State taxes: Oklahoma

Oklahoma’s top tax rate was cut by 0.25% in 2012. The state income tax rates now range from 0.5% to a high of 5.25%. More on Sooner State taxes can be found in the tabbed pages below.

Personal income tax

Oklahoma collects income taxes from its residents at the following rates.

For single taxpayers and couples filing separate returns:

• 0.5% on the first $1,000 of taxable income.
• 1% on taxable income between $1,001 and $2,500.
• 2% on taxable income between $2,501 and $3,750.
• 3% on taxable income between $3,751 and $4,900.
• 4% on taxable income between $4,901 and $7,200.
• 5% on taxable income between $7,201 and $8,700.
• 5.25% on taxable income of $8,701 and above.

For married joint filers, qualifying widows and widowers, and heads of household:

• 0.5% on the first $2,000 of taxable income.
• 1% on taxable income between $2,001 and $5,000.
• 2% on taxable income between $5,001 and $7,500.
• 3% on taxable income between $7,501 and $9,800.
• 4% on taxable income between $9,801 and $12,200.
• 5% on taxable income between $12,201 and $15,000.
• 5.25% on taxable income of $15,001 and above.

Sooner State income tax forms are due April 15, or the next business day if that date falls on a weekend or holiday.

Sales taxes

Oklahoma’s sales tax rate is 4.5%.

Oklahoma is a participant in the Streamlined Sales Tax Initiative, or SSTI, designed to create a nationwide, simplified system to bring uniformity to definitions of items in the sales tax base, reduce the paperwork burden on retailers, and incorporate new technology.

An Oklahoma resident who lives in the state for the entire year and whose total gross household income is $20,000 or less can file for sales tax relief. Taxpayers who can claim an exemption for a dependent, are age 65 or older, or who are physically disabled and make up to $50,000 also are eligible.

The sales tax refund can be claimed by filing Form 538-S along with personal state income tax returns by the April due date. If no state income tax return is required, the form can be filed separately by June 30 (or the next business day if June 30 falls on a weekend) with the Oklahoma Tax Commission.

State law allows incorporated cities and towns as well as counties to levy local sales and use taxes for general and specific purposes of municipal government.

Personal and real property taxes

Property taxes, also known as ad valorem taxes, are the primary source of funding for county government operations.

Property taxes are paid based on the value of a taxpayer’s property. The county assessor, a locally elected office holder, determines the value of most property in the county for tax purposes.

Taxpayers owning tangible personal property in the state of Oklahoma must file a property tax return with each county where property was located Jan. 1 of each year on or before the following March 15. Personal property then is assessed at an amount between 10% and 15% of its fair cash value.

Real property is also assessed as of Jan. 1. It is valued at its “use value” fair cash value for the highest and best use for which the property was actually used (or classified for use) during the previous calendar year.

A homestead exemption of $1,000 of a property’s assessed valuation is available to homeowners living in the property as of Jan. 1.

Homeowners may claim credit for or refund of property taxes by filing Form 538-H.

Some older Oklahoma residents also are entitled to a property valuation freeze by filing Form OTC 994.

Many questions regarding property tax issues are handled at the county level. Each of Oklahoma’s 77 counties has a county tax assessor. Information from your county assessor is available at the assessor’s website.

Further questions regarding property tax issues can be directed to the Oklahoma Tax Commission’s ad valorem division at (405) 319-8200.

Inheritance and estate taxes

Oklahoma has no inheritance tax.

Oklahoma repealed its estate tax effective Jan. 1, 2010.

Other Oklahoma tax facts

Business taxpayers can use Oklahoma Taxpayer Access Point, or OkTAP, to file, pay, update and manage tax accounts 24 hours a day.

Individual taxpayers also may use tax commission-approved income tax filing companies and products to file their personal tax returns.

Once an Oklahoma taxpayers has filed, the refund status also can be checked online.

For information, contact Taxpayer Assistance at the Oklahoma Tax Commission at (405) 521-3160, or visit the Oklahoma Tax Commission website.

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