Okla. Admin. Code § 710:50-15-60

Current through Vol. 42, No. 1, September 16, 2024

Section 710:50-15-60 - Inventors assistance income exclusion

(a) Royalty earned by an inventor from a product developed and manufactured in this State shall be exempt from Oklahoma Income Tax for a period of seven (7) years, from January 1, of the first year in which the royalty is received, as long as the manufacturer remains in the State.

(b) An investment/new jobs credit may be available to the manufacturer of new inventions when manufactured in this State. [See:OAC710:50-15-74 ]

(c) In addition, the manufacturer may exclude from Oklahoma taxable 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 exceeds the Oklahoma taxable income, the excess may be carried forward for a period not to exceed four (4) years. "Depreciable property" means machinery, fixtures, equipment, buildings, or substantial improvements placed in service in this State during the taxable year.

(d) Requirements for qualification, certification and records required are as follows:

(1) A copy of the Fee Agreement between the inventor and the Oklahoma Center for the Advancement of Science and Technology (OCAST) must be provided to the Commission by the inventor or owner of the rights.

(2) A certification by the Division Director or designee of the Technology Development Programs Division of OCAST must be provided to the Commission, specifying the certification date, product/process or service, inventor, manufacturer, and contract numbers.

(3) A certification by the Division Director or designee of the Technology Development Programs of OCAST must be provided to the Commission, specifying the date of first commercial product sale.

(4) The inventor must furnish annually a schedule of all income inuring to the benefit of the inventor attributable to the certified product/process or service.

(5) Manufacturers in this State must furnish annually a copy of the contract with the inventor and a schedule of all payments, disbursements, salaries, wages, benefits, and anything else of value paid, distributed or transferred to the inventor.

(6) Manufacturers in this State must furnish a schedule of receipts and expenses, including any overhead properly attributable to the product/process or service.

(7) Commission auditors will be available to assist in determining if the terms of the contracts are being fulfilled if requested by OCAST. [See: 74 O.S. Sections 5064.1 et seq.]

Okla. Admin. Code § 710:50-15-60

Amended at 16 Ok Reg 2646, eff 6-25-99; Amended at 21 Ok Reg 2571, eff 6-25-04