Oklahoma Revenue Drops Amid Oil Tax Decline

Oklahoma, Tax, Production

Oklahoma’s state revenues have been notably impacted by a decline in Gross Production Taxes, which are levied on oil and gas production. The General Revenue Fund report showed that from November 2022 to November 2023, the state’s treasury receipts totaled $17.05 billion, marking a reduction of nearly $312 million, or 1.8%, from the previous year.

A significant factor in this decrease is the $565 million drop in revenue from the state’s Gross Production Tax over the last year, a 29% decline from the prior year, as reported by the state treasurer’s office. A breakdown of various tax revenues in the past year compared to the previous year revealed:

  • Individual income taxes brought in $5.1 billion, up by $96.3 million, or 1.9%.
  • Corporate tax collections decreased to $939 million, down $93.8 million, or 9.1%.
  • Sales tax receipts rose to $5.98 billion, an increase of $186.5 million, or 3.2%.
  • Use taxes on out-of-state purchases, including internet sales, generated $1.1 billion, up by $90.7 million, or 8.7%.
  • Oil and gas gross production taxes fell to $1.38 billion, down by $564.7 million, or 29.1%.
  • Motor vehicle taxes slightly increased to $877.7 million, up by $2.8 million, or 0.3%.
  • Other revenue sources declined to $1.64 billion, down by $29.5 million, or 1.8%.
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In a month-to-month comparison of November 2023 with November 2022, gross revenue was $1.29 billion, showing a decrease of $23.1 million, or 1.8%. Notable changes include:

  • A rise in individual income taxes to $380.9 million, up by $29.4 million, or 8.4%.
  • A decrease in corporate taxes to $14.5 million, down by $3.1 million, or 17.8%.
  • A slight drop in sales tax revenues to $491.6 million, down by $8.7 million, or 1.7%.
  • An increase in use tax receipts to $103.4 million, up by $10.5 million, or 11.3%.
  • A significant fall in gross production taxes on oil and natural gas to $105.8 million, down by $44.9 million, or 29.8%.
  • A decrease in motor vehicle taxes to $64.2 million, down by $2.8 million, or 4.2%.
  • A fall in other sources to $130.6 million, down by $3.5 million, or 2.6%.

The Gross Receipts to the Treasury report is a key economic indicator, released alongside the General Revenue Fund report by the state’s Office of Management and Enterprise Services, aiding in budgetary planning for state agencies. The General Revenue Fund, which is the state’s main operating account, receives less than half of the state’s gross receipts.

In other economic indicators, the Oklahoma Business Conditions Index for November showed a decline to 43.2, signaling potential economic contraction in the coming months. The U.S. Bureau of Labor Statistics reported Oklahoma’s unemployment rate at 3.25% in October, slightly up from September, while the national rate increased to 3.9%. The annual inflation rate in the U.S. decreased to 3.2% in October, with the energy component of the Consumer Price Index dropping by 4.5% and the food index growing to 3.3%.

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