Okla. Stat. tit. 68, § 68-2357.63

business ventures in conjunction with investment made by qualified

small business capital company.

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

made in Oklahoma small business ventures in conjunction with

investment in such ventures made by a qualified small business

capital company. No amount of a qualified investment made in

conjunction with investment made by a qualified small business

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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 conjunction with 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 this section shall be twenty

percent (20%) of the qualified investment made in Oklahoma small

business ventures in conjunction with qualified investment in such

ventures made by a qualified small business capital company and

shall be allowed for the taxable year during which the qualified

investment is made in an Oklahoma small business venture. If the

tax credit allowed pursuant to subsection A of this section 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. To qualify for the credit

authorized by this section, a qualified investment shall be:

1. Made by a shareholder, member or partner of a qualified

small business capital company that has made a qualified investment

in an Oklahoma small business venture;

2. Invested in the purchase of equity or near-equity in an

Oklahoma small business venture;

3. Made under the same terms and conditions as the qualified

investment made by the qualified small business capital company; and

4. Limited to the lesser of:

a. two hundred percent (200%) of any qualified investment

by the taxpayer in the qualified small business

capital company, or

b. two hundred percent (200%) of the qualified investment

made by the qualified small business capital company

in the Oklahoma small business venture.

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

section for a qualified investment made prior to January 1, 1998.

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

for the same qualified investment amount for which any credit is

claimed pursuant to either Section 2357.73 or 2357.74 of this title.

E. 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 only be claimed for funds borrowed by the

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

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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
itled. The credit may only be claimed for funds borrowed by the

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

Oklahoma Statutes - Title 68. Revenue and Taxation Page 838

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 amount. For purposes of the Oklahoma 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.