Registration Requirements in Oklahoma
Most businesses with activity in Oklahoma will be required to register with the Oklahoma Secretary of State. If you have employees, you will also be required to register with the Oklahoma Tax Commission. The Oklahoma Secretary of State has more information on registration here.
S-Corporation Income Tax
Oklahoma recognizes the federal S-election, and Oklahoma S corporations are not required to pay tax to the state. However, individual S corporation shareholders will owe tax on their share of the corporation’s income.
S corporations are required to file Form 512-S.
S corporations are subject to Oklahoma franchise tax explained below.
LLC/Partnership Income Tax
LLCs and partnerships are not required to pay income tax to Oklahoma. Instead, income from the business is distributed to individual LLC members or partners, who then pay Oklahoma income tax on that amount with their personal return.
Partnerships are required to file Form 514.
Annual Franchise Tax
Oklahoma levies an annual franchise tax on all corporations that do business in the state. Corporations are taxed $1.25 for each $1,000 of capital invested or used in Oklahoma.
Annual Franchise Tax returns are filed on Form 200.
Partnerships with nonresident partners may elect to have a composite return filed on their behalf. This is done with Form 514-PT, this form is included in the partnership booklet linked above.
Individual Income Tax
Oklahoma generally conforms to the Internal Revenue Code on a rolling basis, and therefore adopts most federal provisions, unless otherwise modified.
The starting point for computing Oklahoma's personal income tax liability is the federal adjusted gross income.
Oklahoma has a state defined standard deduction, which is based on your filing status. If you claimed the standard deduction on your federal return, you must choose this on your Oklahoma return as well. Here are Oklahoma's standard deduction amounts.
If you itemized on your federal return, you must take an itemized deduction on your Oklahoma return. It is capped at $17,000 (medical expenses and charitable contributions are excluded from this amount) and any SALT taxes taken on your federal return have to be added back.
You can claim personal and dependent exemptions of $1,000 for each qualifying individual.
Oklahoma does not conform to the Internal Revenue Code (IRC) section 199A, also known as the QBI deduction.
Individual income tax rates vary by income and filing status.
CARES Act Guidance
Rolling conformity states generally adopt changes to the IRC as they are enacted at the federal level, unless otherwise modified.
Oklahoma conforms with all CARES Act provisions.
S corporations and partnerships generally need to file their business returns within 30 days after the due date of your federal return.
Individuals are required to file by April 15th. If the due date falls on a weekend or legal holiday, the due date is the next business day.
S corporations are required to make estimated tax payments when the tax owed can reasonably be expected to exceed $500 or more.
Partnerships may make estimated payments for composite returns.
Individuals that can reasonably expect to owe more than $500 are required to make estimated payments.
Filing an Extension
A valid extension of time to file your federal return automatically extends the due date of you Oklahoma return. A copy of the federal extension must be provided with your Oklahoma return.
If a federal extension has not been requested, businesses can use Form 504-C to request an Oklahoma extension.
Individuals can use Form 504-I to request an Oklahoma extension.
If at least 90% of the tax liability is not paid by the original due date of the return, the unpaid tax becomes delinquent and a penalty of 5% shall be charged thereon
If your business was formed or is located in another state, but generates income in Oklahoma, it may be subject to Oklahoma taxes. The rules for taxation of multistate businesses, including what constitutes nexus with a state for the purpose of various taxes, are complicated. If you run such a business, you should consult with a tax professional.
Oklahoma Tax Commissioner:
Oklahoma Secretary of State: