Taxes in Oklahoma


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Oklahoma - State

Though Oklahoma has a graduated income tax, most residents fall within the top bracket. Below, we explain various Oklahoma state taxes affecting retirement income, such as sales tax, inheritance tax, and property taxes.

For information regarding taxes in other states, see Retirement Taxes by State.

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Oklahoma Tax Rates

State Sales Tax4.5%
Avg State/Local Sales Tax8.99%
Gas Tax$0.19 per gallon
Diesel Tax$0.16 per gallon
Cigarette Tax$2.03 per pack
Income Tax3.99%
Effective Tax Rate:4.75%
Property Tax4.44%
Social Security TaxNone
Medical/Dental Deduction:None
Federal Income Tax Deduction:None
Retirement TaxPartial
State Taxes in Oklahoma

Oklahoma State Taxes Explained

Oklahoma Sales Tax

4.50%. Prescription drugs are exempt; groceries and clothing are not. County and local tax rates vary for a total sales tax of up to 7%. The average Oklahoma sales tax is around 9%.

Motor vehicles are taxed at 1.25%, and 3.25% excise tax applies.

Oklahoma Income Taxes

4.75% top rate on taxable income over $7,200 for single filers ($12,200 for married joint filers).

Oklahoma Property Taxes

The average effective property tax rate in Oklahoma is 0.90%, with a median annual tax assessment of around $1,228 on a $136,800 property.

Oklahoma offers a homestead exemption to reduce the property’s assessed value by $1,000. The exemption results in tax savings from $87 to $134. Taxpayers qualify for an additional $1,000 exemption if annual gross household income is under $20,000, and they meet all Homestead Exemption requirements.

A $200 property tax rebate is available if you are 65 or older or totally disabled and have an income of $12,000 or less. Disabled veterans are 100% exempt from property tax. Veterans and the surviving spouse of a veteran may also qualify for a property tax exemption.

Senior citizens with a household income of $73,200 or less may qualify for a valuation freeze on their primary residence. A valuation freeze means property tax will not increase based on the value of other homes in the neighborhood. The amount of qualifying income depends on the Federal Department of Housing and Urban Development’s estimate of median family income.

Oklahoma Retirement Taxes

Oklahoma does not usually tax Social Security benefits. If you receive income in addition to Social Security in the tax year, benefits may be partially taxable depending on your income level.

Taxpayers may exclude up to $10,000 in retirement benefits up to the amount included in federal adjusted gross income. The retirement benefits must be from an employee pension benefit plan, eligible deferred compensation plan, individual retirement account, annuity or trust, or simplified employee pension under IRC section 408, an employee annuity, United States Retirement bonds under IRC section 86 or lump-sum distributions from a retirement plan under IRC section 402(e).

Military individuals may exclude the greater of 75% of their retirement benefits or $10,000. This amount cannot exceed the federal adjusted gross income. The retirement benefits must be from any component of the Armed Forces of the U.S.

Oklahoma Estate and Inheritance Taxes

There is no inheritance or estate tax in Oklahoma.

For further information, visit the Oklahoma Tax Commission.

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