2023 Oklahoma Statutes › Title 62. Public Finance › §62-891.12. For-profit businesses determination letter and agreements - Withholding taxes.

A. As used in this section:
1. “Estimated direct state benefits” means the tax revenues projected by the Oklahoma Department of Commerce to accrue to the state as a result of new direct jobs;
2. “Estimated indirect state benefits” means the indirect new tax revenues projected by the Oklahoma Department of Commerce to accrue to the state, including, but not limited to, revenue generated from ancillary support jobs directly related to the primary business;
3. “Estimated direct state costs” means the costs projected by the Department to accrue to the state as a result of new direct jobs. Such costs shall include, but not be limited to:
a.
the costs of education of new state resident children,
b.
the costs of public health, public safety and transportation services to be provided to new state residents,
c.
the costs of other state services to be provided to new state residents, and
d.
the costs of other state services; and
4. “Estimated indirect state costs” means the costs projected by the Department to accrue to the state as a result of new indirect jobs. Such costs shall include, but not be limited to, costs enumerated in subparagraphs a, b, c and d of paragraph 3 of this subsection.
B. A for-profit business entity that would otherwise qualify to receive or benefit from proceeds from the issuance of obligations by the Authority from the Economic Development Pool shall be required to obtain a determination letter from the Oklahoma Department of Commerce that the business activity of the entity will result in a positive net benefit rate, to be computed by the Department of Commerce using a methodology which provides for the analysis of estimated direct state benefits, estimated indirect state benefits, estimated direct state costs and estimated indirect state costs. The Oklahoma Department of Commerce shall use such information as it determines to be relevant for the analysis required by this subsection including, but not limited to, the type of business activity in which the entity is engaged or will be engaged, amount of capital investment, type of assets acquired or utilized by the business entity, economic effect of the business activity within the relevant geographic region and such other factors as the Department determines to be relevant. The Oklahoma Department of Commerce may use information regarding the business entity alone or in conjunction with relevant information regarding other business activity in a geographically relevant area surrounding the principal business location of the primary business entity in order to perform the computation of the net benefit rate. If the result of the analysis is a positive net benefit rate, the business entity shall be allowed to capture withholding taxes associated with new jobs or with existing jobs as otherwise provided by this act. The Oklahoma Department of Commerce shall transmit a determination letter to the authorized representative of the business entity and shall also transmit a copy of the determination letter to the Oklahoma Tax Commission and to the Oklahoma Development Finance Authority, regardless of whether the result is a positive or negative net benefit rate. The Oklahoma Development Finance Authority shall not allow a business entity to use captured withholding tax revenues for purposes of any pooled financing otherwise authorized by this act unless the Oklahoma Department of Commerce has previously transmitted a determination letter that reveals a positive net benefit rate for the business entity.
C. Any for-profit business entity that receives proceeds from the issuance of any obligations by the Authority from the Economic Development Pool may be required by the applicable local government entity to enter into such agreements as may be required between the entity, the local government entity, the Authority and the Oklahoma Tax Commission to provide for the segregation of withholding taxes attributable to new direct jobs created or existing payroll retained by the for-profit business entity in connection with the asset or assets acquired, constructed or improved with such proceeds.
D. The amount of withholding taxes subject to the provisions of this section shall, together with other revenue sources or commitments and undertakings by the for-profit business entity or third parties, be sufficient to make payment of any required principal, interest, adequate reserves or other authorized costs for the borrowing by the Authority.
E. The Authority shall have such power of approval regarding the amount and duration of withholding tax segregation pursuant to the provisions of this section in order to ensure payment of its obligations and to promote the marketability of such obligations.
F. The Authority shall obtain information from the for-profit business entity as may be required in order to determine the necessary amount of segregated withholding taxes attributable to new direct jobs or existing payroll.
G. The Oklahoma Tax Commission shall determine with respect to the withholding taxes attributable to the income of employees engaged in new direct jobs or existing jobs for a for-profit business entity participating in a pooled financing pursuant to the Oklahoma Community Economic Development Pooled Finance Act the amount of such withholding taxes required to be deposited to the credit of the Community Economic Development Pooled Finance Revolving Fund.
H. The Oklahoma Tax Commission shall make a deposit in the Community Economic Development Pooled Finance Revolving Fund in accordance with any applicable agreement entered into by a for-profit business entity participating in a pooled financing pursuant to the Oklahoma Community Economic Development Pooled Finance Act.
I. No for-profit business entity that benefits from proceeds of obligations issued by the Authority from the Economic Development Pool may receive or continue to receive incentive payments pursuant to the Oklahoma Quality Jobs Program Act or claim any investment tax credits otherwise authorized pursuant to Section 2357.4 of Title 68 of the Oklahoma Statutes during the period of time that any withholding taxes attributable to the payroll of such entity are being paid to the Community Economic Development Pooled Finance Revolving Fund or in any manner used for the payment of principal, interest or other costs associated with any obligations issued by the Authority pursuant to the provisions of this act.
Added by Laws 2009, c. 309, § 12, eff. July 1, 2009.