Okla. Stat. tit. 68, § 68-2357.8A

Recaptured credit amount - Tax increase.

A. The provisions of this section shall only be applicable to

investments in qualified venture capital companies made on or after

June 7, 2006, pursuant to Section 2357.7 of this title. As used in

this section, “recapture event” means that with respect to an

investment in an Oklahoma business venture by a qualified venture

capital company:

1. The Oklahoma business venture fails to expend at least fifty

percent (50%) of the proceeds of qualified investments for

acquisition of tangible or intangible assets to be used in the

active conduct of the trade or business of the Oklahoma business

venture or for working capital for the active conduct of such trade

or business within eighteen (18) months after the investment is made

or within an extension of such period as provided in Section 2357.7

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of this title. For purposes of this paragraph, “working capital”

shall not include consulting, brokerage or transaction fees;

2. The investment in the Oklahoma business venture is

transferred, withdrawn or otherwise returned within five (5) years;

provided, a “recapture event” shall not include the transfer,

withdrawal or return of an investment as a result of a “market-based

liquidity event”. As used in Section 2351 et seq. of this title, a

“market-based liquidity event” means that an Oklahoma business

venture:

a. sells all or substantially all of its assets to, or is

acquired by share acquisition, share exchange, merger,

consolidation or other similar transaction by another

person or entity other than a person or entity

controlled by a person that made an investment in the

qualified venture capital company that provided funds

for use by the Oklahoma business venture,

b. conducts an initial public offering of a class of its

equity securities pursuant to the requirements of the

United States Securities Act of 1933 or other

applicable federal law governing the sale of

securities in interstate commerce,

c. makes an amortization payment under the terms of a

debt instrument, or

d. repays indebtedness from net income as determined in

accordance with generally accepted accounting

principles or proceeds of the sale of assets in the

ordinary course of business; or

3. The Oklahoma Tax Commission finds that the investment does

not meet the requirements of Section 2357.7 of this title.

B. If a recapture event occurs with respect to an investment

for which a credit authorized by Section 2357.7 of this title was

claimed, the tax imposed pursuant to the applicable provisions of

Title 36 of the Oklahoma Statutes or this title shall be increased

to the extent of the recaptured credit amount.

C. For purposes of this section, the recapture amount shall be

equal to the sum of:

1. The aggregate decrease in the credits previously allowed to

the taxpayer pursuant to Section 2357.7 of this title for all prior

taxable periods which would have resulted if no credit had been

authorized with respect to the qualified investment; plus

2. Interest at the rate prescribed by Section 217 of this title

on the amount determined pursuant to paragraph 1 of this subsection

for each prior taxable period for the period beginning on the due

date for filing the applicable report or return for the prior

taxable period.

D. The tax for the taxable period shall be increased pursuant

to this section only with respect to credits which were used to

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reduce tax liability. In the case of credits not used to reduce tax

liability, the carryforwards allowed shall be adjusted accordingly.

E. For any transaction that is audited by the Tax Commission

after such credits have been allowed, but which is subsequently

determined to constitute a recapture event, the Tax Commission shall

be required to disallow any and all credits claimed in violation of
duce tax liability. In the case of credits not used to reduce tax

liability, the carryforwards allowed shall be adjusted accordingly.

E. For any transaction that is audited by the Tax Commission

after such credits have been allowed, but which is subsequently

determined to constitute a recapture event, the Tax Commission shall

be required to disallow any and all credits claimed in violation of

the requirements of this section or any other provision of Section

2357.7 or 2357.8 of this title for a period of ten (10) years after

the date as of which any applicable tax report or return utilizing

such credits is filed.

F. The provisions of subsection E of this section shall

supersede any other provision of the Uniform Tax Procedure Code or

any other state tax law that would prohibit the disallowance of such

credits based upon an otherwise applicable statute of limitations.