OK SB1856

Amends Oklahoma income tax law (68 O.S. 2021, Section 2355) to add a new automatic income tax rate reduction mechanism beginning tax year 2027, triggered when year-over-year state tax collections increase by at least $200 million

Rate reductions under the new mechanism are tiered based on collection growth: 0.125 percentage points for $200-300 million increase, 0.25 points for $300-400 million, 0.375 points for $400-500 million, and 0.50 points for $500 million or more

Excess collections above thresholds that don't reach the next tier carry forward and are added to the following year's comparison for calculating future rate reductions

Operates in addition to existing rate reduction triggers under Section 34.103 of Title 62, which already allows 0.25 percentage point reductions when collections exceed base year totals plus a threshold amount

Effective date: November 1, 2026