The Oklahoma Bar Journal May 2026

to the IRS. Employers can access yearly Oklahoma Income Tax Withholding Tables to determine withholding computations. 7 It is important to note that passthrough wage withholding (WTP) is related to wage with holding (WTH) but is a distinct tax type. Pass-through entities include S corporations (as described under the Internal Revenue Code (IRC)), general partnerships, limited part nerships, limited liability partner ships, trusts and limited liability companies (only those that are not taxed as corporations for federal income tax purposes pursuant to 68 O.S. §2385.29). Pass-through entities do not include entities dis regarded for income tax purposes under the IRC. 8 Excise taxes. Sales and use taxes on consumed items. A common example of excise tax in Oklahoma includes the fees collected when registering a vehicle or boat. 9 Sales tax (STS) is charged and collected on all transfers of title or possession of tangible personal property occurring within the state, as well as on certain services. It is due on the 20th of each month and is based on the point of deliv ery (where the buyer receives the item or service). Sales tax varies by location, is calculated as total tax = state + city + county, and is subject to the four-digit COPO code for each city/county when filing returns. Common businesses subject to sales tax include retail stores, restaurants, mobile vendors, resale shops, online sellers, whole salers, vehicle parking and storage facilities. Additionally, HB 1955, otherwise known as the “grocery tax” bill, reduced the state sales tax rate on food and food ingredients. This typically only applies to the state portion of sales tax charged

claimants. 6 Employers pay all this tax quarterly, and it is considered a business expense. Wage withholding taxes. Withholding tax is the amount an employer withholds from employ ees’ wages and pays directly to the state. The amount withheld is a credit against the income taxes the employee must pay during the year. Income tax withholding schedules provide graduated tax rates to be withheld by employers each pay period. The frequency at which a business should remit withholding payments to the OTC depends on the amount per quarter a company withholds. If a company withheld more than $500 for the quarter, it must remit monthly. If a company withheld less than $500 for the quarter, it must remit quarterly. In the event that a business withheld $10,000 or more in a month, it must remit twice per week. Typically, how ever, wage withholding returns are due quarterly. Payments are remitted to the OTC throughout the quarter on the same schedule that the employer remits payments

people. A Federal Insurance Contributions Act (FICA) tax of 15.3% is paid on quarterly federal Form 1040-ES. This often applies to sole proprietorships, farming businesses, partners and LLCs. Employment taxes. This includes federal and state employee income withholding taxes as well as federal and state unemployment taxes. Income tax withholding refers to federal income tax and Social Security tax that are withheld from employee paychecks paid by employers through bank deposit. State income withholding tax is also withheld from employee paychecks and paid by employers to the OTC. Social Security tax (FICA) is shared between employers and employees, with each responsi ble for one-half of the tax (7.65% is withheld from employee pay checks, and 7.65% is withheld as a business expense). Unemployment tax is gener ally required of most Oklahoma employers, who are required to pay a tax to the Oklahoma UI Trust Fund for temporary income or benefits to eligible unemployed

Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff.

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THE OKLAHOMA BAR JOURNAL