STATE OF OKLAHOMA

1st Session of the 53rd Legislature (2011)

HOUSE BILL 1543	By:	Cockroft and Reynolds

AS INTRODUCED

An Act relating to revenue and taxation; enacting the Taxpayer Relief Act of 2011; amending 68 O.S. 2001, Section 2355, as last amended by Section 7, Chapter 136, O.S.L. 2007 (68 O.S. Supp. 2010, Section 2355), which relates to income taxation; modifying tax rates applicable to certain amounts of income; specifying rates applicable to certain income amounts; repealing Section 4, Chapter 42, 2nd Extraordinary Session, O.S.L. 2006, as last amended by Section 13, Chapter 378, O.S.L. 2008 (68 O.S. Supp. 2010, Section 2355.1A), which relates to certain state revenue computation used in determining top marginal income tax rate; providing for noncodification; and providing an effective date.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     NEW LAW     A new section of law not to be codified in the Oklahoma Statutes reads as follows:
This act shall be known and may be cited as the “Taxpayer Relief Act of 2011”.
SECTION 2.     AMENDATORY     68 O.S. 2001, Section 2355, as last amended by Section 7, Chapter 136, O.S.L. 2007 (68 O.S. Supp. 2010, Section 2355), is amended to read as follows:
Section 2355.  A.  Individuals.  For all taxable years beginning after December 31, 1998 and before January 1, 2006, a tax is hereby imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed at the option of the taxpayer under one of the two following methods:
1.  METHOD 1.
a.	Single individuals and married individuals filing separately not deducting federal income tax:
(1)	1/2% tax on first $1,000.00 or part thereof,
(2)	1% tax on next $1,500.00 or part thereof,
(3)	2% tax on next $1,250.00 or part thereof,
(4)	3% tax on next $1,150.00 or part thereof,
(5)	4% tax on next $1,300.00 or part thereof,
(6)	5% tax on next $1,500.00 or part thereof,
(7)	6% tax on next $2,300.00 or part thereof, and
(8)	(a)	for taxable years beginning after December 31, 1998, and before January 1, 2002, 6.75% tax on the remainder,
(b)	for taxable years beginning on or after January 1, 2002, and before January 1, 2004, 7% tax on the remainder, and
(c)	for taxable years beginning on or after January 1, 2004, 6.65% tax on the remainder.
b.	Married individuals filing jointly and surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code and heads of households as defined in the Internal Revenue Code not deducting federal income tax:
(1)	1/2% tax on first $2,000.00 or part thereof,
(2)	1% tax on next $3,000.00 or part thereof,
(3)	2% tax on next $2,500.00 or part thereof,
(4)	3% tax on next $2,300.00 or part thereof,
(5)	4% tax on next $2,400.00 or part thereof,
(6)	5% tax on next $2,800.00 or part thereof,
(7)	6% tax on next $6,000.00 or part thereof, and
(8)	(a)	for taxable years beginning after December 31, 1998, and before January 1, 2002, 6.75% tax on the remainder,
(b)	for taxable years beginning on or after January 1, 2002, and before January 1, 2004, 7% tax on the remainder, and
(c)	for taxable years beginning on or after January 1, 2004, 6.65% tax on the remainder.
2.  METHOD 2.
a.	Single individuals and married individuals filing separately deducting federal income tax:
(1)	1/2% tax on first $1,000.00 or part thereof,
(2)	1% tax on next $1,500.00 or part thereof,
(3)	2% tax on next $1,250.00 or part thereof,
(4)	3% tax on next $1,150.00 or part thereof,
(5)	4% tax on next $1,200.00 or part thereof,
(6)	5% tax on next $1,400.00 or part thereof,
(7)	6% tax on next $1,500.00 or part thereof,
(8)	7% tax on next $1,500.00 or part thereof,
(9)	8% tax on next $2,000.00 or part thereof,
(10)	9% tax on next $3,500.00 or part thereof, and
(11)	10% tax on the remainder.
b.	Married individuals filing jointly and surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code and heads of households as defined in the Internal Revenue Code deducting federal income tax:
(1)	1/2% tax on the first $2,000.00 or part thereof,
(2)	1% tax on the next $3,000.00 or part thereof,
(3)	2% tax on the next $2,500.00 or part thereof,
(4)	3% tax on the next $1,400.00 or part thereof,
(5)	4% tax on the next $1,500.00 or part thereof,
(6)	5% tax on the next $1,600.00 or part thereof,
(7)	6% tax on the next $1,250.00 or part thereof,
(8)	7% tax on the next $1,750.00 or part thereof,
(9)	8% tax on the next $3,000.00 or part thereof,
(10)	9% tax on the next $6,000.00 or part thereof, and
(11)	10% tax on the remainder.
B.  Individuals.  For Except as otherwise provided by paragraph 3 of this subsection and except as otherwise provided by subsection H of this section, for all taxable years beginning on or after January 1, 2008 2011, a tax is hereby imposed upon the Oklahoma taxable income of every resident or nonresident individual, which tax shall be computed as follows:
1.  Single individuals and married individuals filing separately:
(a)	1/2% 
(1)	for the 2011 tax year, 5/10 of 1% tax on first $1,000.00 or part thereof,
(2)	for the 2012 tax year, 4/10 of 1% tax on first $1,000.00 or part thereof,
(3)	for the 2013 tax year, 3/10 of 1% tax on first $1,000.00 or part thereof,
(4)	for the 2014 tax year, 2/10 of 1% tax on first $1,000.00 or part thereof,
(5)	for the 2015 tax year, 1/10 of 1% tax on first $1,000.00 or part thereof, and
(6)	for the 2016 tax year and all subsequent tax years 0% tax,
(b)	(1)	for the 2011 tax year, 1% tax on next $1,500.00 or part thereof,
(2)	for the 2012 tax year, 8/10 of 1% tax on the next $1,500.00 or part thereof,
(3)	for the 2013 tax year, 6/10 of 1% tax on the next $1,500.00 or part thereof,
(4)	for the 2014 tax year, 4/10 of 1% tax on the next $1,500.00 or part thereof,
(5)	for the 2015 tax year, 2/10 of 1% tax on the next $1,500.00 or part thereof,
(6)	for the 2016 tax year and all subsequent tax years 0% tax,
(c)	(1)	for the 2011 tax year, 2% tax on next $1,250.00 or part thereof,
(2)	for the 2012 tax year, 1.6% tax on the next $1,250.00 or part thereof,
(3)	for the 2013 tax year, 1.2% tax on the next $1,250.00 or part thereof,
(4)	for the 2014 tax year, 0.8% tax on the next $1,250.00 or part thereof,
(5)	for the 2015 tax year, 0.4% tax on the next $1,250.00 or part thereof, and
(6)	for the 2016 tax year and all subsequent tax years 0% tax,
(d)	(1)	for the 2011 tax year, 3% tax on next $1,150.00 or part thereof,
(2)	for the 2012 tax year, 2.4% tax on the next $1,150.00 or part thereof,
(3)	for the 2013 tax year, 1.8% tax on the next $1,150.00 or part thereof,
(4)	for the 2014 tax year, 1.2% tax on the next $1,150.00 or part thereof,
(5)	for the 2015 tax year, 0.6% tax on the next $1,150.00 or part thereof, and
(6)	for the 2016 tax year and all subsequent tax years 0% tax,
(e)	(1)	for the 2011 tax year, 4% tax on next $2,300.00 or part thereof,
(2)	for the 2012 tax year, 3.2% tax on the next $2,300.00 or part thereof,
(3)	for the 2013 tax year, 2.4% tax on the next $2,300.00 or part thereof,
(4)	for the 2014 tax year, 1.6% tax on the next $2,300.00 or part thereof,
(5)	for the 2015 tax year, 0.8% tax on the next $2,300.00 or part thereof, and
(6)	for the 2016 tax year and all subsequent tax years 0% tax,
(f)	(1)	for the 2011 tax year, 5% tax on next $1,500.00 or part thereof,
(2)	for the 2012 tax year, 4% tax on the next $1,500.00 or part thereof,
(3)	for the 2013 tax year, 3% tax on the next $1,500.00 or part thereof,
(4)	for the 2014 tax year, 2% tax on the next $1,500.00 or part thereof,
(5)	for the 2015 tax year, 1% tax on the next $1,500.00 or part thereof, and
(6)	for the 2016 tax year and all subsequent tax years 0% tax, and
(g)	5.50% tax on the remainder for the 2008 tax year and any subsequent tax year unless the rate prescribed by subparagraph (h) of this paragraph is in effect, and
(h)	5.25% 5.0% tax on the remainder for the 2009 2011 and subsequent tax years except as further reduced pursuant to the provisions of paragraph 3 of this subsection.  The decrease in the top marginal individual income tax rate otherwise authorized by this subparagraph shall be contingent upon the determination required to be made by the State Board of Equalization pursuant to Section 2355.1A of this title.
2.  Married individuals filing jointly and surviving spouse to the extent and in the manner that a surviving spouse is permitted to file a joint return under the provisions of the Internal Revenue Code and heads of households as defined in the Internal Revenue Code:
(a)	1/2% 
(1)	for the 2011 tax year, 5/10 of 1% tax on first $2,000.00 or part thereof,
(2)	for the 2012 tax year, 4/10 of 1% tax on first $2,000.00 or part thereof,
(3)	for the 2013 tax year, 3/10 of 1% tax on first $2,000.00 or part thereof,
(4)	for the 2014 tax year, 2/10 of 1% tax on first $2,000.00 or part thereof,
(5)	for the 2015 tax year, 1/10 of 1% tax on first $2,000.00 or part thereof, and
(6)	for the 2016 tax year and all subsequent tax years 0% tax,
(b)	(1)	for the 2011 tax year, 1% tax on next $3,000.00 or part thereof,
(2)	for the 2012 tax year, 8/10 of 1% tax on the next $3,000.00 or part thereof,
(3)	for the 2013 tax year, 6/10 of 1% tax on the next $3,000.00 or part thereof,
(4)	for the 2014 tax year, 4/10 of 1% tax on the next $3,000.00 or part thereof,
(5)	for the 2015 tax year, 2/10 of 1% tax on the next $3,000.00 or part thereof, and
(6)	for the 2016 tax year and all subsequent tax years 0% tax,
(c)	(1)	for the 2011 tax year, 2% tax on next $2,500.00 or part thereof,
(2)	for the 2012 tax year, 1.6% tax on the next $2,500.00 or part thereof,
(3)	for the 2013 tax year, 1.2% tax on the next $2,500.00 or part thereof,
(4)	for the 2014 tax year, 0.8% tax on the next $2,500.00 or part thereof,
(5)	for the 2015 tax year, 0.4% tax on the next $2,500.00 or part thereof, and
(6)	for the 2016 tax year and all subsequent tax years 0% tax,
(d)	(1)	for the 2011 tax year, 3% tax on next $2,300.00 or part thereof,
(2)	for the 2012 tax year, 2.4% tax on the next $2,300.00 or part thereof,
(3)	for the 2013 tax year, 1.8% tax on the next $2,300.00 or part thereof,
(4)	for the 2014 tax year, 1.2% tax on the next $2,300.00 or part thereof,
(5)	for the 2015 tax year, 0.6% tax on the next $2,300.00 or part thereof, and
(6)	for the 2016 tax year and all subsequent tax years 0% tax,
(e)	(1)	for the 2011 tax year, 4% tax on next $2,400.00 or part thereof,
(2)	for the 2012 tax year, 3.2% tax on the next $2,400.00 or part thereof,
(3)	for the 2013 tax year, 2.4% tax on the next $2,400.00 or part thereof,
(4)	for the 2014 tax year, 1.6% tax on the next $2,400.00 or part thereof,
(5)	for the 2015 tax year, 0.8% tax on the next $2,400.00 or part thereof, and
(6)	for the 2016 tax year and all subsequent tax years 0% tax,
(f)	(1)	for the 2011 tax year, 5% tax on next $2,800.00 or part thereof,
(2)	for the 2012 tax year, 4% tax on the next $2,800.00 or part thereof,
(3)	for the 2013 tax year, 3% tax on the next $2,800.00 or part thereof,
(4)	for the 2014 tax year, 2% tax on the next $2,800.00 or part thereof,
(5)	for the 2015 tax year, 1% tax on the next $2,800.00 or part thereof, and
(6)	for the 2016 tax year and all subsequent tax years 0% tax, and
(g)	5.50% tax on the remainder for the 2008 tax year and any subsequent tax year unless the rate prescribed by subparagraph (h) of this paragraph is in effect, and
(h)	5.25% 5.0% on the remainder for the 2009 2011 and subsequent tax years except as further reduced pursuant to the provisions of paragraph 3 of this subsection.  The decrease in the top marginal individual income tax rate otherwise authorized by this subparagraph shall be contingent upon the determination required to be made by the State Board of Equalization pursuant to Section 2355.1A of this title.
3.  The rate of tax imposed pursuant to subparagraph (g) of paragraph 1 of this subsection and the rate of tax imposed pursuant to subparagraph (g) of paragraph 2 of this subsection shall be further reduced as follows:
(a)	4.0% tax on the remainder for the 2012 tax year,
(b)	3.0% tax on the remainder for the 2013 tax year,
(c)	2.0% tax on the remainder for the 2014 tax year,
(d)	1.0% tax on the remainder for the 2015 tax year, and
(e)	0.0% tax on the remainder for the 2016 and all subsequent tax years.
No deduction for federal income taxes paid shall be allowed to any taxpayer to arrive at taxable income.
C.  Nonresident aliens.  In lieu of the rates set forth in subsection A above, there shall be imposed on nonresident aliens, as defined in the Internal Revenue Code, a tax of eight percent (8%) instead of thirty percent (30%) as used in the Internal Revenue Code, with respect to the Oklahoma taxable income of such nonresident aliens as determined under the provision of the Oklahoma Income Tax Act.
Every payer of amounts covered by this subsection shall deduct and withhold from such amounts paid each payee an amount equal to eight percent (8%) thereof.  Every payer required to deduct and withhold taxes under this subsection shall for each quarterly period on or before the last day of the month following the close of each such quarterly period, pay over the amount so withheld as taxes to the Tax Commission, and shall file a return with each such payment.  Such return shall be in such form as the Tax Commission shall prescribe.  Every payer required under this subsection to deduct and withhold a tax from a payee shall, as to the total amounts paid to each payee during the calendar year, furnish to such payee, on or before January 31, of the succeeding year, a written statement showing the name of the payer, the name of the payee and the payee's social security account number, if any, the total amount paid subject to taxation, and the total amount deducted and withheld as tax and such other information as the Tax Commission may require.  Any payer who fails to withhold or pay to the Tax Commission any sums herein required to be withheld or paid shall be personally and individually liable therefor to the State of Oklahoma.
D.  Corporations.  For all taxable years beginning after December 31, 1989, a tax is hereby imposed upon the Oklahoma taxable income of every corporation doing business within this state or deriving income from sources within this state in an amount equal to six percent (6%) thereof.
There shall be no additional Oklahoma income tax imposed on accumulated taxable income or on undistributed personal holding company income as those terms are defined in the Internal Revenue Code.
E.  Certain foreign corporations.  In lieu of the tax imposed in the first paragraph of subsection C of this section, for all taxable years beginning after December 31, 1989, there shall be imposed on foreign corporations, as defined in the Internal Revenue Code, a tax of six percent (6%) instead of thirty percent (30%) as used in the Internal Revenue Code, where such income is received from sources within Oklahoma, in accordance with the provisions of the Internal Revenue Code and the Oklahoma Income Tax Act.
Every payer of amounts covered by this subsection shall deduct and withhold from such amounts paid each payee an amount equal to six percent (6%) thereof.  Every payer required to deduct and withhold taxes under this subsection shall for each quarterly period on or before the last day of the month following the close of each such quarterly period, pay over the amount so withheld as taxes to the Tax Commission, and shall file a return with each such payment.  Such return shall be in such form as the Tax Commission shall prescribe.  Every payer required under this subsection to deduct and withhold a tax from a payee shall, as to the total amounts paid to each payee during the calendar year, furnish to such payee, on or before January 31, of the succeeding year, a written statement showing the name of the payer, the name of the payee and the payee's social security account number, if any, the total amounts paid subject to taxation, the total amount deducted and withheld as tax and such other information as the Tax Commission may require.  Any payer who fails to withhold or pay to the Tax Commission any sums herein required to be withheld or paid shall be personally and individually liable therefor to the State of Oklahoma.
F.  Fiduciaries.  A tax is hereby imposed upon the Oklahoma taxable income of every trust and estate at the same rates as are provided in subsection B of this section for single individuals.  Fiduciaries are not allowed a deduction for any federal income tax paid.
G.  Tax rate tables.  For all taxable years beginning after December 31, 1991, in lieu of the tax imposed by subsection A or B of this section, as applicable there is hereby imposed for each taxable year on the taxable income of every individual, whose taxable income for such taxable year does not exceed the ceiling amount, a tax determined under tables, applicable to such taxable year which shall be prescribed by the Tax Commission and which shall be in such form as it determines appropriate.  In the table so prescribed, the amounts of the tax shall be computed on the basis of the rates prescribed by subsections A and B of this section.  For purposes of this subsection, the term "ceiling amount" means, with respect to any taxpayer, the amount determined by the Tax Commission for the tax rate category in which such taxpayer falls.
H.  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.
SECTION 3.     REPEALER     Section 4, Chapter 42, 2nd Extraordinary Session, O.S.L. 2006, as last amended by Section 13, Chapter 378, O.S.L. 2008 (68 O.S. Supp. 2010, Section 2355.1A), is hereby repealed.
SECTION 4.  This act shall become effective January 1, 2011.

53-1-6495	MAH	01/19/11