Oklahoma’s corporate income tax Money received by a government entity.... has declined in importance. This specialized form of income tax applies only to corporations, not individuals or other forms of business. As with the individual income tax, only the state can collect a corporate income tax in Oklahoma The tax generated two percent of total tax revenue in 2016.
Advantages of a corporate income tax are:
- it collects direct tax payments from businesses, which benefit from tax-financed services like roads, schools, and public safety; and
- since most owners and customers of corporations are located out of state, it exports some of the tax burden across the country and the world.
Disadvantages of a corporate income tax are:
- businesses may move to states with no or lower tax rates;
- revenues may fluctuate dramatically due to changes in corporate profit;
- businesses increasingly are able to shelter their earnings from state corporate taxes; and
- some argue that the income from corporations is taxed twice, once from this tax and again when individuals pay income tax on their dividend earnings.
The volatility of corporate profits and the ability of corporations to shield some income from state taxation make this a highly variable revenue source. Corporate tax collections suffered a severe drop in the early 2000s due to the national recession, more businesses organizing as subchapter S or limited An amount owed to another entity, such as payroll for work performed by employees, amounts... corporations, tax incentives, and loopholes that allow corporations to shift income out of state. Over the long run, revenue growth has averaged 0.5 percent per year since 2006. Though never the primary source of state tax collections, this tax has declined as a share of total state revenue since the 1980s.
Corporations pay a flat rate of six percent on Oklahoma taxable income. Like the federal corporate tax, the taxable income is after deducting expenses and credits. The share of income that is taxable in Oklahoma is determined by an equally-weighted three-factor formula based on Oklahoma’s share of the corporation’s total payroll, property, and sales. The tax does not apply to banks, credit unions, or insurance companies (which pay separate taxes), or subchapter S corporations and partnerships (which pay individual income taxes).
The corporate income tax in FY 2019 is divided between the state (or General Fund) The principal funding source for most government operations. Any revenue not restricted... (77.5 percent), HB 1017 Education Reform A self-balancing accounting structure with revenues, expenditures, assets and liabilities used to track monies flowing... (16.5 percent), the Teachers Retirement Fund (5 percent), and reimbursements to local government for property tax exemptions (1 percent).