1 STATE OF OKLAHOMA
2 2nd Session of the 59th Legislature (2024)
3 HOUSE BILL 2949 By: McCall
4
5
6 AS INTRODUCED
7 An Act relating to revenue and taxation; amending 68
O.S. 2021, Sections 2355, as last amended by Section
8 1, Chapter 27, 1st Extraordinary Session, O.S.L.
2023, and 2358, as last amended by Section 2, Chapter
9 341, O.S.L. 2022 (68 O.S. Supp. 2023, Sections 2355
and 2358), which relate to income taxation; modifying
10 rates of individual income tax; modifying provisions
related to standard deduction amounts; amending 68
11 O.S. 2021, Section 2355.1P-4, which relates to the
Pass-Through Entity Tax Act; modifying reference to
12 income tax rate for certain natural persons; and
providing an effective date.
13
14
15 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
16 SECTION 1. AMENDATORY 68 O.S. 2021, Section 2355, as
17 last amended by Section 1, Chapter 27, 1st Extraordinary Session,
18 O.S.L. 2023 (68 O.S. Supp. 2023, Section 2355), is amended to read
19 as follows:
20 Section 2355. A. Individuals. For all taxable years beginning
21 after December 31, 1998, and before January 1, 2006, a tax is hereby
22 imposed upon the Oklahoma taxable income of every resident or
23 nonresident individual, which tax shall be computed at the option of
24 the taxpayer under one of the two following methods:
Req. No. 9798 Page 1
1 1. METHOD 1.
2 a. Single individuals and married individuals filing
3 separately not deducting federal income tax:
4 (1) 1/2% tax on first $1,000.00 or part thereof,
5 (2) 1% tax on next $1,500.00 or part thereof,
6 (3) 2% tax on next $1,250.00 or part thereof,
7 (4) 3% tax on next $1,150.00 or part thereof,
8 (5) 4% tax on next $1,300.00 or part thereof,
9 (6) 5% tax on next $1,500.00 or part thereof,
10 (7) 6% tax on next $2,300.00 or part thereof, and
11 (8) (a) for taxable years beginning after December
12 31, 1998, and before January 1, 2002, 6.75%
13 tax on the remainder,
14 (b) for taxable years beginning on or after
15 January 1, 2002, and before January 1, 2004,
16 7% tax on the remainder, and
17 (c) for taxable years beginning on or after
18 January 1, 2004, 6.65% tax on the remainder.
19 b. Married individuals filing jointly and surviving
20 spouse to the extent and in the manner that a
21 surviving spouse is permitted to file a joint return
22 under the provisions of the Internal Revenue Code and
23 heads of households as defined in the Internal Revenue
24 Code not deducting federal income tax:
Req. No. 9798 Page 2
1 (1) 1/2% tax on first $2,000.00 or part thereof,
2 (2) 1% tax on next $3,000.00 or part thereof,
3 (3) 2% tax on next $2,500.00 or part thereof,
4 (4) 3% tax on next $2,300.00 or part thereof,
5 (5) 4% tax on next $2,400.00 or part thereof,
6 (6) 5% tax on next $2,800.00 or part thereof,
7 (7) 6% tax on next $6,000.00 or part thereof, and
8 (8) (a) for taxable years beginning after December
9 31, 1998, and before January 1, 2002, 6.75%
10 tax on the remainder,
11 (b) for taxable years beginning on or after
12 January 1, 2002, and before January 1, 2004,
13 7% tax on the remainder, and
14 (c) for taxable years beginning on or after
15 January 1, 2004, 6.65% tax on the remainder.
16 2. METHOD 2.
17 a. Single individuals and married individuals filing
18 separately deducting federal income tax:
19 (1) 1/2% tax on first $1,000.00 or part thereof,
20 (2) 1% tax on next $1,500.00 or part thereof,
21 (3) 2% tax on next $1,250.00 or part thereof,
22 (4) 3% tax on next $1,150.00 or part thereof,
23 (5) 4% tax on next $1,200.00 or part thereof,
24 (6) 5% tax on next $1,400.00 or part thereof,
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1 (7) 6% tax on next $1,500.00 or part thereof,
2 (8) 7% tax on next $1,500.00 or part thereof,
3 (9) 8% tax on next $2,000.00 or part thereof,
4 (10) 9% tax on next $3,500.00 or part thereof, and
5 (11) 10% tax on the remainder.
6 b. Married individuals filing jointly and surviving
7 spouse to the extent and in the manner that a
8 surviving spouse is permitted to file a joint return
9 under the provisions of the Internal Revenue Code and
10 heads of households as defined in the Internal Revenue
11 Code deducting federal income tax:
12 (1) 1/2% tax on the first $2,000.00 or part thereof,
13 (2) 1% tax on the next $3,000.00 or part thereof,
14 (3) 2% tax on the next $2,500.00 or part thereof,
15 (4) 3% tax on the next $1,400.00 or part thereof,
16 (5) 4% tax on the next $1,500.00 or part thereof,
17 (6) 5% tax on the next $1,600.00 or part thereof,
18 (7) 6% tax on the next $1,250.00 or part thereof,
19 (8) 7% tax on the next $1,750.00 or part thereof,
20 (9) 8% tax on the next $3,000.00 or part thereof,
21 (10) 9% tax on the next $6,000.00 or part thereof, and
22 (11) 10% tax on the remainder.
23 B. Individuals. For all taxable years beginning on or after
24 January 1, 2008, and ending any tax year which begins after December
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1 31, 2015, for which the determination required pursuant to Sections
2 4 2355.1F and 5 2355.1G of this act title is made by the State Board
3 of Equalization, a tax is hereby imposed upon the Oklahoma taxable
4 income of every resident or nonresident individual, which tax shall
5 be computed as follows:
6 1. Single individuals and married individuals filing
7 separately:
8 (a) 1/2% tax on first $1,000.00 or part thereof,
9 (b) 1% tax on next $1,500.00 or part thereof,
10 (c) 2% tax on next $1,250.00 or part thereof,
11 (d) 3% tax on next $1,150.00 or part thereof,
12 (e) 4% tax on next $2,300.00 or part thereof,
13 (f) 5% tax on next $1,500.00 or part thereof,
14 (g) 5.50% tax on the remainder for the 2008 tax year and
15 any subsequent tax year unless the rate prescribed by
16 subparagraph (h) of this paragraph is in effect, and
17 (h) 5.25% tax on the remainder for the 2009 and subsequent
18 tax years. The decrease in the top marginal
19 individual income tax rate otherwise authorized by
20 this subparagraph shall be contingent upon the
21 determination required to be made by the State Board
22 of Equalization pursuant to Section 2355.1A of this
23 title.
24
Req. No. 9798 Page 5
1 2. Married individuals filing jointly and surviving spouse to
2 the extent and in the manner that a surviving spouse is permitted to
3 file a joint return under the provisions of the Internal Revenue
4 Code and heads of households as defined in the Internal Revenue
5 Code:
6 (a) 1/2% tax on first $2,000.00 or part thereof,
7 (b) 1% tax on next $3,000.00 or part thereof,
8 (c) 2% tax on next $2,500.00 or part thereof,
9 (d) 3% tax on next $2,300.00 or part thereof,
10 (e) 4% tax on next $2,400.00 or part thereof,
11 (f) 5% tax on next $2,800.00 or part thereof,
12 (g) 5.50% tax on the remainder for the 2008 tax year and
13 any subsequent tax year unless the rate prescribed by
14 subparagraph (h) of this paragraph is in effect, and
15 (h) 5.25% tax on the remainder for the 2009 and subsequent
16 tax years. The decrease in the top marginal
17 individual income tax rate otherwise authorized by
18 this subparagraph shall be contingent upon the
19 determination required to be made by the State Board
20 of Equalization pursuant to Section 2355.1A of this
21 title.
22 C. Individuals. For all taxable years beginning on or after
23 January 1, 2024, a tax is hereby imposed upon the Oklahoma taxable
24
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1 income of every resident or nonresident individual, which tax shall
2 be computed as follows:
3 1. Single individuals and married individuals filing
4 separately:
5 (a) 0.25% tax on first $1,000.00 or part thereof,
6 (b) 0.75% tax on next $1,500.00 or part thereof,
7 (c) 1.75% tax on next $1,250.00 or part thereof,
8 (d) 2.75% tax on next $1,150.00 or part thereof,
9 (e) 3.75% tax on next $2,300.00 or part thereof,
10 (f) 4.75% tax on the remainder.
11 2. Married individuals filing jointly and surviving spouse to
12 the extent and in the manner that a surviving spouse is permitted to
13 file a joint return under the provisions of the Internal Revenue
14 Code and heads of households as defined in the Internal Revenue
15 Code:
16 (a) 0.25% tax on first $2,000.00 or part thereof,
17 (b) 0.75% tax on next $3,000.00 or part thereof,
18 (c) 1.75% tax on next $2,500.00 or part thereof,
19 (d) 2.75% tax on next $2,300.00 or part thereof,
20 (e) 3.75% tax on next $4,600.00 or part thereof,
21 (f) 4.75% tax on the remainder levied at the rate of four
22 and twenty-five hundredths percent (4.25%).
23 No deduction for federal income taxes paid shall be allowed to
24 any taxpayer to arrive at taxable income. The tax levied pursuant
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1 to this subsection shall be levied only upon the amounts of Oklahoma
2 taxable income in excess of:
3 1. Nine Thousand Seven Hundred Fifty Dollars ($9,750.00) for
4 taxpayers having a single or married filing separate status; or
5 2. Sixteen Thousand Two Hundred Fifty Dollars ($16,250.00) for
6 head of household filing status; or
7 3. Nineteen Thousand Four Hundred Fifty Dollars ($19,450.00)
8 for taxpayers having a joint return filing status.
9 D. Nonresident aliens. In lieu of the rates set forth in
10 subsection A above this section, there shall be imposed on
11 nonresident aliens, as defined in the Internal Revenue Code, a tax
12 of eight percent (8%) instead of thirty percent (30%) as used in the
13 Internal Revenue Code, with respect to the Oklahoma taxable income
14 of such nonresident aliens as determined under the provision of the
15 Oklahoma Income Tax Act.
16 Every payer of amounts covered by this subsection shall deduct
17 and withhold from such amounts paid each payee an amount equal to
18 eight percent (8%) thereof. Every payer required to deduct and
19 withhold taxes under this subsection shall for each quarterly period
20 on or before the last day of the month following the close of each
21 such quarterly period, pay over the amount so withheld as taxes to
22 the Tax Commission, and shall file a return with each such payment.
23 Such return shall be in such form as the Tax Commission shall
24 prescribe. Every payer required under this subsection to deduct and
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1 withhold a tax from a payee shall, as to the total amounts paid to
2 each payee during the calendar year, furnish to such payee, on or
3 before January 31, of the succeeding year, a written statement
4 showing the name of the payer, the name of the payee and the payee's
5 Social Security account number, if any, the total amount paid
6 subject to taxation, and the total amount deducted and withheld as
7 tax and such other information as the Tax Commission may require.
8 Any payer who fails to withhold or pay to the Tax Commission any
9 sums herein required to be withheld or paid shall be personally and
10 individually liable therefor to the State of Oklahoma.
11 E. Corporations. For all taxable years beginning after
12 December 31, 2021, a tax is hereby imposed upon the Oklahoma taxable
13 income of every corporation doing business within this state or
14 deriving income from sources within this state in an amount equal to
15 four percent (4%) thereof.
16 There shall be no additional Oklahoma income tax imposed on
17 accumulated taxable income or on undistributed personal holding
18 company income as those terms are defined in the Internal Revenue
19 Code.
20 F. Certain foreign corporations. In lieu of the tax imposed in
21 the first paragraph of subsection D E of this section, for all
22 taxable years beginning after December 31, 2021, there shall be
23 imposed on foreign corporations, as defined in the Internal Revenue
24 Code, a tax of four percent (4%) instead of thirty percent (30%) as
Req. No. 9798 Page 9
1 used in the Internal Revenue Code, where such income is received
2 from sources within Oklahoma, in accordance with the provisions of
3 the Internal Revenue Code and the Oklahoma Income Tax Act.
4 Every payer of amounts covered by this subsection shall deduct
5 and withhold from such amounts paid each payee an amount equal to
6 four percent (4%) thereof. Every payer required to deduct and
7 withhold taxes under this subsection shall for each quarterly period
8 on or before the last day of the month following the close of each
9 such quarterly period, pay over the amount so withheld as taxes to
10 the Tax Commission, and shall file a return with each such payment.
11 Such return shall be in such form as the Tax Commission shall
12 prescribe. Every payer required under this subsection to deduct and
13 withhold a tax from a payee shall, as to the total amounts paid to
14 each payee during the calendar year, furnish to such payee, on or
15 before January 31, of the succeeding year, a written statement
16 showing the name of the payer, the name of the payee and the payee's
17 Social Security account number, if any, the total amounts paid
18 subject to taxation, the total amount deducted and withheld as tax
19 and such other information as the Tax Commission may require. Any
20 payer who fails to withhold or pay to the Tax Commission any sums
21 herein required to be withheld or paid shall be personally and
22 individually liable therefor to the State of Oklahoma.
23 G. Fiduciaries. A tax is hereby imposed upon the Oklahoma
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
2 individuals. Fiduciaries are not allowed a deduction for any
3 federal income tax paid.
4 H. Tax rate tables. For all taxable years beginning after
5 December 31, 1991, in lieu of the tax imposed by subsection A, B, or
6 C of this section, as applicable there is hereby imposed for each
7 taxable year on the taxable income of every individual, whose
8 taxable income for such taxable year does not exceed the ceiling
9 amount, a tax determined under tables, applicable to such taxable
10 year which shall be prescribed by the Tax Commission and which shall
11 be in such form as it determines appropriate. In the table so
12 prescribed, the amounts of the tax shall be computed on the basis of
13 the rates prescribed by subsection A, B or C of this section. For
14 purposes of this subsection, the term "ceiling amount" means, with
15 respect to any taxpayer, the amount determined by the Tax Commission
16 for the tax rate category in which such taxpayer falls.
17 SECTION 2. AMENDATORY 68 O.S. 2021, Section 2358, as
18 amended by Section 2, Chapter 341, O.S.L. 2022 (68 O.S. Supp. 2023,
19 Section 2358), is amended to read as follows:
20 Section 2358. For all tax years beginning after December 31,
21 1981, taxable income and adjusted gross income shall be adjusted to
22 arrive at Oklahoma taxable income and Oklahoma adjusted gross income
23 as required by this section.
24
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