Oklahoma Administrative Code › Title 710 - Oklahoma Tax Commission › Chapter 50 - Income › Subchapter 15 - Oklahoma Taxable Income › Part 7 - CREDITS AGAINST TAX › Section 710:50-15-105 - Credit for research and development

Current through Vol. 41, No. 20, July 1, 2024
(a)
General provisions.
For
				  taxable years beginning after December 31, 1992, and before January 1, 2003,
				  and for taxable years beginning after December 31, 2005, there is an income tax
				  credit for a net increase in the number of full-time-equivalent employees of a
				  qualifying computer services, data processing or research and development
				  entity occurring before January 1, 2014.
(b)
Definitions.
Qualifying
				  computer services, data processing or research and development entities are
				  those who are primarily engaged in computer services and data processing as
				  defined under Industrial Group Numbers 7372, 7373, 7374 and 7375 of the SIC
				  Manual (latest revision) and those entities which are primarily engaged in
				  research and development as defined under Industrial Group Numbers 8731, 8732,
				  8733 and 8734 of the SIC Manual (latest revision).
(c)
Qualifications.
In order to
				  qualify for the credit, entities primarily engaged in computer services and
				  data processing (as defined under Industrial Group Number 7374 of the SIC
				  Manual [latest revision] must also have a minimum of One Hundred Thousand
				  Dollars ($100,000.00) in purchases of computers, data processing equipment,
				  related peripherals, telephone, telegraph, or telecommunications service or
				  telecommunications equipment. All qualified entities must derive fifty percent
				  (50%) of revenues from out-of-state buyers or consumers. For purposes of
				  determining whether annual gross revenues are derived from sales to
				  out-of-state buyers or consumers, all sales to the federal government shall be
				  considered to be sales to an out-of-state buyer or consumer. All qualified
				  entities must also annually file an affidavit with the Oklahoma Tax Commission
				  stating that the business so qualifies and such other information as required
				  by the Commission.
(d) Amount of
				  credit. The credit allowed is Five Hundred Dollars ($500.00) for each new
				  employee, but in no event may the total annual credit exceed fifty new
				  employees. The credit is allowed in each of the four (4) subsequent years only
				  if the level of new employees is maintained in the subsequent year. However the
				  credit is allowed in each of the eight (8) subsequent years only if the level
				  of new employees is maintained in the subsequent year and if the credit is
				  taken for taxable years beginning after December 31, 2005. In calculating the
				  credit by the number of new employees, only those employees whose paid wages or
				  salary were at least Thirty-five Thousand Dollars ($35,000.00) during each year
				  the credit is claimed shall be included in the calculation. The number of new
				  employees shall be determined by comparing the monthly average number of
				  full-time employees subject to Oklahoma income tax withholding for the final
				  quarter of the taxable year with the corresponding period of the prior taxable
				  year, as substantiated by such reports as may be required by the Tax
				  Commission.
(e)
Limitations.
This credit is not transferable. Unused credits may
				  be carried over in order to each of the four (4) years following the year of
				  qualification and to the extent not used in those initial four (4) years in
				  order to each of the following five (5) years.
(f)
Tax credit moratorium.
No
				  credit may be claimed for jobs created during the period of July 1, 2010
				  through June 30, 2012, for which the credit would otherwise be allowable. This
				  credit may be claimed for tax year 2012 and subsequent tax years, for new jobs
				  created on or after July 1, 2012.
Added at 23 Ok Reg
					 2824, eff 6-25-06; Amended at 28 Ok Reg 18, eff 8-9-10 (emergency); Amended at
					 28 Ok Reg 935, eff 6-1-11