Senate Appropriations Committee Advances Tax Reform Measures to Strengthen Oklahoma’s Economy

OKLAHOMA CITY – The Senate Appropriations Committee passed a series of tax reform measures aimed at simplifying Oklahoma’s tax code, providing relief to individuals and businesses and promoting economic growth. 

Senate Bills 304, 299, 291, and 60, authored by Senator Dave Rader, R- Tulsa, and Adam Pugh, R-Edmond, address income tax structure, corporate tax fairness and taxpayer relief mechanisms.

Senator Rader said true tax reform is important to fostering a more business-friendly environment. 

“These measures represent a significant step forward in making Oklahoma’s tax code more competitive and business-friendly,” Senator Rader said. “By leveling the income tax rate, removing outdated corporate tax provisions and ensuring Oklahomans benefit from economic growth. By simplifying income tax structures and eliminating burdensome provisions like the throwback rule, we are making our state a more attractive place for job creators and entrepreneurs.”

Senator Pugh said these measures will benefit Oklahomans at every level. 

“Oklahoma’s tax code must evolve to support growth and prosperity,” Senator Pugh said. “The goal of Senate Bill 291 is when the economy grows is we recognize and justly reward the taxpayers, who are ultimately responsible for that revenue growth. These reforms will make our state more attractive for businesses, ensure families keep more of their hard-earned money and position Oklahoma as a leader in responsible tax policy. I am optimistic that these measures will strengthen the state’s economic foundation while maintaining fiscal responsibility.”

• Senate Bill 304 by Senator Rader establishes a level 4.75% individual income tax rate while removing the deduction for federal income taxes paid. It also sets standardized deductions at $13,550 for single filers, $27,100 for joint filers and $19,225 for head-of-household filers, making the tax process simpler and more predictable for Oklahoma taxpayers.
   
• Senate Bill 299 by Senator Rader repeals the throwback rule, which currently subjects certain corporate income to state taxation even when it is not taxed in other states. This repeal will prevent undue tax burdens on businesses in Oklahoma, encouraging them to expand and create jobs within the state.
   
• Senate Bill 291 by Senator Pugh introduces an income tax credit for Oklahoma residents that activates when state revenue growth exceeds 10% from the previous fiscal year. The measure provides that 5% of the growth will be set aside to fund the credit. This ensures that taxpayers directly benefit.
   
• Senate Bill 60 by Senator Rader Ensures that tax liability is based solely on in-state sales rather than complex allocation formulas. This change aligns Oklahoma’s corporate tax system with best practices seen in other pro-business states.

The package of tax reforms now moves to the full Senate for consideration. 

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