{"data":{"id":"us-ok/okla.-stat.-tit.-68-68-2357.4","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 68, § 68-2357.4","heading":"Business credit for investment or increase in full-time","body":"Employees\n\nA. Except as otherwise provided in subsection F of Section 3658\n\nof this title and in subsections J and K of this section, for\n\ntaxable years beginning after December 31, 1987, there shall be\n\nallowed a credit against the tax imposed by Section 2355 of this\n\ntitle for:\n\n1. Investment in qualified depreciable property placed in\n\nservice during those years for use in a manufacturing operation, as\n\ndefined in Section 1352 of this title, which has received a\n\nmanufacturer exemption permit pursuant to the provisions of Section\n\n1359.2 of this title or a qualified aircraft maintenance or\n\nmanufacturing facility as defined in Section 1357 of this title in\n\nthis state or a qualified web search portal as defined in Section\n\n1357 of this title; or\n\n2. A net increase in the number of full-time-equivalent\n\nemployees in a manufacturing operation, as defined in Section 1352\n\nof this title, which has received a manufacturer exemption permit\n\npursuant to the provisions of Section 1359.2 of this title or a\n\nqualified aircraft maintenance or manufacturing facility defined in\n\nSection 1357 of this title in this state or in a qualified web\n\nsearch portal as defined in Section 1357 of this title including\n\nemployees engaged in support services.\n\nB. Except as otherwise provided in subsection F of Section 3658\n\nof this title and in subsections J and K of this section, for\n\ntaxable years beginning after December 31, 1998, there shall be\n\nallowed a credit against the tax imposed by Section 2355 of this\n\ntitle for:\n\n1. Investment in qualified depreciable property with a total\n\ncost equal to or greater than Forty Million Dollars ($40,000,000.00)\n\nwithin three (3) years from the date of initial qualifying\n\nexpenditure and placed in service in this state during those years\n\nfor use in the manufacture of products described by any Industry\n\nNumber contained in Division D of Part I of the Standard Industrial\n\nClassification (SIC) Manual, latest revision; or\n\n2. A net increase in the number of full-time-equivalent\n\nemployees in this state engaged in the manufacture of any goods\n\nidentified by any Industry Number contained in Division D of Part I\n\nof the Standard Industrial Classification (SIC) Manual, latest\n\nrevision, if the total cost of qualified depreciable property placed\n\nin service by the business entity within the state equals or exceeds\n\nForty Million Dollars ($40,000,000.00) within three (3) years from\n\nthe date of initial qualifying expenditure.\n\nC. The business entity may claim the credit authorized by\n\nsubsection B of this section for expenditures incurred or for a net\n\nincrease in the number of full-time-equivalent employees after the\n\nbusiness entity provides proof satisfactory to the Oklahoma Tax\n\nCommission that the conditions imposed pursuant to paragraph 1 or\n\nparagraph 2 of subsection B of this section have been satisfied.\n\nD. If a business entity fails to expend the amount required by\n\nparagraph 1 or paragraph 2 of subsection B of this section within\n\nthe time required, the business entity may not claim the credit\n\nauthorized by subsection B of this section but shall be allowed to\n\nclaim a credit pursuant to subsection A of this section if the\n\nrequirements of subsection A of this section are met with respect to\n\nthe investment in qualified depreciable property or net increase in\n\nthe number of full-time-equivalent employees.\n\nE. The credit provided for in subsection A of this section, if\n\nbased upon investment in qualified depreciable property, shall not\n\nbe allowed unless the investment in qualified depreciable property\n\nis at least Fifty Thousand Dollars ($50,000.00). The credit\n\nprovided for in subsection A or B of this section shall not be\n\nallowed if the applicable investment is the direct cause of a\n\ndecrease in the number of full-time-equivalent employees. Qualified\n\nproperty shall be limited to machinery, fixtures, equipment,\nty, shall not\n\nbe allowed unless the investment in qualified depreciable property\n\nis at least Fifty Thousand Dollars ($50,000.00). The credit\n\nprovided for in subsection A or B of this section shall not be\n\nallowed if the applicable investment is the direct cause of a\n\ndecrease in the number of full-time-equivalent employees. Qualified\n\nproperty shall be limited to machinery, fixtures, equipment,\n\nbuildings or substantial improvements thereto, placed in service in\n\nthis state during the taxable year. The taxable years for which the\n\ncredit may be allowed if based upon investment in qualified\n\ndepreciable property shall be measured from the year in which the\n\nqualified property is placed in service. If the credit provided for\n\nin subsection A or B of this section is calculated on the basis of\n\nthe cost of the qualified property, the credit shall be allowed in\n\neach of the four (4) subsequent years. If the qualified property on\n\nwhich a credit has previously been allowed is acquired from a\n\nrelated party, the date such property is placed in service by the\n\ntransferor shall be considered to be the date such property is\n\nplaced in service by the transferee, for purposes of determining the\n\naggregate number of years for which credit may be allowed.\n\nF. The credit provided for in subsection A or B of this\n\nsection, if based upon an increase in the number of full-time-\n\nequivalent employees, shall be allowed in each of the four (4)\n\nsubsequent years only if the level of new employees is maintained in\n\nthe subsequent year. In calculating the credit by the number of new\n\nemployees, only those employees whose paid wages or salary were at\n\nleast Seven Thousand Dollars ($7,000.00) during each year the credit\n\nis claimed shall be included in the calculation. Provided, that the\n\nfirst year a credit is claimed for a new employee, such employee may\n\nbe included in the calculation notwithstanding paid wages of less\n\nthan Seven Thousand Dollars ($7,000.00) if the employee was hired in\n\nthe last three quarters of the tax year, has wages or salary which\n\nwill result in annual paid wages in excess of Seven Thousand Dollars\n\n($7,000.00) and the taxpayer submits an affidavit stating that the\n\nemployee's position will be retained in the following tax year and\n\nwill result in the payment of wages in excess of Seven Thousand\n\nDollars ($7,000.00). The number of new employees shall be\n\ndetermined by comparing the monthly average number of full-time\n\nemployees subject to Oklahoma income tax withholding for the final\n\nquarter of the taxable year with the corresponding period of the\n\nprior taxable year, as substantiated by such reports as may be\n\nrequired by the Tax Commission.\n\nG. The credit allowed by subsection A of this section shall be\n\nthe greater amount of either:\n\n1. One percent (1%) of the cost of the qualified property in\n\nthe year the property is placed in service; or\n\n2. Five Hundred Dollars ($500.00) for each new employee. No\n\ncredit shall be allowed in any taxable year for a net increase in\n\nthe number of full-time-equivalent employees if such increase is a\n\nresult of an investment in qualified depreciable property for which\n\nan income tax credit has been allowed as authorized by this section.\n\nH. The credit allowed by subsection B of this section shall be\n\nthe greater amount of either:\n\n1. Two percent (2%) of the cost of the qualified property in\n\nthe year the property is placed in service; or\n\n2. One Thousand Dollars ($1,000.00) for each new employee.\n\nNo credit shall be allowed in any taxable year for a net\n\nincrease in the number of full-time-equivalent employees if such\n\nincrease is a result of an investment in qualified depreciable\n\nproperty for which an income tax credit has been allowed as\n\nauthorized by this section.\n\nI. Except as provided by subsection G of Section 3658 of this\n\ntitle, any credits allowed but not used in any taxable year may be\nit shall be allowed in any taxable year for a net\n\nincrease in the number of full-time-equivalent employees if such\n\nincrease is a result of an investment in qualified depreciable\n\nproperty for which an income tax credit has been allowed as\n\nauthorized by this section.\n\nI. Except as provided by subsection G of Section 3658 of this\n\ntitle, any credits allowed but not used in any taxable year may be\n\ncarried over in order as follows:\n\n1. To each of the four (4) years following the year of\n\nqualification;\n\n2. To the extent not used in those years in order to each of\n\nthe fifteen (15) years following the initial five-year period;\n\n3. If a C corporation that otherwise qualified for the credits\n\nunder subsection A of this section subsequently changes its\n\noperating status to that of a pass-through entity which is being\n\ntreated as the same entity for federal tax purposes, the credits\n\nwill continue to be available as if the pass-through entity had\n\noriginally qualified for the credits subject to the limitations of\n\nthis section;\n\n4. To the extent not used in paragraphs 1 and 2 of this\n\nsubsection, such credits from qualified depreciable property placed\n\nin service on or after January 1, 2000, may be utilized in any\n\nsubsequent tax years after the initial twenty-year period; and\n\n5. Provided, for tax years beginning on or after January 1,\n\n2016, and ending on or before December 31, 2018, the amount of\n\ncredits available as an offset in a taxable year shall be limited to\n\nthe percentage calculated by the Tax Commission pursuant to the\n\nprovisions of subsection L of this section.\n\nJ. No credit otherwise authorized by the provisions of this\n\nsection may be claimed for any event, transaction, investment,\n\nexpenditure or other act occurring on or after July 1, 2010, for\n\nwhich the credit would otherwise be allowable until the provisions\n\nof this subsection shall cease to be operative on July 1, 2012.\n\nBeginning July 1, 2012, the credit authorized by this section may be\n\nclaimed for any event, transaction, investment, expenditure or other\n\nact occurring on or after July 1, 2010, according to the provisions\n\nof this section; provided, credits accrued during the period from\n\nJuly 1, 2010, through June 30, 2012, shall be limited to a period of\n\ntwo (2) taxable years. The credit shall be limited in each taxable\n\nyear to fifty percent (50%) of the total amount of the accrued\n\ncredit. Any tax credits which accrue during the period of July 1,\n\n2010, through June 30, 2012, may not be claimed for any period prior\n\nto the taxable year beginning January 1, 2012. No credits which\n\naccrue during the period of July 1, 2010, through June 30, 2012, may\n\nbe used to file an amended tax return for any taxable year prior to\n\nthe taxable year beginning January 1, 2012.\n\nK. Beginning January 1, 2017, except with respect to tax\n\ncredits allowed from investment or job creation occurring prior to\n\nJanuary 1, 2017, the credits authorized by this section shall not be\n\nallowed for investment or job creation in electric power generation\n\nby means of wind as described by the North American Industry\n\nClassification System, No. 221119.\n\nL. For tax years beginning on or after January 1, 2016, and\n\nending on or before December 31, 2018, the total amount of credits\n\nauthorized by this section used to offset tax shall be adjusted\n\nannually to limit the annual amount of credits to Twenty-five\n\nMillion Dollars ($25,000,000.00). The Tax Commission shall annually\n\ncalculate and publish a percentage by which the credits authorized\n\nby this section shall be reduced so the total amount of credits used\n\nto offset tax does not exceed Twenty-five Million Dollars\n\n($25,000,000.00) per year. The formula to be used for the\n\npercentage adjustment shall be Twenty-five Million Dollars\n\n($25,000,000.00) divided by the credits used to offset tax in the\n\nsecond preceding year.\nlate and publish a percentage by which the credits authorized\n\nby this section shall be reduced so the total amount of credits used\n\nto offset tax does not exceed Twenty-five Million Dollars\n\n($25,000,000.00) per year. The formula to be used for the\n\npercentage adjustment shall be Twenty-five Million Dollars\n\n($25,000,000.00) divided by the credits used to offset tax in the\n\nsecond preceding year.\n\nM. Pursuant to subsection L of this section, in the event the\n\ntotal tax credits authorized by this section exceed Twenty-five\n\nMillion Dollars ($25,000,000.00) in any calendar year, the Tax\n\nCommission shall permit any excess over Twenty-five Million Dollars\n\n($25,000,000.00) but shall factor such excess into the percentage\n\nadjustment formula for subsequent years.","path":["OK Code","Title 68"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os68.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"af49dbfebc900f0980ea5b8f0850c4844d82d7325585c2f38858ae0ab71ca63c","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-68-68-2357.32a","next":"us-ok/okla.-stat.-tit.-68-68-2357.401"},"notice":"GroundRules: Original legal text. Not legal advice."}