The bill proposes significant amendments to Oklahoma's income tax laws, focusing on tax rates and exemptions for individuals and corporations. Starting in tax year 2024, a new tiered tax structure will be implemented for individuals, beginning at a rate of 0.25% and increasing to 4.75% for taxable income. From tax year 2025 onward, a flat tax rate of 4.75% will apply to all individuals, with the elimination of the deduction for federal income taxes paid. Additionally, the tax rates for nonresident aliens and foreign corporations will be reduced from 30% to 8% and 4%, respectively. The bill also updates statutory references to align with the Internal Revenue Code of 1986 and modifies personal exemptions and standard deductions for specific tax years.

Moreover, the bill introduces various deductions and exemptions, including a $1,000 exemption for blind individuals and those aged 65 and older, and a $1,000 exemption for corporations utilizing the Safety Pays OSHA Consultation Service. It clarifies the treatment of income from partnerships, manufacturing, and processing enterprises, and establishes rules for the apportionment of income based on tangible property. The bill also allows for deductions related to contributions to the Achieving a Better Life Experience (ABLE) program and exempts retirement benefits from the Armed Forces from taxable income starting in 2022. Overall, the legislation aims to streamline tax calculations, provide additional benefits to specific taxpayer groups, and ensure compliance with federal regulations.

Statutes affected:
Introduced: 68-2355, 68-2358