1 STATE OF OKLAHOMA
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2 1st Session of the 60th Legislature (2025)
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3 HOUSE BILL 1009 By: Steagall
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6 AS INTRODUCED
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7 An Act relating to revenue and taxation; amending 68
7 O.S. 2021, Section 2355, as last amended by Section
8 1, Chapter 27, O.S.L. 2023, 1st Extraordinary Session
8 of the 59th Oklahoma Legislature (68 O.S. Supp. 2024,
9 Section 2355), which relates to income taxation;
9 providing for reduction of individual income tax
10 rates; providing formula for income tax rate
10 reductions; providing for reduction of corporate
11 income tax rate; providing formula for income tax
11 rate reductions; specifying income tax years for
12 which reductions applicable; modifying references;
12 amending 68 O.S. 2021, Section 2355.1P-4, which
13 relates to income tax imposed on certain business
13 entities; providing for reduction of tax rates; and
14 providing an effective date.
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17 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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18 SECTION 1. AMENDATORY 68 O.S. 2021, Section 2355, as
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19 last amended by Section 1, Chapter 27, O.S.L. 2023, 1st
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20 Extraordinary Session of the 59th Oklahoma Legislature (68 O.S.
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21 Supp. 2024, Section 2355), is amended to read as follows:
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22 Section 2355. A. Individuals. For all taxable years beginning
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23 after December 31, 1998, and before January 1, 2006, a tax is hereby
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24 imposed upon the Oklahoma taxable income of every resident or
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 1 nonresident individual, which tax shall be computed at the option of
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2 the taxpayer under one of the two following methods:
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3 1. METHOD 1.
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4 a. Single individuals and married individuals filing
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5 separately not deducting federal income tax:
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6 (1) 1/2% tax on first $1,000.00 or part thereof,
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7 (2) 1% tax on next $1,500.00 or part thereof,
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8 (3) 2% tax on next $1,250.00 or part thereof,
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9 (4) 3% tax on next $1,150.00 or part thereof,
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10 (5) 4% tax on next $1,300.00 or part thereof,
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11 (6) 5% tax on next $1,500.00 or part thereof,
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12 (7) 6% tax on next $2,300.00 or part thereof, and
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13 (8) (a) for taxable years beginning after December
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14 31, 1998, and before January 1, 2002, 6.75%
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15 tax on the remainder,
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16 (b) for taxable years beginning on or after
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17 January 1, 2002, and before January 1, 2004,
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18 7% tax on the remainder, and
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19 (c) for taxable years beginning on or after
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20 January 1, 2004, 6.65% tax on the remainder.
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21 b. Married individuals filing jointly and surviving
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22 spouse to the extent and in the manner that a
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23 surviving spouse is permitted to file a joint return
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24 under the provisions of the Internal Revenue Code and
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 1 heads of households as defined in the Internal Revenue
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2 Code not 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 and
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12 heads of households as defined in the Internal Revenue
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13 Code deducting federal income tax:
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14 (1) 1/2% tax on the first $2,000.00 or part thereof,
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15 (2) 1% tax on the next $3,000.00 or part thereof,
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16 (3) 2% tax on the next $2,500.00 or part thereof,
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17 (4) 3% tax on the next $1,400.00 or part thereof,
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18 (5) 4% tax on the next $1,500.00 or part thereof,
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19 (6) 5% tax on the next $1,600.00 or part thereof,
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20 (7) 6% tax on the next $1,250.00 or part thereof,
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21 (8) 7% tax on the next $1,750.00 or part thereof,
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22 (9) 8% tax on the next $3,000.00 or part thereof,
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23 (10) 9% tax on the next $6,000.00 or part thereof, and
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24 (11) 10% tax on the remainder.
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 1 B. Individuals. For all taxable years beginning on or after
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2 January 1, 2008, and ending any tax year which begins after December
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3 31, 2015, for which the determination required pursuant to Sections
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4 4 and 5 of this act is made by the State Board of Equalization, a
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5 tax is hereby imposed upon the Oklahoma taxable income of every
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6 resident or nonresident individual, which tax shall be computed as
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7 follows:
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8 1. Single individuals and married individuals filing
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9 separately:
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10 (a) 1/2% tax on first $1,000.00 or part thereof,
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11 (b) 1% tax on next $1,500.00 or part thereof,
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12 (c) 2% tax on next $1,250.00 or part thereof,
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13 (d) 3% tax on next $1,150.00 or part thereof,
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14 (e) 4% tax on next $2,300.00 or part thereof,
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15 (f) 5% tax on next $1,500.00 or part thereof,
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16 (g) 5.50% tax on the remainder for the 2008 tax year and
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17 any subsequent tax year unless the rate prescribed by
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18 subparagraph (h) of this paragraph is in effect, and
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19 (h) 5.25% tax on the remainder for the 2009 and subsequent
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20 tax years. The decrease in the top marginal
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21 individual income tax rate otherwise authorized by
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22 this subparagraph shall be contingent upon the
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23 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 and heads of households as defined in the Internal Revenue
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7 Code:
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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, 2022 2024, and ending not later than December 31, 2024, a
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3 tax is hereby imposed upon the Oklahoma taxable income of every
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4 resident or nonresident individual, which tax shall be computed as
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5 follows:
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6 1. Single individuals and married individuals filing
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7 separately:
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8 (a) 0.25% tax on first $1,000.00 or part thereof,
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9 (b) 0.75% tax on next $1,500.00 or part thereof,
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10 (c) 1.75% tax on next $1,250.00 or part thereof,
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11 (d) 2.75% tax on next $1,150.00 or part thereof,
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12 (e) 3.75% tax on next $2,300.00 or part thereof,
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13 (f) 4.75% tax on the remainder.
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14 2. Married individuals filing jointly and surviving spouse to
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15 the extent and in the manner that a surviving spouse is permitted to
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16 file a joint return under the provisions of the Internal Revenue
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17 Code and heads of households as defined in the Internal Revenue
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18 Code:
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19 (a) 0.25% tax on first $2,000.00 or part thereof,
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20 (b) 0.75% tax on next $3,000.00 or part thereof,
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21 (c) 1.75% tax on next $2,500.00 or part thereof,
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22 (d) 2.75% tax on next $2,300.00 or part thereof,
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23 (e) 3.75% tax on next $4,600.00 or part thereof,
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24 (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 taxable years beginning on or after January 1, 2025, the
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4 rate of tax otherwise prescribed by each of subparagraphs (a)
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5 through (f) of paragraph 1 and paragraph 2 of subsection C of this
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6 section, expressed as a decimal, shall be divided by the whole
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7 number ten (10). The result of that computation shall be the
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8 numeral used for a reduction of the otherwise applicable income tax
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9 rate in each of those subparagraphs for each income tax year
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10 beginning with the 2025 income tax year. Each income tax rate shall
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11 be reduced by the amount resulting from the computation required by
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12 this subsection for each taxable year until the rate of tax equals
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13 zero (0). No income tax shall be imposed for any individual income
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14 tax year thereafter.
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15 E. Nonresident aliens. In lieu of the rates set forth in this
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16 subsection A above, there shall be imposed on nonresident aliens, as
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17 defined in the Internal Revenue Code, a tax of eight percent (8%),
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18 or the applicable amount based upon the income tax rate reductions
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19 prescribed by subsection D of this section, instead of thirty
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20 percent (30%) as used in the Internal Revenue Code, with respect to
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21 the Oklahoma taxable income of such nonresident aliens as determined
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22 under the provision of the Oklahoma Income Tax Act.
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23 F. Every payer of amounts covered by this subsection E of this
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24 section shall deduct and withhold from such amounts paid each payee
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 1 an amount equal to eight percent (8%) the applicable percentage
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2 thereof based upon the income tax rate reductions prescribed by
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3 subsection D of this section. Every payer required to deduct and
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4 withhold taxes under this subsection shall for each quarterly period
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5 on or before the last day of the month following the close of each
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6 such quarterly period, pay over the amount so withheld as taxes to
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7 the Tax Commission, and shall file a return with each such payment.
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8 Such return shall be in such form as the Tax Commission shall
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9 prescribe. Every payer required under this subsection to deduct and
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10 withhold a tax from a payee shall, as to the total amounts paid to
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11 each payee during the calendar year, furnish to such payee, on or
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12 before January 31, of the succeeding year, a written statement
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13 showing the name of the payer, the name of the payee and the payee's
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14 Social Security account number, if any, the total amount paid
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15 subject to taxation, and the total amount deducted and withheld as
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16 tax and such other information as the Tax Commission may require.
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17 Any payer who fails to withhold or pay to the Tax Commission any
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18 sums herein required to be withheld or paid shall be personally and
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19 individually liable therefor to the State of Oklahoma.
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20 E. G. Corporations. For all taxable years beginning after
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21 December 31, 2021, a A tax is hereby imposed upon the Oklahoma
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22 taxable income of every corporation doing business within this state
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23 or deriving income from sources within this state in an amount equal
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 1 to four percent (4%) thereof or the applicable reduced percentage as
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2 prescribed by this subsection.
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3 1. There shall be no additional Oklahoma income tax imposed on
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4 accumulated taxable income or on undistributed personal holding
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5 company income as those terms are defined in the Internal Revenue
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6 Code thereof.
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7 2. For all taxable years for corporations using a calendar year
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8 for income tax reporting purposes, the changes in the income tax
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9 rate prescribed by this paragraph shall become effective January 1,
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10 2025. For all taxable years for corporations using a fiscal year
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11 for income tax reporting purposes, the changes in the income tax
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12 rate prescribed by this paragraph shall become effective for the
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13 first tax year which begins after January 1, 2025. The rate of tax
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14 otherwise imposed pursuant to the provisions of this subsection,
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15 expressed as a decimal, shall be divided by the whole number ten
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16 (10). The result of that computation shall be the numeral used for
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17 a reduction of the otherwise applicable income tax rate beginning
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18 with the 2025 income tax year. The income tax rate otherwise
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19 prescribed by this subsection shall be reduced by the amount
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20 resulting from the computation required by this paragraph for each
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21 taxable year until the rate of tax equals zero (0). No income tax
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22 shall be imposed for any income tax year thereafter.
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