By Cody Maynard
The Senate this week passed House Bill 1539, which would create a pathway to zero for Oklahoma’s income tax. The bill was sent to the Senate with the title off, so it must return to the House for fourth reading before it is sent to the governor for his consideration of signing it into law.
This is a trigger plan that would allow a quarter-percent reduction in the income tax rate each time tax collections over time grow by more than $300 million. This would help keep Oklahoma competitive with states that have reduced their personal tax rates.
A lookback over the last 30 years shows total state income tax collections have increased 4.1% over that time period, even while we decreased the income tax rate from 7% to 4.75%. This leaves in place sales, use and lodging taxes collected by cities and counties, which are at the discretion of local voters to be used for things like public safety and transportation or other local services.
This would reduce the income tax rate only when we have enough state revenue to continue offering the services enumerated in our Constitution. This would benefit the taxpayer, but also ensure services continue for Oklahomans in need.
Senate Bill 291Â is another income tax bill that bears watching. This bill would create an income tax credit that would take effect when the State Board of Equalization certifies growth in revenue has exceeded 10% compared to the previous fiscal year. The measure would provide that 5% of that growth shall be set aside to fund the credit. The credit awarded shall be determined by a calculation outlined in the measure.
This bill passed the House Appropriations & Budget (A&B) Finance Subcommittee on Thursday and now will be eligible to be considered in full A&B.
Both of these bills are important tax reform measures that could benefit Oklahomans.
This was an incredibly busy committee week in the House. Policy and A&B subcommittees considered a total of 264 bills by the Thursday deadline for bills to be advanced from these initial committees. The measures now will move to oversight committees or full A&B before they become eligible for third reading on the House floor. The Senate, meanwhile, is considering our House measures in committee before they move to the Senate floor.
On a final note, the House and Senate convened in joint session this week to recognize the contributions of the 45th Infantry Division of the Oklahoma National Guard. Our Guard members do so much for us here in the state, whether it is helping with the recent wildfires or assisting with tornadoes, flooding or other natural disasters, administering aid during the COVID pandemic, or helping in the aftermath of the Murrah building bombing in Oklahoma City in 1995. They are dedicated and selfless. Their sacrifice and willing service is very much appreciated and worthy of our commendation.
Thank you for the opportunity to serve. It’s an honor to represent the great people of District 21.