Bill > HB1009

This bill reduces income tax rates for individuals and corporations in Oklahoma through a gradual phased reduction process. For individual income taxes, starting in 2024, the bill establishes new lower tax brackets with rates ranging from 0.25% to 4.75% for different income levels, depending on filing status. Notably, the bill introduces a mechanism for further reducing these rates annually beginning in 2025, where each tax rate will be systematically divided by 10 each year until the rate eventually reaches zero. This means Oklahoma would progressively move toward eliminating individual income tax over time. For corporations, the bill similarly establishes a 4% tax rate with the same gradual reduction mechanism, ensuring that corporate income tax rates will also be progressively reduced until they reach zero. The bill applies these changes to both resident and non-resident individuals and corporations, and includes provisions for pass-through entities. The tax rate reductions will be implemented differently for entities using calendar years versus fiscal years, with the changes becoming effective January 1, 2025, for calendar year taxpayers and at the start of the first tax year after January 1, 2025, for fiscal year taxpayers. The ultimate goal appears to be a systematic approach to phasing out income taxes in Oklahoma over several years.

Budget and Finance

http://www.oklegislature.gov/BillInfo.aspx?Bill=hb1009&Session=2600