Triggered tax cuts

Triggered tax cuts are automatic reductions in tax rates when public revenue meets a fiscal target. Instead of lawmakers proposing legislation annually and voting on specific tax cuts, these triggers automatically lower tax rates — and revenue — when certain benchmarks are met. These benchmarks are set by the legislature and put into statute that was voted on previously.

Proponents say that automatic triggers lower tax rates when revenue exceeds a certain amount, return money to taxpayers, and avoid government bloat without harming public funding. Opponents say this approach lets current policymakers ensure future tax cuts while avoiding responsibility for budget shortfalls those tax cuts create down the line. Current lawmakers get to claim credit for future tax cuts while avoiding challenging decisions like spending cuts or  increasing regressive taxes, like sales taxes, to make up the difference. Instead, these challenging decisions fall on future lawmakers who did not vote for the trigger tax cuts to begin with. They also argue that triggered tax cuts, and the spending reductions they could force, threaten future funding for critical services like education and health care.

Oklahoma lawmakers have passed triggered personal income tax cuts three times since 2010. Two of those cuts — in 2012 and 2016 — needed to be overturned because they created harmful budget shortfalls. The third time was in 2025, when Oklahoma lawmakers enacted House Bill 2764 , which includes language that could trigger tax cuts in the future if certain revenue requirements are met. This bill also reduced the personal income tax rate by 0.25 percent and eliminated three of six tax brackets effectively immediately. In the December 2025 Board of Equalization meeting , the Oklahoma Management and Enterprise Services presented the process to determine if the criteria described under HB 2764 has been met for the triggered income tax cut to go into effect.