Tax imposed - Classes of taxpayers

A. Individuals. For all taxable years beginning after December 31, 1998, and before January 1, 2006, a tax is hereby imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed at the option of the taxpayer under one of the two following methods: 1. METHOD 1. a. Single individuals and married individuals filing separately not deducting federal income tax: (1) 1/2% tax on first $1,000.00 or part thereof, (2) 1% tax on next $1,500.00 or part thereof, (3) 2% tax on next $1,250.00 or part thereof, (4) 3% tax on next $1,150.00 or part thereof, (5) 4% tax on next $1,300.00 or part thereof, (6) 5% tax on next $1,500.00 or part thereof, (7) 6% tax on next $2,300.00 or part thereof, and (8) (a) for taxable years beginning after December 31, 1998, and before January 1, 2002, 6.75% tax on the remainder, (b) for taxable years beginning on or after January 1, 2002, and before January 1, 2004, 7% tax on the remainder, and (c) for taxable years beginning on or after January 1, 2004, 6.65% tax on the remainder. b. Married individuals filing jointly and surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code of 1986, as amended, and heads of households as defined in the Internal Revenue Code of 1986, as amended, not deducting federal income tax: (1) 1/2% tax on first $2,000.00 or part thereof, (2) 1% tax on next $3,000.00 or part thereof, (3) 2% tax on next $2,500.00 or part thereof, (4) 3% tax on next $2,300.00 or part thereof, (5) 4% tax on next $2,400.00 or part thereof, (6) 5% tax on next $2,800.00 or part thereof, (7) 6% tax on next $6,000.00 or part thereof, and (8) (a) for taxable years beginning after December 31, 1998, and before January 1, 2002, 6.75% tax on the remainder, (b) for taxable years beginning on or after January 1, 2002, and before January 1, 2004, 7% tax on the remainder, and (c) for taxable years beginning on or after January 1, 2004, 6.65% tax on the remainder. 2. METHOD 2. a. Single individuals and married individuals filing separately deducting federal income tax: (1) 1/2% tax on first $1,000.00 or part thereof, (2) 1% tax on next $1,500.00 or part thereof, (3) 2% tax on next $1,250.00 or part thereof, (4) 3% tax on next $1,150.00 or part thereof, (5) 4% tax on next $1,200.00 or part thereof, (6) 5% tax on next $1,400.00 or part thereof, (7) 6% tax on next $1,500.00 or part thereof, (8) 7% tax on next $1,500.00 or part thereof, (9) 8% tax on next $2,000.00 or part thereof, (10) 9% tax on next $3,500.00 or part thereof, and (11) 10% tax on the remainder. b. Married individuals filing jointly and surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code of 1986, as amended, and heads of households as defined in the Internal Revenue Code of 1986, as amended, deducting federal income tax: (1) 1/2% tax on the first $2,000.00 or part thereof, (2) 1% tax on the next $3,000.00 or part thereof, (3) 2% tax on the next $2,500.00 or part thereof, (4) 3% tax on the next $1,400.00 or part thereof, (5) 4% tax on the next $1,500.00 or part thereof, (6) 5% tax on the next $1,600.00 or part thereof, (7) 6% tax on the next $1,250.00 or part thereof, (8) 7% tax on the next $1,750.00 or part thereof, (9) 8% tax on the next $3,000.00 or part thereof, (10) 9% tax on the next $6,000.00 or part thereof, and (11) 10% tax on the remainder. B. Individuals. For all taxable years beginning on or after January 1, 2008, and ending any tax year which begins after December 31, 2015, for which the determination required pursuant to Sections 2355.1F and 2355.1G of this title is made by the State Board of Equalization, a tax is hereby imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed as follows: 1. Single individuals and married individuals filing separately: (a) 1/2% tax on first $1,000.00 or part thereof, (b) 1% tax on next $1,500.00 or part thereof, (c) 2% tax on next $1,250.00 or part thereof, (d) 3% tax on next $1,150.00 or part thereof, (e) 4% tax on next $2,300.00 or part thereof, (f) 5% tax on next $1,500.00 or part thereof, (g) 5.50% tax on the remainder for the 2008 tax year and any subsequent tax year unless the rate prescribed by subparagraph (h) of this paragraph is in effect, and (h) 5.25% tax on the remainder for the 2009 and subsequent tax years. The decrease in the top marginal individual income tax rate otherwise authorized by this subparagraph shall be contingent upon the determination required to be made by the State Board of Equalization pursuant to Section 2355.1A of this title. 2. Married individuals filing jointly and surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code of 1986, as amended, and heads of households as defined in the Internal Revenue Code of 1986, as amended: (a) 1/2% tax on first $2,000.00 or part thereof, (b) 1% tax on next $3,000.00 or part thereof, (c) 2% tax on next $2,500.00 or part thereof, (d) 3% tax on next $2,300.00 or part thereof, (e) 4% tax on next $2,400.00 or part thereof, (f) 5% tax on next $2,800.00 or part thereof, (g) 5.50% tax on the remainder for the 2008 tax year and any subsequent tax year unless the rate prescribed by subparagraph (h) of this paragraph is in effect, and (h) 5.25% tax on the remainder for the 2009 and subsequent tax years. The decrease in the top marginal individual income tax rate otherwise authorized by this subparagraph shall be contingent upon the determination required to be made by the State Board of Equalization pursuant to Section 2355.1A of this title. C. Individuals. For tax years 2024 and 2025, a tax is hereby imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed as follows: 1. Single individuals and married individuals filing separately: (a) 0.25% tax on first $1,000.00 or part thereof, (b) 0.75% tax on next $1,500.00 or part thereof, (c) 1.75% tax on next $1,250.00 or part thereof, (d) 2.75% tax on next $1,150.00 or part thereof, (e) 3.75% tax on next $2,300.00 or part thereof, and (f) 4.75% tax on the remainder. 2. Married individuals filing jointly and surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code of 1986, as amended, and heads of households as defined in the Internal Revenue Code of 1986, as amended: (a) 0.25% tax on first $2,000.00 or part thereof, (b) 0.75% tax on next $3,000.00 or part thereof, (c) 1.75% tax on next $2,500.00 or part thereof, (d) 2.75% tax on next $2,300.00 or part thereof, (e) 3.75% tax on next $4,600.00 or part thereof, and (f) 4.75% tax on the remainder. No deduction for federal income taxes paid shall be allowed to any taxpayer to arrive at taxable income. D. Individuals. For tax year 2026 and for subsequent tax years subject to rate reductions as provided by subsection E of this section, a tax is hereby imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed as follows: 1. Single individuals and married individuals filing separately: (a) 0% tax on first $3,750.00 or part thereof, (b) 2.5% tax on the next $1,150.00 or part thereof, (c) 3.5% tax on next $2,300.00 or part thereof, and (d) 4.5% tax on the remainder. 2. Married individuals filing jointly and surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code of 1986, as amended, and heads of households as defined in the Internal Revenue Code of 1986, as amended: (a) 0% tax on first $7,500.00 or part thereof, (b) 2.5% tax on the next $2,300.00 or part thereof, (c) 3.5% tax on next $4,600.00 or part thereof, and (d) 4.5% tax on the remainder. No deduction for federal income taxes paid shall be allowed to any taxpayer to arrive at taxable income. E. As provided by subsection D of Section 34.103 of Title 62 of the Oklahoma Statutes, if the comparison year total collections exceeds the base year total collections plus the income tax rate reduction threshold, as certified by the State Board of Equalization pursuant to paragraph 2 of subsection D of Section 34.103 of Title 62 of the Oklahoma Statutes, the tax rates otherwise prescribed in paragraphs 1 and 2 of subsection D of this section shall each be reduced by twenty-five one-hundredths (0.25) of a percentage point (0.0025) until the applicable rate equals zero percent (0%). Each successive certification by the State Board of Equalization with respect to which the comparison year total collections exceeds the base year total collections plus the income tax rate reduction threshold, as determined by the State Board of Equalization as provided by subsection D of Section 34.103 of Title 62 of the Oklahoma Statutes, shall further reduce the individual income tax rates by twenty-five one-hundredths (0.25) of a percentage point (0.0025) until the applicable rate equals zero percent (0%). Any reduction in the income tax rates authorized by this section and by this act shall take effect on January 1 following the final certification by the State Board of Equalization, if any, made during its meeting in February each year. F. If a revenue failure is declared pursuant to the provisions of Section 34.49 of Title 62 of the Oklahoma Statutes prior to the end of the calendar year in which the Board makes a certification pursuant to paragraph 2 of subsection D of Section 34.103 of Title 62 of the Oklahoma Statutes, the reduction in tax rates, as otherwise provided for in this section, shall not occur until a subsequent certification is made by the State Board of Equalization pursuant to paragraph 2 of subsection D of Section 34.103 of Title 62 of the Oklahoma Statutes. G. Nonresident aliens. In lieu of the rates set forth in subsection A above, there shall be imposed on nonresident aliens, as defined in the Internal Revenue Code of 1986, as amended, a tax of eight percent (8%) instead of thirty percent (30%) as used in the Internal Revenue Code of 1986, as amended, with respect to the Oklahoma taxable income of such nonresident aliens as determined under the provision of the Oklahoma Income Tax Act. Every payer of amounts covered by this subsection shall deduct and withhold from such amounts paid each payee an amount equal to eight percent (8%) thereof. Every payer required to deduct and withhold taxes under this subsection shall for each quarterly period on or before the last day of the month following the close of each such quarterly period, pay over the amount so withheld as taxes to the Oklahoma Tax Commission, and shall file a return with each such payment. Such return shall be in such form as the Tax Commission shall prescribe. Every payer required under this subsection to deduct and withhold a tax from a payee shall, as to the total amounts paid to each payee during the calendar year, furnish to such payee, on or before January 31 of the succeeding year, a written statement showing the name of the payer, the name of the payee and the payee’s Social Security account number, if any, the total amount paid subject to taxation, and the total amount deducted and withheld as tax and such other information as the Tax Commission may require. Any payer who fails to withhold or pay to the Tax Commission any sums herein required to be withheld or paid shall be personally and individually liable therefor to the State of Oklahoma. H. Corporations. For all taxable years beginning after December 31, 2021, a tax is hereby imposed upon the Oklahoma taxable income of every corporation doing business within this state or deriving income from sources within this state in an amount equal to four percent (4%) thereof. There shall be no additional Oklahoma income tax imposed on accumulated taxable income or on undistributed personal holding company income as those terms are defined in the Internal Revenue Code of 1986, as amended. I. Certain foreign corporations. In lieu of the tax imposed in the first paragraph of subsection G of this section, for all taxable years beginning after December 31, 2021, there shall be imposed on foreign corporations, as defined in the Internal Revenue Code of 1986, as amended, a tax of four percent (4%) instead of thirty percent (30%) as used in the Internal Revenue Code of 1986, as amended, where such income is received from sources within this state, in accordance with the provisions of the Internal Revenue Code of 1986, as amended, and the Oklahoma Income Tax Act. Every payer of amounts covered by this subsection shall deduct and withhold from such amounts paid each payee an amount equal to four percent (4%) thereof. Every payer required to deduct and withhold taxes under this subsection shall for each quarterly period on or before the last day of the month following the close of each such quarterly period, pay over the amount so withheld as taxes to the Tax Commission, and shall file a return with each such payment. Such return shall be in such form as the Tax Commission shall prescribe. Every payer required under this subsection to deduct and withhold a tax from a payee shall, as to the total amounts paid to each payee during the calendar year, furnish to such payee, on or before January 31 of the succeeding year, a written statement showing the name of the payer, the name of the payee and the payee’s Social Security account number, if any, the total amounts paid subject to taxation, the total amount deducted and withheld as tax, and such other information as the Tax Commission may require. Any payer who fails to withhold or pay to the Tax Commission any sums herein required to be withheld or paid shall be personally and individually liable therefor to the State of Oklahoma. J. Fiduciaries. A tax is hereby imposed upon the Oklahoma taxable income of every trust and estate at the same rates as are provided in subsections B through D of this section for single individuals. Fiduciaries are not allowed a deduction for any federal income tax paid. K. Tax rate tables. For all taxable years beginning after December 31, 1991, in lieu of the tax imposed by subsections A through D of this section, as applicable there is hereby imposed for each taxable year on the taxable income of every individual, whose taxable income for such taxable year does not exceed the ceiling amount, a tax determined under tables, applicable to such taxable year which shall be prescribed by the Tax Commission and which shall be in such form as it determines appropriate. In the table so prescribed, the amounts of the tax shall be computed on the basis of the rates prescribed by subsections A through D of this section. For purposes of this subsection, the term “ceiling amount” means, with respect to any taxpayer, the amount determined by the Tax Commission for the tax rate category in which such taxpayer falls. Added by Laws 1971, c. 137, § 5, emerg. eff. May 11, 1971. Amended by Laws 1971, H.J.R. No. 1026, p. 1041, § 2, emerg. eff. June 22, 1971; Laws 1971, H.J.R. No. 1026, p. 1043, § 3, emerg. eff. June 22, 1971; Laws 1977, c. 53, § 1, eff. Jan. 1, 1979; Laws 1979, c. 195, § 2, emerg. eff. May 24, 1979; Laws 1980, c. 288, § 4, eff. July 1, 1980; Laws 1985, c. 179, § 93, operative July 1, 1985; Laws 1985, c. 200, § 1, operative July 1, 1985; Laws 1988, c. 204, § 12, operative July 1, 1988; Laws 1989, 1st Ex. Sess., c. 2, § 99, operative Jan. 1, 1990; Laws 1992, c. 311, § 1, eff. Sept. 1, 1992; Laws 1998, c. 427, § 2, eff. Jan. 1, 1999; Laws 2001, c. 383, § 2, eff. July 1, 2001; Laws 2004, c. 322, § 13, eff. Dec. 1, 2004 (State Question No. 713, Legislative Referendum No. 336, adopted at election held Nov. 2, 2004); Laws 2005, c. 413, § 4, eff. July 1, 2005; Laws 2006, c. 16, § 63, emerg. eff. March 29, 2006; Laws 2006, 2nd Ex. Sess., c. 42, § 3, eff. Jan. 1, 2007; Laws 2007, c. 136, § 7, eff. Jan. 1, 2008; Laws 2013, c. 253, § 2, eff. July 1, 2013; Laws 2014, c. 195, § 1; Laws 2014, c. 195, § 2; Laws 2021, c. 493, § 1, eff. Jan. 1, 2022; Laws 2022, c. 228, § 45, emerg. eff. May 5, 2022; Laws 2023, 1st Ex. Sess., c. 27, § 1, eff. Jan. 1, 2024; Laws 2025, c. 307, § 2, eff. Nov. 1, 2025. NOTE: Laws 2005, c. 381, § 10 repealed by Laws 2006, c. 16, § 64, emerg. eff. March 29, 2006. Laws 2021, c. 492, § 1 repealed by Laws 2022, c. 228, § 46, emerg. eff. May 5, 2022.