Revenue and taxation; definitions; income tax credits; apprentice position; cap on tax credits; Governor's Council for Workforce and Economic Development; Oklahoma Department of Career and Technology Education; annual report; effective date.
The bill imposes certain limitations on the use of tax credits, including a cap of ten apprentices per employer over the five years the credits are available. Additionally, the total tax credits allotted cannot exceed three million dollars annually. Any unused credits cannot be carried over to the next taxable year, and the credit cannot reduce the employer's tax liability to below zero. This marks an effort to maintain a control over the fiscal implications of the tax incentive while promoting the employment of apprentices.
House Bill 1586 introduces a tax credit incentive for employers who hire apprentices in Oklahoma. The bill defines various terms relevant to the apprenticeship program, such as 'apprentice', 'apprenticeable agreement', and 'eligible employer'. This legislation aims to promote workforce development by providing a $1,000 income tax credit for each qualified apprentice employed by an eligible employer for a minimum duration of seven months in the preceding calendar year. The tax credit is available for taxable years starting from January 1, 2022, to December 31, 2026.
Notable points of contention surrounding HB1586 involve the limitations it places on employers regarding the number of apprentices they can claim tax credits for and the cessation of the tax credit in 2027, which might deter long-term planning for workforce initiatives. While proponents argue that the bill is a step towards enhancing job training programs and skilled workforce development, critics may point out that the caps on credits could limit small businesses' participation. Furthermore, the requirement for annual reporting by the Governor's Council for Workforce and Economic Development underscores the necessity for oversight but also adds a layer of administrative obligation for participating employers.