The state income tax on Oklahoma's 8-bracket schedule ranges from 0.5% to 7%. The corporate tax on net income is 6.0%, and the franchise tax equals $1.25 per $1,000 invested in Oklahoma. The state levies a sales and use tax of 4.5%, and many municipalities levy their own sales taxes, ranging from none to 6%. The typical city in Oklahoma has an 8% or 9% sales tax, but collections are reduced by competition from Indian reservations where there is little or no sales tax. The state also imposes a full array of excise taxes covering motor fuels, tobacco products, insurance premiums, public utilities, alcoholic beverages, amusements, pari-mutuels, and other selected items. It is estimated, however, that about a third of all cigarettes are bought in Indian territories where the state excises do not apply. The severance tax on oil and gas is 7% of gross value; on uranium, 5%; and on asphalt and minerals, up to 1%. The gas conservation excise tax is 7 cents per million cu ft. There is no inheritance tax, but the state estate tax is tied to the federal tax exemption for state death taxes, and is thus scheduled to be phased out in tandem with the federal exemption by 2007 unless the legislature takes countervailing action. Oklahoma's revenue losses from the phasing out of its estate tax are estimated at -$4.6 million for 2002/03, -$10.3 million for 2003/04 and -$11.5 million for 2006/07. Death and gift taxes accounted for 1.4% of state collections in 2002. Other state taxes include various license fees and stamp taxes. Property taxes, although the third lowest per capita in the US (next to New Mexico and Alabama), are collected only at the local level and remain the principal source of revenue for local governments. In 2000, the local level governments collected 38.2% of total state and local revenues.
Total state tax collections in Oklahoma in 2002 were $6.053 billion (down almost $300 million from 2001). In 2003, combined state and local taxes amounted to 9.1% of income, and Oklahoma was ranked 35th highest rate in the country in terms of state and local tax burden.
The following table from the US Census Bureau provides a summary of taxes collected by the state in 2002.
|Sales and gross receipts||2,272,729||650.52|
|General sales and gross receipts||1,529,465||437.78|
|Selective sales taxes||743,264||212.74|
|Other selective sales||17,812||5.1|
|Hunting and fishing||16,079||4.6|
|Motor vehicle operators||12,272||3.51|
|Occupation and business, NEC||170,916||48.92|
|Corporation net income||173,701||49.72|
|Death and gift||85,976||24.61|
|Documentary and stock transfer||9,511||2.72|