Oklahoma Franchise Tax Repeal

The Oklahoma State legislature has enacted H.B. 1039 which became law without a signature on June 2, 2023. The law eliminates all corporate franchise tax fees and reporting requirements beginning for tax year 2024. For tax years 2023 and prior, the state imposes a franchise tax of $1.25 per $1,000 of capital used, invested, or employed within the state of Oklahoma. As the franchise tax was based on capital rather than profits, businesses were obligated to pay this tax even if they were not profitable. Oklahoma is taking the position of eliminating their franchise taxes similar to Kansas, Rhode Island, Pennsylvania, and West Virginia. Additional states, such as Mississippi and Connecticut, have begun the process of phasing out their franchise taxes. By lowering the overall cost and administrative burden on businesses, Oklahoma hopes to encourage all new and existing businesses to grow and expand in the state.

For additional information about these changes, please contact us. We’re here to help.

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