The bill amends Oklahoma's individual income tax rates and standard deduction amounts, introducing a new tax structure for taxable years beginning on or after January 1, 2024, and ending December 31, 2025. It establishes reduced tax rates for single individuals and married couples filing jointly, with rates starting at 0.25% on the first $1,000 and increasing through various brackets, culminating at 4.75% on the remainder for single filers. For married couples, the rates are adjusted for higher income brackets. The bill also specifies that no federal income tax deductions will be allowed in calculating taxable income. Starting January 1, 2026, a new flat tax rate of 4.75% will be implemented for individuals, and the previous 30% tax rate for nonresident aliens will be replaced with an 8% tax rate.

Additionally, the bill modifies the standard deduction for individuals and introduces new amounts for taxable years starting on or after January 1, 2026. It includes provisions for tax incentives for agricultural commodity processing facilities, deductions for organ donation expenses, and exemptions for certain retirement benefits. The bill also addresses the allocation of income and losses for partnerships and business entities, ensuring compliance with federal tax regulations. Overall, the proposed changes aim to simplify the tax structure, provide financial relief to specific groups, and align Oklahoma's tax code with federal standards.

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