Governor Fallin Announces Deal To Cut State Income Tax

Tuesday, April 23rd 2013, 10:33 pm
By: News 9

Changes coming out of the state capitol are going to put money in our pockets. Governor Fallin and State Republican leadership announced a deal on Tuesday to cut the state's income tax.

Politicians call this a "home-run" deal, but accountants say the impact on our wallets won't make or break the budget.

4/23/2013 Related Story: Oklahoma Leaders Agree On Income Tax Cut For 2015

An income tax cut for the state's top tax bracket by a quarter-of-a-percent beginning in 2015, from 5.25 percent to 5 percent. It'll impact individuals making more than $8,700 a year or families making $15,000 a year.

The goal is in part to make Oklahoma more attractive to businesses. The estimated range of savings falls between $88 and $140.

Let's say a family makes $50,000 a year. The state income tax payment at 5.25 percent is just over $2,600. When the tax cut kicks in, that same family would pay $2,500, saving $125. Accountant Chris Marble says they'll have to make up for that money somewhere.

The tax rate will drop again in 2016 to 4.85 percent, only for top tax bracket, but that'll only happen if the state's revenue increases to cover the cut. They estimate that number at about $4.5 million.

That same bill also establishes a reserve of $120 million by the end of 2015 for repairs to the state Capitol.