Does Texas or Oklahoma have lower overall taxes?

It depends on income and home value. Texas wins for most homeowners earning above $60K and for all renters — the $0 income tax outweighs Texas's higher property tax. Oklahoma wins for homeowners earning under $50K and for retirees with under $20K of pension income (where Oklahoma's pension exclusion plus lower property tax dominates). Above $100K of income, Texas leads by $3,000-$8,000/yr.

Why is Oklahoma's sales tax so high?

Oklahoma's state sales-tax rate (4.5%) is below the national average, but cities and counties have unusually broad authority to stack local rates. The combined statewide average reaches 8.99% — the highest in the nation among states with any sales tax. Major cities like Oklahoma City (8.625%) and Tulsa (8.517%) run high; some smaller jurisdictions push past 10%. Texas caps local stacks at 2% by statute.

Is Oklahoma property tax really half of Texas?

Yes. Oklahoma's effective property tax averages 0.89% versus Texas's 1.6-1.9%. On a $300K home, Oklahoma runs about $2,700/yr versus Texas at $4,800-$5,700/yr. Oklahoma's lower assessment ratio (11% of fair market value for residential, with the assessed value then taxed) keeps bills predictable.

Does Oklahoma tax retirement income?

Partially. Oklahoma excludes up to $20,000/person of pension and IRA income for residents 65+. Social Security is fully exempt at all ages. Above the $20K threshold, Oklahoma's flat 4.75% applies. Texas taxes neither Social Security nor any retirement distribution — a clear win for any retiree above $20K of non-Social-Security retirement income.

Should I move from Oklahoma to Texas for the income tax savings?

Usually yes, if you earn above $60K and either rent or own a home valued under ~$400K. Income-tax savings at $80K-$120K income typically run $3,200-$5,500/yr, exceeding the additional Texas property tax for most homeowners. The case weakens for high-value Texas homes (above $600K, where 1.8% effective property tax produces $11,000+ annual bills) and for retirees with under $20K of pension income.

State Comparison

Texas vs Oklahoma: Tax & Cost of Living Comparison (2026)

Texas and Oklahoma share an oil-and-gas economy, college-football intensity, and a 540-mile border. The tax structures diverge: Texas charges $0 income tax but among the highest property tax in the country; Oklahoma charges 4.75% income tax but property tax half of Texas's. For most households, Texas wins by a small margin — but the calculation flips for low-income earners.

Last reviewed: May 7, 2026 · Reviewed by ProSalaryTax tax research team

TL;DR — 30-second version

1.On a $100K salary, Texas take-home runs roughly $3,800/yr higher than Oklahoma — Texas's $0 income tax against Oklahoma's flat 4.75% (above the $13,250 single threshold).
2.Property tax flips the math. Texas averages 1.6-1.9% effective; Oklahoma averages 0.9%. On a $300K home, Texas runs $5,400/yr versus Oklahoma's $2,700 — closing roughly $2,700 of the income-tax gap.
3.Sales tax favors Texas marginally (combined ~8.2% vs Oklahoma's ~8.99%, the highest combined statewide average in the nation). Local stacks in Tulsa and Oklahoma City push past 9.5%.
4.Neither state has estate or inheritance tax. Both rank in the top 10 nationally for retiree-friendly tax policy on Social Security and pension income.
5.Net net: Texas wins by $1,000-$2,000/yr for most middle-income households; Oklahoma wins for low earners (under ~$30K, where the income-tax bracket is small and Texas property tax still hits) and for renters in any income tier.

Take-Home Pay: Texas vs Oklahoma

Gross Salary	Texas	Oklahoma	Difference
$50,000	$42,355	$40,830	+$1,526 Texas
$75,000	$61,593	$58,942	+$2,651 Texas
$100,000	$79,180	$75,405	+$3,776 Texas
$150,000	$113,791	$107,766	+$6,026 Texas
$200,000	$148,927	$140,652	+$8,276 Texas

Assumes single filing status, standard deduction, no 401(k) or HSA contributions. 2026 tax year.

Tax-by-Tax Breakdown

Income Tax

Texas: 0% — no state income tax

Oklahoma: 4.75% flat above $13,250 (single)

Winner: Texas

Oklahoma collapsed its progressive schedule into a near-flat structure: 0.25% on the first $1K, ranging up to 4.75% above $13,250 single ($24,200 MFJ). Effective rate on $100K single income is roughly 4.4% after standard deduction. Texas constitutionally bars personal income tax (Prop 4, 2019).

Property Tax

Texas: 1.6-1.9% effective

Oklahoma: 0.89% effective

Winner: Oklahoma

On a $300K home, Texas runs $4,800-$5,700/yr; Oklahoma runs $2,700/yr — a $2,000-$3,000/yr swing. Oklahoma's homestead exemption is $1,000 (token) but the state's much lower assessment ratio and millage rates produce the actual gap. Texas counties cap homestead taxable-value growth at 10%/yr but assessment is at 100% of market.

Sales Tax

Texas: 6.25% state + up to 2% local (avg ~8.2%)

Oklahoma: 4.5% state + up to 7% local (avg ~8.99%)

Winner: Texas by ~0.8 pts

Oklahoma has the highest combined statewide average sales tax in the nation, despite a low state portion (4.5%). Cities and counties stack aggressively — Oklahoma City runs 8.625%, Tulsa 8.517%, smaller cities push past 10%. Texas caps local stacks at 2% statutorily.

Estate Tax

Texas: None

Oklahoma: None

Winner: Tie

Neither state has estate or inheritance tax. Both states are equally favorable for estate planning above the federal $13.99M exemption (2026).

Houston Premium vs Tulsa Value

Median home prices through Q1 2026 sit at roughly $310K in Texas (Austin metro $440K, Dallas $350K, Houston $290K, San Antonio $260K) versus $235K in Oklahoma (Oklahoma City $230K, Tulsa $215K, Norman $260K, Edmond $310K). Oklahoma's housing is appreciably cheaper across the state — a 2,200-square-foot home in Edmond runs $310K against $400K+ for the equivalent in Houston suburbs.

The property-tax bill closes much of the headline housing-price gap for owners. A $300K Texas home costs $4,800-$5,700/yr in property tax; the equivalent Oklahoma home costs $2,700. Over a 10-year hold the differential exceeds $25,000 — enough to make Oklahoma's lower headline price genuinely lower in cost of ownership too.

Sales tax is the unexpected Oklahoma weakness. Oklahoma's combined statewide average (8.99%) is the highest in the nation among states with any sales tax. Cities and counties stack heavily because Oklahoma's state portion is only 4.5%. Tulsa and Oklahoma City both run above 8.5%; smaller jurisdictions sometimes exceed 10%. Texas caps local stacks at 2% by statute, so the worst combined Texas rate is 8.25%.

Energy and auto costs lean Oklahoma. Oklahoma electricity averages 11¢/kWh versus Texas's 14¢/kWh — Oklahoma is among the cheapest in the country. Auto insurance averages $1,800/yr in Oklahoma vs $2,100/yr in Texas. Combined energy plus auto savings run about $700/yr in Oklahoma's favor for a typical household.

Income tax on $100K (single)

Texas $0/yr · Oklahoma ~$4,400/yr (state). Oklahoma's effective rate is roughly 4.4% after the $7,350 standard deduction (single).

Property tax on $300K home

Texas ~$5,200/yr · Oklahoma ~$2,700/yr. The $2,500 gap closes most of the income-tax delta for moderate-income homeowners.

Sales tax (combined avg)

Texas 8.2% · Oklahoma 8.99% (highest combined US average). Texas wins by 0.8 pts on average and by more in major cities. Oklahoma's local stacks compensate for a low state base.

Median home price (Q1 2026)

Texas $310K · Oklahoma $235K. Oklahoma is roughly 25% cheaper on the median — Edmond and Norman offer near-Austin housing at Houston-suburb prices.

Auto insurance avg

Texas $2,100/yr · Oklahoma $1,800/yr. Oklahoma's lower urban density and lower uninsured-motorist rate produce cheaper premiums.

Electricity avg

Texas 14¢/kWh · Oklahoma 11¢/kWh. Oklahoma is among the five cheapest states for residential electricity. Texas's deregulated retail market offers shopping but average rates run above the national mean.

Who Wins for Whom

Family, $75K household, Tulsa homeowner considering Texas

Best fit: Roughly even — slight edge Oklahoma

Oklahoma income tax on $75K family runs ~$2,200, plus property tax on a $250K Tulsa home ~$2,200 = $4,400 total. Texas: $0 income tax, but a comparable home costs more — $300K Texas equivalent at 1.7% effective rate = $5,200 in property tax alone. Oklahoma actually wins by ~$800/yr at this profile, plus 25% cheaper housing if the family stays put. Tax-driven moves from Oklahoma to Texas only make financial sense above ~$100K income or for renters.

Single renter, $60K

Best fit: Texas

Without a property-tax bill, Texas math simplifies. On $60K, Oklahoma state income tax runs ~$2,200; Texas $0. Clean $2,200/yr in Texas's favor with no offset. Sales tax is roughly tied (TX 8.2% vs OK 8.99%). Renting in Houston, Dallas, or Oklahoma City costs roughly the same ($1,200-$1,500/mo for a 1BR). For renters at moderate incomes the case for Texas is purest — savings flow directly into discretionary income or savings rate.

Tech worker, $150K base

Best fit: Texas

Austin and Dallas tech employer density (Apple, Tesla, Oracle, Indeed, Dell, Meta ATX) has no Oklahoma equivalent. Oklahoma City has Paycom and a small fintech cluster but the talent depth is 1/20th of Austin's. Income-tax savings of $6,500/yr at this income level cement the choice. Tulsa Remote ($10K relocation incentive) is real but selective.

Retiree (no mortgage, $1M+ portfolio)

Best fit: Texas (marginally)

Both states tax neither Social Security nor estate transfers. Oklahoma fully exempts up to $20,000 of pension/IRA income for residents 65+; Texas charges $0 across the board. For retirees with under $20K of pension income, the states tie; above that threshold Texas pulls ahead. Texas property tax burden is the offset for homeowners.

Family with kids, $90K household

Best fit: Oklahoma

At this income level, Oklahoma income tax runs roughly $3,500/yr — closeable by Oklahoma's substantially lower property tax (saves $2,500/yr on a $300K home), lower auto insurance ($300/yr), and lower electricity ($300/yr). Net $400-$600/yr in Oklahoma's favor, plus 25% cheaper housing. Stillwater and Norman public schools are competitive with Texas tier-2 districts.

Renter, any income

Best fit: Texas

Without a property tax bill, the Texas math simplifies to income tax + sales tax. Texas's $0 income tax beats Oklahoma's effective ~4.4% with no offset. On $80K of income, Texas wins by roughly $3,200/yr in pre-tax dollars.

Oil-and-gas industry professional

Best fit: Texas

Houston, Midland-Odessa, and the Permian Basin cluster employ ~3x the oil-and-gas headcount of Tulsa and Oklahoma City combined. Compensation packages run higher; income-tax savings amplify. Oklahoma royalty-owner exemptions are favorable for landowners but don't outweigh employment density.

Should You Actually Move?

Texas added roughly 470,000 residents in 2024-2025; Oklahoma added about 28,000. The Texas-to-Oklahoma counter-migration is small but growing — Tulsa Remote ($10K relocation grant for remote workers), Oklahoma City's redevelopment, and Texas's compounding property-tax appraisals are all factors. Most cross-border movement is the other direction (Oklahoma to Texas for jobs).

The income-vs-property-tax trade has a clear breakeven. At $80K single income with a $300K home, Oklahoma's effective state income tax runs roughly $3,200/yr plus $2,700/yr property tax — total $5,900. Texas runs $0 income plus $5,200/yr property = $5,200. Texas wins by about $700 even at moderate income. The breakeven point sits closer to $50K household income — below that, Oklahoma's much lower property tax dominates because the income-tax line item is small. Above ~$60K, Texas pulls ahead and keeps widening.

Oklahoma's downside: smaller employer base, less weather diversity (tornadoes are the bigger risk than Texas hurricanes for the I-35 corridor), and Tulsa's airport connectivity is a fraction of DFW or IAH. For remote workers and retirees without strong employment ties, Oklahoma is genuinely competitive. For corporate-track professionals, Texas remains the default.

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Texas vs Oklahoma: The Honest Verdict

Texas wins for most middle and upper-middle income earners. The $0 income tax is the largest line item, and Texas's higher property tax doesn't fully offset it for households earning above ~$60K. The math gets closer for renters (where Texas is decisively better) and for homeowners earning under $50K (where Oklahoma is decisively better). Above $100K, Texas's advantage compounds at $3,000-$8,000/yr depending on home value.

Single highest-leverage move: don't buy a Texas home in a high-growth metro (Austin, Houston suburbs, North Dallas) without modeling 8-12% annual property-tax-bill growth. Many out-of-state buyers in 2020-2022 underestimated the appraisal compounding and saw their effective annual cost of ownership increase 40-50% over four years. Oklahoma's 1% homestead cap (and lower base) keeps surprises off the table. If you're moving for tax reasons and uncertain of timeframe, rent in Texas first.

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