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ENGR. S. A. TO ENGR. H. B. NO. 1539 Page 1
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ENGROSSED SENATE AMENDMENT
TO
ENGROSSED HOUSE
BILL NO. 1539 By: Lepak and Kendrix of the
House
and
Bergstrom of the Senate
[ revenue and taxation - income tax rates - method
for reduction - revenue determination - State Board
of Equalization - effective date ]
AUTHOR: Add the following Senate Coauthors: Bullard, Jett,
Wingard, Stewart, Hamilton, and McIntosh
AMENDMENT NO. 1. Page 1, restore the title
Passed the Senate the 10th day of April, 2025.
Presiding Officer of the Senate
Passed the House of Representatives the ____ day of __________,
2025.
Presiding Officer of the House
of Representatives
ENGR. H. B. NO. 1539 Page 1
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ENGROSSED HOUSE
BILL NO. 1539 By: Lepak and Kendrix of the
House
and
Bergstrom of the Senate
[ revenue and taxation - income tax rates - method
for reduction - revenue determination - State Board
of Equalization - effective date ]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 2355, as
last amended by Section 1, Chapter 27, 1st Extraordinary Session,
O.S.L. 2023 (68 O.S. Supp. 2024, Section 2355), is amended to read
as follows:
Section 2355. 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:
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(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 and
heads of households as defined in the Internal Revenue
Code 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,
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(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,
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(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 and
heads of households as defined in the Internal Revenue
Code 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
4 and 5 of this act is made by the State Board of Equalization, a
tax is hereby imposed upon the Oklahoma taxable income of every
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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
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Code and heads of households as defined in the Internal Revenue
Code:
(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 all taxable years beginning on or after
January 1, 2024, and except as provided pursuant to the provisions
of subsection D 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:
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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,
(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 and heads of households as defined in the Internal Revenue
Code:
(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,
(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. 1. "Qualifying cumulative revenue growth" means an increase
of at least Three Hundred Million Dollars ($300,000,000.00) in
excess of the applicable base year amount, which shall include any
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decrease in the total collections amount for any fiscal year which
reflects a decline in total revenue collections. If the total
revenue collections equal or exceed Three Hundred Million Dollars
($300,000,000.00) using either a comparison of one fiscal year to
the next succeeding fiscal year or equal or exceed Three Hundred
Million Dollars ($300,000,000.00) as a result of multiple successive
comparisons, which shall take into account any comparison which
results in an increase of less than Three Hundred Million Dollars
($300,000,000.00) or which results in a decline in total collections
from the preceding year, then if such cumulative net total,
including any year in which total collections declined, equals or
exceeds Three Hundred Million Dollars ($300,000,000.00) then the
next decrease in the income tax rates as described by this
subsection shall be implemented.
2. "Total revenue collections" includes all revenue sources
reported in the annual report of the Oklahoma Tax Commission
excluding any tax collected by the Commission from levies imposed by
counties, cities, towns or any other entity of local government.
3. Except as otherwise provided by this subsection, for all
taxable years beginning on or after January 1, 2026, a tax is hereby
imposed upon the Oklahoma taxable income of every resident or
nonresident individual, which tax shall be as prescribed in
paragraphs 1 and 2 of subsection C of this section reduced in each
of the rates as prescribed by paragraph 1 or paragraph 2 of
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subsection C of this section by twenty-five hundredths of one
percent (0.0025), expressed as a decimal, for purposes of the
reduction, for any income tax year beginning on the January 1 date
immediately succeeding a fiscal year ending on the preceding June 30
for which the State Board of Equalization makes a certification, at
its December meeting, that total revenue collections for such fiscal
year exceeded the qualifying cumulative revenue growth by Three
Hundred Million Dollars ($300,000,000.00) or more.
4. The State Board of Equalization, at its December meeting
each year, shall make a determination regarding the possibility of a
decrease in the income tax rate otherwise prescribed by this
subsection. If the revenue conditions prescribed by this subsection
are met, which shall be included as part of the findings of the
State Board of Equalization, then the income tax rates otherwise
prescribed by paragraphs 1 and 2 of subsection C of this section
shall be reduced by twenty-five hundredths of one percent (0.0025)
effective on January 1 of the calendar year immediately following
the year during which the State Board of Equalization makes the
finding that qualifying cumulative revenue growth as defined by this
subsection is sufficient to reduce the income tax rates otherwise
prescribed by paragraphs 1 and 2 of subsection C of this section.
For purposes of this subsection, the total collections from all
revenue sources for the fiscal year ending June 30, 2023, shall be
the initial base year amount.
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5. Beginning with the December 2025 meeting of the State Board
of Equalization and at each succeeding December meeting, the State
Board shall compare the total revenue collections amount for the
fiscal year ending on the immediately preceding June 30 date, to the
applicable base year total collections amount. If there is an
increase in the total collections amount equal to or greater than
Three Hundred Million Dollars ($300,000,000.00) compared to the
initial base year total collections amount, the income tax rates
otherwise prescribed by paragraphs 1 and 2 of subsection C of this
section shall be reduced effective January 1 of the immediately
succeeding calendar year. If there is not an increase of at least
Three Hundred Million Dollars ($300,000,000.00) in the total
collections amount as reflected in the December certification of
total collections compared to the applicable base year total
collection amount, there shall be no modification of such income tax
rates.
6. For any fiscal year with respect to which the qualifying
cumulative revenue growth as determined at the December meeting
equals or exceeds the applicable base year total collection amount
by Three Hundred Million Dollars ($300,000,000.00) or more, the
applicable base year total collections amount shall be adjusted for
purposes of any succeeding comparison by adding Three Hundred
Million Dollars ($300,000,000.00) plus the increment of all revenues
exceeding Three Hundred Million Dollars ($300,000,000.00) to the
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prior base year amount and the resulting sum shall become the
adjusted base year amount for purposes of future computations
required by this subsection.
7. After an adjustment is made to any base year amount, a
reduction in the income tax rate otherwise prescribed pursuant to
this subsection, in increments of twenty-five hundredths of one
percent (0.0025), may only occur if there is a subsequent increase
of Three Hundred Million Dollars ($300,000,000.00) or more in the
qualifying cumulative revenue growth as defined by this subsection.
Subject to the determinations regarding the increase in total
collections as defined by this subsection, the reductions prescribed
by this subsection shall be made for all applicable income tax years
until the rates of individual income tax as prescribed by paragraphs
1 and 2 of subsection C of this section equals zero (0).
8. For purposes of reporting total collections for purposes of
this subsection, the Oklahoma Tax Commission shall use the same
methodology used to report estimated revenues to the State Board of
Equalization that was used to make the report for the December 2024
meeting.
E. Nonresident aliens. In lieu of the rates set forth in
subsection A above this section, there shall be imposed on
nonresident aliens, as defined in the Internal Revenue Code, a tax
of eight percent (8%) instead of thirty percent (30%) as used in the
Internal Revenue Code, with respect to the Oklahoma taxable income
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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 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.
E. F. 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
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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.
F. G. Certain foreign corporations. In lieu of the tax imposed
in the first paragraph of subsection D F 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, a tax of four percent (4%) instead of thirty percent (30%) as
used in the Internal Revenue Code, where such income is received
from sources within Oklahoma, in accordance with the provisions of
the Internal Revenue Code 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
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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.
G. H. Fiduciaries. A tax is hereby imposed upon the Oklahoma
taxable income of every trust and estate at the same rates as are
provided in subsection B or, C, or D of this section for single
individuals. Fiduciaries are not allowed a deduction for any
federal income tax paid.
H. I. Tax rate tables. For all taxable years beginning after
December 31, 1991, in lieu of the tax imposed by subsection A, B or,
C, or 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 subsection A, B or, C, or D of this section.
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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.
SECTION 2. This act shall become effective November 1, 2025.
Passed the House of Representatives the 25th day of March, 2025.
Presiding Officer of the House
of Representatives
Passed the Senate the ___ day of __________, 2025.
Presiding Officer of the Senate