Oklahoma is not particularly tax friendly. They have a 4.75% individual tax, plus a 4% business tax. On top of a business tax, they also assess franchise taxes on capital assets. They don’t tax social security, but have a high payroll tax wage base.
State Taxes at a Glance – Oklahoma
| Type of Tax | 2023 |
|---|
| Individual Rates | 0.25% to 4.75% |
| Corporate / Business Tax Rates | 4.00% flat tax |
| Gross Receipts Tax | None |
| Sales Tax | 8.97% (average) |
| Property Taxes | 0.88% as a percentage of primary home |
| Estate or Inheritance Tax | None |
State Income Taxes in Oklahoma
The state of Oklahoma does have an individual income tax. Like most states with income tax, it is calculated on a marginal scale with multiple brackets (6). The tax rates range from between 0.25% to 4.75%.
State Business Taxes in Oklahoma
The state of Oklahoma has a flat corporate income tax rate of 4.00% on all income regarding C Corporations. For other businesses that are flow-thru entities, such as S Corporations, Partnerships, LLCs, etc., they are taxed at the individual income tax rate which ranges from 0.25% to 4.75% of your Oklahoma income.
Franchise Taxes in Oklahoma
In addition to the corporate income tax, Oklahoma has a Franchise tax assessed on capital of all corporations (including S-Corporations). The tax is 0.125% on capital assets, with a maximum tax of $20,000.
Sales and Property Taxes in Oklahoma
Sales Taxes – Like most states, Oklahoma has both a local and state sales tax rates. Their state sales tax rate is 4.50% and their local sales tax rate is 4.48% (which bring the total average sales tax rate to 8.98%). Which puts it at one of the top ten most expensive states for Sales Tax.
Property Taxes in Oklahoma – the average property tax rate for residential property in the state of Oklahoma is 0.88%. Which puts it slightly below the national average of 1.08%.
Oklahoma DMV fees
Oklahoma’s has a flat fee for registering vehicles. Since it’s not based on the vehicle’s value, they are not deductible. To learn more, here’s a link to the Oklahoma DMV website.
Oklahoma Domicile
If you maintain a permanent place of abode for over 7 months (210 days), you are considered an Oklahoma resident.
Oklahoma Tax on Social Security Benefits
Even though there is a state income tax in Oklahoma a, they do not assess state income tax on social security benefits.
Payroll Taxes in Oklahoma
Unemployment taxes usually consist of three factors. They are the wage base, range of rates, number of schedules. Below is an outline of the three:
- Wage Base – Oklahoma has a wage base of $25,700
- UI Rates – range from 0.30% to 7.50%
- Schedules – Oklahoma has multiple rate schedules regarding UI
Oklahoma Business Entities – LLCs
Oklahoma is one of the least expensive states in the country to open an LLC. Here are some important facts:
- Oklahoma’s annual LLC fee is $25.
- When you register with the state, you pay a one time fee of $100
- Secretary of State of Oklahoma website – click here
Oklahoma Tax Contact Phone Numbers
Important phone numbers for the Oklahoma Department of Taxation:
- Website: www.Oklahoma.gov/Tax
- Phone# for Individuals – (405) 521-3160
- Phone# for Businesses – Same