Okla. Stat. tit. 68, § 68-2357.62

business capital companies.

A. Except as provided in Section 1 of this act, for taxable

years beginning after December 31, 1997, and before January 1, 2012,

there shall be allowed a credit against the tax imposed by Section

2355 or, effective January 1, 2001, Section 2370 of this title or,

effective July 1, 2001, against the tax imposed by Section 624 or

628 of Title 36 of the Oklahoma Statutes, for qualified investment

in qualified small business capital companies. No amount of a

qualified investment made in a qualified small business capital

company which has not been invested in one or more Oklahoma small

business ventures prior to the effective date of the moratorium

provided for in Section 1 of this act shall be eligible for any

credit otherwise authorized pursuant to this section. No qualified

investment made in a qualified small business capital company or

qualified investment made by a qualified small business capital

company in one or more Oklahoma small business ventures during the

period of the moratorium pursuant to Section 1 of this act shall be

eligible for any credit otherwise authorized pursuant to this

section.

B. The credit provided for in subsection A of this section

shall be twenty percent (20%) of the qualified investment in

qualified small business capital companies which is subsequently

invested in an Oklahoma small business venture by the qualified

venture capital company and may only be claimed for a taxable year

during which the qualified small business capital company makes the

qualified investment in an Oklahoma small business venture. The

credit shall be allowed for the amount of the qualified investment

in an Oklahoma small business venture if the funds are used in

pursuit of a legitimate business purpose of the Oklahoma small

business venture consistent with its organizational instrument,

bylaws or other agreement responsible for the governance of the

small business venture. The qualified small business capital

company shall issue such reports as the Oklahoma Tax Commission may

require attributing the source of funds of each investment it makes

in an Oklahoma business venture. If the tax credit exceeds the

amount of taxes due or if there are no state taxes due of the

taxpayer, the amount of the claim not used as an offset against the

taxes of a taxable year may be carried forward for a period not to

exceed three (3) taxable years.

C. No taxpayer may claim the credit provided for in this

section for qualified investments in qualified small business

capital companies made prior to January 1, 1998.

D. No taxpayer may claim the credit provided for in this

section if the capital provided by a qualified small business

capital company is used by an Oklahoma small business venture for

the acquisition of any other legal entity.

Oklahoma Statutes - Title 68. Revenue and Taxation Page 836

E. No financial lending institution shall be eligible to claim

the credit provided for in this section except with respect to

qualified investments in a qualified small business capital company.

F. No taxpayer may claim the credit authorized by this section

for the same qualified investment for which any credit is claimed

pursuant to either Section 2357.73 or 2357.74 of this title.

G. If a pass-through entity is entitled to a credit under this

section, the pass-through entity shall allocate such credit to one

or more of the shareholders, partners or members of the pass-through

entity; provided, the total of all credits allocated shall not

exceed the amount of the credit to which the pass-through entity is

entitled. The credit may also be claimed for funds borrowed by the

pass-through entity to make a qualified investment if a shareholder,

partner or member to whom the credit is allocated has an unlimited

and continuing legal obligation to repay the borrowed funds but the

allocation may not exceed such shareholder’s, partner’s or member’s
amount of the credit to which the pass-through entity is

entitled. The credit may also be claimed for funds borrowed by the

pass-through entity to make a qualified investment if a shareholder,

partner or member to whom the credit is allocated has an unlimited

and continuing legal obligation to repay the borrowed funds but the

allocation may not exceed such shareholder’s, partner’s or member’s

pro-rata equity share of the pass-through entity even if the

taxpayer’s legal obligation to repay the borrowed funds is in excess

of such pro-rata share of such borrowed funds. For purposes of the

Small Business Capital Formation Incentive Act, “pass-through

entity” means a corporation that for the applicable tax years is

treated as an S corporation under the Internal Revenue Code, general

partnership, limited partnership, limited liability partnership,

trust, or limited liability company that for the applicable tax year

is not taxed as a corporation for federal income tax purposes.