Quality Jobs Program
A cash back incentive program providing enrolled companies quarterly cash rebates, of up to 5% of newly created taxable payroll, for 10 years. Qualifying manufacturers and service companies must project a new payroll investment of $2.5 million or more. A fully executed contract, with the Department of Commerce, must be in place before any new jobs can be included in the new taxable payroll.
More Information
Contact: Oklahoma Department of Commerce
High Impact Job Program
Lowers annualized payroll threshold to $1 million for businesses that produce new direct jobs to the State that are equal to or greater than 1% of the total labor force of the county in which they locate. Payout is 2.5% of taxable wages for up to 6 years. More Information
Contact: Oklahoma Department of Commerce
Quality Jobs Small Employer Program
A cash back incentive program available to small employers providing enrolled companies quarterly cash rebates, of up to 5% of newly created taxable payroll, for 7 years. More Information
Contact: Oklahoma Department of Commerce
Investment/New Jobs Tax Credits
A 5 year tax credit on the greater of 1% per year of investment in qualified new depreciable property or a credit of $500 per year per new job. More Information
Contact: Oklahoma Tax Commission
Sales Tax Refunds
A sales tax refund for building materials for certain manufacturers and aircraft maintenance facilities, purchases of computers, data processing equipment, telecommunications equipment for certain aircraft facilities; and for purchases of computer services and data processing equipment for qualified computer services or research and development companies. 2010 Incentives Guide
Contact: Oklahoma Tax Commission
Income Tax Exemptions
A tax credit for hazardous waste recycling, reuse or source reduction; for CNG conversion; and for insurance premiums. 2010 Incentives Guide
Contact: Department of Environmental Quality
American Indian Land Tax Credits
• All of Claremore qualifies for this Federal Tax Credit
• Applicable to businesses that employ enrolled American Indians and their spouses.
• Applies to businesses that are not expanding.
Benefits:
• Accelerated Federal Property Depreciation Schedule
• Federal Employment Tax Credits of up to $4,000 per qualifying employee per year.
• Savings of up to 35% to 40% in depreciation of equipment.
More Information
Contact: Oklahoma Department of Commerce
Five-Year Ad Valorem Tax Exemption
C. Ad Valorem Tax Exception
1. State Decision
Certain new and expanding manufacturers, research and development companies with significant out-of-state sales, aircraft repair companies, certain distribution companies, oil refineries, and certain windpower generators may be eligible for ad valorem tax exemptions for up to five years. Computer services and data processing companies must meet certain conditions. SIC Industry Group Numbers 7372 and 7373 must have out-of-state sales of at least 50%. SIC Code Industry Group Number 7374 must have out-of-state sales of at least 80%.Distribution centers in SIC Industry Groups 4221, 4222, 4225, 4226 and Major Groups 50 and 51 that have 100 employees, and invest five million dollars may also qualify. Employees must be paid at least 175% of the federal minimum wage.SB-798 provided for the reinstatement of the five-year manufacturing exemption for distribution centers. The bill added establishments primarily engaged in distribution as defined by NAICS 49311, 49312, 49313 and 49319. Construction of the establishments must begin on or after November 1, 2007 and be completed within three (3) years from the date of construction. Windpower generators in NAICS 221119 are exempt from the payroll requirement. Eligible property, which may be exempt from the ad valorem tax, may include land, buildings, improvements, machinery, fixtures and equipment used directly and exclusively in the primary activity or process of the company located on the facility site.
Threshold requirements are an investment of at least $250,000 and an addition of $250,000 in annual payroll in counties with a population of 75,000 or less. If the company is located in a larger county, an additional annualized payroll of at least $1,000,000 is required. However, if a $7 million investment is made in new facilities for certain computer service companies already in the program, no new payroll is required. Firms must make an annual application to the County Assessor. Upon approval of application, the State will reimburse tax dollars to local taxing jurisdictions which they would have otherwise received. As a result, although application for the exemption is made to the County Assessor, Oklahoma Tax Commission personnel are involved in the final review to determine the exemption. It is the responsibility of the company to apply for the exemption each year.
Oklahoma's Freeport Law exempts from taxation goods, wares and merchandise that come from outside Oklahoma and leave the State within 9 months if such goods, wares and merchandise are held for assembly, storage, manufacturing, processing or fabricating. More Information
Contact: Oklahoma Tax Commission
For more Information contact the Oklahoma Tax Commission at 405-521-3278 or Oklahoma Tax Commission. For forms visit www.oktax.state.ok.us or contact a local County Assessor to discuss what property may qualify for the exemption.
Key Sales Tax Exemptions• Processing Machinery, electricity, fuel, & other real property used in Manufacturing.
• Interstate 1-800, WATS and private-line business telecommunications systems.
2010 Incentives Guide
Contact: Oklahoma Tax Commission
Training for Industry Program (TIP) Programs
Training programs are available for Growing Companies
and new Start-ups at no cost to employers.
The Following services are provided by TIP:
• Job analysis and training needs assessment
• Instructional materials and development
• Instructor costs & training facilities costs
• Pre-employment training
• Post-employment technical and team-based training
Specific training areas include:
• Company orientation
• Product knowledge
• Specialized software
• Customer service
• Operations/Manufacturing methods
• Safety/Ergonomics
• Quality/ISO/QS
• Team/management skills
More Information
Contact: Oklahoma Department of Commerce
Scott Smith (405) 815-5110 scottsmith@okcommerce.gov
Infrastructure
Industrial Access Road Assistance
(Limited Under Option 1 - Quality Jobs Program)
The Industrial Access Road Program assists local development efforts by funding, within limits, facilities connecting a specific industry or industrial area directly to state or local road systems. Application is through local governing bodies who contact the Department of Transportation. More Information
Contact: City of Claremore
Contact: Oklahoma Department of Transportation
Mitch Surrett, (405) 522-0290 or msurrett@FD9NS01.okladot.state.ok.us
Major Finance and Assistance Programs
Oklahoma Finance Authorities (OFA)OFA offers financing for real estate and equipment. Tax-exempt and taxable financing is available for most industries. Projects may include plant construction, expansion or replacement. Maximum funding is $5 million on fixed collateral assets up to 15 years. Loans are fixed rate or variable and below market for tax-exempt projects. Contact: OFA (405) 842-1145
Oklahoma Development Finance Authorities (ODFA)
Oklahoma Development Finance Authority offers a credit enhancement program to bolster credit of revenue bonds issued by ODFA for loans to Oklahoma businesses. All bonds are state tax-exempt and may be federally tax-exempt. ODFA also grants tax-exempt bonds for select facilities like transportation, infrastructure or environmental facilities.
2010 Incentives Guide
Contact: ODFA at (405) 842-1145
Small Business Linked Deposit Program
This program offers below-market interest rates to eligible companies through local financing. Businesses with less than 200 employees and gross annual sales below $4 million are eligible for up to $1 million loans. Loans are for a two-year term and may be renewed for 3 more terms in accordance with State Treasurer’s guidelines. More Information
Contact: State Treasurer's Office (405) 522-4235
USDA Rural Development Intermediary Relending Program (IRP)
A Revolving loan fund set up by intermediaries. Intermediaries and ultimate recipients must be unable to obtain proposed loan elsewhere at reasonable terms. Loans are for existing business expansion, job creation, saving existing jobs or community development. Terms are negotiated between intermediary and recipient.
More Information
Contact: Intermediary Relending Program Lenders- KAMO Economic Development Corporation (918) 256-5551
Rural Enterprises, Inc. (580) 924-5094
USDA Rural Economic Development Loan Program
Banks may pledge between 3-10 million dollars to the State Treasury’s Rural Economic Development Revolving Loan fund. The Program’s review board and the Secretary of Agriculture manage and approve the fund’s use in conjunction with participating financial institutions. Loans are at below market interest rates and set by the lender. Credits may offset any Oklahoma tax liability resulting from the loan.
More Information
Contact: USDA Rural Development (405) 742-1000 More Information
Contact: Tim Hight (918) 341-4755
thight@claremoreusa.com
The Program guarantees up to 80% of a loan made by a commercial lender with a maximum loan amount of $25M for communities with a population less than 50,000. More Information
Contact: USDA Rural Development (405) 742-1000 SBA Loan Programs
7(a) Guaranty Loan Program
• Maximum loan amount of $2 million.
• Commercial lenders make and administer the loans and the SBA guarantees loan
• Maximum loan maturities of 25 years for real estate and equipment & 7 years for working capital with interest rates negotiated between the borrower and the lender. More Information
Contact: US Small Business Administration (405) 609-8000 Oklahoma Export Finance Program
Oklahoma Department of Commerce works with Oklahoma firms to identify financing options for exports. Assistance is available through the Export-Import Bank of the United States.
Contact: Oklahoma Department of Commerce (405) 815-5136
Programs Used in Conjunction with Public Bodies
Tax Increment Financing (TIF)
Oklahoma cities and counties may create tax increment districts to obtain funding for economic development in distressed areas for up to 25 years.
What is Tax Increment Financing?
Tax Increment Financing (TIF) is an economic development
tool that local communities can use to stimulate private
investment and development. It targets areas (districts)
to develop and captures the increased tax revenue generated
from the private development itself. These tax revenues are
then used to fund the public improvements and infrastructure
necessary for the development.
To capture the revenue, a local community issues bonds
and obtains the funds it needs to pay for project costs.
As an alternative, a developer and the community may agree
for the developer to pay for the costs initially and be
reimbursed by the community as tax increment is produced.
California became the first state to authorize a Tax Increment
Financing in 1952. Currently 48 states, including Oklahoma,
have authorized the use of this development tool.
Purposes
• TIF helps communities safeguard themselves against urban
blight by enabling the community to reimburse a developer
for many of the project costs normally incurred by the developer.
• TIF helps developers with construction costs by shifting the
burden of all or a potion of certain project costs temporarily
to the community.
• TIF helps the general public by redeveloping depressed areas,
thereby improving the community, its economy, and quality of
life without the necessity of raising property taxes.
The Process
A community first decides how it will administer Tax Increment
Financing and exercises its authority to encourage targeted
development or redevelopment. The community then chooses the
TIF District, an area from which the initial tax assessment
is measured and the incremental tax is drawn.
In order to designate a TIF District, the community first determines
that the projected TIF area meets project requirements and then
creates a TIF District development plan.
The Plan
A TIF District development plan serves as an outline for the
project. Project plans must be adopted and include estimated
project costs, project impact assessments, scope of debt,
and a project timeline.
The community authorizes the use of TIF in order to implement a
project plan and determine a base tax year, against which incremental
tax revenue will be measured. The incremental tax revenue generated
by the TIF area is calculated by subtracting tax revenue from the
assessment for the base tax year from the total tax revenue produced
by the TIF area for each consecutive year of the TIF project.
Following the request for project proposals for a designated TIF
area, the community then chooses to enter into a project agreement
with one or more developers. The project agreement clarifies
terms and conditions for which the community provides TIF support
and the developers construct and maintain the project.
The Results
In order to provide project financing, the community incurs long-term
debt in the form of a bond issue or, alternatively, a promissory note
to evidence that the community will reimburse the developer for
certain project costs.
If the project is successful, the increased assessed value of the TIF
District yields incremental tax revenue. The community then utilizes
the incremental revenue to eliminate debt it initially acquired to
contribute to the project.
Contact: CIEDA Tim Hight (918) 341-4755
thight@claremoreusa.com
Development Bonds and Public Trust Financing
Public Trust Financing:
Public Trust Financing is available for development at state, county & city levels. Trusts may enter into lease-leaseback, sale-leaseback, interest rate swaps and similar transactions as well as issuing bonds.
More Information
Contact: State Bond Advisor’s Office (405) 602-3100.
General Obligation Limited Tax Bonds (GOLTBs)
• Revenue bonds are issued in association with a particular private activity project.
• Revenue generated by the project in the form of income is used to retire the bonds.
• If revenue generated by the project is inadequate to retire the bonds, then a levy will be placed on the property taxes of the jurisdiction in order to retire the bonds.
Resource Links
Oklahoma Department of Commerce
Oklahoma Tax Commission
Oklahoma Department of Transportation
Oklahoma State Treasurer office
Oklahoma State Bond Office
Contact:
Tim Hight (918) 341-4755
thight@claremoreusa.com
