Okla. Stat. tit. 68, § 68-2357.4

Employees

A. Except as otherwise provided in subsection F of Section 3658

of this title and in subsections J and K of this section, for

taxable years beginning after December 31, 1987, there shall be

allowed a credit against the tax imposed by Section 2355 of this

title for:

1. Investment in qualified depreciable property placed in

service during those years for use in a manufacturing operation, as

defined in Section 1352 of this title, which has received a

manufacturer exemption permit pursuant to the provisions of Section

1359.2 of this title or a qualified aircraft maintenance or

manufacturing facility as defined in Section 1357 of this title in

this state or a qualified web search portal as defined in Section

1357 of this title; or

2. A net increase in the number of full-time-equivalent

employees in a manufacturing operation, as defined in Section 1352

of this title, which has received a manufacturer exemption permit

pursuant to the provisions of Section 1359.2 of this title or a

qualified aircraft maintenance or manufacturing facility defined in

Section 1357 of this title in this state or in a qualified web

search portal as defined in Section 1357 of this title including

employees engaged in support services.

B. Except as otherwise provided in subsection F of Section 3658

of this title and in subsections J and K of this section, for

taxable years beginning after December 31, 1998, there shall be

allowed a credit against the tax imposed by Section 2355 of this

title for:

1. Investment in qualified depreciable property with a total

cost equal to or greater than Forty Million Dollars ($40,000,000.00)

within three (3) years from the date of initial qualifying

expenditure and placed in service in this state during those years

for use in the manufacture of products described by any Industry

Number contained in Division D of Part I of the Standard Industrial

Classification (SIC) Manual, latest revision; or

2. A net increase in the number of full-time-equivalent

employees in this state engaged in the manufacture of any goods

identified by any Industry Number contained in Division D of Part I

of the Standard Industrial Classification (SIC) Manual, latest

revision, if the total cost of qualified depreciable property placed

in service by the business entity within the state equals or exceeds

Forty Million Dollars ($40,000,000.00) within three (3) years from

the date of initial qualifying expenditure.

C. The business entity may claim the credit authorized by

subsection B of this section for expenditures incurred or for a net

increase in the number of full-time-equivalent employees after the

business entity provides proof satisfactory to the Oklahoma Tax

Oklahoma Statutes - Title 68. Revenue and Taxation Page 767

Commission that the conditions imposed pursuant to paragraph 1 or

paragraph 2 of subsection B of this section have been satisfied.

D. If a business entity fails to expend the amount required by

paragraph 1 or paragraph 2 of subsection B of this section within

the time required, the business entity may not claim the credit

authorized by subsection B of this section but shall be allowed to

claim a credit pursuant to subsection A of this section if the

requirements of subsection A of this section are met with respect to

the investment in qualified depreciable property or net increase in

the number of full-time-equivalent employees.

E. The credit provided for in subsection A of this section, if

based upon investment in qualified depreciable property, shall not

be allowed unless the investment in qualified depreciable property

is at least Fifty Thousand Dollars ($50,000.00). The credit

provided for in subsection A or B of this section shall not be

allowed if the applicable investment is the direct cause of a

decrease in the number of full-time-equivalent employees. Qualified

property shall be limited to machinery, fixtures, equipment,
ty, shall not

be allowed unless the investment in qualified depreciable property

is at least Fifty Thousand Dollars ($50,000.00). The credit

provided for in subsection A or B of this section shall not be

allowed if the applicable investment is the direct cause of a

decrease in the number of full-time-equivalent employees. Qualified

property shall be limited to machinery, fixtures, equipment,

buildings or substantial improvements thereto, placed in service in

this state during the taxable year. The taxable years for which the

credit may be allowed if based upon investment in qualified

depreciable property shall be measured from the year in which the

qualified property is placed in service. If the credit provided for

in subsection A or B of this section is calculated on the basis of

the cost of the qualified property, the credit shall be allowed in

each of the four (4) subsequent years. If the qualified property on

which a credit has previously been allowed is acquired from a

related party, the date such property is placed in service by the

transferor shall be considered to be the date such property is

placed in service by the transferee, for purposes of determining the

aggregate number of years for which credit may be allowed.

F. The credit provided for in subsection A or B of this

section, if based upon an increase in the number of full-time-

equivalent employees, shall be allowed in each of the four (4)

subsequent years only if the level of new employees is maintained in

the subsequent year. In calculating the credit by the number of new

employees, only those employees whose paid wages or salary were at

least Seven Thousand Dollars ($7,000.00) during each year the credit

is claimed shall be included in the calculation. Provided, that the

first year a credit is claimed for a new employee, such employee may

be included in the calculation notwithstanding paid wages of less

than Seven Thousand Dollars ($7,000.00) if the employee was hired in

the last three quarters of the tax year, has wages or salary which

will result in annual paid wages in excess of Seven Thousand Dollars

($7,000.00) and the taxpayer submits an affidavit stating that the

employee's position will be retained in the following tax year and

will result in the payment of wages in excess of Seven Thousand

Oklahoma Statutes - Title 68. Revenue and Taxation Page 768

Dollars ($7,000.00). The number of new employees shall be

determined by comparing the monthly average number of full-time

employees subject to Oklahoma income tax withholding for the final

quarter of the taxable year with the corresponding period of the

prior taxable year, as substantiated by such reports as may be

required by the Tax Commission.

G. The credit allowed by subsection A of this section shall be

the greater amount of either:

1. One percent (1%) of the cost of the qualified property in

the year the property is placed in service; or

2. Five Hundred Dollars ($500.00) for each new employee. No

credit shall be allowed in any taxable year for a net increase in

the number of full-time-equivalent employees if such increase is a

result of an investment in qualified depreciable property for which

an income tax credit has been allowed as authorized by this section.

H. The credit allowed by subsection B of this section shall be

the greater amount of either:

1. Two percent (2%) of the cost of the qualified property in

the year the property is placed in service; or

2. One Thousand Dollars ($1,000.00) for each new employee.

No credit shall be allowed in any taxable year for a net

increase in the number of full-time-equivalent employees if such

increase is a result of an investment in qualified depreciable

property for which an income tax credit has been allowed as

authorized by this section.

I. Except as provided by subsection G of Section 3658 of this

title, any credits allowed but not used in any taxable year may be
it shall be allowed in any taxable year for a net

increase in the number of full-time-equivalent employees if such

increase is a result of an investment in qualified depreciable

property for which an income tax credit has been allowed as

authorized by this section.

I. Except as provided by subsection G of Section 3658 of this

title, any credits allowed but not used in any taxable year may be

carried over in order as follows:

1. To each of the four (4) years following the year of

qualification;

2. To the extent not used in those years in order to each of

the fifteen (15) years following the initial five-year period;

3. If a C corporation that otherwise qualified for the credits

under subsection A of this section subsequently changes its

operating status to that of a pass-through entity which is being

treated as the same entity for federal tax purposes, the credits

will continue to be available as if the pass-through entity had

originally qualified for the credits subject to the limitations of

this section;

4. To the extent not used in paragraphs 1 and 2 of this

subsection, such credits from qualified depreciable property placed

in service on or after January 1, 2000, may be utilized in any

subsequent tax years after the initial twenty-year period; and

5. Provided, for tax years beginning on or after January 1,

2016, and ending on or before December 31, 2018, the amount of

credits available as an offset in a taxable year shall be limited to

Oklahoma Statutes - Title 68. Revenue and Taxation Page 769

the percentage calculated by the Tax Commission pursuant to the

provisions of subsection L of this section.

J. No credit otherwise authorized by the provisions of this

section may be claimed for any event, transaction, investment,

expenditure or other act occurring on or after July 1, 2010, for

which the credit would otherwise be allowable until the provisions

of this subsection shall cease to be operative on July 1, 2012.

Beginning July 1, 2012, the credit authorized by this section may be

claimed for any event, transaction, investment, expenditure or other

act occurring on or after July 1, 2010, according to the provisions

of this section; provided, credits accrued during the period from

July 1, 2010, through June 30, 2012, shall be limited to a period of

two (2) taxable years. The credit shall be limited in each taxable

year to fifty percent (50%) of the total amount of the accrued

credit. Any tax credits which accrue during the period of July 1,

2010, through June 30, 2012, may not be claimed for any period prior

to the taxable year beginning January 1, 2012. No credits which

accrue during the period of July 1, 2010, through June 30, 2012, may

be used to file an amended tax return for any taxable year prior to

the taxable year beginning January 1, 2012.

K. Beginning January 1, 2017, except with respect to tax

credits allowed from investment or job creation occurring prior to

January 1, 2017, the credits authorized by this section shall not be

allowed for investment or job creation in electric power generation

by means of wind as described by the North American Industry

Classification System, No. 221119.

L. For tax years beginning on or after January 1, 2016, and

ending on or before December 31, 2018, the total amount of credits

authorized by this section used to offset tax shall be adjusted

annually to limit the annual amount of credits to Twenty-five

Million Dollars ($25,000,000.00). The Tax Commission shall annually

calculate and publish a percentage by which the credits authorized

by this section shall be reduced so the total amount of credits used

to offset tax does not exceed Twenty-five Million Dollars

($25,000,000.00) per year. The formula to be used for the

percentage adjustment shall be Twenty-five Million Dollars

($25,000,000.00) divided by the credits used to offset tax in the

second preceding year.
late and publish a percentage by which the credits authorized

by this section shall be reduced so the total amount of credits used

to offset tax does not exceed Twenty-five Million Dollars

($25,000,000.00) per year. The formula to be used for the

percentage adjustment shall be Twenty-five Million Dollars

($25,000,000.00) divided by the credits used to offset tax in the

second preceding year.

M. Pursuant to subsection L of this section, in the event the

total tax credits authorized by this section exceed Twenty-five

Million Dollars ($25,000,000.00) in any calendar year, the Tax

Commission shall permit any excess over Twenty-five Million Dollars

($25,000,000.00) but shall factor such excess into the percentage

adjustment formula for subsequent years.