Oklahomans could see the personal income tax fully eliminated through a gradual phaseout process under legislation that has cleared its first legislative hurdle.

House Bill 1539, by state Rep. Mark Lepak, R-Claremore, would cut the state’s personal income-tax rate by a quarter point each time that net state revenue increases by at least $300 million.

Oklahoma’s top personal income-tax rate is 4.75 percent. Because state revenue is down slightly this year, the passage of HB 1539 would not have any immediate impact on tax rates, but it would mandate future tax cuts once growth resumes at sufficient levels.

Oklahoma’s current 4.75 percent personal income tax rate is among the highest in the region.

Texas has no personal income tax while Colorado imposes a 4.4 percent rate most years and recently provided a temporary reduction to 4.25 percent. Officials in Arkansas have cut their rate to 3.9 percent. The top rate in Missouri fell to 4.7 percent in January, leapfrogging Oklahoma. Louisiana has cut its income-tax rate to 3 percent and has a “trigger” law in place to further cut the rate as revenue increases in future years.

Among bordering states, Kansas and New Mexico have higher personal income-tax rates than Oklahoma.

In addition to having one of the highest income-tax rates in the region, Oklahoma’s tax is also imposed at a lower income level than what is typical in many states.

Currently, Oklahoma’s top personal income tax rate is imposed on those with incomes of $7,200 for single filers and $12,200 for joint filers and lower tax rates are imposed for those with incomes below those thresholds.

With little discussion and no debate, HB 1539 passed out of the House Appropriations and Budget Finance Subcommittee on a 7-2 vote that broke along party lines with Republicans in support and Democrats opposed.