During the 2024 legislative session, Gov. Kevin Stitt and House lawmakers supported cutting the state’s personal income tax and putting it on a gradual path to full repeal, but Senate leaders refused to grant that proposal a vote.

Now a new poll shows Oklahoma business leaders view the Senate’s inaction as a missed opportunity for the state.

The Business Leaders Poll, a collaborative project of The State Chamber, the Oklahoma Business Roundtable, and The State Chamber Research Foundation, surveyed 325 business owners and executives in Oklahoma over four weeks in early summer 2024.

The poll found 78 percent of business leaders favored reducing or eliminating the state income tax, with half saying the state should use growth revenue to reduce the tax over time and 28 percent supporting “outright elimination of the income tax so Oklahoma can compete with other high-growth states.”

“Business leaders believe that reform of the state’s income tax would improve Oklahoma’s competitiveness, and strongly favor reducing the state income tax if it can be done out of growth revenue or spending cuts in non-core areas,” stated a summary of the Business Leaders Poll.

When asked what types of state taxes are most in need of reform to make Oklahoma more competitive regionally, business leaders pointed to the individual income tax by a nearly two-to-one margin over the next highest priority, taxes on business.

“The identification of individual income tax as the top priority is notable given that the survey sample was nearly evenly split between leaders at companies who pay corporate income taxes (50%) and companies who operate as pass-through entities, paying taxes through the individual income tax code (42%),” the poll summary noted.

For business leaders to overwhelmingly support cuts to the personal income tax rate, even though nearly half of the polled businesses are not subject to it, indicates that business leaders “are focused on tax reform as a matter of overall state economic competitiveness and as a workforce issue, not just as a matter of what will directly benefit their companies’ bottom lines,” the poll summary noted.

Oklahoma’s current top income-tax rate of 4.75 percent is higher than several neighboring states, including Texas (which has no personal income tax), Arkansas (3.9 percent), and Colorado (4.4 percent). Missouri’s top rate of 4.8 percent is almost the same as Oklahoma’s rate. Among bordering states, only Kansas and New Mexico have significantly higher personal income-tax rates than Oklahoma.

Internal Revenue Service (IRS) data for 2022 show Oklahoma ranked 20th for its ratio of in-migration to out-migration of individuals with incomes of more than $200,000. But 11 of the 19 states with a better ratio of high-income individuals moving to their states also had a lower personal income tax rate than Oklahoma and seven of those 11 states had no personal income tax at all.

The states outranking Oklahoma included neighboring Arkansas and Texas.