State Rep. Jay Steagall, R-Yukon, has become the second lawmaker in recent weeks to file legislation that would gradually lead to the full elimination of Oklahoma’s personal income tax.

“Recent polls show that Oklahomans overwhelmingly support the elimination of the state income tax, an effort for which I have filed legislation in the past two years and (am) filing once again for the 60th Legislature,” Steagall said. “The state income tax is a clear violation of our own state constitution and I will continue to pursue righting this wrong in the upcoming session.”

Steagall pointed to Article 2, Section 2 of the Oklahoma Constitution, which declares that “all persons have the inherent right to life, liberty, the pursuit of happiness, and the enjoyment of the gains of their own industry.” He said income taxes go against the foundation of the state constitution and encroach on Oklahomans’ liberties.

House Bill 1009, by Steagall, would reduce the personal income tax rate and corporate income tax rate by equal amounts every year for 10 years, at which point the two taxes would be eliminated.

Steagall indicated the legislation would completely phase out Oklahoma’s personal and corporate income taxes by 2035.

Steagall’s bill is the second such measure publicly announced since the Nov. 5 general election.

Under Senate Bill 1, by state Sen. Micheal Bergstrom, R-Adair, the state’s personal income-tax rate would be cut from its current rate of 4.75 percent to 4.5 percent in the 2025 tax year. The bill provides for additional, automatic income-tax reductions of another quarter-point every year that the Oklahoma Legislature has at least $400 million in growth revenue available.

SB 1 would not cut the tax rate during state revenue failures or shortfalls.

Members of the Oklahoma House of Representatives passed a similar measure to gradually eliminate the personal income tax during the 2024 legislative session but that bill was never granted a hearing in the Senate. Lawmakers ultimately adjourned the 2024 legislative session without passing any income-tax cuts.

However, Senate lawmakers are reportedly more receptive to addressing tax issues during the 2025 session.

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 (where the rate is 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.

While Oklahoma has experienced positive net migration since 2019 as more people move into the state than leave it, Internal Revenue Service data show that states with no personal income tax are still outpacing Oklahoma, particularly when it comes to attracting higher-income individuals.

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 in early summer 2024.

The poll found that 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.”

The tax bills can be considered by lawmakers after the next legislative session begins on Feb. 3, 2025.