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1 STATE OF OKLAHOMA
1
2 1st Session of the 60th Legislature (2025)
2
3 SENATE BILL 323 By: Deevers
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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 rate 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 modifying certain income tax rate for certain tax
11 years; updating statutory references; updating
12 statutory language; and 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
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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
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21 after December 31, 1998, and before January 1, 2006, a tax is hereby
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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. 1415 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. 1415 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:
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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
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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, a tax is hereby imposed upon the Oklahoma taxable
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3 income of every resident or nonresident individual, which tax shall
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4 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
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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. Nonresident aliens. In lieu of the rates set forth in
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4 subsection A above, there shall be imposed on nonresident aliens, as
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5 defined in the Internal Revenue Code of 1986, as amended, a tax of
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6 eight percent (8%) instead of thirty percent (30%) as used in the
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7 Internal Revenue Code of 1986, as amended, with respect to the
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8 Oklahoma taxable income of such nonresident aliens as determined
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9 under the provision of the Oklahoma Income Tax Act.
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10 Every payer of amounts covered by this subsection shall deduct
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11 and withhold from such amounts paid each payee an amount equal to
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12 eight percent (8%) thereof. Every payer required to deduct and
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13 withhold taxes under this subsection shall for each quarterly period
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14 on or before the last day of the month following the close of each
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15 such quarterly period, pay over the amount so withheld as taxes to
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16 the Oklahoma Tax Commission, and shall file a return with each such
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17 payment. Such return shall be in such form as the Tax Commission
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18 shall prescribe. Every payer required under this subsection to
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19 deduct and withhold a tax from a payee shall, as to the total
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20 amounts paid to each payee during the calendar year, furnish to such
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21 payee, on or before January 31, of the succeeding year, a written
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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
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24 paid subject to taxation, and the total amount deducted and withheld
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1 as tax and such other information as the Tax Commission may require.
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2 Any payer who fails to withhold or pay to the Tax Commission any
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3 sums herein required to be withheld or paid shall be personally and
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4 individually liable therefor to the State of Oklahoma.
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5 E. Corporations. For all taxable years beginning after
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6 December 31, 2021, a A tax is hereby imposed upon the Oklahoma
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7 taxable income of every corporation doing business within this state
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8 or deriving income from sources within this state in an amount equal
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9 to four percent (4%) for tax years 2022 through 2024, three percent
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10 (3%) for tax year 2025, two percent (2%) for tax year 2026, and one
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11 percent (1%) for tax year 2027 thereof. For tax year 2028 and
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12 subsequent tax years, there shall be no income tax imposed upon the
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13 Oklahoma taxable income of every corporation doing business within
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14 this state or deriving income from sources within this state.
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15 There shall be no additional Oklahoma income tax imposed on
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16 accumulated taxable income or on undistributed personal holding
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17 company income as those terms are defined in the Internal Revenue
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18 Code of 1986, as amended.
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19 F. Certain foreign corporations. In lieu of the tax imposed in
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20 the first paragraph of subsection D of this section, for all taxable
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21 years beginning after December 31, 2021, there shall be imposed on
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22 foreign corporations, as defined in the Internal Revenue Code of
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23 1986, as amended, a tax of four percent (4%) instead of thirty
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24 percent (30%) as used in the Internal Revenue Code of 1986, as
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Req. No. 1415 Page 9
1 amended, where such income is received from sources within Oklahoma
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2 this state, in accordance with the provisions of the Internal
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3 Revenue Code of 1986, as amended, and the Oklahoma Income Tax Act.
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4 Every payer of amounts covered by this subsection shall deduct
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5 and withhold from such amounts paid each payee an amount equal to
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6 four percent (4%) thereof. Every payer required to deduct and
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7 withhold taxes under this subsection shall for each quarterly period
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8 on or before the last day of the month following the close of each
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9 such quarterly period, pay over the amount so withheld as taxes to
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10 the Tax Commission, and shall file a return with each such payment.
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11 Such return shall be in such form as the Tax Commission shall
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12 prescribe. Every payer required under this subsection to deduct and
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13 withhold a tax from a payee shall, as to the total amounts paid to
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14 each payee during the calendar year, furnish to such payee, on or
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15 before January 31, of the succeeding year, a written statement
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16 showing the name of the payer, the name of the payee and the payee's
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17 Social Security account number, if any, the total amounts paid
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18 subject to taxation, the total amount deducted and withheld as tax,
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19 and such other information as the Tax Commission may require. Any
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20 payer who fails to withhold or pay to the Tax Commission any sums
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21 herein required to be withheld or paid shall be personally and
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22 individually liable therefor to the State of Oklahoma.
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23 G. Fiduciaries. A tax is hereby imposed upon the Oklahoma
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24 taxable income of every trust and estate at the same rates as are
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1 provided in subsection B or C of this section for single
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2 individuals. Fiduciaries are not allowed a deduction for any
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3 federal income tax paid.
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4 H. Tax rate tables. For all taxable years beginning after
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5 December 31, 1991, in lieu of the tax imposed by subsection A, B or
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6 C of this section, as applicable there is hereby imposed for each
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7 taxable year on the taxable income of every individual, whose
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8 taxable income for such taxable year does not exceed the ceiling
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9 amount, a tax determined under tables, applicable to such taxable
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10 year which shall be prescribed by the Tax Commission and which shall
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11 be in such form as it determines appropriate. In the table so
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12 prescribed, the amounts of the tax shall be computed on the basis of
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13 the rates prescribed by subsection A, B or C of this section. For
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14 purposes of this subsection, the term "ceiling amount" means, with
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15 respect to any taxpayer, the amount determined by the Tax Commission
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16 for the tax rate category in which such taxpayer falls.
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17 SECTION 2. AMENDATORY 68 O.S. 2021, Section 2370, is
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18 amended to read as follows:
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19 Section 2370. A. For taxable years beginning after December
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20 31, 2021, for the privilege of doing business within this state,
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21 every state banking association, national banking association and
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22 credit union organized under the laws of this state, located or
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23 doing business within the limits of the State of Oklahoma this state
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24 shall annually pay to this state a privilege tax at the rate of four
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Req. No. 1415 Page 11
1 percent (4%) for tax years 2022 through 2024, three percent (3%) for
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2 tax year 2025, two percent (2%) for tax year 2026, and one percent
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3 (1%) for tax year 2027 of the amount of the taxable income as
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4 provided in this section. For tax year 2028 and subsequent tax
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5 years, there shall be no tax imposed.
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6 B. 1. The privilege tax levied by this section shall be in
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7 addition to the Business Activity Tax levied in Section 1218 of this
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8 title and the franchise tax levied in Article 12 of this title and
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9 in lieu of the tax levied by Section 2355 of this title and in lieu
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10 of all taxes levied by the State of Oklahoma this state, or any
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11 subdivision thereof, upon the shares of stock or personal property
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12 of any banking association or credit union subject to taxation under
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13 this section.
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14 2. Nothing in this section shall be construed to exempt the
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15 real property of any banking associations or credit unions from
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16 taxation to the same extent, according to its value, as other real
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17 property is taxed. Nothing herein shall be construed to exempt an
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18 association from payment of any fee or tax authorized or levied
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19 pursuant to the banking laws.
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20 3. Personal property which is subject to a lease agreement
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21 between a bank or credit union, as lessor, and a nonbanking business
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22 entity or individual, as lessee, is not exempt from personal
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23 property ad valorem taxation. Provided further, that it shall be
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24 the duty of the lessee of such personal property to return sworn
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1 lists or schedules of their taxable property within each county to
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2 the county assessor of such county as provided in Sections 2433 and
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3 2434 of this title.
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4 C. Any tax levied under this section shall accrue on the last
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5 day of the taxable year and be payable as provided in Section 2375
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6 of this title. The accrual of such tax for the first taxable year
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7 to which this act the Oklahoma Income Tax Act applies, shall apply
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8 notwithstanding the prior accrual of a tax in the same taxable year
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9 based upon the net income of the next preceding taxable year;
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10 provided, however, any additional deduction enuring to the benefit
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11 of the taxpayer shall be deducted in accordance with the optional
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12 transitional deduction procedures in Section 2354 of this title.
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13 D. The basis of the tax shall be United States taxable income
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14 as defined in paragraph 10 of Section 2353 of this title and any
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15 adjustments thereto under the provisions of Section 2358 of this
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16 title with the following adjustments:
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17 1. There shall be deducted all interest income on obligations
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18 of the United States government and agencies thereof not otherwise
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19 exempted and all interest income on obligations of the State of
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20 Oklahoma this state or political subdivisions thereof, including
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21 public trust authorities, not otherwise exempted under the laws of
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22 this state; and
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23 2. Expense deductions claimed in arriving at taxable income
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24 under paragraph 10 of Section 2353 of this title shall be reduced by
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Req. No. 1415 Page 13
1 an amount equal to fifty percent (50%) of excluded interest income
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2 on obligations of the United States government or agencies thereof
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3 and obligations of the State of Oklahoma this state or political
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4 subdivisions thereof.
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5 E. 1. Except as otherwise provided in paragraph 2 of this
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6 subsection, before January 1, 2017, there shall be allowed a credit
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7 against the tax levied in subsection A of this section in an amount
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8 equal to the amount of taxable income received by a participating
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9 financial institution as defined in Section 90.2 of Title 62 of the
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10 Oklahoma Statutes pursuant to a loan made under the Rural Economic
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11 Development Loan Act. Such credit shall be limited each year to
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12 five percent (5%) of the amount of annual payroll certified by the
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13 Oklahoma Rural Economic Development Loan Program Review Board
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14 pursuant to the provisions of paragraph 3 of subsection B of Section
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15 90.4 of Title 62 of the Oklahoma Statutes with respect to the loan
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16 made by the participating financial institution and may be claimed
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17 for any number of years necessary until the amount of total credits
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18 claimed is equal to the total amount of taxable income received by
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19 the participating financial institution pursuant to the loan. Any
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20 credit allowed but not used in a taxable year may be carried forward
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21 for a period not to exceed five (5) taxable years. In no event
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22 shall a credit allowed pursuant to the provisions of this subsection
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23 be transferable or refundable.
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1 2. No credit otherwise authorized by the provisions of this
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2 subsection may be claimed for any event, transaction, investment,
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3 expenditure or other act occurring on or after July 1, 2010, for
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4 which the credit would otherwise be allowable. The provisions of
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5 this paragraph shall cease to be operative on July 1, 2012.
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6 Beginning July 1, 2012, the credit authorized by this subsection may
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7 be claimed for any event, transaction, investment, expenditure or
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8 other act occurring on or after July 1, 2012, according to the
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9 provisions of this subsection.
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10 SECTION 3. This act shall become effective November 1, 2025.
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Req. No. 1415 Page 15Every fact on this page links to its source, starting with the official bill record.