New law nixes state tax for military Published June 26, 2009 By Cammy Drebes Office of the Staff Judge Advocate TINKER AIR FORCE BASE, Okla. -- Oklahoma Gov. Brad Henry recently signed State Bill 881 into law, exempting Oklahoma Military Pay from state tax for all service members - National Guard, Reserves and active duty. The law goes into effect on July 1, 2010, and will make Oklahoma one of only 16 states exempting all military wages from state tax for those members who have Oklahoma as their legal state of residence. Being stationed in Oklahoma does not automatically make a military member a legal resident of Oklahoma and legal residency is not synonymous with "home of record." To establish legal residency in a state you must show a permanent desire to remain in the state. This can be done by doing a number of things that together show you intend to be a resident. These things can include: acquiring land in the state, obtaining a driver's license in the state, registering to vote or filing for homestead exemption if you purchase a home in the state of Oklahoma. Military members should never change their state of legal residence solely for the purpose of not paying taxes. Airmen may contact the legal office if they have more specific questions.