Tax in Oklahoma: a complete guide
Understand the different tax responsibilities from state income and sales tax to property and estate tax with this Oklahoma tax guide.
Oklahoma state income tax
Oklahoma’s state income tax operates on a progressive system. The rates range between 0.25 percent and 4.75 percent.
These ranges are broken down as follows for single filers:
| Oklahoma taxable income | Tax rate |
|---|---|
| $0—$1,000 | 0.25 percent |
| $1,001—$2,500 | 0.75 percent |
| $2,501—$3,750 | 1.75 percent |
| $3,751—$4,900 | 2.75 percent |
| $4,901—$7,200 | 3.75 percent |
| $7,201 and above | 4.75 percent |
For those who are married and filing jointly, the ranges are as follows:
| Oklahoma taxable income | Tax rate |
|---|---|
| $0—$2,000 | 0.25 percent |
| $2,001—$5,000 | 0.75 percent |
| $5,001—$7,500 | 1.75 percent |
| $7,501—$9,800 | 2.75 percent |
| $9,801—$12,200 | 3.75 percent |
| $12,201 and above | 4.75 percent |
Compared to some of Oklahoma’s neighboring states, the top state income tax rate is relatively low. For example, Arkansas and Kansas higher rates are 6.6 percent and 5.7 percent respectively.
On top of your state income tax, residents of Oklahoma must also pay federal tax. As of 2023, there are seven different federal income tax brackets.
Oklahoma also has a 4.00 percent corporate income tax rate.
If compiling and filing your taxes is an area you struggle with, a financial advisor can help. They can take a deep dive into your finances and develop a tax strategy that meets your needs and could reduce your tax liability and save you money.
Oklahoma sales tax
The statewide sales tax in Oklahoma is 4.50 percent.
However, like with many other states in the US, local municipalities can also charge sales tax. The maximum local sales tax rate is 7.00 percent, bringing the maximum sales tax in the state to 11.5 percent.
Certain items are exempt from sales tax or have their own special rates. These include:
Prescription drugs are sales tax-exempt
Certain items used in meals or food for school children are tax-exempt
Nearly all items used in production agriculture are tax-exempt
Oklahoma property tax
According to data from the U.S. Census Bureau, the average American household spends $2,690 on real estate property taxes.
In Oklahoma, however, this is much lower.
According to Tax Rates, the highest property tax can be found in Tulsa County, where residents pay on average $1,344. The lowest can be found in Cimarron County, where paying $244 is the norm.
In Oklahoma, property taxes are collected on a county level, with each county using its own method of assessing and collecting taxes.
Oklahoma motor tax
In Oklahoma, you can expect to pay a combined sales and excise tax rate of 4.5 percent on all vehicle purchases. This is broken down into a 1.25 percent sales tax and an excise tax of 3.25 percent.
For used car purchases, owners pay a flat fee of $20 for the first $1,500 they spend and must pay the combined rate of 4.5 percent for the remaining price.
When purchasing a vehicle, you must also factor in the fuel cost. In Oklahoma, you must pay taxes of $0.19 per gallon on gasoline and $0.16 per gallon on diesel.
Oklahoma estate tax
Oklahoma does not levy estate tax or inheritance tax.
However, federal estate tax can still apply if your estate is above a certain threshold ($12.92 million in 2023).
It’s also important to consider that you may have to pay estate taxes if you inherit an estate from someone in a state that levies it. It’s important to check local regulations to ensure you’re paying the right amount of tax.
Oklahoma retirement tax
Oklahoma has a lower cost of living than many other states in the US. This is a huge advantage for retirees, especially those on a fixed income looking to make their money go further.
For retirees aged 65 and older, Oklahoma offers an income tax exemption of up to $10,000. Income from Social Security is also not taxed, meaning retirees hold on to more of their income than they would in other states.
The state also boasts lower housing, healthcare, and transportation costs than the national average, making it an attractive destination for US retirees.
For further tax guidance and to ensure you’re not paying more tax than you need to, it’s wise to speak to an expert. A financial advisor can help you handle all your tax queries and ensure you’re not paying more tax than needed.
Senior Content Writer
Rachel is a Senior Content Writer at Unbiased. She has nearly a decade of experience writing and producing content across a range of different sectors.