The Tax Foundation

Research Areas

Oklahoma

The Facts on Oklahoma’s Tax Climate

Here are some basic facts on Oklahoma’s tax system and how it compares to other states:

Tax Freedom Day Arrives on April 11th in Oklahoma
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2008, Oklahoma taxpayers had to work until April 11th to pay their total tax bill, ranking it 43rd in the nation. This is 12 days earlier than national Tax Freedom Day (April 23). The Tax Freedom Days of neighboring states are: Kansas, April 18 (ranked 26th); Colorado, April 23 (ranked 15th); New Mexico, April 12 (ranked 42nd); Texas, April 12 (ranked 40th); Arkansas, April 17 (ranked 30th) and Missouri, April 14 (ranked 36th).

Tax Freedom Day has been projected using the most up-to-date economic and budget projections from official government agencies. However, Tax Foundation estimates of average state and local tax rates for 2008 will not be released until later this spring as we await more up-to-date data from various government agencies.
Full study of Tax Freedom Day, nationwide and in each state

Oklahoma's State/Local Tax Burden Slightly Above National Average
Oklahoma's taxpayers have gone from the 42nd highest state and local tax burden in 1977 to the 19th highest in 2008. Estimated at 9.8% of income, Oklahoma's current state/local tax burden is just above the national average of 9.7%. Oklahomans pay $3,761 per capita in state and local taxes.
Oklahoma's State-Local Tax Burden, 1977-Present
Other States' State/Local Tax Burdens
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2008

Oklahoma's 2008 Business Tax Climate Ranks 19th
Oklahoma ranks 19th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Kansas (33rd), Colorado (13th), New Mexico (23rd), Texas (8th), Arkansas (35th) and Missouri (15th).
50-State Comparison of Business Tax Climates (data only)
2008 State Business Tax Climate Index, Fifth Edition (full study)

Oklahoma's Individual Income Tax System
Oklahoma's personal income tax system consists of seven brackets and a top rate of 5.65%, kicking in at an income level of $8,700. Oklahoma's top rate of 5.65% is 30th highest among states levying personal income taxes. Oklahoma's 2005 individual income tax collections were $697 per person, which ranked 30th highest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita

Oklahoma's Corporate Income Tax System
Oklahoma's corporate tax structure consists of a flat tax rate of 6% on all corporate income. This tax ranks the state 36th highest among states levying corporate income taxes. In 2006, state-level corporate tax collections (excluding local taxes) were $64.60 per capita, which ranked 45th highest nationally.
50-State Table of Corporate Income Tax Rates, 2000-2008
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household, 2005
50-State Table of State Corporate Income Tax Collections Per Capita, 2006

Oklahoma's Sales and Gasoline Taxes Comparatively Low
Oklahoma levies a 4.5% general sales or use tax on consumers, which is below the national median of 5.4%. The state collected approximately $1,101 per person in sales taxes in 2005, and ranks 37th highest nationally. Oklahoma's gasoline tax stands at 17 cents per gallon and ranks 5th lowest nationally. Oklahoma's cigarette tax stands at $1.03 per pack of twenty and ranks 25th highest nationally. The sales tax was adopted in 1933, the gasoline tax in 1923 and the cigarette tax in 1933.
50-State Table of Sales and Excise Tax Rates
50-State Table of State and Local General Sales and Gross Receipts Tax Collections Per Household and Per Capita, Fiscal Year 2005

Oklahoma Property Taxes Among Nation's Lowest
Oklahoma's local governments collected $1,637,457,000 in property taxes during fiscal year 2004, which is the latest year the Census Bureau published state-by-state property tax collections. Oklahoma is one of the 13 states that collect no state-level property taxes, meaning Oklahoma's per capita property tax collections equaled $465 for all levels of government in FY2004, ranking it 47th nationally.
State property tax collections per capita by state

Federal Tax Burdens and Expenditures: Oklahoma is a Beneficiary
Oklahoma taxpayers receive more federal funding per dollar of federal taxes paid than the average state. Per dollar of Federal tax collected in 2005, Oklahoma citizens received approximately $1.36 in the way of federal spending. This ranks the state 15th highest nationally. This represent a rise from 1995 when Oklahoma received $1.30 per dollar of taxes in federal spending, ranking it 11th highest. Neighboring states and the amount of federal money received per dollar of federal taxes collected were: Kansas ($1.12), Colorado ($0.81), New Mexico ($2.03), Texas ($0.94), Arkansas ($1.41), and Missouri ($1.32).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state

Articles from the Tax Foundation