The Oklahoma State Senate has taken action that will prevent Oklahomans from paying any state taxes on their federal income tax rebates.
In a special session of the Legislature on Tuesday, lawmakers approved HB 1002X - legislation ensuring that the $300 and $600 federal tax rebate checks are not subject to state taxes. Those checks, which are a byproduct of the federal tax reduction program approved by the U.S. Congress earlier this year, have been going out to taxpayers since August.
Senate President Pro Tempore Stratton Taylor, who authored HB 1002X, called the legislation a good common sense solution.
"We wanted to make sure that Oklahomans got to keep every dollar of their federal tax rebate. It just didn't make sense to apply state taxes to the proceeds of a tax cut. This legislation fixed that problem," said Senator Taylor.
In the same piece of legislation, lawmakers altered Oklahoma's College Savings Act to conform to recent tax changes made on the federal level.
The Oklahoma legislation ensures that college savings account earnings will not be subject to state income taxes when they are withdrawn for use. The special accounts encourage parents to begin saving early for their children's future higher education costs.
"Through tax breaks and other incentives, we're trying to make it as attractive as possible to put money away for a future college education. The college savings accounts were already a good deal for Oklahoma parents, but the latest legislation will make them even better," said Senator Taylor.