Income tax; modifying certain income tax rate for certain tax years. Effective date.
SB308 would substantially reduce and ultimately eliminate Oklahoma’s individual income tax over a staged schedule. The bill amends the state income tax statute to set lower marginal rates beginning with tax year 2024, then further reduces rates and expands the zero-tax brackets in tax years 2025 through 2028. Under the bill, the top individual rate would fall to 4.75% in 2024, 3.75% in 2025, 2.75% in 2026, 1.75% in 2027, and 0.75% in 2028, before reaching 0% for tax year 2029 and later. The bill also removes the deduction for federal income taxes paid in the affected years and retains separate treatment for nonresident aliens, corporations, foreign corporations, trusts, and estates.
The bill’s main legal effect would be to amend 68 O.S. 2021, Section 2355, the state’s income tax rate statute, by replacing the existing individual rate structure with a phase-down schedule and then a full repeal of individual income tax liability. It would also update statutory language and references to reflect the new subsections and effective dates. The bill would not change the corporate income tax rate, which remains at 4%, but it would affect residents, nonresidents, married filers, heads of household, trusts, estates, and withholding obligations tied to nonresident and foreign corporation payments. The act would become effective November 1, 2025, though the rate changes are written to apply to future tax years beginning in 2024 and later.
The available context shows no recorded committee debate or floor votes, so there is no direct transcript evidence of support or opposition. Based on the bill’s content, the general sentiment appears to be strongly pro-tax-cut and aimed at long-term elimination of the individual income tax. The measure’s sponsor is listed as Sen. Deevers, and the caption frames it as a tax-rate modification bill.
The most likely point of contention is the fiscal impact of reducing and then eliminating a major state revenue source. Supporters would likely view the bill as tax relief and a simplification of the tax code, while critics would likely focus on the loss of revenue for state services and the feasibility of phasing rates down so quickly. Another possible issue is the bill’s interaction with existing tax policy, including the removal of the federal income tax deduction and the continued taxation of corporations and certain nonresident income. The bill had been referred from second reading to the Revenue and Taxation Committee and then to the Appropriations Committee, indicating that revenue and budget effects are central to its consideration.
SB308 would amend Oklahoma’s income tax statute, 68 O.S. 2021, Section 2355, to replace the current individual income tax brackets with a multi-year phase-down that ends in full repeal of individual income tax beginning in tax year 2029. It would lower rates for single filers, joint filers, heads of household, trusts, and estates, eliminate the deduction for federal income taxes paid in the affected years, and preserve separate tax rules for corporations, foreign corporations, and nonresident aliens. The bill would therefore significantly alter state tax law and reduce income tax liability for individuals over time while leaving the corporate income tax largely intact.
No committee transcript or vote record is available, so there is no documented public debate in the provided materials. The bill’s structure indicates a clear pro-tax-cut, anti-income-tax sentiment, with the sponsor proposing a gradual path to zero individual income tax. The referral to both Revenue and Taxation and Appropriations suggests the measure is being treated as a major fiscal policy change with likely budget implications.
The central point of contention is likely the loss of state revenue from phasing out individual income taxes, which could affect funding for core government services and require offsetting budget changes. Supporters would likely argue that the bill provides broad tax relief, improves competitiveness, and simplifies the tax code, while opponents would likely question whether the state can absorb the revenue reduction and whether the phase-down schedule is fiscally sustainable. The bill’s elimination of the federal income tax deduction and its continued taxation of corporations and certain nonresident income may also draw scrutiny from taxpayers and fiscal analysts.