Oklahoma state tax: Overview
Oklahoma state tax is a plus for many homeowners since median property tax bills are far below the national average. And with income tax rates that max out at 4.75%, higher earners might won't pay as much as they would in many other states.
However, not all taxes in Oklahoma are as affordable. For example, lower earners in Oklahoma may pay a higher income tax rate than they would in other states. Also, the state still taxes groceries and other essentials. But at least there are low gas taxes and no death taxes in Oklahoma.
In the News: Oklahoma is finally eliminating its 4.5% state tax on groceries, an initiative that took two years to achieve. State lawmakers estimate the tax cut will save each family an average of $648 per year. However, other estimates range from savings of $125 a year for a family earning $40,000 to high-earning households saving an average of $408 per year. For more information, see Kiplinger's report Grocery Tax in Oklahoma: How Much Will You Save?
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[Data for this state tax guide was gathered from a number of sources including the Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
Oklahoma income tax
Oklahoma has a graduated state individual income tax rate ranging from 0.25 percent to 4.75 percent.
Oklahoma tax on retirement income: Social Security benefits, Military pensions and Railroad Retirement benefits are not taxed by the state.
Oklahoma sales tax
Oklahoma's state sales tax rate is 4.5%. Localities can add as much as 4.49%, and the average combined rate is 8.99%, according to the Tax Foundation.
- Groceries: Taxable
- Prescription drugs: Taxable
How much are Oklahoma property taxes?
Oklahoma homeowners pay some of the lowest property tax bills in the country, with a median tax bill of $914 and an average effective property tax rate of 0.76%.
Oklahoma Property Tax Breaks for Retirees
Residents 65 or older with a previous year household income at or below $85,600 may qualify for a property tax valuation freeze. This income threshold is for 2023 and may change in future years.
An additional homestead exemption of up to $1,000 is available to some residents. However, income limits and other qualifying criteria apply. The income limit for the additional homestead exemption is much lower than for the property tax freeze.
Oklahoma gas tax
Gasoline: $0.16 per gallon.
Diesel: $0.13 per gallon.
Source: Sales Tax Handbook
Oklahoma tax on alcohol and tobacco
| Product | Tax Amount |
|---|---|
| Cigarettes | $2.03 per pack |
| Cigars Little and Large | $1.20 per 10 cigars |
| Snuff and Tobacco | 60%-80% factory list price |
Source: Sales Tax Handbook
| Product | Tax Amount |
|---|---|
| Wine | $0.72 per gallon |
| Beer | $0.40 per gallon |
| Liquor | $5.56 per gallon |
Source: Sales Tax Handbook
Oklahoma estate and inheritance taxes
There is no estate or inheritance tax in Oklahoma.
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