For the purposes of federal income tax, LLCs are categorized as pass-through entities in Oklahoma. As a result, the LLC is exempt from paying federal income tax. Instead, the LLC’s gains and losses are distributed to each individual member, who then reports them on their individual tax returns. The highest tax rate for individuals is 5%, and it fluctuates depending on their level of income.
LLCs are further liable to state income tax in Oklahoma. Taxable income for an LLC is determined by deducting permitted expenses from gross income, and is subject to a 6% tax rate. LLCs must submit a Form 200 yearly income tax return to the Oklahoma Tax Commission, along with a Schedule K-1 for each member.
Oklahoma LLCs may also be required to pay an annual charge known as the Oklahoma Annual Certificate, which is due on or before the first day of the fourth month after the end of the LLC’s fiscal year. This fee is in addition to state income tax. With a minimum of $200 and a maximum of $5,000, the price is $25 per member. The Oklahoma Secretary of State will receive payment of this charge, which is distinct from the LLC’s income tax return.
Franchise tax, which some states levy on businesses for the right to conduct business there, is not necessary for LLCs to pay in Oklahoma. However, in order to keep their LLC status, businesses must submit an annual certificate of conformity to the Oklahoma Secretary of State. The LLC is in good standing with the state and has paid all required fees and taxes, according to this certificate.
In conclusion, LLCs in Oklahoma are liable to state income tax and are taxed as pass-through entities for federal income tax purposes. Additionally, they might need to submit an annual certificate of compliance to the Secretary of State and pay the Oklahoma Annual Certificate cost. To ensure compliance with all tax laws and rules in Oklahoma, LLCs should speak with a tax expert.