Oklahoma Incentives (continued)

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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.