Oklahoma § 68-3904 - Incentive payments

§ 68-3904. Incentive payments

A. An establishment which meets the qualifications specified in

the Small Employer Quality Jobs Incentive Act may receive quarterly

incentive payments for a seven-year period from the Oklahoma Tax

Commission pursuant to the provisions of the Small Employer Quality

Jobs Incentive Act in an amount equal to the net benefit rate

multiplied by the actual gross taxable payroll of new direct jobs as

verified by the Tax Commission.

B. In order to receive incentive payments, an establishment

shall apply to the Oklahoma Department of Commerce. The application

Oklahoma Statutes - Title 68. Revenue and Taxation

shall be on a form prescribed by the Department and shall contain

such information as may be required by the Department to determine

if the applicant is qualified. The establishment may apply for an

effective date for a project, which shall not be more than twelve

(12) months from the date the application is submitted to the

Department.

C. Before approving an application for incentive payments, the

Department must first determine that the applicant meets the

following requirements:

1. Be engaged in a basic industry;

2. Has no more than five hundred full-time employees in this

state on the date of application nor an average of more than five

hundred full-time employees in this state during the four calendar

quarters immediately preceding the date of application;

3. Has a projected minimum employment, as determined by the

Department, of new direct jobs within twelve (12) months of the date

of application, or after July 1, 2011, within twenty-four (24)

months of the date of application, as follows:

a.

if the establishment is located in a municipality with

a population less than three thousand five hundred

(3,500) persons, as determined by the Department of

Commerce based on the most recent U.S. Department of

Commerce data, or if the establishment is located in

an unincorporated area and the largest municipality

within twenty (20) miles of the establishment is such

a municipality, new direct jobs equal to the greater

of five (5) jobs or five percent (5%) of the company's

full-time employment at the date of application,

b.

if the establishment is located in a municipality with

a population of three thousand five hundred (3,500)

persons or more but less than seven thousand (7,000)

persons, as determined by the Department of Commerce

based on the most recent U.S. Department of Commerce

data, or if the establishment is located in an

unincorporated area and the largest municipality

within twenty (20) miles of the establishment is such

a municipality, new direct jobs equal to the greater

of ten (10) jobs or seven and one-half percent (7.5%)

of the company's full-time employment at the date of

the application, and

c.

if the establishment is located in a municipality with

a population of seven thousand (7,000) persons or

more, as determined by the Department of Commerce

based on the most recent U.S. Department of Commerce

data, or if the establishment is located in an

unincorporated area and the largest municipality

within twenty (20) miles of the establishment is such

Oklahoma Statutes - Title 68. Revenue and Taxation

a municipality, new direct jobs equal to the greater

of fifteen (15) jobs or ten percent (10%) of the

company's full-time employment at the date of

application.

Provided, for an establishment engaged in software publishing as

defined or classified in the NAICS Manual under Industry Group No.

5112, data processing, hosting and related services as defined or

classified in the NAICS Manual under Industry Group No. 5182,

computer systems design and related services as defined or

classified in the NAICS Manual under Industry Group No. 5415,

scientific research and development services as defined or

classified in the NAICS Manual under Industry Group No. 5417,

medical and diagnostic laboratories as defined or classified in the

NAICS Manual under Industry Group No. 6215 or testing laboratories

as defined or classified in the NAICS Manual under U.S. Industry No.

541380, the projected minimum employment requirements of this

paragraph must be achieved within thirty-six (36) months of the date

of application;

4. Has or will have within twelve (12) months of the date of

application, or after July 1, 2011, within twenty-four (24) months

of the date of application, as determined by the Department, sales

of at least thirty-five percent (35%) for the first two (2) years

and subsequently sixty percent (60%) of its total sales to out-ofstate customers or buyers, to in-state customers or buyers if the

product or service is resold by the purchaser to an out-of-state

customer or buyer for ultimate use, or to the federal government,

except that:

a.

those establishments in the NAICS Manual under the

U.S. Industry No. 541710 or 541380 are excused from

the out-of-state sales requirement,

b.

warehouses that serve as distribution centers for

retail or wholesale businesses shall be required to

distribute forty percent (40%) of inventory to out-ofstate locations, and

c.

adjustment and collection services activities defined

or classified in the NAICS Manual under U.S. Industry

No. 561440 shall be required to have seventy-five

percent (75%) of loans to be serviced made by out-ofstate debtors;

5. Will pay the individuals it employs in new direct jobs an

average annualized wage which equals or exceeds:

a.

one hundred twenty-five percent (125%) of the average

county wage of small employers located in that county

as that percentage is determined by the Department of

Commerce based on the most recent wage and employment

data from the Oklahoma Employment Security Commission

for the county in which the new direct jobs are

Oklahoma Statutes - Title 68. Revenue and Taxation

located. For purposes of this subparagraph, health

care premiums paid by the applicant for individuals in

new direct jobs shall be included in the annualized

wage, or

b.

one hundred ten percent (110%) of the average county

wage of small employers located in that county as that

percentage is determined by the Department of Commerce

based upon the most recent wage and employment data

from the Oklahoma Employment Security Commission for

the county in which the new direct jobs are located.

For purposes of this subparagraph, health care

premiums paid by the applicant for individuals in new

direct jobs shall not be included in the annualized

wage, or

c.

one hundred percent (100%) of the average county wage,

excluding health care premiums paid by the applicant

for individuals in new direct jobs if the county in

which the new jobs are located has:

(1) according to the most recent annual determination

by the Oklahoma Employment Security Commission, a

county unemployment rate more than ten percent

(10%) higher than the state unemployment rate,

and

(2) according to the most recent United States Census

Bureau Data, a county personal poverty rate above

fifteen percent (15%);

6. Has a basic health benefit plan which, as determined by the

Department, meets the elements established under divisions (1)

through (7) of subparagraph b of paragraph 1 of subsection A of

Section 3603 of this title and which will be offered to individuals

within twelve (12) months of employment in a new direct job;

7. Has not received incentive payments under the Oklahoma

Quality Jobs Program Act, the Saving Quality Jobs Act, or the Former

Military Facility Development Act; and

8. Is not qualified for approval of an application for

incentive payments under the Oklahoma Quality Jobs Program Act, the

Saving Quality Jobs Act, or the Former Military Facility Development

Act.

D. The Oklahoma Department of Commerce shall determine if an

applicant is qualified to receive the incentive payment. Upon

qualifying the applicant, the Department shall notify the Tax

Commission and shall provide it with a copy of the application, and

approval which shall provide the number of persons employed by the

applicant upon the date of approval and the maximum total incentives

which may be paid to the applicant during the seven-year period.

The Tax Commission may require the qualified establishment to submit

additional information as may be necessary to administer the

Oklahoma Statutes - Title 68. Revenue and Taxation

provisions of the Small Employer Quality Jobs Incentive Act. The

approved establishment shall report to the Tax Commission quarterly

to show its continued eligibility for incentive payments, as

provided in Section 3905 of this title. Establishments may be

audited by the Tax Commission to verify such eligibility. Once the

establishment is approved, an agreement shall be deemed to exist

between the establishment and the State of Oklahoma, requiring

incentive payments to be made for a seven-year period as long as the

establishment retains its eligibility and within the limitations of

the Small Employer Quality Jobs Incentive Act which existed at the

time of such approval. Any establishment which has been approved

for incentive payments prior to July 1, 2002, shall continue to

receive such payments pursuant to the laws as they existed prior to

July 1, 2002, for any period of time of the original five-year

period for such payments remaining after July 1, 2002.

E. For any contract executed by an establishment on or after

August 2, 2018, five percent (5%) of the quarterly incentive payment

amount shall be transferred by the Oklahoma Tax Commission to the

Oklahoma Quick Action Closing Fund.

Added by Laws 1997, c. 419, § 4, eff. Jan. 1, 1998. Amended by Laws

1998, c. 379, § 4, eff. July 1, 1998; Laws 1999, c. 67, § 1, emerg.

eff. April 7, 1999; Laws 2002, c. 308, § 3, eff. July 1, 2002; Laws

2003, c. 377, § 4, emerg. eff. June 4, 2003; Laws 2004, c. 457, § 4,

eff. July 1, 2004; Laws 2005, c. 352, § 3, eff. July 1, 2005; Laws

2006, c. 256, § 1, eff. July 1, 2006; Laws 2007, c. 1, § 67, emerg.

eff. Feb. 22, 2007; Laws 2007, c. 357, § 3, eff. July 1, 2007; Laws

2010, c. 254, § 1, eff. Jan. 1, 2011; Laws 2013, c. 227, § 28, eff.

Nov. 1, 2013; Laws 2018, c. 191, § 1, eff. Nov. 1, 2018; Laws 2019,

c. 25, § 42, emerg. eff. April 4, 2019; Laws 2019, c. 197, § 1, eff.

July 1, 2019.

NOTE: Laws 2006, c. 281, § 35 repealed by Laws 2007, c. 1, § 68,

emerg. eff. Feb. 22, 2007. Laws 2018, c. 144, § 3 repealed by Laws

2019, c. 25, § 43, emerg. eff. April 4, 2019.