State tax rates and rules for income, sales, property, estate, and other taxes that impact retirees. Go to Retiree Tax Map Oklahoma Add to State Compare List | View List View State Compare List (0) selected | Compare up to 5 The Bottom Line Mixed Tax Picture There's good news and bad news for retirees living Oklahoma. The Sooner State doesn't tax Social Security benefits. Residents can also exclude up to $10,000 per person ($20,000 per couple) of other types of retirement income. That's certainly helpful.But Oklahoma has one of the highest combined state and local sales tax rates in the nation, at an average of 8.97%. Both groceries and clothing are subject to sales tax, too.Oklahoma falls right in the middle when the median property tax rates for all 50 states are compared. Plus, elderly homeowners may qualify for a rebate or tax "freeze" if their income is below a certain amount. Income Tax Range Low: 0.5% (on up to $1,000 of taxable income for single filers and up to $2,000 for married joint filers)High: 5% (on taxable income over $7,200 for single filers and over $12,200 for married joint filers)Starting in 2022, the lowest rate will be 0.25% and the highest rate will be 4.75%. Taxation of Social Security Benefits Social Security benefits are not taxed by the state. Tax Breaks for Other Retirement Income Up to $10,000 of federally-taxed income from private, federal government, and designated Oklahoma state and local government retirement plans is exempt. In addition, federally-taxed income from the federal Civil Services Retirement System in lieu of Social Security is fully exempt.Military pensions and Railroad Retirement benefits are fully exempt. Sales Tax 4.5% state levy. Localities can add as much as 7%, and the average combined rate is 8.97%, according to the Tax Foundation.Groceries: TaxableClothing: TaxableMotor Vehicles: Taxable (1.25%), and 3.25% excise tax appliesPrescription Drugs: Exempt Real Property Taxes In Oklahoma, the median property tax rate is $892 per $100,000 of assessed home value. Residents 65 or older who's gross household income is $12,000 or less may qualify for a $200 rebate on their property taxes. The rebate can be claimed on the resident's Oklahoma income tax form.For 2022, senior citizens with household income of $73,200 or less may also qualify for a valuation freeze on their primary residence. Annual Car Taxes and Fees An annual vehicle registration fee based on the car's age is imposed. Estate and Inheritance Taxes No estate or inheritance tax.