Okla. Admin. Code § 710:50-15-116
Current through Vol. 42, No. 1, September 16, 2024
Section 710:50-15-116 - Credit for qualified employers and employees in the vehicle manufacturing industry(a)General provisions. For tax years beginning after December 31, 2018, and ending before January 1, 2026, three (3) credits are allowed against the tax imposed by Section 2355 of Title 68 for the employment of qualified employees: (1) Credit for qualified employers for tuition reimbursement to qualified employees.(2) Credit for qualified employers for compensation paid to qualified employees.(3) Credit for qualified employees. (b)Definitions. The following words and terms, when used in this Section, shall have the following meaning, unless the context clearly indicates otherwise: (1)"Qualified employee".(A) A qualified employee is any person newly employed in Oklahoma by a qualified employer on or after January 1, 2018. A qualified employee may include a person whose prior employment was not as a full-time engineer, or whose employment was not in the state of Oklahoma, even though employed by the same qualified employer. (B) The qualified employee must have been awarded an undergraduate or graduate degree from a qualified program by an institution.(C) Qualified employee may include a person who has been awarded an undergraduate or graduate degree from a qualified program by an institution and is employed by a professional staffing company and assigned to work in vehicle manufacturing in this state.(D) Qualified employee may include a person who was employed in vehicle manufacturing in the state of Oklahoma prior to January 1, 2018, but not as a full-time engineer, prior to being awarded an undergraduate or graduate degree from a qualified program by an institution.(E) Qualified employee does not include a person employed in vehicle manufacturing in this state immediately preceding employment or contracting with a qualified employer.(F) Qualified employee does not include any person employed in vehicle manufacturing in the state of Oklahoma as a full-time engineer prior to January 1, 2018.(2)"Vehicle manufacturing", which includes vehicle manufacturing and automotive parts manufacturing, means a private or public company first placed in operation in this state after November 1, 2018, for vehicle manufacturing and November 1, 2019, for automotive parts manufacturing which is engaged in the research, development, design and manufacture of motor vehicles which may be driven on the avenues of public access or in automotive parts manufacturing. For purposes of this Section, "motor vehicle" does not include low-speed electric vehicles or motor vehicles manufactured primarily, but not exclusively, for off-road use, such as primarily for use on a golf course. For operations placed in service after November 1, 2018, and before November 2, 2019, "motor vehicle" also does not include buses or truck-tractors.(3)"Compensation", "institution", "qualified employer", "qualified program", and "tuition" shall be defined as in Section 2357.404 of Title 68 of the Oklahoma Statutes. (c)Credit for tuition reimbursement.(1) Qualified employers are allowed a credit against the tax imposed pursuant to Section 2355 of Title 68 of the Oklahoma Statutes based on the amount of tuition reimbursed to a qualified employee.(2) The credit for tuition reimbursement may only be claimed if the qualified employee has been awarded an undergraduate or graduate degree within one (1) year of starting employment with the qualified employer.(3) The credit for tuition reimbursement is equal to fifty percent (50%) of the tuition reimbursed to a qualified employee and may be claimed for the first through fourth years of employment with the qualified employer. The credit is only allowed to be claimed in the tax year that the tuition was reimbursed to the qualified employee and may not exceed in any taxable year fifty percent (50%) of the average annual amount paid by a qualified employee for enrollment and instruction in a qualified program at a public institution in Oklahoma.(4) The credit for tuition reimbursement may not be used to reduce the tax liability of the qualified employer to less than zero (0), is not transferable and may not be carried over.(5) The credit for tuition reimbursement may not be claimed after the fourth year of employment of the qualified employee. (d)Credit for compensation paid.(1) Qualified employers are allowed a credit against the tax imposed pursuant to Section 2355 of Title 68 of the Oklahoma Statutes for compensation paid to a qualified employee.(2) The credit for compensation paid equals: (A) Ten percent (10%) of the compensation paid for the first through fifth years of employment in vehicle manufacturing if the qualified employee graduated from an institution located in this state.(B) Five percent (5%) of the compensation paid for the first through fifth years of employment in vehicle manufacturing if the qualified employee graduated from an institution located outside this state.(3) The credit for compensation paid cannot exceed Twelve Thousand Five Hundred Dollars ($12,500.00) for each qualified employee annually.(4) The credit for compensation paid may not be used to reduce the tax liability of the qualified employer to less than zero (0), is not transferable and may not be carried over.(5) The credit for compensation paid may not be claimed after the fifth year of employment.(e)Credit for qualified employees.(1) A qualified employee shall be allowed a credit against the tax imposed pursuant to Section 2355 of Title 68 of the Oklahoma Statutes of up to Five Thousand Dollars ($5,000.00) per year for a period of time not to exceed five (5) years.(2) The credit authorized by this Section shall not be used to reduce the tax liability of the taxpayer to less than zero (0).(3) Any credit claimed, but not used, may be carried over, in order, to each of the five (5) subsequent taxable years.(f)Limitation of credit.(1) Effective for tax years beginning on or after January 1, 2019, no more than Three Million Dollars ($3,000,000.00) of credits authorized by (c) and (d) of this Section may be allowed as an offset in a taxable year. The Tax Commission shall determine the percentage which may be claimed as a credit no later than September 1 of each calendar year. In the event the total tax credits authorized by (c) and (d) of this Section exceed Three Million Dollars ($3,000,000.00) in any tax year, the Tax Commission shall permit any excess over Three Million Dollars ($3,000,000.00), but shall factor such excess into the percentage adjustment formula for subsequent years.(2) Effective for tax years beginning on or after January 1, 2019, no more than Two Million Dollars ($2,000,000.00) of credits authorized by (e) of this Section may be allowed as an offset in a taxable year. The Tax Commission shall determine the percentage which may be claimed as a credit no later than September 1 of each calendar year. In the event the total tax credits authorized by (e) of this Section exceed Two Million Dollars ($2,000,000.00) in any tax year, the Tax Commission shall permit any excess over Two Million Dollars ($2,000,000.00), but shall factor such excess into the percentage adjustment formula for subsequent years. Okla. Admin. Code § 710:50-15-116
Adopted by Oklahoma Register, Volume 36, Issue 22, August 1, 2019, eff. 8/11/2019Amended by Oklahoma Register, Volume 37, Issue 24, September 1, 2020, eff. 9/11/2020