Okla. Stat. tit. 68, § 68-2357.404

employees of vehicle and automotive parts manufacturing companies.

A. As used in this section:

1. "Vehicle manufacturing" and "automotive parts manufacturing"

mean a private or public company first placed in operation in this

state after November 1, 2019, which is engaged in the research,

development, design and manufacture of motor vehicles or automotive

parts manufacturing which may be driven on the avenues of public

access. For purposes of this section, "motor vehicle" does not

include low-speed electric vehicles or motor vehicles manufactured

primarily for off-road use, such as primarily for use on a golf

course;

2. "Compensation" means payments in the form of contract labor

for which the payor is required to provide a Form 1099 to the person

Oklahoma Statutes - Title 68. Revenue and Taxation Page 901

paid, wages subject to withholding tax paid to a part-time employee

or full-time employee, or salary or other remuneration.

Compensation shall not include employer-provided retirement, medical

or health-care benefits, reimbursement for travel, meals, lodging or

any other expense;

3. "Institution" means an institution within The Oklahoma State

System of Higher Education or any other public or private college or

university that is accredited by a national accrediting body;

4. "Qualified employer" means a sole proprietor, general

partnership, limited partnership, limited liability company,

corporation, other legally recognized business entity, or public

entity whose principal business activity involves the vehicle

manufacturing as defined in this section;

5. "Qualified employee" means any person, regardless of the

date of hire, employed in this state by or contracting in this state

with a qualified employer on or after January 1, 2018, who has been

awarded an undergraduate or graduate degree from a qualified program

by an institution, and who was not employed in vehicle manufacturing

in this state immediately preceding employment or contracting with a

qualified employer. Provided, the definition shall not be

interpreted to exclude any person who was employed in vehicle

manufacturing, but not as a full-time engineer, prior to being

awarded an undergraduate or graduate degree from a qualified program

by an institution or any person who has been awarded an

undergraduate or graduate degree from a qualified program by an

institution and is employed by a professional staffing company and

assigned to work in vehicle manufacturing in this state;

6. "Qualified program" means a program that awards an

undergraduate or graduate degree and that has been accredited by the

Engineering Accreditation Commission of the Accreditation Board for

Engineering and Technology (ABET); and

7. "Tuition" means the average annual amount paid by a

qualified employee for enrollment and instruction in a qualified

program. Tuition shall not include the cost of books, fees or room

and board.

B. 1. Except as otherwise provided in subsection E of this

section, for taxable years beginning after December 31, 2018, and

ending before January 1, 2026, a qualified employer shall be allowed

a credit against the tax imposed pursuant to Section 2355 of Title

68 of the Oklahoma Statutes for tuition reimbursed to a qualified

employee.

2. The credit authorized by this subsection may be claimed only

if the qualified employee has been awarded an undergraduate or

graduate degree within one (1) year of commencing employment with

the qualified employer.

3. The credit authorized by this subsection shall be in the

amount of fifty percent (50%) of the tuition reimbursed to a

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qualified employee for the first through fourth years of employment.

In no event shall this credit exceed fifty percent (50%) of the

average annual amount paid by a qualified employee for enrollment

and instruction in a qualified program at a public institution in

Oklahoma.
mount of fifty percent (50%) of the tuition reimbursed to a

Oklahoma Statutes - Title 68. Revenue and Taxation Page 902

qualified employee for the first through fourth years of employment.

In no event shall this credit exceed fifty percent (50%) of the

average annual amount paid by a qualified employee for enrollment

and instruction in a qualified program at a public institution in

Oklahoma.

4. The credit authorized by this subsection shall not be used

to reduce the tax liability of the qualified employer to less than

zero (0).

5. No credit authorized by this subsection shall be claimed

after the fourth year of employment.

C. 1. Except as otherwise provided in subsection E of this

section, for taxable years beginning after December 31, 2018, and

ending before January 1, 2026, a qualified employer shall be allowed

a credit against the tax imposed pursuant to Section 2355 of Title

68 of the Oklahoma Statutes for compensation paid to a qualified

employee.

2. The credit authorized by this subsection shall be in the

amount of:

a. ten percent (10%) of the compensation paid for the

first through fifth years of employment in vehicle

manufacturing if the qualified employee graduated from

an institution located in this state, or

b. five percent (5%) of the compensation paid for the

first through fifth years of employment in vehicle

manufacturing if the qualified employee graduated from

an institution located outside this state.

3. The credit authorized by this subsection shall not exceed

Twelve Thousand Five Hundred Dollars ($12,500.00) for each qualified

employee annually.

4. The credit authorized by this subsection shall not be used

to reduce the tax liability of the qualified employer to less than

zero (0).

5. No credit authorized pursuant to this subsection shall be

claimed after the fifth year of employment.

D. 1. Except as otherwise provided in subsection F of this

section, for taxable years beginning after December 31, 2018, and

ending before January 1, 2026, a qualified employee shall be allowed

a credit against the tax imposed pursuant to Section 2355 of Title

68 of the Oklahoma Statutes of up to Five Thousand Dollars

($5,000.00) per year for a period of time not to exceed five (5)

years.

2. The credit authorized by this subsection shall not be used

to reduce the tax liability of the taxpayer to less than zero (0).

3. Any credit claimed, but not used, may be carried over, in

order, to each of the five (5) subsequent taxable years.

E. 1. For any tax year during which the credit is allowed, the

total amount of credits authorized by subsections B and C of this

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section used to offset tax shall be adjusted annually to limit the

annual amount of credits to Three Million Dollars ($3,000,000.00).

The Tax Commission shall annually calculate and publish a percentage

by which the credits authorized by subsections B and C of this

section shall be reduced so the total amount of credits used to

offset tax does not exceed Three Million Dollars ($3,000,000.00) per

year. The formula to be used for the percentage adjustment shall be

Three Million Dollars ($3,000,000.00) divided by the credits claimed

in the second preceding year.

2. Pursuant to paragraph 1 of this subsection, in the event the

total tax credits authorized by subsections B and C of this section

exceed Three Million Dollars ($3,000,000.00) in any tax year, the

Tax Commission shall permit any excess over Three Million Dollars

($3,000,000.00), but shall factor such excess into the percentage

adjustment formula for subsequent years.

F. 1. For any tax year during which the credit is allowed, the

total amount of credits authorized by subsection D of this section

used to offset tax shall be adjusted annually to limit the annual

amount of credits to Two Million Dollars ($2,000,000.00). The Tax

Commission shall annually calculate and publish a percentage by
excess into the percentage

adjustment formula for subsequent years.

F. 1. For any tax year during which the credit is allowed, the

total amount of credits authorized by subsection D of this section

used to offset tax shall be adjusted annually to limit the annual

amount of credits to Two Million Dollars ($2,000,000.00). The Tax

Commission shall annually calculate and publish a percentage by

which the credits authorized by subsection D of this section shall

be reduced so the total amount of credits used to offset tax does

not exceed Two Million Dollars ($2,000,000.00) per year. The

formula to be used for the percentage adjustment shall be Two

Million Dollars ($2,000,000.00) divided by the credits claimed in

the second preceding year.

2. Pursuant to paragraph 1 of this subsection, in the event the

total tax credits authorized by subsection D of this section exceed

Two Million Dollars ($2,000,000.00) in any tax year, the Tax

Commission shall permit any excess over Two Million Dollars

($2,000,000.00), but shall factor such excess into the percentage

adjustment formula for subsequent years.