Senator Coffee Authors Bill to End Retirement Tax

Senator Glenn Coffee has announced plans to file legislation eliminating state income tax on retirement income. The Oklahoma City Republican said he had filed the measure for the 2003 legislative session, but would not kick in until the economy had begun a strong recovery.

"This is something Governor Henry supported during his campaign, but of course the budget situation hasn't changed. We're still facing a serious shortfall. Still, I think it's important to show our seniors that we are serious about eliminating income tax on their pensions. Once things improve, that will happen," explained Senator Coffee, R-OKC.

Under Senate Bill 550, the exemption would not kick in until the first calendar year following the State Equalization Boards final certification of a minimum 7.5% increase over the previous year's revenues.

"At that point, the exemption would be phased in; fifty percent of pension income would be exempt the first year, and the remaining fifty percent would be exempt in the second," explained Senator Coffee. "I think this is a very responsible way to implement a tax reform that Oklahoma really needs. Even though there are some existing tax breaks for our older citizens, many are still struggling to make ends meet, especially with the skyrocketing costs of medical care and prescription drugs. This would make a huge difference to thousands of retirees."

In addition, Coffee said eliminating state tax on retirement income could help keep more Oklahomans from moving out of state to protect their pensions.

"This is going to become an even greater issue as our population continues to age. I don't think we should have to put parents and grandparents in the position of having to leave their families behind so they can get by on their retirement incomes," noted Senator Coffee.

"I think this is a responsible and sensible mechanism to ensure this tax reform will happen once our economy has recovered," said Coffee.

Senator Coffee's legislation will be considered after the legislature officially reconvenes on February 3rd.