Proposed bill would eliminate Oklahoma’s personal income tax

OKLAHOMA CITY — Rep. Jay Steagall, R-Yukon, has filed legislation to phase out Oklahoma’s personal and corporate income taxes over a decade, with the goal of eliminating the tax entirely by 2035.

House Bill 1009, to be considered in the 2025 session, would reduce the personal income tax rate by 0.00475 percent annually and the corporate income tax rate by 0.004 percent annually over 10 years. Steagall had filed a nearly identical bill for consideration during the 2024 legislative session.

“Recent polls show that Oklahomans overwhelmingly support the elimination of the state income tax, an effort for which I have filed legislation in the past two years and filing once again for the 60th Legislature,” Steagall said. “The state income tax is a clear violation of our own state constitution and I will continue to pursue righting this wrong in the upcoming session.”

Steagall pointed to Article 2, Section 2 of the Oklahoma Constitution, which states “all persons have the inherent right to life, liberty, the pursuit of happiness, and the enjoyment of the gains of their own industry.” He said income taxes go against the foundation of the state constitution and encroach on Oklahomans’ liberties.

The state income tax was created statutorily in 1915. Stegall said the gradual reduction over a decade would give the Legislature opportunity to act on much-needed tax reform.