Oklahoma Incentives and Workforce Development Guide
For a list of Oklahoma economic development agencies that can help with the site selection process, visit our Online Site Seekers’ Guide.
- Quality Jobs (QJ) Incentive Program:
- Successful program that promotes job growth and helps improve a company’s bottom line by injecting cash back into a business as it expands and creates new jobs in Oklahoma. The QJ program provides a cash rebate up to 5% to companies that meet certain thresholds. In addition to requiring health insurance coverage, the thresholds include a requirement to create $2.5 million in payroll within three years and pay an average wage greater than the average county wage or $31,297, whichever is lower. In limited instances, the rebates may increase up to 6% for companies entering a second contract that pays 150% of their first contract or if the company hires veterans and veterans account for when at least 10% of the company’s jobs.
- Small Employer Quality Jobs Program:
- Provides incentive payments to a qualifying small employer. The payments may reach as high as 5% of new taxable payroll and last for up to seven years. Qualifying payroll must be attributable to annual salaries that are at least 110% to 125% of the average cohort wage of small businesses in the county where the jobs are located.
- 21st Century Quality Jobs 10 Year Cash Incentive:
- The first of its kind, this new incentive was created in 2009 to attract knowledge-based companies to Oklahoma through a policy of rewarding businesses with a highly skilled and compensated workforce. For industries that require out-of-state sales in the Quality Jobs Program, this incentive reduces out-of-state sales requirements from 75% to 50%. Additionally, it requires only 10 full-time jobs at an annual wage of the lesser of $94,000 or 300% of the county’s average wage. If a company meets the thresholds and creates high paying jobs, then it will allow a net benefit rate of up to 10% of payroll.
- Foreign Trade Zones:
- U.S. Customs Duty Management Program where manufacturers and distributors located in Foreign Trade Zones—since for Customs purposes, are considered to reside outside the U.S.—benefit from cost savings and flexibility. Businesses engaged in international trade within these Zones benefit from special customs procedures when importing and when warehousing, manufacturing or assembling with imported goods that remain in bond under Customs Control. Subzones may be established for single purpose manufacturing/fabricating and distribution operations. There are four Zones in Oklahoma: Port of Muskogee (FTZ #164) and the Tulsa Port of Catoosa (FTZ #53), which are both on the McClellan Kerr Arkansas River Navigation System, providing rail, barge and truck transportation services from Oklahoma to ports throughout the world; the Port Authority at Will Rogers World Airport of the Greater Oklahoma City Area (FTZ #106), Oklahoma City; and the International Business Park in Durant (FTZ #227).
- 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.
- Oklahoma Quick Action Closing Fund:
- Established in the 1st Session of the 53rd Oklahoma Legislature in House Bill 1953, it can be expended by the Governor for economic development and related infrastructure development to locate a high-impact business project or facility in Oklahoma or retain such a facility in the State. The business making an application must be engaged in a business activity that is eligible for Oklahoma Quality Jobs Program Act incentive payments (68 O.S. § 3603) or in a “basic industry” as set forth in the 21st Century Quality Jobs Incentive Act (68 O.S. § 3913).
- State Small Business Credit Initiative:
- The State of Oklahoma was awarded $13,168,350 by the U.S Treasury for the State Small Business Credit Initiative. The award will be used to make capital investment in new and expanding small businesses in Oklahoma. i2E will manage the funds on behalf of the State of Oklahoma. For more information please contact i2E at (405) 235- 2305 or www.i2e.org.
- Oklahoma Quality Events Program:
- If incremental sales taxes are greater in a community as the result of hosting a quality event, this incentive program allows the Oklahoma Tax Commission to make a payment of no more than $250,000 to the host community for eligible expenses resulting from hosting the Quality Event. “Quality Event” is a meeting of the members for a nationally recognized organization. Additionally, in order to be considered a quality event for the incentive, the site selection process must be a competitive process in which at least one site not located in Oklahoma was considered by the organization. Eligible expenses are those expenses that are:
- Paid by the local government entity from the general revenue fund or a locally imposed tax.
- Paid to either the certified sponsor of the Quality Event or paid to a for-profit or nonprofit entity through the certified sponsor.
- Used for advertising, promoting, organizing or otherwise supporting the Quality Event.
If the host community meets the other statutory requirements, it is eligible to be reimbursed for the eligible expenses from incremental state sales tax revenue collected from a period of up to two days prior to and to two days after the last day of the Quality Event. Additionally, the state sales taxes that are captured for reimbursement must occur no more than 13 miles from the property lines of the primary property for the Quality Event.
- Oklahoma Community Economic Development Pooled Finance:
- Creates a financing incentive that targets job creation and infrastructure development; and a foundation of ensuring Oklahoma’s infrastructure is high quality for attracting and retaining jobs. A $100 million Infrastructure Pool is created for public financing to local governments issued through the Oklahoma Development Finance Authority. The Infrastructure Pool revenue must be used for infrastructure development. Bonds issued from the Infrastructure Pool are financed or repaid from taxes voted on by local community. A $100 million Economic Development Pool is created for public finance to local governments in conjunction with a for-profit entity through ODFA.
The Economic Development Pool shall be used for economic development projects in the state. Debt issued from the Economic Development Pool may be paid from withholdings taxes, and other revenue, at the for-profit entity benefitted by the financing. For debt obligations issued under this act, there is a maximum maturity of 25 years and a maximum coupon rate of 14%. 65% of the net proceeds from both the Infrastructure Pool and the Economic Development Pool shall be used by ODFA for municipalities that do not exceed 300,000 people. The remaining 35% may be used by the ODFA for any eligible local government. Effective September 1, 2010 an evergreen clause permits the renewal of issuing capacity by ODFA.
- Grants of up to $500,000 are available to Oklahoma companies for business expansion, or up to $1 million for new out-of-state companies who are moving their business to Oklahoma and based upon new jobs and leverage. Companies must pay at least 110% of average county wage for all new jobs. At least 51% of the new jobs must be made available to low and moderate-income persons. Tax Increment Financing and local incentives vary by location.
- Oklahoma Film Act:
- The Oklahoma Film Enhancement Rebate Act allows a rebate of up to 37% of qualified expenditures made in Oklahoma that are directly attributable to film, television production, television commercial and theater. Qualifying Expenditures for productions include the cost of construction and operations, photography, sound synchronization, wages and wardrobe, facilities and related services. The minimum budget for the project shall be $50,000 with a minimum of $25,000 spent in Oklahoma. In addition to the rebate, the State of Oklahoma offers a Point-of-Purchase sales tax exemption to qualifying productions on sales tax paid for property or services to be used in productions. The POP Sales Tax Exemption cannot be used in conjunction with the rebate, and there is no minimum budget or expenditure requirement.
- Oklahoma Capital Access Program:
- The Oklahoma Capital Investment Board (OCIB) manages this easy-to-use economic service program that encourages additional business lending activity. It provides a “credit insurance” reserve for Oklahoma banks through a fee matching arrangement for loans enrolled in the program. It gives banks additional resources to finance economic development and community reinvestment activities. For more information visit Oklahoma Capital Investment Board (OCIB) Web site.
- Investment/New Jobs Tax Credit:
- Provides growing manufacturers a significant corporate income 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. The tax credit is equal to 1% of the investment OR $500 per job, whichever is higher. The tax credit is doubled for locations in an Enterprise Zone.
- Quality Jobs and Investment Tax Credits:
- These incentives 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 wage, which is $40,747 for 2013. The incentives also allow a five-year tax credit of 2% per year of investment in qualified new depreciable property.
- Ad Valorem Tax Exemptions:
- Certain new and expanding manufacturers, research and development companies, certain computer services and data processing companies with significant out-of state sales, aircraft repair companies, oil refineries, and certain wind, solar, and other energy generators may be eligible for ad valorem tax exemptions for up to five years. Data processing centers must have out-of-state sales of at least 80%, and may also be eligible based on payroll or capital investment. Threshold requirements are an investment of at least $250,000 and an addition of $250,000 in annual payroll in counties with a population of 75,000 or less. If the company is located in a larger county, an additional annualized payroll of at least $1,000,000 is required. Certain distribution firms have special requirements to qualify for ad valorem exemptions:
- Must have construction with a minimum capital investment of $5,000,000
- AND Employ at least 100 full-time employees
- AND Pay wages or salaries of at least 175% of the federally minimum wage (now $7.25)
Firms must make an annual application to the County Assessor by March 15th of the year in which the exemption is requested.
- Alternative Energy Sources Tax Credits:
- Oklahoma encourages alternative, zero-emission fuel production by providing tax credits to producers of electricity utilizing such sources and to small wind turbine manufacturers. Tax credits accrue and may be claimed beginning January 1, 2011. Producers may receive 75 one-hundredths of one cent per kilowatt-hour. Credits may be earned for 10 years once production begins, and earned credits may be carried forward 10 years. Non-taxable electric producers may transfer the credits.
Small wind turbine manufacturers may earn a credit of $25 per square foot of rotor swept area starting in 2003. The credits are freely transferable and may be carried forward 10 years.
- Sales Tax Refunds on Construction Materials:
- This incentive is available on construction materials for certain manufacturers and aircraft maintenance repair facilities, on purchases of computers, data processing equipment, telecommunication equipment for certain aircraft facilities, and for purchases of computer services and data processing equipment for qualified computer services or research and development companies.
- Manufacturer’s Sales Tax Exemption:
- This incentive is available to manufacturers that obtain a manufacturer’s sales tax exemption permit. Benefits include tax exemption on the purchase of machinery and equipment, goods consumed in manufacturing process and energy used in the manufacturing process. (68 O.S. §§ 1359, 1359.2 and 1364)
- Sales/Income Tax Credit for Tourism Attraction Projects:
- The Oklahoma Tourism Development Act provides an incentive for qualified new or expanding tourism facilities and attractions. Approved companies are issued a credit against either income tax or sales tax liability that results from expenditures for projects that attract more tourists to Oklahoma. The credit is calculated based on a percentage of the attraction’s development costs. The company and the Director of the Department of Tourism and Recreation must enter into a tourism attraction development agreement with a 10-year term before any credits may be issued.