Bill No. 304 proposes significant amendments to the Oklahoma income tax code, introducing new tax brackets and rates for individuals and corporations starting from tax year 2024. For individual taxpayers, the bill establishes a tiered tax rate beginning at 0.25% for the first $1,000 of income, escalating to 4.75% on the remainder, with a flat rate of 4.75% for all individuals starting in 2025. Additionally, the tax rate for nonresident aliens is reduced from 30% to 8%, and a 4% tax is imposed on corporations operating in Oklahoma. The bill also includes various insertions related to the Internal Revenue Code of 1986 and modifies definitions and calculations of taxable income to simplify the tax structure.

Further amendments focus on the allocation of income for business entities, particularly unitary business enterprises and insurance companies, specifying how gains or losses from publicly traded partnerships will be allocated based on tangible property costs. The bill also outlines provisions for agricultural commodity processing facilities and addresses the treatment of farming losses. Notably, it proposes changes to the standard deduction amounts for individual taxpayers starting in 2025, with new amounts set for different filing statuses. The bill clarifies the treatment of moving expenses, extends tax filing deadlines for Armed Forces members, and introduces deductions for contributions to the ABLE program, while ensuring compliance with federal tax law. The effective date for these changes is set for November 1, 2025.

Statutes affected:
Introduced: 68-2355, 68-2358
Committee Substitute: 68-2355, 68-2358
Floor (Senate): 68-2355, 68-2358
Engrossed: 68-2355, 68-2358