Budget & Tax
Oklahoma sales tax collections reach all-time high
January 30, 2014
Jonathan Small
On January 2, 2014, the Office of Management and Enterprise Services released the news that for the most recent fiscal year, net state sales tax collections reached an all-time high.
The fact that net state sales tax collections reached an all-time high in fiscal year 2013 is particularly noteworthy considering that during the same time period, hundreds of thousands of Oklahomans experienced increased payroll taxes and federal income taxes, increased health insurance premiums due to Obamacare, new taxes and fees created by Obamacare, and depressed consumer demand.
The growth of state sales tax collection in Oklahoma is remarkable. In fiscal 2003, net state sales tax collections were $1,404,275,613. In fiscal 2013, the most recent fiscal year, net state sales tax collections were $2,275,444,163, an increase of $871 million — or 62 percent in just 10 years. Comparatively, inflation over this same period was 27 percent, state population growth was 9 percent, and state personal income growth 39 percent. Oklahoma’s top personal income tax rate was 7 percent in 2004. Since 2004, the top rate has been lowered periodically over the last 10 years to its current top rate of 5.25 percent, a total reduction in the rate of 25 percent. Changes to Oklahoma’s personal income tax requirements during this period have also included increases in the standard deduction and the addition of a child tax credit, which all served to lower the portion of personal income taxes owed by hundreds of thousands of Oklahomans. During this period, Oklahoma also eliminated its death tax.
According to OMES, net state sales tax collections are poised to set another record for the current fiscal year ending June 30, 2014. Despite the significant obstacles facing Oklahoma families’ wallets as mentioned above, net state sales tax collections to date for the state general fund exceed the prior year by $16.3 million.
As I have pointed out, total taxes collected by the state in fiscal 2013 reached $7.86 billion, an all-time high. This is $2.1 billion more than the $5.73 billion collected in fiscal 2003. So too have net state sales tax collections reached an all-time high — $2.28 billion for fiscal 2013, an increase of $871 million or 62 percent more than the $1.40 billion collected in fiscal 2003.
Be sure to read future blog posts as we continue to highlight the various tax sources that each set all-time highs.