Budget & Tax

Oklahoma attracts movers, but income tax still a deterrent

January 7, 2025

Ray Carter

New data from U-Haul, the do-it-yourself moving company, show that Oklahoma remains one of the nation’s most popular states for middle-class families looking for a new start.

According to the U-Haul Growth Index, Oklahoma ranked 11th nationally in 2024 among the 50 states in the net increase of do-it-yourself movers who used U-Haul.

That continues a trend highlighted by a variety of sources in recent years, including Census data, that show Oklahoma has ranked among the top destination states for Americans decamping from other states. Oklahoma has ranked among the top 10 states in domestic migration, or just outside the top 10, in several measures in recent years.

U-Haul’s growth rankings are configured by each state’s net gain (or loss) of customers utilizing one-way U-Haul equipment in a calendar year. The U-Haul Growth Index is compiled from more than 2.5 million one-way U-Haul truck, trailer, and U-Box moving container transactions that occur annually.

“State-to-state transactions from the past year reaffirm customer tendencies that have been pronounced for some time,” John “J.T.” Taylor, U-Haul International president, said in a press release. “Migration to the Southeast and Southwest continues as families gauge their cost of living, job opportunities, quality of life, and other factors that go into relocating to a new state. Out-migration remains prevalent for a number of markets across the Northeast, Midwest, and West Coast—and particularly California.”

Even as Oklahoma enjoys healthy population growth thanks in part to domestic migration from other states, the state still struggles to attract and retain the upper-income earners who are most likely to invest and create jobs in Oklahoma. Internal Revenue Service data show that Oklahoma continues to lose high-income earners, despite experiencing strong domestic-migration growth overall thanks to middle-class families who move here.

While Oklahoma gained around 70,000 individuals between 2012 and 2022 thanks to domestic migration, with a net gain in adjusted gross income of $344 million, the state also lost some of its highest earners to other states.

Oklahoma lost 158 individuals or families with an adjusted gross income of over $200,000 to other states during that same time period, resulting in a net loss of $652 million in income.

Oklahoma’s personal income tax, which currently has a top rate of 4.75 percent, is believed to be a major contributor to the loss of higher-income individuals.

Oklahoma’s 4.75 percent tax rate is higher than the rates imposed in several neighboring states, including Texas (which has no personal income tax), Arkansas (3.9 percent), Colorado (4.4 percent) and Missouri (4.7 percent).

Nationally, nine states do not impose an income tax on wages (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming) and several other states have lower tax rates than Oklahoma, such as Arizona (2.5 percent), North Dakota (2.5 percent), Indiana (3 percent) and Ohio (3.5 percent).

While the U-Haul Growth Index indicates that Oklahoma is attracting middle-class movers, the index shows that no-income-tax states are doing the same thing at an even higher rate.

The top 10 states on the U-Haul Growth Index include Texas, Florida, Tennessee, and Washington, which do not tax personal income. Other states in the U-Haul top 10 impose notably lower income-tax rates than Oklahoma, such as Arizona, Indiana, and North Carolina (where the tax rate was lowered to 4.25 percent at the beginning of this month with the rate scheduled to gradually decline to 2.49 percent).

Notably, two no-income-tax states have ranked high on the U-Haul index for multiple years now. Texas has ranked first or second among U-Haul Growth States each year since 2016. Florida has been fourth or higher every year since 2015.

In contrast, high-tax California has experienced the greatest net loss of do-it-yourself movers in U-Haul equipment and ranked 50th for the fifth consecutive year, while New York ranked 47 on the list, that state’s lowest growth ranking in a decade.