Oklahoma LLC Taxes

Oklahoma’s low cost of living and strong economy make it an attractive location in which to start a business. Yet, many new business owners may find it challenging to understand the business taxes involved with their new ventures. 

Regardless of the size of your business, if you operate a limited liability company (LLC) in Oklahoma, you’ll need to stay up to date on your finances and pay federal, state, and local taxes. Our guide will help you understand which taxes you must pay for your Oklahoma LLC.

Recommended: Schedule a free consultation with an accountant to stay on top of your taxes. 

Oklahoma LLC Taxes Owed

LLCs benefit from pass-through taxation, which means the business’s profits pass through to its members’ individual tax returns. As a result, your LLC itself doesn’t pay taxes to the federal government or the state of Oklahoma. Instead, LLC owners must pay taxes on their portion of the income generated by the LLC. 

In Oklahoma, LLC owners can expect to pay the following taxes:

Federal Taxes

Regardless of where your business is located, if you have an LLC within the United States, you will have to pay federal income taxes and federal self-employment taxes. These taxes are reported on your Form 1040.

Federal Self-Employment Taxes

It doesn’t matter if your LLC is a single-member LLC or a multi-member LLC; all LLC members must pay self-employment taxes on their share of the LLC’s profits. The self-employment tax rate is 15.3%. 

Federal Income Taxes

Your federal income taxes will depend on your tax bracket, and the cutoffs for individual tax brackets, as well as the percent owed, will change each year.

Oklahoma State Taxes

All US states have their own laws and regulations associated with how they tax businesses and individuals. Below you’ll find information on the most important state taxes Oklahoma LLCs need to know about.

Oklahoma Income Taxes

The state income tax rate in Oklahoma is 4.75%. This is quite low when compared to other states, making Oklahoma one of the states with the most affordable income tax rates.

Oklahoma Sales and Use Tax

Oklahoma’s state sales tax is 4.5%. You’ll likely pay much more, though, depending on where you conduct business. The average local sales tax rate in Oklahoma is 4.47% so, in areas that impose their own local sales taxes, you may end up paying a combined rate of 8.97%. That combined total means Oklahoma has one of the highest sales tax rates in the country.

Register for a Sales and Use Tax Return for Oklahoma

If your business sells taxable goods or services, you must register it to collect sales tax with the Oklahoma Tax Commission and file a Sales and Use Tax Return each year. Visit the OkTAP portal on the Oklahoma Tax Commission website to learn more and file your return.

Additional State Taxes

The Oklahoma Tax Commission oversees the collection of various state-specific taxes businesses may have to pay, depending on their location, industry, and number of employees. Some examples of these additional taxes include:

  • Mixed Beverage Tax
  • Motor Fuel Tax
  • Franchise Tax
  • Tire Recycling Fee

To learn more, visit the Oklahoma Tax Commission website.

Oklahoma Local Taxes

Different cities and counties across Oklahoma likely will have their own laws and ordinances governing businesses. Regardless of where you live in Oklahoma, we recommend you check with your local jurisdiction to ensure your business obtains the proper local permits and follows any local regulations that may impact its operations.

Oklahoma LLC Compliance

You must obey Oklahoma’s state and local laws in order to maintain your business in good standing. While LLCs technically don’t file taxes with the state, Oklahoma businesses must still file an annual certificate each year.

Oklahoma LLC Annual Certificate

All Oklahoma LLCs must file an annual certificate with the Oklahoma Secretary of State. You can file this certificate — the equivalent of an annual report in other states — by mail or online. The filing fee is $25.

Each year, your annual certificate will be due on your business’s anniversary date. This is the date the state approved the formation of your LLC. If you don’t file within 60 days of your anniversary date, the state will mark your LLC as “not in good standing.” That designation can lead to issues with financing and other credit-based situations.

If you fail to file an annual certificate for three years, the state will shut down your LLC. If you don’t take action within six years of your last annual certificate filing, the state will make your business’s name available again in Oklahoma.

For more information, check out our Oklahoma LLC Annual Certificate guide.

LLC taxes are complex. While our guide can provide you with important information, we recommend you schedule a free consultation with an accountant to ensure you handle your business taxes correctly.