State legislative agreement centers on income tax cuts

Friday, May 20th 2005, 6:32 am

By: News On 6

OKLAHOMA CITY (AP) _ State lawmakers have agreed to tax cuts that include reducing the state's top income tax rate, increasing the standard deduction and cutting taxes on businesses, retirees and military pensions.

Government sources tell The Associated Press the top income tax rate will drop from 6.65 percent to 6.25 percent; retirement income of up to $10,000 will be exempt from taxes and 50 percent of military pensions will be exempt.

Also, the corporate income tax on Oklahoma-based property would be eliminated and the standard deduction on state income taxes would increase from $1,000 to $4,000.

Negotiations are continuing on Governor Brad Henry's proposal to give income tax rebates of $50 to $100 to taxpayers this year.

The sources say the governor's proposals for a sales tax holiday and reducing estate taxes are not part of the agreement and that full details will be formally announced next week.