OKLAHOMA CITY (KFOR) – Oklahoma’s franchise tax has been eliminated as part of a comprehensive tax reform plan.

According to the Oklahoma State Chamber, the tax reform plan was proposed after the State Chamber Research Foundation and the Tax Foundation conducted various studies. The Foundations’ goal is to make Oklahoma a more pro-growth tax environment for the state’s existing and future businesses.

Officials say lawmakers passed budget legislation during a special session last week that would revoke the franchise tax. On Friday, the budget became law without the governor’s signature.

“The franchise tax is bad for Oklahoma’s economic growth. Repealing it is a sizable step in the
right direction. We shouldn’t be punishing businesses that want to operate here. We should be
encouraging them to grow and expand,” said Ben Lepak, executive director of the State
Chamber Research Foundation.

According to the Chamber, “the franchise tax is a direct tax on capital investment, charged to businesses simply for the ‘privilege’ of doing business in Oklahoma. Once common in state tax codes around the country, now only 13 states assess it on companies.”

The tax reform plan, which includes a portion of the personal income tax rate, was recommended by The State Chamber this session.

“We are pleased to see lawmakers get the ball rolling on tax reform in our state. We have seen
pro-growth tax reform produce results in other states, and we know we can do the same in
Oklahoma. Let’s be clear, there are more changes that need to occur in order for us to have one
of the most competitive tax codes in the country, but this is certainly a move in the right
direction,” said Chad Warmington, president and CEO of The State Chamber.