This bill amends Section 2355 of the Oklahoma income tax law, introducing a new tax structure for individuals that will be implemented from 2024 to 2032. The proposed changes include incremental tax rates for single individuals and married couples filing jointly, starting with a rate of 0.25% on the first $1,000 of income for single filers and a maximum rate of 4.75% on the remainder for the 2024 tax year. The bill outlines a gradual reduction in these tax rates, ultimately leading to no tax on Oklahoma taxable income for the year 2032 and beyond. Additionally, it updates statutory language to incorporate the Internal Revenue Code of 1986 and removes outdated references, while also stipulating that no deductions for federal income taxes paid will be allowed in calculating taxable income.

The bill also proposes significant tax reductions for nonresident aliens and corporations in Oklahoma. It lowers the tax rate for nonresident aliens from 30% to 8% on their Oklahoma taxable income and requires payers to withhold this tax and remit it to the Oklahoma Tax Commission. For corporations, a new tax rate of 4% on Oklahoma taxable income is established, replacing the previous 30% rate, and this applies to all taxable years beginning after December 31, 2021. The bill also ensures that fiduciaries of trusts and estates are taxed at the same rates as single individuals. These changes are set to take effect on November 1, 2025.

Statutes affected:
Introduced: 68-2355