OKLAHOMA CITY – Oklahoma City continues its trajectory toward a top 10 favorable business tax environment.
Oklahoma has moved up four spots from last year on the 2024 State Business Tax Climate Index and now ranks 19th in the nation for business-friendly conditions. Rankings from the Tax Foundation, a nonprofit tax policy organization that reviews the tax policies and structures of all states, show Oklahoma showing significant improvement in several key areas, including investment, business expansion, and economic development objectives. It was recognized that the recognition as a place has improved.
Key highlights of Oklahoma’s significant increase in tax competitiveness include gains in the personal and property tax categories. The state introduced permanent full spending through legislation in 2022, securing fourth place in the corporate tax component as other states become less competitive.
The Oklahoma State Chamber commissioned a study in 2021 in partnership with the Tax Foundation to analyze Oklahoma’s tax system. Ben Lepak, executive director of the State Chamber Research Foundation, said the study will help states become more competitive, including full expensing, which allows businesses to immediately deduct the full amount of certain investments in technology, equipment and buildings. He said a number of reforms had been identified that could be pursued. .
“We can encourage investment in things that will grow businesses and lead to increased employment,” Lepak said. “There are many economists across the country who believe this was the most pro-growth aspect of the 2017 federal tax package. And in many states, their state policy is essentially tied to federal policy. So, as that provision was starting to expire at the federal level, Oklahoma became the first state to make it permanent.”
Repak said changes to the income tax system would put the state in the top 10. The state Legislature’s plan to continue moving up the rankings includes a proposal to move homeownership from a six-box system to one that applies to all taxpayers. That would double the standard deduction and lower-income citizens would also benefit from the change, he said.
“Having multiple state income tax brackets is really just unnecessarily complicated,” Lepak said.
Oklahoma currently has a graduated personal income tax, with rates ranging from 0.25% to 4.75%.
Additionally, Lepak said a revenue trigger that ties future income tax cuts to economic growth would prevent a fiscal crisis during an economic downturn.
Oklahoma also eliminated the marriage penalty in the 2023 legislative session by adjusting the threshold for the top marginal tax bracket to $14,400, twice the threshold for the top marginal tax bracket. The personal tax component index increased. For single filers.
CEO and Chamber President Chad Warmington said Oklahoma’s business community and legislators have been dedicated to developing a progressive tax reform initiative.
“These measures have streamlined our tax code, reduced the tax burden, and promoted fiscal responsibility, all of which are essential to attracting businesses and individuals to our state. Getting to where we want Oklahoma to be We still have work to do, but these numbers show we are moving in the right direction,” Warmington said in a statement. “With improved tax competitiveness, Oklahoma is well-positioned to attract new investment, foster innovation, and provide a nurturing environment for both emerging and established companies.”