Bill No. 1539 proposes significant changes to Oklahoma's income tax structure, particularly for individual taxpayers, effective January 1, 2024. The bill introduces a tiered tax rate system with lower rates: 0.25% on the first $1,000, 0.75% on the next $1,500, and a maximum of 4.75% on income above that for single individuals. Married couples filing jointly will see similar reductions. Notably, the bill eliminates the allowance for federal income tax deductions when calculating taxable income. Additionally, it establishes a mechanism for future tax rate reductions based on "qualifying cumulative revenue growth," which requires an increase of at least $300 million in total revenue collections to trigger a potential reduction of 0.0025% in income tax rates.

The bill also amends tax law concerning trusts and estates, imposing a tax on their Oklahoma taxable income at the same rates applicable to single individuals, while clarifying that fiduciaries cannot deduct federal income taxes. It modifies tax rate tables for individuals and introduces a new category of rates, with the Tax Commission responsible for determining the "ceiling amount" that dictates applicable tax rate categories. The act is set to take effect on November 1, 2025, following its passage in the House of Representatives on March 25, 2025.

Statutes affected:
Introduced: 68-2355
Floor (House): 68-2355
Engrossed: 68-2355