Budget & Tax, Law & Principles
Oklahoma’s ‘path to zero’ income tax survives first test in legislature
February 16, 2026
Ray Carter
Under existing Oklahoma law, whenever state tax collections experience strong growth, a portion of the growth is earmarked for income-tax reduction, guaranteeing that working families get a break whenever the state government is flush with cash.
State Sen. Julia Kirt, D-Oklahoma City, urged lawmakers to repeal that law, suggesting government growth should take priority over taxpayer relief.
“We’re really tying the hands of future legislatures with something that cannot guarantee our fiscal stability,” Kirt said.
To trigger a rate reduction under current law, total state tax collections must increase by an amount that exceeds the prior highest-year spending total by an amount equal to the estimated cost of another quarter-point tax cut multiplied by 1.25 percent.
The law allows that process to be repeated over and over again across many years until the state’s current 4.5-percent personal income tax rate is fully but gradually eliminated.
Senate Bill 1302, by Kirt, would repeal Oklahoma’s “path to zero” law.
Kirt noted lawmakers have cut taxes by $1.3 billion since 2020, and said two prior tax cuts tied to revenue-growth triggers occurred during downturns when revenue had not fully rebounded to prior highs.
“We’ve got to focus on those things that matter to the people of Oklahoma. And I think having some future tax cut is not part of that.” —State Sen. Julia Kirt (D-Oklahoma City)She argued that Oklahomans do not want tax relief.
“We’ve got to focus on those things that matter to the people of Oklahoma,” Kirt said. “And I think having some future tax cut is not part of that.”
The bill drew no debate.
SB 1302 failed the Senate Revenue and Taxation Committee on a 2-9 vote that broke along party lines with Democrats in support and Republicans opposed.
Oklahoma’s top income-tax rate of 4.5 percent remains higher than the rates in several states in the immediate region.
Texas has no personal income tax, while Colorado imposes a 4.4 percent rate. Officials in Arkansas have cut their rate to 3.9 percent, and Louisiana has cut its income-tax rate to 3 percent.