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Oklahoma is globally recognized for its outstanding incentive programs and pro-business environment. Businesses can choose between a cash incentive or a tax credit package, and in some cases, qualifying businesses can take advantage of both programs.
- Oklahoma Incentives and Tax Guide
Job Creation Incentives
Oklahoma’s successful Quality Jobs incentive program promotes job growth and helps improve your company’s bottom line by injecting cash back into your business as you expand and create new jobs in Oklahoma. The Quality Jobs program provides a cash rebate to companies that create well-paying jobs and promote economic development.
Quality Jobs Program
Oklahoma’s Quality Jobs incentive program is a 10-year cash rebate that promotes job growth and helps improve your company’s bottom line by injecting cash back into your business as you expand and create new jobs in Oklahoma. The Quality Jobs program provides a cash rebate to companies that create well-paying jobs and promote economic development.
Small Employer Quality Jobs Program
The Small Employer Quality Jobs Program provides quarterly incentive payments to a qualifying small employer (500 employees or less). Quarterly payments may be as much as 5% of new taxable payroll for up to 7 years.
21st Century Quality Jobs Program
This Quality Jobs program is specially tuned for businesses with a highly-skilled, knowledge-based workforce. This unique incentive may pay qualifying businesses cash back, up to 10 percent of new payroll, for up to ten years for the creation of 10 jobs with an annual average wage of the lesser of $112,100 or 300% of the county’s average wage.
Quality Jobs + Investment Tax Credits
These tax credits target manufacturing industries that have a large capital investment of at least $40 million in addition to creating new jobs that pay higher than the state average wages. The credits also allow a five-year tax credit on the greater of 2 percent per year of investment in qualified new depreciable property or credit of $1,000 per year per new job.
Incentives for Investment
Rural Jobs Act
The Oklahoma Rural Jobs Act promotes greater access to capital for qualifying small businesses located in rural areas of the state. Rural Funds, their affiliates or investors may earn a tax credit on the amount equity that they invest in a Rural Fund, which must then deploy as capital expenditures to provide financing for small businesses in rural Oklahoma
Strategic Industrial Development Enhancement (SIDE) Act
The Strategic Industrial Development Enhancement (SIDE) Act promotes the competitiveness of rural industrial parks by improving connections between railroads and industrial park developments. This can be done through projects that include qualified economic development expenditures in industrial parks, qualified initial infrastructure expenditures associated with industrial parks, or a combination of the two.
Oklahoma Tourism Development Act
Oklahoma’s Tourism Development Act promotes investment in new or expanded tourism sites such as entertainment districts, destination hotels, arenas, museums, theme parks, cultural centers, and others tourism destinations. For projects that meet requirements, program participants may receive sales tax credits or a sales tax incentive payment annually for ten years.
Investment / New Jobs Package
This package provides growing manufacturers a significant tax credit based on either an investment in depreciable property or on the addition of full-time-equivalent employees engaged in manufacturing, processing, or aircraft maintenance.
Business Expansion Incentive Program
This incentive targets business expansion projects which include job creation and significant investment in facilities, machinery, and equipment.
Investment / New Jobs Package
This package provides growing manufacturers a significant tax credit based on either an investment in depreciable property or on the addition of full-time-equivalent employees engaged in manufacturing, processing, or aircraft maintenance.
Workforce Tax Credits
Aerospace Industry Engineer Workforce Tax Credits
Aerospace companies hiring engineers in a variety of fields will receive tax credit equal to 5% of the compensation paid to an engineer and 10% if the engineer graduated from an Oklahoma college or university, plus another credit of up to 50% of the tuition reimbursed to an employee. Additionally, the engineer hired receives a tax credit of $5,000 per year.
Automotive Engineer Workforce Tax Credit
Companies that manufacture or assemble motor vehicles, or manufacture automotive parts, and hire newly employed engineers may be eligible for a corporate income tax credit of up to 10% of the compensation paid to the engineer, plus an additional tax credit of up to 50% of the tuition cost reimbursed to an employee. Additionally, the engineer hired receives a tax credit of $5,000 per year.
Software/Cybersecurity Workforce Tax Credit
Cybersecurity or software employees who have received a degree from an accredited institution can receive a tax credit up to $2,200 annually or $1,800 annually for qualifying employees who are awarded a certificate from a technology center.
American Indian Lands Tax Credit
Because of the state’s unique Native American heritage, two-thirds of Oklahoma locations qualify for special federal tax treatment. Businesses locating or expanding in these areas can claim accelerated federal depreciation on their buildings, resulting in tax savings of up to 40%. Additionally, businesses in qualifying areas that hire Native Americans or their spouses living in the area can claim federal tax credits of up to $4,000 per qualifying employee.
Disclaimer: Federal tax credits on hiring expires Dec 31, 2021, and must be renewed for investments that occur past Jan 1, 2022. Accelerated federal depreciation on buildings expired Dec 31, 2020 and must be renewed for investments that occur past Jan 1, 2021.
Manufacturing Sales Tax Exemptions
Oklahoma has a comprehensive sales tax exemption for manufacturers who qualify for and obtain a Manufacturer’s Sales Tax Exemption Permit (MSEP).
The exemptions cover purchases of machinery and equipment, energy and tangible personal property used in design, development and the manufacturing operation at the manufacturing site.
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Five-year Ad Valorem Tax Exemption
A qualifying manufacturing company can abate ad valorem taxes upon new, expanded or acquired manufacturing facilities and equipment for a period of five years. This incentive is available for manufacturing, research and development, warehouse and distribution, certain computer/data processing services, refinery and aircraft repair.
Freeport Inventory Benefits
Exempts from taxation goods, wares and merchandise that come from outside the state and leave the state within nine months if such goods, wares and merchandise are held for assembly, storage, manufacturing, processing or fabricating purposes within the state.
Customized Employee Training
Every business is different. That’s why we have flexible programs to meet your needs. Whether you’re a new or expanding company in our state, our nationally acclaimed Training for Industry Program (TIP) can help you create the quality workforce you need to be successful, all at little or no cost to you. TIP is delivered through Oklahoma’s system of 59 technology center campuses across the state. Some of the services we provide under TIP include job analysis, training needs assessment, pre-employment training, pre-production training, post-production training, instructional materials and development, and more.
Additional Benefits
Grant Opportunities for Locating and Expanding Businesses
Grants of up to $1,000,000 are available for infrastructure financing to Oklahoma communities to assist new business locations or expansions. Companies must pay at least 110% of the average county wage for all new jobs. At least 51% of the new jobs must be made available to low- and moderate-income persons.
New Market Tax Credits
To spur private investment in low-income urban and rural communities, investors receive a 39 percent federal tax credit.
Foreign Trade Zones (FTZs)
The benefits of operating within a designated site licensed by the Foreign Trade Zones Board are many. At the very least, an FTZ can help you defer paying duties. More often, the company pays lower costs, not only to U.S. Customs, but to its bank, insurance company and other vendors.
Industrial Access Road Assistance
Designed to aid local industrial development efforts by funding, within practical limitations, access facilities connecting a specific industry or industrial area directly to the state or local road system.
Your Site Selection Experts
Contact us today for a confidential, no-cost incentives analysis for your project. Call the Oklahoma Team at 800-588-5959.
Martin Roberts
Christopher Suttle
