 2354 of this title.
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20 D. The basis of the tax shall be United States taxable income
20
21 as defined in paragraph 10 of Section 2353 of this title and any
21
22 adjustments thereto under the provisions of Section 2358 of this
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23 title with the following adjustments:
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24
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1 1. There shall be deducted all interest income on obligations
1
2 of the United States government and agencies thereof not otherwise
2
3 exempted and all interest income on obligations of the State of
3
4 Oklahoma this state or political subdivisions thereof, including
4
5 public trust authorities, not otherwise exempted under the laws of
5
6 this state; and
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7 2. Expense deductions claimed in arriving at taxable income
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8 under paragraph 10 of Section 2353 of this title shall be reduced by
8
9 an amount equal to fifty percent (50%) of excluded interest income
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10 on obligations of the United States government or agencies thereof
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11 and obligations of the State of Oklahoma this state or political
11
12 subdivisions thereof.
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13 E. 1. Except as otherwise provided in paragraph 2 of this
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14 subsection, before January 1, 2017, there shall be allowed a credit
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15 against the tax levied in subsection A of this section in an amount
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16 equal to the amount of taxable income received by a participating
16
17 financial institution as defined in Section 90.2 of Title 62 of the
17
18 Oklahoma Statutes pursuant to a loan made under the Rural Economic
18
19 Development Loan Act. Such credit shall be limited each year to
19
20 five percent (5%) of the amount of annual payroll certified by the
20
21 Oklahoma Rural Economic Development Loan Program Review Board
21
22 pursuant to the provisions of paragraph 3 of subsection B of Section
22
23 90.4 of Title 62 of the Oklahoma Statutes with respect to the loan
23
24 made by the participating financial institution and may be claimed
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Req. No. 1553 Page 14
1 for any number of years necessary until the amount of total credits
1
2 claimed is equal to the total amount of taxable income received by
2
3 the participating financial institution pursuant to the loan. Any
3
4 credit allowed but not used in a taxable year may be carried forward
4
5 for a period not to exceed five (5) taxable years. In no event
5
6 shall a credit allowed pursuant to the provisions of this subsection
6
7 be transferable or refundable.
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8 2. No credit otherwise authorized by the provisions of this
8
9 subsection may be claimed for any event, transaction, investment,
9
10 expenditure or other act occurring on or after July 1, 2010, for
10
11 which the credit would otherwise be allowable. The provisions of
11
12 this paragraph shall cease to be operative on July 1, 2012.
12
13 Beginning July 1, 2012, the credit authorized by this subsection may
13
14 be claimed for any event, transaction, investment, expenditure or
14
15 other act occurring on or after July 1, 2012, according to the
15
16 provisions of this subsection.
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17 SECTION 3. This act shall become effective November 1, 2025.
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19 60-1-1553 QD 12/30/2024 11:20:06 PM
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Req. No. 1553 Page 15Every fact on this page links to its source, starting with the official bill record.