Oklahoma House Bill HB3377

Oklahoma 2026 Regular Session

• Introduced: 2/2/26
• Refer: 2/3/26

Caption

Revenue and taxation; income tax; Oklahoma adjusted gross income; deduction; qualified tips; effective date.

Summary

HB3377 amends Oklahoma’s income tax adjustment statute to create a new subtraction from Oklahoma adjusted gross income for “qualified tips” received by a taxpayer. Beginning with tax years on or after January 1, 2027, a taxpayer may deduct the amount of qualified tips that were also allowed on the taxpayer’s federal return, subject to a $25,000 annual cap. The bill defines qualified tips as cash tips received in the course of employment in occupations that traditionally and customarily receive tips, and it directs the Oklahoma Tax Commission to publish a list of those occupations on its website by December 31, 2026. The bill also ties the new deduction to federal treatment by limiting it to tips already recognized on the federal income tax filing. It does not alter the tax base for wages generally, but it creates a targeted state income tax benefit for tipped workers in occupations identified by the Tax Commission. The bill’s effective date is November 1, 2026, though the deduction itself applies to tax years beginning on or after January 1, 2027.

Impact

HB3377 would amend 68 O.S. 2021, Section 2358, which governs the adjustments used to calculate Oklahoma taxable income and Oklahoma adjusted gross income. The practical effect is to reduce state income tax liability for eligible tipped workers by allowing a new subtraction for qualified tips, up to $25,000 per taxpayer per year. The Oklahoma Tax Commission would also have an administrative role in identifying covered occupations and publishing that list online, which could affect payroll, withholding, and tax preparation for employers and taxpayers in service industries.

Sentiment

There is no recorded committee transcript or vote history in the provided materials, so the bill’s sentiment cannot be measured from debate or roll call data. Based on the bill text alone, the measure appears policy-oriented and narrowly targeted, with an apparent intent to provide tax relief to workers who rely on tips. The absence of recorded opposition or support in the available context means no clear legislative consensus or controversy can be inferred from the materials provided.

Contention

The main potential point of contention is the definition of “qualified tips” and which occupations will be included on the Tax Commission’s list, since that determines who benefits from the deduction. Another possible issue is the $25,000 cap, which may be viewed as either generous or too limited depending on the taxpayer’s income and tipping volume. Because the bill conditions the deduction on federal treatment and excludes higher-compensated employees under the referenced federal threshold, questions could also arise about administrative complexity, eligibility verification, and whether the deduction disproportionately benefits certain service-sector workers over others.