Small business incubators help accelerate the success and development of startups. By providing entrepreneurs with an array of targeted resources, services and professional advice, incubators are helping foster the next wave of Oklahoma success stories in Oklahoma.
The Role of Small Business Incubators
Business incubators nurture the development of entrepreneurial companies, helping them survive and grow during the startup period, when they are most vulnerable. Common goals of incubation programs include: creating jobs in a community, enhancing a community’s entrepreneurial climate, retaining businesses in a community, building or accelerating growth in a local industry and diversifying local economies.
What Startups Fit in an Incubator?
Business incubators foster innovation, developing products and services that enhance global communities. While early incubators supported diverse sectors, including technology and light industry, newer programs specialize in areas like retail, food processing, medical technology and software. Additionally, incubators now focus on supporting microenterprises, women and minority-owned businesses, environmental projects and telecommunications.
Business Benefits
The Oklahoma Small Business Incubators Incentives Act enables the tenants of a certified incubator facility to be exempt from state tax liability on income earned as a result of occupancy for up to five years. In 2001, the Legislature amended the act to extend the tenant’s tax exemption from five to 10 years. When they qualify, the exemption remains in effect after the tenant is no longer an incubator occupant.
Find an Incubator
Small business incubators are located throughout the state. The Oklahoma Department of Commerce certifies incubators and provides a directory.
Information for Incubators
We certify incubators to assure they meet certain standards of excellence. To certify your business incubator, contact Cathy Curtis at cathy.curtis@okcommerce.gov or 405-815-5262.
Oklahoma’s Incubator News
About the Oklahoma Small Business Incubators Incentives Act
In 1988, the Oklahoma Legislature passed the Oklahoma Small Business Incubators Incentives Act. The Act enables the tenants of a certified incubator facility to be exempt from state tax liability on income earned as a result of occupancy for up to five years. In 2001, the Legislature amended “the Act” to extend the tenant’s tax exemption from five to 10 years. The exemption remains in effect after the tenant has graduated from an incubator. For tax years starting before January 1, 2020, in order to qualify for the tax exemption from the sixth through the 10th year, the tenant must make at least 75 percent of its gross sales to out-of-state buyers, to buyers located within the state if the product or service is resold to an out-of-state customer, or to the federal government.
For tax years starting after January 1, 2020, the requirement for the sixth through the 10th year is not required. The exemption will be in effect for ten years as long as the tenant graduates from a certified incubator.
Since the inception of the Act, the State of Oklahoma has benefited from increased revenues and increases in the number of start-up and expanding small businesses. These businesses have created jobs and enhanced economic activity in the Oklahoma communities in which they are located.
About Oklahoma’s Small Business Incubator Program
Oklahoma’s 1988 Small Business Incubators Incentives Act provides state tax exemptions for incubator tenants. Initially, this exemption lasted five years, but a 2001 amendment extended it to 10. From years six to ten (prior to 2021), tenants needed to generate at least 75% of their sales out-of-state, to in-state resellers exporting out-of-state, or to the federal government. This legislation has boosted Oklahoma’s revenue and fostered startup growth, creating jobs and stimulating local economies.
The Roles of Commerce with Incubators
The role of the Oklahoma Department of Commerce in the incubator process is to certify the incubators pursuant to O.S. Title 74 Section 5071-79. It is the responsibility of the incubator owner to hire managers to manage and market their incubators and provide business services 2 to their tenants.
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