Generally stock option are not taxable when granted. The general rule of thumb is that stock options are not taxable until they are exercised. Exercising an option is buying the stock at the agreed upon price. Stock Options are taxed at ordinary income.

Stock Options are sometimes taxable when issued if they are granted "in the money" or already have value when granted.

If the options are incentive stock options (ISOs) you will not have to pay taxes until you sell the stock that you buy when the options are exercised. If you hold the stock for at least one year after exercise (and two years after the the options were granted to you), then the sale is taxed at the capital gain rate. If you sell the stock early it will be taxed as ordinary income.

If the options are not ISOs, they are taxed at exercise as Jeffrey explained.