Thursday, February 24, 2011

Oklahoma Taxpayer Relief Act of 2011

 SB133 and HB1543 are called the “Taxpayer Relief Act of 2011”. SB 133 proposes to eliminate individual income tax on a phased in basis. The reduction will begin in tax year 2012 with the tax being fully eliminated in tax year 2016. The bills read in part (sections E and H respectively), “For the taxable years beginning January 1, 2016, and for all taxable years thereafter, the tax otherwise imposed pursuant to the provisions of this section upon the taxable income of individuals shall cease to become effective as law and no individual income tax shall be imposed.”

The Oklahoma Tax Commission released an impact statement that estimates a savings to taxpayers of $142.95 million in fiscal year 2012 and $580.6 million in 2013.

According to Oklahoma's personal income tax system begins at an income level of $8,700. The top rate of 5.5% is 30th highest among states levying personal income taxes. Oklahoma's 2008 state-level individual income tax collections were $768 per person, which ranked 32nd highest nationally. Oklahoma's state and local tax burden is currently estimated at 8.7% of income (37th nationally), below the national average of 9.8%.

Oklahoma levies a 4.5% general sales or use tax on consumers, which is below the national median of 5.85%. Oklahoma's gasoline tax stands at 17 cents per gallon and ranks 45th highest nationally. Oklahoma's cigarette tax stands at $1.03 per pack of twenty and ranks 27th highest nationally.

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