Oklahoma Decouples From Trump Tax Deduction Plan

Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...

By Paul Stinson

Gov. Mary Fallin (R) May 12 signed final legislation making Oklahoma among the first states to decouple from the federal tax code in the wake of President Donald Trump’s tax reform proposal.

The new law freezes the state’s standard deduction at $6,350 for single filers, $12,700 for married filers and $9,350 for head of household.

The Oklahoma Senate passed the bill ( H.B. 2348) May 4 by a 39-6 tally, after House passage May 2 by a 51-44 score.

Trump’s tax plan—a list of bullet points released April 26—calls for doubling the federal standard deduction, which is typically used by low- and middle-income earners who don’t itemize their deductions. Trump’s plan also would cut the top income-tax rate to 35 percent from 39.6 percent, and would eliminate the state and local tax deduction.

The Oklahoma legislation is forecast to add $4.4 million and $14.5 million, respectively, to state coffers in fiscal years 2018 and 2019, according to a May 2 fiscal analysis. It was authored by Appropriations & Budget Committee Chairwoman Leslie Osborn (R).

Oklahoma Democrats have criticized the legislation for siding with the wealthy rather than working-class Oklahomans.

“If H.B. 2348 is enacted and Trump’s proposal is adopted, Oklahomans who don’t itemize will lose a substantial tax benefit,” the Oklahoma Democratic Caucus said in a news release following House passage.

Sport Ticket Fees

The governor also signed May 12 a measure adding fees to Oklahoma professional sporting event tickets, including the National Basketball Association’s Oklahoma City Thunder.

The new law establishes a fee on the initial sale of tickets to professional sporting events involving basketball, baseball, football, arena football, soccer and ice hockey.

Effective July 1, the legislation adds a $1 fee for tickets priced under $50. A $2 fee would apply for tickets priced in excess of $50.

The measure is expected to add $2.6 million to the state’s general revenue, according to a May 2 research analysis conducted by the Oklahoma Tax Commission.

The bill ( H.B. 2361) cleared the Senate in a 32-12 vote May 4 after winning the House May 2 by a 69-20 tally. It was also authored by Osborn.

End to Fuel Discount

In addition, Fallin signed into law a bill eliminating a discount on motor fuel taxes for eligible purchasers beginning July 2022.

Currently, purchasers pay 98.4 and 98.1 percent of taxes due on gasoline and diesel fuel.

The measure is expected to yield a net positive for revenue for fiscal year 2023, according to the Oklahoma Tax Commission.

Osborn’s H.B. 2358 cleared the Senate in a 45-0 vote May 4 after winning the House May 2 by a 51-44 score.

To contact the reporter on this story: Paul Stinson in Austin, Texas at pstinson@bna.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bna.com

For More Information

Text of H.B. 2348 is at http://src.bna.com/oES.Text of H.B. 2361 is at http://src.bna.com/oHf.Text of H.B. 2358 is at http://src.bna.com/oHh.

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