Drop in income tax rate
The full Senate has given approval to legislation that would reduce the state income tax rate from 5.25 percent to 4.75 percent. Senate Bill 585 would be fully effective in tax year 2015 and would cut income taxes by $250 million while actually enabling increased funding for core services, like education. The measure was approved 33 to 13.
SB 585 would target more than 30 obsolete tax subsidies for elimination or reform while protecting most tax preferences for low-income individuals, senior citizens and members of the military. When fully implemented, it is estimated that nine out of 10 Oklahoma taxpayers would see a tax reduction or no change at all.
Long-time educator Sen. Ron Sharp praised passage of legislation that will help increase funding for education and other important state services.
The Shawnee Republican said Senate Bill 585 is a win-win for all Oklahomans including students, taxpayers and businesses.
“As a 38-year teacher, I’m dedicated to ensuring that education is properly funded and that our students receive the best possible education. The students we educate today will be tomorrow’s taxpayers, and this bill is a step in improving education and investing in our state’s future,” said Sharp. “Some think that in order to cut taxes, funding to state services, like education, must be reduced but this isn’t true. By reforming the tax code and lowering the income tax, we can actually increase funding to education and other state services.”
Sharp noted that lowering the income tax will have multiple benefits for Oklahoma citizens and businesses.
House Bill 1716, by Rep. Leslie Osborn, passed by a 79-14 margin in the House of Representatives. It repeals the state’s franchise tax. Currently under a moratorium through June of 2013, the tax was crafted to tax corporations for doing business in Oklahoma. Those entities were levied a tax of $1.25 for every $1,000 of capital invested or used in the state.
If nothing had been done about the franchise tax this legislative session, the moratorium would have expired June 30, meaning this tax would again be levied against companies on July 1, 2014. If passed by the Senate and signed by the governor, this measure would go into effect July 1, 2014.