2011 Oklahoma Incentives and Tax Guide Last Updated: October 29, 2010 2011 Oklahoma Incentives and Tax Guide For further information, please contact: Oklahoma’s Fast Forward Team E-mail: [email protected] Phone: (800) 588-5959 www.OKcommerce.gov/incentives Oklahoma Department of Commerce 900 N Stiles Ave. Oklahoma City, OK 73104 Last Updated: October 29, 2010 Disclaimer: The materials contained in this document have been prepared by the Oklahoma Department of Commerce for informational purposes only and do not constitute legal or tax advice. This information is subject to change based on judicial interpretation and legislative action. The application of the information is subject to your unique facts and circumstances. YOU SHOULD NOT ACT UPON ANY INFORMATION CONTAINED IN THESE MATERIALS WITHOUT SEEKING YOUR OWN PROFESSIONAL LEGAL AND TAX ADVICE. Page 1 of 104 2011 Oklahoma Incentives and Tax Guide Last Updated: October 29, 2010 What's New in the 2011 Oklahoma Business Incentives and Tax Information Guide ................................................................................. 9 I. Major Property Tax and Financial Incentives ..................................... 11 A. Cash Payment Programs ................................................... 11 1. The Oklahoma Quality Jobs Program ................................ 11 2. 5% Areas for Oklahoma Quality Jobs Program ................. 17 5% Qualifying Area Map ....................................................... 18 3. Small Employer Quality Jobs Program ............................ 19 4. The 21st Century Oklahoma Quality Jobs Program ......... 24 5. Quality Jobs Program- PrimeWIN .................................... 30 B. Oklahoma Quality Events Program ................................. 33 C. Oklahoma Community Economic Development Pooled Finance ................................................................................. 35 D. Ad Valorem Tax Exemptions ............................................ 36 1. State Decision .................................................................... 36 2. Exempt Inventory ............................................................. 37 3. Aircraft Manufacturers Exemption License ..................... 38 4. Local Incentive ................................................................. 38 II. Income Tax Credits and Exemptions ............................................... 40 A. For Business ..................................................................... 40 1. The Investment / New Jobs Income Tax Credit ................. 40 Page 2 of 104 2011 Oklahoma Incentives and Tax Guide Last Updated: October 29, 2010 2. Quality Jobs + Investment Tax Credits ............................. 41 3. Aerospace Industry Engineer Work Force Tax Credits .... 42 4. Tax Incentive Areas Map- Former Indian Lands .............. 43 5. Federal Tax Incentives on Former Indian Reservation Lands .................................................................................... 44 6. Insurance Premium Tax Credit ......................................... 45 7. Alternative Energy Sources Tax Credits ........................... 45 8. Clean Burning Fuel Vehicle Credit .................................... 46 9. Clean Burning Fuel Vehicle Infrastructure Credit ............ 46 10. Ethanol Fuel Retailer Tax Credit ..................................... 46 B. For Investors .................................................................... 47 1. Technology Transfer Income Tax Exemption .................... 47 2. Income Tax Exemption for Interest Paid on Bonds Issued by or on Behalf of Public Agencies ............................................ 47 3. Commercial Space Industry Credit ................................... 47 4. Historic Rehabilitation Tax Credit ................................... 48 5. Venture Capital Tax Credit ............................................... 48 C. For Entrepreneurs ............................................................ 49 1. New Products Development Income Tax Exemption ......... 49 2. Incubator Site Tenant Tax Exemption .............................. 49 D. Worker Related ................................................................ 50 Page 3 of 104 2011 Oklahoma Incentives and Tax Guide Last Updated: October 29, 2010 1. The Work Opportunity Tax Credit Program (WOTC) ....... 50 2. Federal Empowerment Zone Incentives ........................... 50 III. Sales Tax Exemptions and Refunds ................................................. 52 A. Exemptions ....................................................................... 52 1. Manufacturers .................................................................. 52 2. Computer Services and Data Processing .......................... 52 3. Sales at Aircraft Maintenance Facilities ........................... 53 4. Aircraft Repairs and Modifications .................................. 53 5. Aircraft Maintenance or Manufacturing Facility ............. 53 6. Excise Tax on Aircraft Sales .............................................. 54 7. Telecommunications ......................................................... 54 8. Spaceport .......................................................................... 54 B. Refunds ............................................................................. 54 1. Computer Services / Data Processing / Telecommunications Equipment ............................................................................ 55 2. Construction Materials ..................................................... 56 IV. Transportation and Distribution Benefits........................................ 57 A. Industrial Access Roads ................................................... 57 B. Foreign-Trade Zones ........................................................ 57 C. Truck Registration Benefits.............................................. 59 1. Other Truck Registration Benefits: ................................... 59 Page 4 of 104 2011 Oklahoma Incentives and Tax Guide Last Updated: October 29, 2010 2. Benefits under IFTA: ......................................................... 60 V. Tourism and Film Incentives ............................................................ 61 A. Oklahoma Film Act ........................................................... 61 B. Sales/Income Tax Credit for Tourism Attraction Projects 61 C. Income Tax Credit for Construction of Oklahoma Film/Music Facilities ............................................................ 61 VI. Major Finance and Assistance Programs ......................................... 63 A. Financing Assistance ........................................................ 63 1. Oklahoma Finance Authorities ......................................... 63 2. Public Trust Financing: Industrial Revenue Bonds ......... 63 3. General Obligation Limited Tax Bonds (GOLTBs) ............ 64 4. Tax Increment Financing (TIF)......................................... 64 5. The Oklahoma Local Development and Enterprise Zone Incentive Leverage Act ......................................................... 65 6. Sales Tax Financing .......................................................... 65 7. Private Activity Bond Allocation ...................................... 66 8. Small Business Linked Deposit Program .......................... 66 9. Oklahoma Capital Access Program .................................. 67 10. Export Finance Program ................................................. 67 11. Small Business Loan Guarantees .................................... 67 B. Technology Assistance ..................................................... 68 1. Technology Partnerships .................................................. 68 Page 5 of 104 2011 Oklahoma Incentives and Tax Guide Last Updated: October 29, 2010 2. i2E - Innovation to Enterprise .......................................... 68 4. OCAST Commercialization Programs ............................... 69 C. Venture Capital ................................................................ 70 1. Oklahoma Capital Investment Board ................................ 70 2. Oklahoma Capital Access Program .................................. 72 D. Quality Jobs Investment Program ................................... 72 E. Infrastructure................................................................... 72 1. Community Development Block Grants (CDBG) ............... 72 2. Community Development Block Grant – Economic Development Infrastructure Financing (CDBG-EDIF) ......... 73 F. Workforce Assistance ....................................................... 73 1. Advanced Degree Programs .............................................. 73 2. Job Matching and Job Search Assistance ......................... 73 3. Workforce Investment Act Programs ............................... 74 4. Governor’s Council for Workforce and Economic Development ......................................................................... 74 5. Partial Unemployment Benefits Program ........................ 75 6. Employee Training ........................................................... 75 G. Economic Development .................................................... 76 1. The EDGE Fund ................................................................. 76 2. History of EDGE ................................................................ 76 VII. Organizational Costs and Taxes ...................................................... 78 Page 6 of 104 2011 Oklahoma Incentives and Tax Guide Last Updated: October 29, 2010 A. Oklahoma