Oklahoma Franchise Tax Officially Ends

Big news for franchise owners in Oklahoma: Oklahoma House Bill 1039 enacted on June 2, 2023, repealed the franchise tax and the reporting requirements starting with tax year 2023. 

Here’s what you need to know about this massive change to prepare for the 2023 tax year. 

Important Notes for Filing for Tax Year 2023

For tax years 2023 and prior, every corporation organized under the laws of this state, or qualified to do or doing business in Oklahoma including associations, joint stock companies and business trusts as defined by Oklahoma statutes unless exempt by statutes are subject to franchise tax. The franchise tax was levied and assessed at the rate of $1.25 per $1,000.00 or fraction thereof on the amount of capital allocated or employed in Oklahoma up to a maximum of $20,000.00.

Now that this franchise tax has been repealed, the above will no longer apply. For businesses, this means that the tax will no longer be collected or reported beginning January 1, 2024 – which will apply to taxes filed in 2025.

However, the franchise tax was in effect in 2022 and 2023, so you will need to account for it when filing for tax year 2023 in 2024.

Filing for Tax Year 2023

Due Dates for Tax Year 2023

• Form FRX 200: Franchise tax is due and payable on July 1, and the final franchise tax return will be delinquent if not remitted on or before September 15, 2024. For corporations who remit the maximum amount of $20,000.00 in the preceding tax year, franchise tax is due and payable on May 1 and the final franchise tax return must be remitted on or before June 1, 2024. 

• Elected To File As Part Of The Corporate Income Tax Return: Form 200-F Oklahoma Tax Commission Franchise Election Form must be filed by July 1, 2023 to make an election to file a combined franchise and corporate income tax return or file the annual franchise tax using the same period and due date as the corporate income tax filing year. Elections will no longer be accepted going forward. The franchise tax is due with the filing of the tax year 2023 corporate income tax return. 

Registered Agent’s Fee 

All Foreign (non-Oklahoma) Corporations including non-profits, must pay an Annual Registered Agent Fee of $100.00. Prior to the franchise tax repeal, the Oklahoma Tax Commission collects the registered agents fee on behalf of the Secretary of State which was remitted with the franchise tax return. The Oklahoma Tax Commission and Secretary of State are currently in discussion to determine how to collect the registered agent fee going forward. 

Officer’s List 

The list of current officer information was previously filed with the franchise tax return. Failure to provide this information could result in the corporation being suspended. Guidance on whether taxpayers are still required to provide this information will be available at a future date.

Tax year 2023 will be the last and final year that franchise tax returns will be required to be filed in Oklahoma. 

Need assistance with your tax year 2023 returns and navigating the complexities of franchise taxes? Contact Evolved for assistance.

Evolved is a tax compliance and advisory firm with offices in New York City and Philadelphia, and clients nationally throughout the US.  We provide tax provision, private equity and venture capital services alongside advisory for high net-worth tax and family office tax.