The Inhofe Disaster Savings Account Act establishes a new financial mechanism aimed at assisting Oklahoma residents in managing the costs associated with disaster-related damages. The Act allows individuals to create a "Disaster Savings Account," which can be used to cover insurance deductibles and self-insured losses related to catastrophic events such as hurricanes, tornadoes, and floods. Taxpayers can contribute to this account with specific limits based on their insurance deductibles, and contributions made to the account are tax-deductible. Additionally, any interest earned on the account is exempt from state income tax.

The Act also outlines the tax implications of distributions from the Disaster Savings Account. Distributions used for qualified disaster expenses are not subject to income tax, while other distributions will be included in the taxpayer's income, with an additional tax imposed on taxable distributions. The legislation specifies that the Oklahoma Tax Commission is responsible for implementing the rules and regulations necessary for the administration of the Act. The provisions of this Act will take effect on November 1, 2025.