1 STATE OF OKLAHOMA
2 1st Session of the 59th Legislature (2023)
3 HOUSE BILL 1953 By: McCall
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5
6 AS INTRODUCED
7 An Act relating to revenue and taxation; amending 68
O.S. 2021, Section 2355, as amended by Section 45,
8 Chapter 228, O.S.L. 2022 (68 O.S. Supp. 2022, Section
2355), which relates to income tax rates; modifying
9 income tax rates; and providing an effective date.
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12 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
13 SECTION 1. AMENDATORY 68 O.S. 2021, Section 2355, as
14 amended by Section 45, Chapter 228, O.S.L. 2022 (68 O.S. Supp. 2022,
15 Section 2355), is amended to read as follows:
16 Section 2355. A. Individuals. For all taxable years beginning
17 after December 31, 1998, and before January 1, 2006, a tax is hereby
18 imposed upon the Oklahoma taxable income of every resident or
19 nonresident individual, which tax shall be computed at the option of
20 the taxpayer under one of the two following methods:
21 1. METHOD 1.
22 a. Single individuals and married individuals filing
23 separately not deducting federal income tax:
24 (1) 1/2% tax on first $1,000.00 or part thereof,
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1 (2) 1% tax on next $1,500.00 or part thereof,
2 (3) 2% tax on next $1,250.00 or part thereof,
3 (4) 3% tax on next $1,150.00 or part thereof,
4 (5) 4% tax on next $1,300.00 or part thereof,
5 (6) 5% tax on next $1,500.00 or part thereof,
6 (7) 6% tax on next $2,300.00 or part thereof, and
7 (8) (a) for taxable years beginning after December
8 31, 1998, and before January 1, 2002, 6.75%
9 tax on the remainder,
10 (b) for taxable years beginning on or after
11 January 1, 2002, and before January 1, 2004,
12 7% tax on the remainder, and
13 (c) for taxable years beginning on or after
14 January 1, 2004, 6.65% tax on the remainder.
15 b. Married individuals filing jointly and surviving
16 spouse to the extent and in the manner that a
17 surviving spouse is permitted to file a joint return
18 under the provisions of the Internal Revenue Code and
19 heads of households as defined in the Internal Revenue
20 Code not deducting federal income tax:
21 (1) 1/2% tax on first $2,000.00 or part thereof,
22 (2) 1% tax on next $3,000.00 or part thereof,
23 (3) 2% tax on next $2,500.00 or part thereof,
24 (4) 3% tax on next $2,300.00 or part thereof,
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1 (5) 4% tax on next $2,400.00 or part thereof,
2 (6) 5% tax on next $2,800.00 or part thereof,
3 (7) 6% tax on next $6,000.00 or part thereof, and
4 (8) (a) for taxable years beginning after December
5 31, 1998, and before January 1, 2002, 6.75%
6 tax on the remainder,
7 (b) for taxable years beginning on or after
8 January 1, 2002, and before January 1, 2004,
9 7% tax on the remainder, and
10 (c) for taxable years beginning on or after
11 January 1, 2004, 6.65% tax on the remainder.
12 2. METHOD 2.
13 a. Single individuals and married individuals filing
14 separately deducting federal income tax:
15 (1) 1/2% tax on first $1,000.00 or part thereof,
16 (2) 1% tax on next $1,500.00 or part thereof,
17 (3) 2% tax on next $1,250.00 or part thereof,
18 (4) 3% tax on next $1,150.00 or part thereof,
19 (5) 4% tax on next $1,200.00 or part thereof,
20 (6) 5% tax on next $1,400.00 or part thereof,
21 (7) 6% tax on next $1,500.00 or part thereof,
22 (8) 7% tax on next $1,500.00 or part thereof,
23 (9) 8% tax on next $2,000.00 or part thereof,
24 (10) 9% tax on next $3,500.00 or part thereof, and
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1 (11) 10% tax on the remainder.
2 b. Married individuals filing jointly and surviving
3 spouse to the extent and in the manner that a
4 surviving spouse is permitted to file a joint return
5 under the provisions of the Internal Revenue Code and
6 heads of households as defined in the Internal Revenue
7 Code deducting federal income tax:
8 (1) 1/2% tax on the first $2,000.00 or part thereof,
9 (2) 1% tax on the next $3,000.00 or part thereof,
10 (3) 2% tax on the next $2,500.00 or part thereof,
11 (4) 3% tax on the next $1,400.00 or part thereof,
12 (5) 4% tax on the next $1,500.00 or part thereof,
13 (6) 5% tax on the next $1,600.00 or part thereof,
14 (7) 6% tax on the next $1,250.00 or part thereof,
15 (8) 7% tax on the next $1,750.00 or part thereof,
16 (9) 8% tax on the next $3,000.00 or part thereof,
17 (10) 9% tax on the next $6,000.00 or part thereof, and
18 (11) 10% tax on the remainder.
19 B. Individuals. For all taxable years beginning on or after
20 January 1, 2008, and ending any tax year which begins after December
21 31, 2015, for which the determination required pursuant to Sections
22 4 and 5 of this act is made by the State Board of Equalization, a
23 tax is hereby imposed upon the Oklahoma taxable income of every
24
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1 resident or nonresident individual, which tax shall be computed as
2 follows:
3 1. Single individuals and married individuals filing
4 separately:
5 (a) 1/2% tax on first $1,000.00 or part thereof,
6 (b) 1% tax on next $1,500.00 or part thereof,
7 (c) 2% tax on next $1,250.00 or part thereof,
8 (d) 3% tax on next $1,150.00 or part thereof,
9 (e) 4% tax on next $2,300.00 or part thereof,
10 (f) 5% tax on next $1,500.00 or part thereof,
11 (g) 5.50% tax on the remainder for the 2008 tax year and
12 any subsequent tax year unless the rate prescribed by
13 subparagraph (h) of this paragraph is in effect, and
14 (h) 5.25% tax on the remainder for the 2009 and subsequent
15 tax years. The decrease in the top marginal
16 individual income tax rate otherwise authorized by
17 this subparagraph shall be contingent upon the
18 determination required to be made by the State Board
19 of Equalization pursuant to Section 2355.1A of this
20 title.
21 2. Married individuals filing jointly and surviving spouse to
22 the extent and in the manner that a surviving spouse is permitted to
23 file a joint return under the provisions of the Internal Revenue
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1 Code and heads of households as defined in the Internal Revenue
2 Code:
3 (a) 1/2% tax on first $2,000.00 or part thereof,
4 (b) 1% tax on next $3,000.00 or part thereof,
5 (c) 2% tax on next $2,500.00 or part thereof,
6 (d) 3% tax on next $2,300.00 or part thereof,
7 (e) 4% tax on next $2,400.00 or part thereof,
8 (f) 5% tax on next $2,800.00 or part thereof,
9 (g) 5.50% tax on the remainder for the 2008 tax year and
10 any subsequent tax year unless the rate prescribed by
11 subparagraph (h) of this paragraph is in effect, and
12 (h) 5.25% tax on the remainder for the 2009 and subsequent
13 tax years. The decrease in the top marginal
14 individual income tax rate otherwise authorized by
15 this subparagraph shall be contingent upon the
16 determination required to be made by the State Board
17 of Equalization pursuant to Section 2355.1A of this
18 title.
19 C. Individuals. For all taxable years beginning on or after
20 January 1, 2022 2024, a tax is hereby imposed upon the Oklahoma
21 taxable income of every resident or nonresident individual, which
22 tax shall be computed as follows:
23 1. Single individuals and married individuals filing
24 separately:
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1 (a) 0.25% 0.00% tax on first $1,000.00 or part thereof,
2 (b) 0.75% 0.50% tax on next $1,500.00 or part thereof,
3 (c) 1.75% 1.50% tax on next $1,250.00 or part thereof,
4 (d) 2.75% 2.50% tax on next $1,150.00 or part thereof,
5 (e) 3.75% 3.50% tax on next $2,300.00 or part thereof,
6 (f) 4.75% 4.50% tax on the remainder.
7 2. Married individuals filing jointly and surviving spouse to
8 the extent and in the manner that a surviving spouse is permitted to
9 file a joint return under the provisions of the Internal Revenue
10 Code and heads of households as defined in the Internal Revenue
11 Code:
12 (a) 0.25% 0.00% tax on first $2,000.00 or part thereof,
13 (b) 0.75% 0.50% tax on next $3,000.00 or part thereof,
14 (c) 1.75% 1.50% tax on next $2,500.00 or part thereof,
15 (d) 2.75% 2.50% tax on next $2,300.00 or part thereof,
16 (e) 3.75% 3.50% tax on next $2,400.00 or part thereof,
17 (f) 4.75% 4.50% tax on the remainder.
18 No deduction for federal income taxes paid shall be allowed to
19 any taxpayer to arrive at taxable income.
20 D. Nonresident aliens. In lieu of the rates set forth in
21 subsection A above this section, there shall be imposed on
22 nonresident aliens, as defined in the Internal Revenue Code, a tax
23 of eight percent (8%) instead of thirty percent (30%) as used in the
24 Internal Revenue Code, with respect to the Oklahoma taxable income
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1 of such nonresident aliens as determined under the provision of the
2 Oklahoma Income Tax Act.
3 Every payer of amounts covered by this subsection shall deduct
4 and withhold from such amounts paid each payee an amount equal to
5 eight percent (8%) thereof. Every payer required to deduct and
6 withhold taxes under this subsection shall for each quarterly period
7 on or before the last day of the month following the close of each
8 such quarterly period, pay over the amount so withheld as taxes to
9 the Tax Commission, and shall file a return with each such payment.
10 Such return shall be in such form as the Tax Commission shall
11 prescribe. Every payer required under this subsection to deduct and
12 withhold a tax from a payee shall, as to the total amounts paid to
13 each payee during the calendar year, furnish to such payee, on or
14 before January 31, of the succeeding year, a written statement
15 showing the name of the payer, the name of the payee and the payee's
16 Social Security account number, if any, the total amount paid
17 subject to taxation, and the total amount deducted and withheld as
18 tax and such other information as the Tax Commission may require.
19 Any payer who fails to withhold or pay to the Tax Commission any
20 sums herein required to be withheld or paid shall be personally and
21 individually liable therefor to the State of Oklahoma.
22 E. Corporations. For all taxable years beginning after
23 December 31, 2021, a tax is hereby imposed upon the Oklahoma taxable
24 income of every corporation doing business within this state or
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1 deriving income from sources within this state in an amount equal to
2 four percent (4%) thereof.
3 There shall be no additional Oklahoma income tax imposed on
4 accumulated taxable income or on undistributed personal holding
5 company income as those terms are defined in the Internal Revenue
6 Code.
7 F. Certain foreign corporations. In lieu of the tax imposed in
8 the first paragraph of subsection D of this section, for all taxable
9 years beginning after December 31, 2021, there shall be imposed on
10 foreign corporations, as defined in the Internal Revenue Code, a tax
11 of four percent (4%) instead of thirty percent (30%) as used in the
12 Internal Revenue Code, where such income is received from sources
13 within Oklahoma, in accordance with the provisions of the Internal
14 Revenue Code and the Oklahoma Income Tax Act.
15 Every payer of amounts covered by this subsection shall deduct
16 and withhold from such amounts paid each payee an amount equal to
17 four percent (4%) thereof. Every payer required to deduct and
18 withhold taxes under this subsection shall for each quarterly period
19 on or before the last day of the month following the close of each
20 such quarterly period, pay over the amount so withheld as taxes to
21 the Tax Commission, and shall file a return with each such payment.
22 Such return shall be in such form as the Tax Commission shall
23 prescribe. Every payer required under this subsection to deduct and
24 withhold a tax from a payee shall, as to the total amounts paid to
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1 each payee during the calendar year, furnish to such payee, on or
2 before January 31, of the succeeding year, a written statement
3 showing the name of the payer, the name of the payee and the payee's
4 Social Security account number, if any, the total amounts paid
5 subject to taxation, the total amount deducted and withheld as tax
6 and such other information as the Tax Commission may require. Any
7 payer who fails to withhold or pay to the Tax Commission any sums
8 herein required to be withheld or paid shall be personally and
9 individually liable therefor to the State of Oklahoma.
10 G. Fiduciaries. A tax is hereby imposed upon the Oklahoma
11 taxable income of every trust and estate at the same rates as are
12 provided in subsection B, or C or D of this section for single
13 individuals. Fiduciaries are not allowed a deduction for any
14 federal income tax paid.
15 H. Tax rate tables. For all taxable years beginning after
16 December 31, 1991, in lieu of the tax imposed by subsection A, B, or
17 C or D of this section, as applicable there is hereby imposed for
18 each taxable year on the taxable income of every individual, whose
19 taxable income for such taxable year does not exceed the ceiling
20 amount, a tax determined under tables, applicable to such taxable
21 year which shall be prescribed by the Tax Commission and which shall
22 be in such form as it determines appropriate. In the table so
23 prescribed, the amounts of the tax shall be computed on the basis of
24 the rates prescribed by subsection A, B or C of this section. For
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1 purposes of this subsection, the term "ceiling amount" means, with
2 respect to any taxpayer, the amount determined by the Tax Commission
3 for the tax rate category in which such taxpayer falls.
4 SECTION 2. This act shall become effective January 1, 2024.
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6 59-1-7151 MAH 01/18/23
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Statutes affected:
Introduced: 68-2355
Floor (House): 68-2355
Engrossed: 68-2355, 68-2358