Oklahoma

Property Classification:

Property is divided into the following five classes for Oklahoma property tax assessment purposes (Okla. Stat. § 68-2803):

1. real property;

2. tax-exempt household goods of heads of families and livestock employed in support of families;

3. personal property other than tax-exempt household goods of heads of families and livestock employed in support of families;

4. public service corporation property; and

5. railroad and air carrier property.

Real property - includes both land and all associated rights and privileges that add value to the land. Generally, the term encompasses mines, minerals, quarries, and trees, as well as most buildings, structures, and improvements. Certain improvements (such as improvements on leased land that do not become a part of the realty, improvements on federal or state land, and improvements on land belonging to public service corporations) are treated for tax purposes as personal property. (Okla. Stat. § 68-2806)

Oklahoma property tax law makes no express provision for forests or open-space lands.

Valuation and Assessment:

All taxable real property is assessed annually at a specified percentage of its fair cash value as of January 1. (Okla. Stat. § 68-2817)

Fair cash value - means the value or price at which a willing buyer would purchase property and a willing seller would sell property if both parties are knowledgeable about the property and its uses and if neither party is under any undue pressure to buy or sell and for real property shall mean the value for the highest and best use for which such property was used, or was previously classified for use, during the calendar year next preceding the applicable January 1 assessment date.

Agricultural land, including forest land, is assessed by county assessors on a calculated “use value” that recognizes agricultural use class and agricultural productivity. Use class includes Cropland, Improved Pasture, Native Pasture, and Timber and Wasteland. Agricultural productivity is defined by a productivity index (0 to 100). Each soil mapping unit defined by the NRCS soil survey is assigned productivity points (1-100) based on the soil characteristics. A use value per use class per productivity point per acre is calculated based on comparable sales and cash rentals in each county. The comparable sales are given a weight of 25% and annual cash rentals a weight of 75% (Lewis, 2010). The annual cash rentals are capitalized using a capitalization rate set by the Oklahoma Tax Commission.

Exemptions

Timber inventories are classified as a crop and as such are exempt from ad valorem taxation. Individuals may also apply for a “Homestead Exemption” with the assessor for the county where the property is located. This exemption reduces the assessed valuation of the property by $1,000.

The state of Oklahoma does not have a severance or yield tax on timber or timber products.