Oklahoma has a competitive 4.5% top income tax rate (reduced from 4.75% in 2024, restructured to 4 brackets). Social Security is fully exempt. The state sales tax is 4.5% — one of the lowest state rates, though local additions can push total rates to 11%+. Property taxes average 0.85% effective rate. Oklahoma completely exempts retirement income for retirees age 65+ (up to $10,000 per person). Oil and gas severance taxes fund a significant portion of state operations.
At a glance
Key Facts
State Income Tax
0%–4.5% progressive (4 brackets); top rate 4.5% applies to income over $13,550 (single); restructured from 6 brackets in 2024
Social Security
Fully exempt from Oklahoma income tax regardless of income level
Retirement Exemption
Up to $10,000 per person (age 65+) exempt from Oklahoma income tax on pension, IRA, and other retirement income
Sales Tax
4.5% state rate — one of the lowest in the US; local additions up to 6.5%; combined rates up to 11.5% in some cities; groceries taxed
Property Tax
0.85% average effective rate; assessed at 11% of fair cash value; homestead exemption $1,000 off assessed value
Oil & Gas Severance
Oklahoma levies a gross production tax on oil and gas; significant revenue source; 2% reduced rate for new wells (incentive period)
Introduction
Oklahoma's tax environment is among the most competitive in the South-Central US, with a top income tax rate of 4.5% (Texas has no income tax, but Oklahoma's overall burden including sales and property taxes competes well). Oklahoma's generous Social Security and retirement income exemptions make it attractive for retirees.
Oklahoma's economy is diversified between oil and gas, agriculture, aerospace and defense, and a growing technology sector (Tulsa has emerged as a significant tech hub with the Tulsa Remote program attracting remote workers from across the country).
Section 01
Oklahoma Income Tax: Brackets, Retirement Exemptions, and Social Security
Oklahoma's income tax uses four brackets with rates from 0% to 4.5% (restructured from 6 narrow brackets in 2024):
Oklahoma Income Tax Brackets 2026
Taxable Income (Single)
Rate
$0 – $10,099
0%
$10,100 – $11,249
2.5%
$11,250 – $13,549
3.5%
Above $13,550
4.5%
Oklahoma restructured from 6 narrow brackets (0.25%–4.75%) to 4 broader brackets (0%–4.5%) in 2024, cutting the top rate from 4.75% to 4.5%. The 0% first bracket provides meaningful relief to lower earners. Because the brackets above $13,550 are relatively low, most working Oklahomans pay the 4.5% marginal rate on most of their income above the standard deduction.
Oklahoma Retirement Income Exemptions
Oklahoma provides multiple retirement income exclusions:
Social Security: 100% exempt for all filers at all income levels
Retirement income (age 65+): Up to $10,000 per person exempt from pension, IRA, 401(k), annuity, and railroad retirement income
Married couple: Both spouses can claim $10,000 each = up to $20,000 per couple exempt
Federal government pension: Fully exempt if qualifying federal government retirement pay
Military retirement: Exempt from Oklahoma income tax
Oklahoma Tulsa Remote Program
The Tulsa Remote program (funded by the George Kaiser Family Foundation) offered $10,000 to remote workers who relocated to Tulsa, Oklahoma. The program has attracted thousands of remote workers from high-cost cities. Oklahoma's relatively low income tax (4.5% vs California's 13.3% or New York's 10.9%) is a meaningful financial incentive for relocated remote workers.
Section 02
Oklahoma Sales Tax, Property Tax, and Oil Severance Taxes
Oklahoma's 4.5% state sales tax rate is one of the lowest in the US. However, cities and counties add significant local taxes, resulting in some of the highest combined rates nationally in certain areas.
Combined Sales Tax Rates
City
State Rate
Local Rate
Total Rate
Oklahoma City
4.5%
4.25%
8.75%
Tulsa
4.5%
4.017%
8.517%
Norman
4.5%
4.75%
9.25%
Broken Arrow
4.5%
3.85%
8.35%
Lawton
4.5%
6.5%
11%
Oklahoma taxes groceries at the full combined rate — one of the states that has not implemented a grocery exemption. This makes Oklahoma's grocery tax burden significant in high-local-rate cities.
Oklahoma Property Tax
Oklahoma's 0.85% average effective property tax rate is below the national average. Oklahoma assesses property at 11% of fair cash value (lower than many states). A $300,000 home has an assessed value of $33,000 before exemptions; at a 2.5% mill rate, the annual tax is approximately $825. Oklahoma's $1,000 homestead exemption off assessed value saves approximately $25–$30/year at typical rates — relatively modest.
Oklahoma Oil and Gas Gross Production Tax
Oklahoma imposes a gross production tax on oil and gas extracted from Oklahoma wells: typically 7.1% for oil and natural gas, with a reduced 2% rate applying for the first 36 months of new well production (incentive rate). Oil and gas taxes are a significant revenue source for the Oklahoma state budget and help offset the impact of income tax reductions on state revenue.
Oklahoma's oil and gas income, retirement exemptions, and multi-jurisdictional sales tax complexity benefit from professional guidance. TaxHub connects you with CPAs who understand Oklahoma tax law.
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Oklahoma has four income tax brackets for 2026: 0% (up to $10,099), 2.5% ($10,100–$11,249), 3.5% ($11,250–$13,549), and 4.5% (above $13,550) for single filers. Oklahoma restructured from 6 narrow brackets (0.25%–4.75%) to this 4-bracket system in 2024, also reducing the top rate from 4.75% to 4.5%. Because the 4.5% bracket begins at only $13,550 of taxable income, most working Oklahomans pay the 4.5% marginal rate on most of their income above the standard deduction.
Q
Does Oklahoma tax Social Security and retirement income?
Oklahoma fully exempts Social Security benefits from state income tax for all income levels. Oklahoma also provides a $10,000 per person exemption for pension, IRA, 401(k), and annuity income for residents age 65 and older. Married couples can each claim the $10,000 exemption, totalling $20,000/couple. Federal government pensions and military retirement pay are fully exempt. Oklahoma ranks among the better states for retirement income tax treatment.
Q
What is Oklahoma's sales tax rate?
Oklahoma's state sales tax rate is 4.5% — one of the lowest state rates in the US. However, cities and counties add substantial local taxes, with combined rates ranging from 8.35% (Broken Arrow) to 11%+ (some smaller cities). Oklahoma taxes groceries at the full combined rate, making the grocery tax burden significant in higher-local-rate areas.
Q
How does Oklahoma compare to Texas for taxes?
Texas has no state income tax, while Oklahoma's top rate is 4.5%. For a single earner with $100,000 income, Oklahoma charges approximately $3,275 in state income tax (3.28% effective rate). However, Texas property taxes (1.60% effective) are almost double Oklahoma's (0.85%). On a $300,000 home, Texas costs approximately $2,250 more per year in property tax vs Oklahoma. The combined income + property tax burden often makes Oklahoma comparable to Texas for middle-income homeowners, and better for high-income renters.
Disclaimer:This guide provides general tax information for educational purposes only. Oklahoma income tax rates and exemptions are subject to legislative change. Always consult a qualified Oklahoma tax professional for advice specific to your situation.