Incorporator The Journal of U.S. Formation
Start Free Quiz
Editorial 8 MIN READ

Oklahoma in June 2023: the $100 formation, the $25 keep-alive, and the tax Stitt cannot repeal

A flat Articles of Organization fee, a small Annual Certificate, and a 4% corporate income tax that survived another session

The Editors
Staff, Incorporator.org
8 min read Updated
Contents 6 sections
  1. What the Secretary of State charges
  2. The Annual Certificate, not an annual report
  3. Corporate income tax, the franchise-tax repeal, and what happened in 2023
  4. Versus Delaware, and the recurring-cost case
  5. Who Oklahoma actually makes sense for
  6. Sources

n Oklahoma LLC costs $100 to form and $25 a year to stay in good standing. Those two numbers, plus a 4% flat corporate income tax that the governor has now failed twice to repeal, are the Oklahoma filing picture in June 2023.

This is a guide for a founder looking at Oklahoma formation this month, not a brochure for the state. If you are here, the operating business is probably already in Oklahoma and the question is what the paperwork actually costs.

What the Secretary of State charges

You form an Oklahoma LLC by filing Articles of Organization with the Oklahoma Secretary of State. The state filing fee is $100, paid once, and the form is two pages. The required contents are short: the name of the LLC (which must contain "limited liability company," "LLC," or "L.L.C."), the street address of the principal place of business, the name and Oklahoma street address of the registered agent, the term of existence (usually "perpetual"), and the signature of the organizer. Filing is accepted online through the SOS Entity Filing portal, by mail, or in person in Oklahoma City.

The governing statute is the Oklahoma Limited Liability Company Act, codified at Okla. Stat. Title 18 §§ 2000 through 2060. The formation mechanics sit in § 2004 (Articles of Organization), the registered- agent requirement in § 2010, and the fee schedule in § 2055, which fixes the Articles fee at $100 and the annual Certificate fee at $25. These numbers are set by statute rather than by regulation, which is why they have not moved in years and are not likely to move without a bill.

Online filings typically process in one to two business days in routine weeks. Oklahoma does not publish a granular expedited-fee menu the way Delaware does; the SOS offers same-day walk-in processing for an additional fee at the counter in Oklahoma City, but most founders file online and wait. There is no separate publication requirement (as in New York) and no county recording step (as Alabama used to impose).

You will still need an EIN from the IRS, which you obtain by completing Form SS-4 online in a single sitting, and an operating agreement that Oklahoma does not require you to file but expects you to have; § 2012.2 makes the operating agreement the controlling document for members' rights and obligations to the extent it does not conflict with the Act.

The Annual Certificate, not an annual report

Oklahoma does not require an annual report of the kind Florida or Texas requires. It requires an Annual Certificate, which is effectively a one-line affirmation that the LLC still exists, paired with a $25 fee. The Annual Certificate is due on the anniversary of formation each year, not on a calendar date common to every LLC. If you formed on June 6, 2023, your first Annual Certificate is due June 6, 2024, and every June 6 thereafter. Miss it and the LLC enters a not-in-good-standing posture sixty days after the anniversary; miss it for three years and the SOS can administratively cancel the LLC under § 2055.2.

The $25 fee is fixed by § 2055 and has not changed since the statute was last updated. Reinstatement after administrative cancellation requires payment of all past-due Annual Certificate fees plus a reinstatement fee, and the SOS may require a current Certificate of Compliance from the Oklahoma Tax Commission before issuing reinstatement. The cheapest thing you can do, by a wide margin, is calendar the anniversary.

One practical note: the SOS mails a reminder to the registered agent address on file, and the reminders are easy to lose because they look generic. This is the single most common failure mode for Oklahoma LLCs held by out-of-state owners who moved their registered agent or changed their address without updating the SOS.

Corporate income tax, the franchise-tax repeal, and what happened in 2023

Oklahoma taxes corporate income at a flat 4.0% under Okla. Stat. Title 68 § 2355. The rate was reduced from 6% to 4% effective for tax years beginning on or after January 1, 2022, as part of HB 2960 from the 2021 session, and it has remained at 4% since. Governor Stitt has made elimination of the corporate income tax a priority of his second term; the 2022 session considered HB 1328, which would have phased the tax out, and the bill did not advance out of committee. The 2023 session began with renewed proposals, including a standalone elimination measure and a broader tax-reform package. The session adjourned Memorial Day weekend without a corporate-rate bill reaching the governor's desk. The 4% rate therefore remains in force for tax year 2023.

Pass-through LLCs are not subject to the corporate income tax. Members pick up their share of income on their individual Oklahoma returns at individual rates, which top out at 4.75% under § 2355 for tax year 2023 after the 2022 rate cut. Oklahoma enacted an elective pass-through entity tax in 2019 (HB 2665, codified at 68 § 2355.1P-1 through 2355.1P-4) that allows the LLC itself to pay Oklahoma income tax and take a federal deduction, a workaround for the federal $10,000 SALT cap. The election is revocable, and whether to make it is an accountant conversation rather than a formation one.

The franchise tax is where Oklahoma became materially cheaper. HB 1032 of the 2017 session repealed the Oklahoma franchise tax, which had applied to corporations at $1.25 per $1,000 of capital with a $20,000 cap. The last franchise-tax return was due in 2017 for the 2016 tax year. The repeal was paired with an increased gross production (oil and gas severance) tax, which sits at 7% under 68 § 1001 and which has filled the revenue hole the franchise tax left. For a non-oil-and-gas LLC this is a meaningful reduction in the long-run cost of being organized in Oklahoma. For an oil and gas operator, the 7% severance is the tax that matters, and the corporate rate is a secondary consideration.

What Oklahoma does not have, notably, is an LLC-specific franchise or privilege tax of the kind Alabama, Tennessee, or California uses. The $25 Annual Certificate is the only recurring state-level LLC-entity obligation, and corporate income tax only applies if you have elected corporate treatment.

Versus Delaware, and the recurring-cost case

The comparison most Oklahoma founders actually run is against Delaware. Delaware charges $90 to form an LLC and $300 a year in flat franchise tax under 6 Del. C. § 18-1107, with no annual report requirement for LLCs. Oklahoma charges $100 to form and $25 a year.

On formation, Delaware is $10 cheaper. On recurring cost, Oklahoma is $275 a year cheaper per entity. Over a ten-year hold the Oklahoma LLC pays $250 in Annual Certificates; the Delaware LLC pays $3,000 in franchise tax. If the business operates in Oklahoma, there is no offsetting benefit to the Delaware charge; the Delaware LLC will have to foreign-qualify in Oklahoma, paying the same $100 initial filing plus $25 annually under Title 18 § 2043, and then still owes the Delaware $300. That is $325 in Oklahoma plus $300 in Delaware each year, which is the worst of both states.

Where Delaware is still worth the premium is for entities that genuinely need the Court of Chancery: venture-backed C-corps, holding companies with intra-affiliate litigation risk, and anything heading toward a sale that institutional buyers expect in Delaware form. For an Oklahoma-operating LLC that does not plan to raise institutional capital, Oklahoma is simply cheaper and the answer is to form here.

The comparison against neighboring states is closer. Texas charges $300 to form an LLC but has no annual SOS fee, instead imposing a margin tax on gross receipts above $1.23 million (for 2022 and 2023, adjusted biennially). Arkansas charges $45 to form and $150 a year in franchise tax. Kansas charges $165 to form and $50 a year. Missouri charges $50 to form and no annual report fee. For a landlord holding a single property, Missouri and Arkansas are in the same neighborhood as Oklahoma on total cost. For an operating business with Oklahoma nexus, Oklahoma wins on recurring cost against any neighbor except Missouri, and Missouri's LLC case law is thinner than Oklahoma's.

Who Oklahoma actually makes sense for

Oklahoma is a sensible home-state formation for any business that operates in Oklahoma, and the numbers do not require any tax arbitrage argument to work. The $100 formation is at the low end of the national range, the $25 Annual Certificate is one of the lowest recurring fees in any state, and the franchise-tax repeal removed the one line item that had previously made Oklahoma more expensive than its neighbors for well-capitalized entities.

Oklahoma also works for a passive holding entity that owns Oklahoma real estate, Oklahoma mineral interests, or working interests in Oklahoma wells. The severance tax does the revenue work at the production level, the corporate rate is a flat 4% if the entity is taxed as a C-corp, and the Annual Certificate is $25. For a mineral- interest LLC held by a family trust, the Oklahoma posture is particularly efficient because the alternative, forming elsewhere and foreign-qualifying into Oklahoma, pays the Oklahoma $25 either way and adds the home-state recurring cost on top.

Oklahoma does not make sense for an entity with no Oklahoma connection. There is no privacy advantage here (the member and manager information on the Articles and the Annual Certificate is publicly searchable), no banking advantage, and no case-law premium that justifies forming in Oklahoma if the business lives in another state. If you are reading this because someone suggested Oklahoma as a cheap-LLC state, the honest answer is that Oklahoma's low cost is only captured when the business is actually here; otherwise, form at home.

For founders already inside Oklahoma this month, the sequence is short: file the Articles, pay the $100, calendar the anniversary for the $25 Annual Certificate, and watch the 2024 session to see whether the corporate income tax finally comes down. See the companion piece on the 2022 elimination attempt for the political mechanics, and the earlier Oklahoma formation guide for the underlying statutory walkthrough.

Sources

Keep reading

More from the journal.