Income tax; modifying certain apportionment factors for determining Oklahoma taxable income for certain tax years. Effective date.
SB60 amends Oklahoma’s income tax apportionment rules in 68 O.S. Section 2358. The core policy change is for multistate businesses: for tax year 2026 and later, income from a unitary business would be apportioned to Oklahoma solely by the sales factor, replacing the current three-factor formula that averages property, payroll, and sales/gross revenue for tax year 2025 and earlier. The bill leaves in place the existing separate-allocation rules and special apportionment provisions for certain industries, including insurance, transportation, pipelines, communications, and publicly traded partnerships, while preserving the Tax Commission’s authority to adjust apportionment in unusual cases.
The bill also makes a broad set of conforming and existing Oklahoma income tax provisions part of the amended section, including deductions and exemptions for individuals and corporations. These include provisions related to retirement income, Social Security, military pay and retirement, college savings and ABLE contributions, organ donation, agricultural commodity processing, pass-through entity tax treatment, and captive REIT add-backs. Although most of these provisions are not newly created by SB60, they remain embedded in the amended statute and continue to define Oklahoma taxable income after the apportionment change.
The practical impact of SB60 is on how multistate corporations calculate the share of income taxable in Oklahoma. Moving to a single sales-factor apportionment generally reduces the weight of in-state property and payroll in the tax formula, which can lower or shift tax liability for businesses with significant Oklahoma operations but relatively lower Oklahoma sales, while increasing the emphasis on in-state sales activity. The bill does not appear to change the corporate income tax rate or the underlying tax base, but it does alter the method used to assign income to Oklahoma beginning in 2026.
The available legislative history suggests the bill moved with little visible opposition. It passed the Senate 9-0 on March 3, 2025, and the Senate Appropriations Committee reported it “Do Pass as Amended” on March 5, 2025. No committee transcript was provided, so there is no recorded floor or committee debate in the materials supplied. The overall sentiment in the available record appears favorable and technical, with the bill framed as a tax apportionment adjustment rather than a broader tax increase or cut.
The main point of potential contention is the policy shift from a three-factor formula to a sales-only formula. Supporters of single-sales-factor apportionment typically view it as more competitive and more favorable to in-state investment and employment, while critics may argue it can reduce Oklahoma’s ability to tax businesses based on their physical presence and payroll in the state. Because the bill is highly technical and affects multistate corporate taxpayers most directly, the likely debate centers on revenue effects, business competitiveness, and fairness in apportioning income among states.
SB60 amends 68 O.S. Section 2358, Oklahoma’s income tax apportionment statute, to change the formula used for unitary businesses beginning with tax year 2026. For tax year 2025 and earlier, the statute continues to use the three-factor apportionment method based on property, payroll, and sales or gross revenue; for tax year 2026 and later, Oklahoma taxable income is apportioned solely by the sales factor. The bill leaves existing allocation rules, industry-specific apportionment rules, and numerous individual and corporate deductions and exemptions in place, but it changes how multistate business income is assigned to Oklahoma for tax purposes.
The available voting record indicates strong support and little or no opposition. SB60 passed the Senate 9-0 on March 3, 2025, and the Senate Appropriations Committee recommended it do pass as amended on March 5, 2025. No committee transcript was provided, so there is no direct record of debate, but the bill appears to have been treated as a technical tax policy measure with generally favorable sentiment.
The likely point of contention is the move from a three-factor apportionment formula to a sales-only formula for multistate businesses. Supporters may favor the change as a way to modernize Oklahoma’s tax code and encourage in-state investment and payroll by reducing tax weight on property and wages. Opponents, if any, would likely focus on possible revenue loss, the fairness of shifting tax burden toward businesses with higher Oklahoma sales, and whether the change benefits some industries more than others. No specific objections are recorded in the provided materials.