Oklahoma Ranked Top 20 State For Business, Individual Taxes

Oklahoma is moving up in the rankings for state taxes. A few years ago we were in the bottom half, now we’re ranked in the top 20 for most attractive states for businesses and individuals when it comes to the tax environment.

“The Tax Foundation’s annual report is really the gold standard across the country measuring states attractiveness for businesses,” said Ben Lepack, Executive Director of the State Chamber Research Foundation.

According to the Tax Foundation’s website, “the Index is designed to show how well states structure their tax systems and provides a road map for improvement.”

Just a few years ago, Oklahoma ranked in the bottom half of the country on their taxes and now they’ve bumped up to 19th. Oklahoma is also fourth in regards to the corporate tax rank, and 15th in property taxes.

“That’s really been a result of state leaders and the business communities focused effort and incremental steps over the last few years to improve Oklahoma’s overall tax competitiveness,” said Lepack.

Lawmakers eliminated the franchise tax, and marriage penalty to the personal income tax this year. Even though they didn’t eliminate grocery tax or income tax like the governor called for, the state still moved up in rankings.

“That means it’s all upside potential for the state if we can make some really positive reforms to our income tax, that should get us the rest of the way towards meeting that top 10 goal,” said Lepack.

The report shows the absence of a major tax is what the top 10 states have in common, whether that be the corporate income tax, the individual income tax, or the sales tax – most of which, Oklahoma has looked at doing away with at some point.

“It’s sort of like the price of entry, if you don’t have a competitive progrowth tax system, you’re not involved in the conversation,” said Lepack.

Lepack says one way to meet the top 10 goal is reducing the personal income tax, but in a responsible way.

“Making sure is phased in overtime and it’s tied to economic growth so that we don’t end up, if we have a downturn, in a situation where the state has budget problems which we’ve seen in previous years,” said Lepack.

Lepack proposed simplifying the tax bracket for the state income tax and nearly doubling the standard deduction. He says if lawmakers looked at taking these steps next legislative session, it could make the state more attractive to large businesses looking to plant roots in the state, and help incentivize Oklahoma businesses to stay here. 

“If we can take a few more steps particularly related