Income tax credit; providing certain tax credit. Effective date.
Summary
SB291 creates a refundable state income tax credit tied to excess revenue growth. The bill directs the State Board of Equalization to continue certifying five-year average revenue benchmarks for oil, natural gas, and corporate income tax receipts, and it adds a new annual certification beginning in 2026 for growth in amounts available for appropriation. If that growth exceeds 10%, the Board must certify the amount above five percentage points of growth for use in calculating a tax credit.
The credit would apply against the corporate income tax and would be calculated by the Oklahoma Tax Commission by dividing the certified excess amount among state income tax returns, with a larger amount for married filing jointly returns. The Commission must publish the credit amount within 45 days of certification. The credit is not available in any year in which a revenue failure is declared before November 1. The act is set to take effect November 1, 2025.
Impact
The bill amends 62 O.S. 2021, Section 34.103, and creates a new section to be codified at 68 O.S. Section 2357.207. It changes how certain excess revenues are handled by directing deposits into the Revenue Stabilization Fund and Constitutional Reserve Fund, and it adds a mechanism for returning some of the state’s revenue growth to taxpayers through a refundable income tax credit. The measure affects the State Board of Equalization, the Oklahoma Tax Commission, corporate taxpayers, and individual income tax filers.
Sentiment
The available voting history suggests generally favorable support for the bill, though not unanimous. It passed the Senate committee 9-2, advanced on Senate third reading 37-8, and received a 5-2 do pass vote in the House. That pattern indicates the proposal had broad backing among lawmakers who viewed it as a way to share strong revenue growth with taxpayers while preserving reserve-fund protections.
Contention
The main points of contention appear to be the bill’s revenue-triggered tax credit structure and its effect on state budgeting. Supporters likely favor returning excess collections to taxpayers when growth is strong, while opponents may be concerned that the credit reduces funds available for appropriations or complicates fiscal planning. The bill also distinguishes between revenue sources and reserve-fund deposits, which may have raised questions about how much revenue should be retained versus distributed, and about the administrative complexity of calculating and publishing the credit each year.