Bill > SB100

This bill amends Oklahoma's income tax law to introduce a new tax exemption for tip income reported on Internal Revenue Service Form 4137 and tip statements. Specifically, for tax year 2026 and subsequent tax years, income reported as tips will be completely exempt from Oklahoma state taxable income. This means that servers, bartenders, and other service industry workers who receive tips will not have to pay state income tax on those earnings. The bill is a relatively straightforward modification to the existing tax code, adding a single paragraph (labeled as paragraph 25) to the section detailing income tax adjustments. The exemption applies to tip income that is formally documented through official IRS forms and statements, ensuring that only reported tip income receives this tax benefit. The bill will take effect on November 1, 2025, giving state tax authorities and taxpayers time to prepare for the new exemption.

Budget and Finance

http://www.oklegislature.gov/BillInfo.aspx?Bill=sb100&Session=2600