The evenly-divided Oklahoma Senate voted Monday to send Gov. Brad Henry a tax relief package that speeds up income tax cuts and provides Oklahomans with a back-to-school sales tax holiday.
Senate Bill 861, by Sen. Don Barrington, R-Lawton, passed on a bipartisan 33 to 15vote. This bill is the result of a bipartisan tax relief agreement announced by Senate and House leaders in March.
Senate Co-President Pro Tempore Glenn Coffee, R-Oklahoma City, called on Henry to sign the legislation.
“This bill provides much-needed relief to Oklahoma taxpayers. It’s a very good bill for Oklahoma families and small businesses, so the governor should sign it,” Coffee said.
Senate Finance Committee co-chair Mike Mazzei, R-Tulsa, said cutting the state’s income tax rate provides a boost to the state economy.
“This bill speeds up the income tax cuts enacted in 2006, which is a boost to the economy and job creation here in Oklahoma. History is replete with examples of income tax cuts resulting in unprecedented economic growth – from America in the 1960s and 1980s to Ireland in the 1990s,” stated Mazzei.
Barrington said the sales tax holiday will help back-to-school shoppers in Oklahoma, especially in areas that border Oklahoma’s neighbors.
“Oklahoma businesses lose many customers to states like Texas that offer sales tax holidays to back-to-school shoppers. SB 861 helps level the playing field by giving Oklahoma families a break, too,” said Barrington.
Details of the tax relief package in SB 861 include:
· Acceleration of last year’s income tax cut plan, bringing the state’s top marginal income tax rate down to 5.25 percent one year earlier. Currently the rate is 5.65 percent.
· A statewide three-day sales tax holiday beginning the first Friday in August for clothing and footwear with a sales price of less than $100.
· Elimination of the state’s franchise tax on most small businesses.
· A tax credit for stay-at-home parents similar to that currently offered for parents with children in daycare.
· Acceleration of last year’s income tax cut plan, bringing the state’s top marginal income tax rate down to 5.25 percent one year earlier. Currently the rate is 5.65 percent.
· A statewide three-day sales tax holiday beginning the first Friday in August for clothing and footwear with a sales price of less than $100.
· Elimination of the state’s franchise tax on most small businesses.
· A tax credit for stay-at-home parents similar to that currently offered for parents with children in daycare.