Three tax reform ideas proposed by the State Chamber Research Foundation are making big waves in the Oklahoma State Legislature, and will lift the Sooner State into the top 10 of the State Business Tax Climate Index if signed into law, according to Tax Foundation analyst Janelle Fritts.
Each bill tackles tax reform on a unique front.
House Bill 2695 seeks to repeal the state’s franchise tax.
House Bill 2285 aims to create a flat 4.5 percent income tax and set revenue triggers for future rate reductions.
House Bill 1375 looks to repeal the throwback rule and change the apportionment formula from three-factor to single sales factor.
The State Business Tax Climate Index is highly regarded as the gold standard for measuring state tax structure competitiveness. Oklahoma would jump from 23rd to 9th place in the Tax Climate Index if all three bills are signed into law, barring policy changes from other states, Fritts said.
"The changes put forth in this package of bills would represent significant pro-growth change for Oklahoma," Fritts said.
The Index ranked Oklahoma 26th in 2022, but the Sooner State improved to 23rd in 2023.
Click here for Fritts' full Tax Foundation report on how each bill will change Oklahoma's economy for the better.