Okla. Stat. tit. 74, § 74-5064.7: Incentives for inventors and businesses

A. The following incentives shall be available to inventors for

products developed and manufactured in this state and to instate

manufacturers of said products; provided, to qualify for the

incentives, the product shall be patented or have patent pending

pursuant to federal law and shall be registered with the Oklahoma

Center for the Advancement of Science and Technology (OCAST):

1. Royalty earned by an inventor from a product developed and

manufactured in this state shall be exempt from state income tax for

a period of seven (7) years from January 1 of the first year in

which such royalty is received as long as the manufacturer remains

in the state; and

2. An instate manufacturer of a product developed in this state

by an inventor shall be eligible for a tax credit, as provided for

in Section 2357.4 of Title 68 of the Oklahoma Statutes. In addition

such manufacturer may exclude from Oklahoma taxable income, or in

the case of an individual, the Oklahoma adjusted gross income,

sixty-five percent (65%) of the cost of depreciable property

purchased and utilized directly in manufacturing the product. The

maximum exclusion shall not exceed Five Hundred Thousand Dollars

($500,000.00). If the exclusion allowed by this paragraph exceeds

the Oklahoma taxable income, or in the case of an individual, the

Oklahoma adjusted gross income, the amount of the exclusion that is

in excess of such income may be carried forward as an exclusion

against subsequent Oklahoma taxable income or in the case of an

individual, subsequent Oklahoma adjusted gross income, for a period

not to exceed four (4) years. For the purposes of this paragraph,

"depreciable property" means machinery, fixtures, equipment,

buildings, or substantial improvements thereto, placed in service in

this state during the taxable year.

B. The Oklahoma Tax Commission, in conjunction with the

Oklahoma Center for the Advancement of Science and Technology, shall

promulgate rules to implement the provisions of this section.