The State of Oklahoma offers low tax rates, low cost of operation for businesses, and low cost-of-living for employees. Oklahoma is globally recognized for outstanding incentive programs and a pro-business environment. Businesses can choose between a cash incentive or a tax credit package, but in some cases, qualifying businesses can take advantage of both programs. Choctaw Nation is available to assist with identifying federal, state, and local incentives applicable to a project.
Choctaw Nation Incentives
Choctaw Development Fund
The Choctaw Development Fund was created by tribal leadership in 2017 to entice growth in the 10 ½ county territory. The economic development fund can supplement federal, state, and local incentives for business attraction, retention, and expansion in the form of cash payments, community development projects, or provide assistance to Choctaw tribal members to start or expand a business.
Oklahoma law provides local governments with the authority to customize job creation and investment in a variety of methods.
Waived Fees or Expedited Development Permitting
Local governments are granted the authority to regulate construction, waive permitting fees, and expedite the permitting process in their jurisdiction.
Tax Increment Financing
Local governments are granted the authority to identify blighted areas where additional measures must be enacted in order to entice development. State law limits the use of the funds, but most economic development purposes are eligible. Communities can reinvest the tax increment created by the development to finance public improvements, capital needs, job creation, etc.
Local governments have the authority to enact taxes which go toward economic development purposes. The use of the funds are determined by each taxing jurisdiction.
Quality Jobs Program
The Quality Jobs Program promotes job growth and helps improve a company’s bottom line by injecting cash incentives back into the business as the company expands and creates new jobs in Oklahoma. For up to 10 years, the Oklahoma Tax Commission will make quarterly cash payments of up to 5% of new taxable payroll to qualifying manufacturers and certain service industries that have a new payroll investment of $2.5 million or more.
21st Century Quality Jobs Program
The 21st Century Quality Jobs Program is specially tuned for businesses with a highly skilled, knowledge-based workforce. This unique incentive may pay qualifying businesses cash back, up to 10% of payroll, for up to ten years, for the creation of 10 jobs, at an annual wage typically 300% of the county average wage.
Small Employer Quality Jobs Program
The Small Employer Quality Jobs Program provides quarterly incentive payments to a qualifying small employer (500 employees or less). Quarterly payments may be as much as 5% of new taxable payroll for up to 7 years.
Investment / New Jobs Tax Credit Package
The Investment/New Jobs Tax Credit Package allows manufacturing, processing, or aircraft maintenance companies with a qualifying capital investment in excess of $40 million, in addition to creating new jobs that pay higher than the state average wages, a five-year tax credit on the greater of 2% per year of investment in qualified new depreciable property or credit of $1,000 per year per new job.
Business Expansion Incentive Program
The Business Expansion Incentive Program targets business expansion projects which include job creation and significant investment in facilities, machinery, and equipment.
Aerospace Engineer Workforce Tax Credit
The Aerospace Engineer Workforce Tax Credit gives aerospace companies, hiring engineers in a variety of fields, a tax credit equal to 5% of the compensation paid to an engineer and 10% if the engineer graduated from an Oklahoma college or university, plus another credit of up to 50% of the tuition reimbursed to an employee. Additionally, the engineer hired receives a tax credit of $5,000 per year.
Automotive Engineer Workforce Tax Credit
The Automotive Engineer Workforce Tax Credit provides motor vehicle assemblers and manufacturers or automotive parts manufacturers who hire newly employed engineers with corporate income tax credits of up to 10% of the compensation paid to the engineer, plus an additional tax credit of up to 50% of the tuition cost reimbursed to an employee. The engineer hired also is eligible to receive a tax credit of $5,000 per year.
Manufacturing Sales Tax Exemptions
The Manufacturer’s Sales Tax Exemption Permit exempts taxes paid on purchases of machinery and equipment, energy, and tangible personal property used in design, development, and the manufacturing operation at the manufacturing site.
Software/Cybersecurity Workforce Tax Credit
Cybersecurity or software employees who have received a degree from an accredited institution can receive a tax credit up to $2,200 annually or $1,800 annually for qualifying employees who are awarded a certificate from a technology center.
Ad Valorem Manufacturing Exemption
The Ad Volorem Manufacturing Exemption program can abate ad valorem taxes upon new, expanded or acquired manufacturing facilities, and equipment for a period of five years. This incentive is available for manufacturing, research and development, warehouse and distribution, certain computer/data processing services, refinery, and aircraft repair.
Freeport Inventory Benefits
The Freeport Inventory Benefits program provides an exemption from taxation on goods, wares, and merchandise that come from outside the state and leave the state within nine months if such goods, wares, and merchandise are held for assembly, storage, manufacturing, processing, or fabricating purposes within the state.
Customized Employee Training
The Training for Industry Program provides a flexible training program to meet the unique needs of each particular business. Whether the company is new or expanding in Oklahoma, the nationally acclaimed training program can help businesses create the quality workforce needed to be successful, all at little or no cost to the employer. Employee training is delivered through Oklahoma’s system of 59 technology center campuses across the state. Some of the services provided include job analysis, training needs assessment, pre-employment training, pre-production training, post-production training, instructional materials and development, and more.
Industrial Access Road Assistance
The Industrial Access Road Assistance Program was designed to aid local industrial development efforts by funding, within practical limitations, access facilities connecting a specific industry or industrial area directly to the state or local road system.
New Market Tax Credits
The New Market Tax Credit program incentivizes community development and economic growth through the use of tax credits that attract private investment to distressed communities. In exchange for investing in underserved areas, investors can claim a tax credit worth 39% of their original equity to be claimed over a 7 year period.
American Indian Lands Tax Credit
Because of the state’s unique Native American heritage, all land within the 10 1/2 county territory qualify for special federal tax treatment. Businesses locating or expanding in these areas can claim accelerated federal depreciation on their buildings, resulting in tax savings of up to 40%. Additionally, businesses in qualifying areas that hire Native Americans or their spouses living in the area can claim federal tax credits of up to $4,000 per qualifying employee.
Disclaimer: Expires Dec 31, 2020, and must be renewed for investments that occur past Jan 1, 2021.
Foreign Trade Zones
The Foreign Trade Zones are secured areas under U.S. Customs and Border Protection supervision that are generally considered outside United States jurisdiction. The designation benefits businesses by deferring the payment of import taxes and duties.
The Opportunity Zone incentive is a new community investment tool established by Congress in the Tax Cuts and Jobs Act of 2017 to encourage long-term investments in low income urban and rural communities. Opportunity Zones provide a tax incentive for investors to reinvest unrealized capital gains into dedicated opportunity funds. Thirteen (13) Opportunity Zones have been desiganted in Choctaw Nation's 10 ½ county territory.
The Promise Zone program targets high poverty communities where the federal government partners with local leaders to increase economic activity, improve educational opportunities, leverage private investment, reduce violent crime, enhance public health, and address other priorities identified by the community. Most of Choctaw Nation's 10 ½ county territory is included in the federal designation.
EB-5 Immigrant Investor Visa
The United States EB-5 Immigrant Investor Visa program, created by the Immigration Act of 1990, is intended to encourage foreign investment and economic growth in rural communities or areas with high unemployment. Foreign investors who contribute more than $500,000 toward a project and employ at least 10 American workers will become eligible for lawful, permanent US residency.
The United States Small Business Administration's Historically Underutilized Business Zone (HUBZone) program helps small businesses in urban and rural communities gain preferential access to federal procurement opportunites. The federal government's goal is to award at least 3% of all federal contracting dollars to HUBZone certified small businesses each year by limiting competition, bidding preferences, and 10% price evaluation preference. Small businesses with a principal office located in Choctaw Nation's 10 ½ county territory are HUBZone program eligible.