Oklahoma Administrative Code › Title 710 - Oklahoma Tax Commission › Chapter 50 - Income › Subchapter 15 - Oklahoma Taxable Income › Part 7 - CREDITS AGAINST TAX › Section 710:50-15-74 - Credit for investment/new jobs

Current through Vol. 41, No. 20, July 1, 2024
(a)
For tax years 1981 through 1987.
For tax years 1981 through 1987
				  the Oklahoma Investment/New Jobs Credit is allowed for Oklahoma Income Tax
				  purposes only on investment in qualified depreciable property which directly
				  results in a net increase in the number of employees engaged in manufacturing
				  or processing in this state.
(b)
For 1988, and later years.
For 1988, and later years, the Oklahoma
				  Investment/New Jobs Credit may be calculated on the investment or new employees
				  when other qualifications are met. (See OTC Form 506).
(c)
Examples.
A company engaged
				  in the process of cooking hamburgers for sale to the general public does not
				  qualify for the Investment/New Jobs Credit. The Oklahoma Supreme Court
				  determined, in the case
McDonald's Corp. vs. Oklahoma Tax
				  Commission
, 563 P.2d 635 (Okla. 1977), that a company engaged in retail
				  sales or a service organization (laundry, transportation, oil & gas
				  production, drilling, restaurant, repair services, etc.) does not qualify for
				  Oklahoma Investment/New Jobs Credit. [
See:
68 O.S. §§
										2357.4,
				  2357.5
				  ]
(d)
"Processing"
				  defined.
For purposes of this Section,
"processing"
means
				  the preparation of tangible personal property for market. "Processing" begins
				  when the form, context, or condition of the tangible personal property is
				  changed with the intent of eventually transforming the property into a saleable
				  product. "Processing" ends when the property being processed is in the form in
				  which it is ultimately intended to be sold at retail. A business that has the
				  majority of its emphasis on the retail side of business does not qualify as a
				  processor or a manufacturer for purposes of this credit.
(e)
Leasing of employees by
				  manufacturing or processing entity for purposes of the new jobs credit.
A company that engages in manufacturing or processing may still qualify for the
				  Oklahoma New Jobs Credit pursuant to 68 O.S. §
										2357.4
				  even though they lease their employees through an employee leasing company. The
				  leased employees must still meet the requirements of 68 O.S. §
										2357.4
				  for full-time equivalent employees and there must exist an employer-employee
				  relationship between the leased employees and the employer who seeks the new
				  jobs credit pursuant to 68 O.S. §
										2357.4.
				  Whether the employer-employee relationship exists between the employer
				  manufacturing or processing entity and an employee who is leased will be
				  determined on a case by case basis by considering the following factors:
(1) The right of the employer to control the
				  details of the employees work;
(2)
				  The employer furnishing the tools and the workplace;
(3) The employee having taxes, worker's
				  compensation and unemployment insurance funds withheld and the employer being
				  liable for these items;
(4) The
				  employer's right to discharge the employee; and
(5) The permanency of the employer-employee
				  relationship.