OK
Oklahoma House Bill HB4046

Oklahoma 2022 Regular Session

Oklahoma House Bill HB4046 Compare Versions

Only one version of the bill is available at this time.
OldNewDifferences
11
22
33 Req. No. 9290 Page 1 1
44 2
55 3
66 4
77 5
88 6
99 7
1010 8
1111 9
1212 10
1313 11
1414 12
1515 13
1616 14
1717 15
1818 16
1919 17
2020 18
2121 19
2222 20
2323 21
2424 22
2525 23
2626 24
2727
2828 STATE OF OKLAHOMA
2929
3030 2nd Session of the 58th Legislature (2022 )
3131
3232 HOUSE BILL 4046 By: Boles
3333
3434
3535
3636
3737
3838 AS INTRODUCED
3939
4040 An Act relating to revenue and taxation ; amending 68
4141 O.S. 2021, Section 2902, which relates to
4242 manufacturing facilities ; adding commercial mining of
4343 cryptocurrency to definition; defining terms;
4444 requiring annual filing; and providing an effective
4545 date.
4646
4747
4848
4949
5050
5151 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
5252 SECTION 1. AMENDATORY 68 O.S. 2021, Section 2902, is
5353 amended to read as follows:
5454 Section 2902. A. Except as otherwise provided by subsection H
5555 of Section 3658 of this title pursuant to which the exemption
5656 authorized by this section may not be claimed, a qualifying
5757 manufacturing concern, as defined by S ection 6B of Article X of the
5858 Oklahoma Constitution, and as further defined herein , shall be
5959 exempt from the levy of any ad valorem taxes upon new, expanded or
6060 acquired manufacturing facilities including facilities engaged in
6161 research and development, for a period of five (5) years. The
6262 provisions of Section 6B of Article X of the Okla homa Constitution
6363
6464 Req. No. 9290 Page 2 1
6565 2
6666 3
6767 4
6868 5
6969 6
7070 7
7171 8
7272 9
7373 10
7474 11
7575 12
7676 13
7777 14
7878 15
7979 16
8080 17
8181 18
8282 19
8383 20
8484 21
8585 22
8686 23
8787 24
8888
8989 requiring an existing facility to have been unoccupied for a period
9090 of twelve (12) months prior to acquisition shall be construed as a
9191 qualification for a f acility to initially receive an exemption, and
9292 shall not be deemed to be a qualifi cation for that facility to
9393 continue to receive an exemption in each of the four (4) years
9494 following the initial year for which the exemption was granted.
9595 Such facilities are hereby classified for the purposes of taxation
9696 as provided in Section 22 of Arti cle X of the Oklahoma Constitution.
9797 B. For purposes of this section, the following definitions
9898 shall apply:
9999 1. "Manufacturing facilities " means facilities engaged in the
100100 mechanical or chemical transformation of materials or substances
101101 into new products and except as provided by paragraph 6 of
102102 subsection C of this section shall include:
103103 a. establishments which have received a manufacturer
104104 exemption permit pursuant to the prov isions of Section
105105 1359.2 of this title,
106106 b. facilities including repair and replace ment parts,
107107 primarily engaged in aircraft repair, building and
108108 rebuilding whether or not on a factory basis,
109109 c. establishments primarily engaged in computer services
110110 and data processing as defined under Industrial Group
111111 Numbers 5112 and 5415, and U.S. Indu stry Number 334611
112112 and 519130 of the NAICS Manual, latest revision, and
113113
114114 Req. No. 9290 Page 3 1
115115 2
116116 3
117117 4
118118 5
119119 6
120120 7
121121 8
122122 9
123123 10
124124 11
125125 12
126126 13
127127 14
128128 15
129129 16
130130 17
131131 18
132132 19
133133 20
134134 21
135135 22
136136 23
137137 24
138138
139139 which derive at least fifty percent (50%) of their
140140 annual gross revenues from the sale of a product or
141141 service to an out-of-state buyer or consumer, and as
142142 defined under Industrial Gro up Number 5182 of the
143143 NAICS Manual, latest revision, which derive at least
144144 eighty percent (80%) of their annual gross revenues
145145 from the sale of a product or service to an out -of-
146146 state buyer or consumer. Eligibility as a
147147 manufacturing facility pursuant to this subparagraph
148148 shall be established, subject to review by the
149149 Oklahoma Tax Commission, by annually filing an
150150 affidavit with the Tax Commission stating that the
151151 facility so qualifies and such other information as
152152 required by the Tax Commission. For purp oses of
153153 determining whether annual gross revenues are derived
154154 from sales to out-of-state buyers, all sales to the
155155 federal government shall be considered to be an out -
156156 of-state buyer,
157157 d. establishments primarily engaged in commercial mining
158158 of cryptocurrency or in hosting persons engaged in the
159159 commercial mining of cryptocurrency through
160160 utilization of the establishment's infrastructure
161161 including servers and network hardware pow ered by
162162 Internet bandwidth, electricity, and other services
163163
164164 Req. No. 9290 Page 4 1
165165 2
166166 3
167167 4
168168 5
169169 6
170170 7
171171 8
172172 9
173173 10
174174 11
175175 12
176176 13
177177 14
178178 15
179179 16
180180 17
181181 18
182182 19
183183 20
184184 21
185185 22
186186 23
187187 24
188188
189189 generally required for such mining operations , and
190190 which have at least a capital investment of One
191191 Million Dollars ($1,000,000.00). For the purposes of
192192 this subparagraph:
193193 (1) "Blockchain technology" or "blockchain" means
194194 shared or distributed data structures or digital
195195 ledgers governed by consensus protocols and
196196 maintained by peer-to-peer networks that store
197197 digital transactions and verify and secure
198198 transactions cryptographically ,
199199 (2) "Commercial mining of cryptocurrency " means the
200200 process by which blockchain technology i s used to
201201 mine cryptocurrency and includes the process
202202 through which blockchain transactions are
203203 verified and accepted by adding the transactions
204204 to a blockchain ledger, which inv olves solving
205205 complex mathematical cryptographi c problems
206206 associated with a block containing transaction
207207 data, and
208208 (3) "Cryptocurrency" means a type of virtual currency
209209 that utilizes blockchain technology and that can
210210 be digitally traded between users or c an be
211211 converted or exchanged for legal tender .
212212
213213 Req. No. 9290 Page 5 1
214214 2
215215 3
216216 4
217217 5
218218 6
219219 7
220220 8
221221 9
222222 10
223223 11
224224 12
225225 13
226226 14
227227 15
228228 16
229229 17
230230 18
231231 19
232232 20
233233 21
234234 22
235235 23
236236 24
237237
238238 Eligibility as a manufacturing faci lity pursuant to
239239 this subparagraph shall be established, subject to
240240 review by the Oklahoma Tax Commission, by annually
241241 filing an affidavit with the Tax Commission stating
242242 that the facility so qualifies and such other
243243 information as required by the Tax Comm ission,
244244 e. facilities that the investment cost of the
245245 construction, acquisition or expansion is Five Hundred
246246 Thousand Dollars ($500,000.00) or more with respect to
247247 assets placed into service during calendar year 2022 .
248248 For subsequent calendar years, the investment required
249249 shall be increased annually by a percentage equal to
250250 the previous year's increase in the Consumer Price
251251 Index-All Urban Consumers ( "CPI-U") and such adjusted
252252 amount shall be the required investment cost in order
253253 to qualify for the exemp tion authorized by this
254254 section. The Oklahoma Department of Commerce shall
255255 determine the amount of the increase, if any, on
256256 January 1 of each year. The Oklahoma Tax Commiss ion
257257 shall publish on its website at least an nually the
258258 adjusted dollar amount in o rder to qualify for the
259259 exemption authorized by this section and shall include
260260 the adjusted dollar amount in any of its relevant
261261 forms or publications with respect to the exe mption.
262262
263263 Req. No. 9290 Page 6 1
264264 2
265265 3
266266 4
267267 5
268268 6
269269 7
270270 8
271271 9
272272 10
273273 11
274274 12
275275 13
276276 14
277277 15
278278 16
279279 17
280280 18
281281 19
282282 20
283283 21
284284 22
285285 23
286286 24
287287
288288 Provided, "investment cost" shall not include the cost
289289 of direct replacement, refurbishment, repair or
290290 maintenance of existing machinery or equipment, except
291291 that "investment cost" shall include capital
292292 expenditures for direct replacement, refurbi shment,
293293 repair or maintenance of existing ma chinery or
294294 equipment that qualifies fo r depreciation and/or
295295 amortization pursuant to the Internal Revenue Code of
296296 1986, as amended, and such expenditures shall be
297297 eligible as a part of an "expansion" that otherwise
298298 qualifies under this section,
299299 e. f. establishments primarily engaged in distrib ution as
300300 defined under Industry Numbers 49311, 49312, 49313 and
301301 49319 and Industry Sector Number 42 of the NAICS
302302 Manual, latest revision, and which meet the following
303303 qualifications:
304304 (1) construction with an initial ca pital investment
305305 of at least Five Mill ion Dollars ($5,000,000.00),
306306 (2) employment of at least one hundred (100) full -
307307 time-equivalent employees, as certified by the
308308 Oklahoma Employment Security Commission,
309309 (3) payment of wages or salaries to its employees a t
310310 a wage which equals or exceeds the a verage wage
311311 requirements in the Oklahoma Quality Jobs Program
312312
313313 Req. No. 9290 Page 7 1
314314 2
315315 3
316316 4
317317 5
318318 6
319319 7
320320 8
321321 9
322322 10
323323 11
324324 12
325325 13
326326 14
327327 15
328328 16
329329 17
330330 18
331331 19
332332 20
333333 21
334334 22
335335 23
336336 24
337337
338338 Act for the year in which the real property was
339339 placed into service, and
340340 (4) commencement of construction on or after November
341341 1, 2007, with construction to be completed within
342342 three (3) years from the date of the commencement
343343 of construction,
344344 f. g. facilities engaged in the manufacturing, compounding,
345345 processing or fabrication of materials into articles
346346 of tangible personal property according to the special
347347 order of a customer (custom order manu facturing) by
348348 manufacturers classified as operating in North
349349 American Industry Classification System (NAICS)
350350 Sectors 32 and 33, but does not include such custom
351351 order manufacturing by manufacturers classified in
352352 other NAICS code sectors, and
353353 g. h. with respect to any entity making an application for
354354 the exemption authorized by this section on or after
355355 January 1, 2023, the establishment making application
356356 for exempt treatment o f real or personal property
357357 acquired or improved beginning January 1, 2022, and
358358 for any calendar year thereafter, the entity shall be
359359 required to pay new direct jobs, as defined by Section
360360 3603 of this title for purposes of the Oklahoma
361361 Quality Jobs Program Act, an average annualized wage
362362
363363 Req. No. 9290 Page 8 1
364364 2
365365 3
366366 4
367367 5
368368 6
369369 7
370370 8
371371 9
372372 10
373373 11
374374 12
375375 13
376376 14
377377 15
378378 16
379379 17
380380 18
381381 19
382382 20
383383 21
384384 22
385385 23
386386 24
387387
388388 which equals or exceeds the average wage require ment
389389 in the Oklahoma Quality Jobs Program Act for the year
390390 in which the real or personal property was placed into
391391 service. The Oklahoma Tax Commission may request
392392 verification from the Oklahoma Department of Commerce
393393 that an establishment seeking an exemp tion for real or
394394 personal property pays an average annualized wage that
395395 equals or exceeds the average wage requirement in
396396 effect for the year in which the real or personal
397397 property was placed into service. For purpose s of
398398 this subparagraph, it shall not b e necessary for the
399399 establishment to qualify for incentive payments
400400 pursuant to the Oklahoma Quality Jobs Program Act, but
401401 the establishment shall be subject to the wage
402402 requirements of the Oklahoma Quality Jobs Progra m Act
403403 with respect to new direct jobs in order to qualify
404404 for the exempt treatment authorized by this section.
405405 Eligibility as a manufacturing facility pursuant to this
406406 subparagraph shall be established, subject t o review by the Tax
407407 Commission, by annually filing an affidavit with the Tax Commi ssion
408408 stating that the facility so qualifies and containing such other
409409 information as required by the Tax Commission.
410410
411411 Req. No. 9290 Page 9 1
412412 2
413413 3
414414 4
415415 5
416416 6
417417 7
418418 8
419419 9
420420 10
421421 11
422422 12
423423 13
424424 14
425425 15
426426 16
427427 17
428428 18
429429 19
430430 20
431431 21
432432 22
433433 23
434434 24
435435
436436 Provided, eating and drinking places, as well as other r etail
437437 establishments, shall not qualify as m anufacturing facilities for
438438 purposes of this section, nor shall centrally assessed properties.
439439 Eligibility as a manufacturing facility pursuant to this
440440 subparagraph shall be established, subject to review by the Tax
441441 Commission, by annually filing an applic ation with the Tax
442442 Commission stating that the facility so qualifies and containing
443443 such other information as required by the Tax Commission;
444444 2. "Facility" and "facilities", except as otherwise provided by
445445 this section, means and includes the land, buildi ngs, structures and
446446 improvements used directly and exclusively in the manufacturing
447447 process. Effective January 1, 2022, and for each calendar year
448448 thereafter, for establishments which have received a manufacture r
449449 exemption permit pursuant to the provision s of Section 1359.2 of
450450 this title, or facilities engaged in manufacturing activities
451451 defined or classified in the NAICS Manual under Industry Nos. 311111
452452 through 339999, inclusive, but for no other establishments , facility
453453 and facilities means and includes the land, buildings, structures,
454454 improvements, machinery, fixtures, equipment and other personal
455455 property used directly and exclusively in the manufacturing process;
456456 and
457457 3. "Research and development " means activities directly related
458458 to and conducted for the purpose of discovering, enhancing ,
459459
460460 Req. No. 9290 Page 10 1
461461 2
462462 3
463463 4
464464 5
465465 6
466466 7
467467 8
468468 9
469469 10
470470 11
471471 12
472472 13
473473 14
474474 15
475475 16
476476 17
477477 18
478478 19
479479 20
480480 21
481481 22
482482 23
483483 24
484484
485485 increasing or improving future or existing products or processes or
486486 productivity.
487487 C. The following provisions shall apply:
488488 1. A manufacturing concern shall be entitled to the exemption
489489 herein provided for each new manufacturing facility constructed,
490490 each existing manufacturing facility acquired and the expansion of
491491 existing manufacturing facilities on the same site, as such terms
492492 are defined by Section 6B of Article X of t he Oklahoma Constitution
493493 and by this section;
494494 2. No manufacturing concern shall r eceive more than one five -
495495 year exemption for any one manufacturing facility unless the
496496 expansion which qualifies the manufacturing facility for an
497497 additional five-year exemption meets the requirements of paragraph 4
498498 of this subsection and the employment le vel established for any
499499 previous exemption is maintained;
500500 3. Any exemption as to the expansion of an existing
501501 manufacturing facility shall be limited to the increase in ad
502502 valorem taxes directly attributable to the ex pansion;
503503 4. All initial applications for any exemption for a new,
504504 acquired or expanded manufacturing facility shall be granted only
505505 if:
506506 a. there is a net increase in annualized base payroll
507507 over the initial payr oll of at least Two Hundred Fifty
508508 Thousand Dollars ($250,000.00) if the facility i s
509509
510510 Req. No. 9290 Page 11 1
511511 2
512512 3
513513 4
514514 5
515515 6
516516 7
517517 8
518518 9
519519 10
520520 11
521521 12
522522 13
523523 14
524524 15
525525 16
526526 17
527527 18
528528 19
529529 20
530530 21
531531 22
532532 23
533533 24
534534
535535 located in a county with a population of fewer than
536536 seventy-five thousand (75,000), according to the most
537537 recent Federal Decennial Census, while maintaining or
538538 increasing base payroll in subsequent years, or at
539539 least One Million Dollars ($1,000,000.00) i f the
540540 facility is located in a county with a population of
541541 seventy-five thousand (75,000) or more, according to
542542 the most recent Federal Decennial Census, while
543543 maintaining or increasing base payroll in subsequent
544544 years; provided the payroll requirement of this
545545 subparagraph shall be waived for claims for exemptions
546546 including claims previously denied or on appeal on
547547 March 3, 2010, for all initial applications for
548548 exemption filed on or after January 1, 2004, and on or
549549 before March 31, 2009, and all subsequent annual
550550 exemption applications filed related to the initial
551551 application for exemption, for an applicant, if the
552552 facility has been located in Oklahoma for at least
553553 fifteen (15) years engaged in marine engine
554554 manufacturing as defined under U.S. Industry Numbe r
555555 333618 of the NAICS Manual, latest revision, and has
556556 maintained an average employment of five hundred (500)
557557 or more full-time-equivalent employees over a ten -year
558558 period. Any applicant that qualifies for the payroll
559559
560560 Req. No. 9290 Page 12 1
561561 2
562562 3
563563 4
564564 5
565565 6
566566 7
567567 8
568568 9
569569 10
570570 11
571571 12
572572 13
573573 14
574574 15
575575 16
576576 17
577577 18
578578 19
579579 20
580580 21
581581 22
582582 23
583583 24
584584
585585 requirement waiver as outlined in the previous
586586 sentence and subsequently closes its Oklahoma
587587 manufacturing plant prior to January 1, 2012, may be
588588 disqualified for exemption and subject to recapture.
589589 For an applicant engaged in paperboard manufacturing
590590 as defined under U.S. Industry Number 32 2130 of the
591591 NAICS Manual, latest revision, union master payouts
592592 paid by the buyer of the facility to specified
593593 individuals employed by the facility at the time of
594594 purchase, as specified under the purchase agreement,
595595 shall be excluded from payroll for purpo ses of this
596596 section.
597597 In order to provide certainty with respect to
598598 investments in manufacturing facilities pertaining to
599599 all initial applications for exemption filed on or
600600 after January 1, 2016, the following definitio ns shall
601601 apply:
602602 (1) "base payroll" shall mean total payroll adjusted
603603 for any nonrecurring bonuses, exercise of stock
604604 option or stock rights and other nonrecurring,
605605 extraordinary items included in total payroll,
606606 and
607607
608608 Req. No. 9290 Page 13 1
609609 2
610610 3
611611 4
612612 5
613613 6
614614 7
615615 8
616616 9
617617 10
618618 11
619619 12
620620 13
621621 14
622622 15
623623 16
624624 17
625625 18
626626 19
627627 20
628628 21
629629 22
630630 23
631631 24
632632
633633 (2) "initial payroll" shall mean base payroll for the
634634 year immediately precedin g the initial
635635 construction, acquisition or expansion.
636636 The Tax Commission shall verify payroll information
637637 through the Oklahoma Employment Security Commission by
638638 using reports from the Oklahoma Employment Security
639639 Commission for the calendar year immediatel y preceding
640640 the year for which initial application is made for
641641 base-line payroll, which must be maintained or
642642 increased for each subsequent year; provided, a
643643 manufacturing facility shall have the option of
644644 excluding from its payroll, for purposes of this
645645 section:
646646 i. payments to sole proprietors, members
647647 of a partnership, members of a limited
648648 liability company who own at least ten
649649 percent (10%) of the capital of the
650650 limited liability company or
651651 stockholder-employees of a corporation
652652 who own at least ten perc ent (10%) of
653653 the stock in the corporation, and
654654 ii. any nonrecurring bonuses, exercise of
655655 stock option or stock rights or other
656656 nonrecurring, extraordinary items
657657
658658 Req. No. 9290 Page 14 1
659659 2
660660 3
661661 4
662662 5
663663 6
664664 7
665665 8
666666 9
667667 10
668668 11
669669 12
670670 13
671671 14
672672 15
673673 16
674674 17
675675 18
676676 19
677677 20
678678 21
679679 22
680680 23
681681 24
682682
683683 included in total payroll numbers as
684684 reported by the Okla homa Employment
685685 Security Commission. A manufacturing
686686 facility electing either option shall
687687 indicate such election upon its
688688 application for an exemption under this
689689 section. Any manufacturing facility
690690 electing either option shall submit
691691 such information as the Tax Commission
692692 may require in order to verify payroll
693693 information. Payroll information
694694 submitted pursuant to the provisions of
695695 this paragraph shall be submitted to
696696 the Tax Commission and shall be subject
697697 to the provisions of Section 205 of
698698 this title, and
699699 b. the facility offers, or will offer within one hundred
700700 eighty (180) days of the date of employment, a basic
701701 health benefits plan to the full -time-equivalent
702702 employees of the facility, which is determined by the
703703 Department of Commerce to consist of the elements
704704 specified in subparagraph b of paragraph 1 of
705705 subsection A of Section 3603 of this title or elements
706706 substantially equivalent thereto.
707707
708708 Req. No. 9290 Page 15 1
709709 2
710710 3
711711 4
712712 5
713713 6
714714 7
715715 8
716716 9
717717 10
718718 11
719719 12
720720 13
721721 14
722722 15
723723 16
724724 17
725725 18
726726 19
727727 20
728728 21
729729 22
730730 23
731731 24
732732
733733 For purposes of this section, calculation of the amount of
734734 increased base payroll shall be measured from the start of initial
735735 construction or expa nsion to the completion of such construction or
736736 expansion or for three (3) years from the start of initial
737737 construction or expansion, whichever occurs first. The amount of
738738 increased base payroll shall include payroll for full-time-
739739 equivalent employees in this state who are employed by an entity
740740 other than the facility which has previously or is currently
741741 qualified to receive an exemption pursuant to the provisions of this
742742 section and who are leased or otherwise provide d to the facility, if
743743 such employment did not exist in this state prior to the start of
744744 initial construction or expansion of the facility. The
745745 manufacturing concern shall submit an affidavit to the Tax
746746 Commission, signed by an officer, stating that the co nstruction,
747747 acquisition or expansion o f the facility will result in a net
748748 increase in the annualized base payroll as required by this
749749 paragraph and that full -time-equivalent employees of the facility
750750 are or will be offered a basic health benefits plan as r equired by
751751 this paragraph. If, after the completion of such construction or
752752 expansion or after three (3) years from the start of initial
753753 construction or expansion, whichever occurs first, the construction,
754754 acquisition or expansion has not resulted in a ne t increase in the
755755 amount of annualized base payroll, if required, or any other
756756 qualification specified in this paragraph has not been met, the
757757
758758 Req. No. 9290 Page 16 1
759759 2
760760 3
761761 4
762762 5
763763 6
764764 7
765765 8
766766 9
767767 10
768768 11
769769 12
770770 13
771771 14
772772 15
773773 16
774774 17
775775 18
776776 19
777777 20
778778 21
779779 22
780780 23
781781 24
782782
783783 manufacturing concern shall pay an amount equal to the amount of any
784784 exemption granted including penalties and in terest thereon, to the
785785 Tax Commission for deposit to the Ad Valorem Reimbursement Fund;
786786 5. Except as otherwise provided by this paragraph, any new,
787787 acquired or expanded computer data processing, data preparation or
788788 information processing services provider classified in U.S. Industry
789789 Number 518210 of the North American Industrial Classification System
790790 (NAICS) Manual, 2017 revision, may apply for exemptions under this
791791 section for each year in which new, acquired, o r expanded capital
792792 improvements to the facil ity are made for assets placed in serv ice
793793 not later than December 31, 2021, if:
794794 a. there is a net increase in annualized payroll of the
795795 applicant at any facility or facilities of the
796796 applicant in this state of at least Two Hundred Fifty
797797 Thousand Dollars ($250,000.00), which is attributable
798798 to the capital improvements, or a net increase of
799799 Seven Million Dollars ($7,000,000.00) or more in
800800 capital improvements, while maintaining or increasing
801801 payroll at the facility or facilities in this state
802802 which are included in the application, and
803803 b. the facility offers, or will offer within one hundred
804804 eighty (180) days of the date of employment of new
805805 employees attributable to the capital improvements, a
806806 basic health benefits p lan to the full-time-equivalent
807807
808808 Req. No. 9290 Page 17 1
809809 2
810810 3
811811 4
812812 5
813813 6
814814 7
815815 8
816816 9
817817 10
818818 11
819819 12
820820 13
821821 14
822822 15
823823 16
824824 17
825825 18
826826 19
827827 20
828828 21
829829 22
830830 23
831831 24
832832
833833 employees of the facility, which is determined by the
834834 Department of Commerce to consist of the elements
835835 specified in subparagraph b of paragraph 1 of
836836 subsection A of Section 3603 of this title or elements
837837 substantially equivalent thereto.
838838 An establishment described by this paragraph, the primary
839839 business activity of which is described by Industry No. 518210 of
840840 the North American Industry Classification System (NAICS) Manual,
841841 2017 revision, that has applied for and been grante d an exemption
842842 for personal property at any time within five (5) years prior to th e
843843 effective date of this act, may apply for exemptions for items of
844844 eligible personal property to be located within improvements to real
845845 property and such real property and i mprovements having been exempt
846846 from ad valorem taxation prior to the effective dat e of this act
847847 pursuant to the provisions of this section if such personal property
848848 is placed in service not later than December 31, 2036. No
849849 additional personal property of such establishment placed in service
850850 after such date shall qualify for the exempt treatment otherwise
851851 authorized pursuant to this paragraph;
852852 6. Effective January 1, 2017, an entity engaged in electric
853853 power generation by means of wind, as described by the North
854854 American Industry Classification Syst em, No. 221119, shall not be
855855 defined as a qualifying manufacturing concern for purposes of the
856856 exemption otherwise authorized pursuant to Section 6B of Article X
857857
858858 Req. No. 9290 Page 18 1
859859 2
860860 3
861861 4
862862 5
863863 6
864864 7
865865 8
866866 9
867867 10
868868 11
869869 12
870870 13
871871 14
872872 15
873873 16
874874 17
875875 18
876876 19
877877 20
878878 21
879879 22
880880 23
881881 24
882882
883883 of the Oklahoma Constitution or qualify as a "manufacturing
884884 facility" as defined in this secti on. No initial application for
885885 exemption shall be filed by or accepted from an entity engaged in
886886 electric power generation by means of wind on or after January 1,
887887 2018;
888888 7. An entity or applicant engaged in an i ndustry as defined
889889 under U.S. Industry Numbe r 324110 of the NAICS Manual, latest
890890 revision, which has applied for or been granted an exemption for a
891891 time period which began on or after calendar year 2012 and before
892892 calendar year 2016 but which did not meet the payroll requirements
893893 of subparagraph a of paragraph 4 of this subsection becau se of
894894 nonrecurring bonuses, exercise of stock option or stock rights or
895895 other nonrecurring, extraordinary items included in total payroll in
896896 the previous year, shall be allow ed an exemption, beginning with
897897 calendar year 2016, for the number of years includ ing the calendar
898898 year for which the exemption was denied, remaining in the entity 's
899899 five-year exemption period, provided such entity attains or
900900 increases payroll at or above the initial or base payroll
901901 established for the exemption; and
902902 8. A facility engaged in manufacturing defined under U.S.
903903 Industry Number 327310 of the NAICS Manual shall have the payroll
904904 requirements of paragraph 4 of this subsection waived for tax year
905905 2021, which is based in part on the 2020 cale ndar year payroll
906906 reported to the Okla homa Employment Security Commission, and may
907907
908908 Req. No. 9290 Page 19 1
909909 2
910910 3
911911 4
912912 5
913913 6
914914 7
915915 8
916916 9
917917 10
918918 11
919919 12
920920 13
921921 14
922922 15
923923 16
924924 17
925925 18
926926 19
927927 20
928928 21
929929 22
930930 23
931931 24
932932
933933 continue to receive the exemption for the five -year period provided
934934 in this section only if all other requirements of this sectio n are
935935 met.
936936 D. 1. Except as provided in par agraph 2 of this subsection,
937937 the five-year period of exemption from ad valorem taxes for any
938938 qualifying manufacturing facility property shall begin on January 1
939939 following the initial qualifying use of the propert y in the
940940 manufacturing process.
941941 2. The five-year period of exemption from ad valo rem taxes for
942942 any qualifying manufacturing facility, as specified in subparagraphs
943943 a and b of this paragraph, which is located within a tax incentive
944944 district created pursuan t to the Local Development Act by a county
945945 having a population of at least five hu ndred thousand (500,000),
946946 according to the most recent Federal Decennial Census, shall begin
947947 on January 1 following the expiration or termination of the ad
948948 valorem exemption, abatement, or other incentive provided thro ugh
949949 the tax incentive district. Facil ities qualifying pursuant to this
950950 subsection shall include:
951951 a. a manufacturing facility as defined in subparagraph c
952952 of paragraph 1 of subsection B of this section, and
953953 b. an establishment primarily engaged in distribu tion as
954954 defined under Industry Number 49311 of the North
955955 American Industry Classification System for which the
956956 initial capital investment was at least One Hundred
957957
958958 Req. No. 9290 Page 20 1
959959 2
960960 3
961961 4
962962 5
963963 6
964964 7
965965 8
966966 9
967967 10
968968 11
969969 12
970970 13
971971 14
972972 15
973973 16
974974 17
975975 18
976976 19
977977 20
978978 21
979979 22
980980 23
981981 24
982982
983983 Eighty Million Dollars ($180,000,000.00); provide d,
984984 that the qualifying job creation and depr eciable
985985 property investment occurred p rior to calendar year
986986 2017 but not earlier than calendar year 2013.
987987 E. Any person, firm or corporation claiming the exemption
988988 herein provided for shall file each year for wh ich exemption is
989989 claimed, an application the refor with the county assessor of the
990990 county in which the new, expanded or acquired facility is located.
991991 The application shall be on a form or forms prescribed by the Tax
992992 Commission, and shall be filed on or bef ore March 15, except as
993993 provided in Section 2902.1 of this title, of each year in which the
994994 facility desires to take the exemption or within thirty (30) days
995995 from and after receipt by such person, firm or corporation of notice
996996 of valuation increase, whiche ver is later. In a case where
997997 completion of the facility or facilities will occur after January 1
998998 of a given year, a facility may apply to claim the ad valorem tax
999999 exemption for that year. If such facility is found to be qualified
10001000 for exemption, the ad v alorem tax exemption provided for herein
10011001 shall be granted for that entire year and shall apply to the ad
10021002 valorem valuation as of January 1 of that given year. For
10031003 applicants which qualify under the provisions of subparagraph b of
10041004 paragraph 1 of subsection B of this section, the application shall
10051005 include a copy of the affidavit and any other information required
10061006 to be filed with the Tax Commission.
10071007
10081008 Req. No. 9290 Page 21 1
10091009 2
10101010 3
10111011 4
10121012 5
10131013 6
10141014 7
10151015 8
10161016 9
10171017 10
10181018 11
10191019 12
10201020 13
10211021 14
10221022 15
10231023 16
10241024 17
10251025 18
10261026 19
10271027 20
10281028 21
10291029 22
10301030 23
10311031 24
10321032
10331033 F. The application shall be examined by the county assessor and
10341034 approved or rejected in the same manner as pr ovided by law for
10351035 approval or rejection of c laims for homestead exemptions. The
10361036 taxpayer shall have the same right of review by and appeal from the
10371037 county board of equalization, in the same manner and subject to the
10381038 same requirements as provided by law fo r review and appeals
10391039 concerning homestead ex emption claims. Approved applications shall
10401040 be filed by the county assessor with the Tax Commission no later
10411041 than June 15, except as provided in Section 2902.1 of this title, of
10421042 the year in which the facility de sires to take the exemption.
10431043 Incomplete applications and applications filed after June 15 will be
10441044 declared null and void by the Tax Commission. In the event that a
10451045 taxpayer qualified to receive an exemption pursuant to the
10461046 provisions of this section shal l make payment of ad valorem taxes in
10471047 excess of the amount due, the county treasur er shall have the
10481048 authority to credit the taxpayer 's real or personal property tax
10491049 overpayment against current taxes due. The county treasurer may
10501050 establish a schedule of up to five (5) years of credit to resolve
10511051 the overpayment.
10521052 G. Nothing herein shall in any manner affect, alter or impair
10531053 any law relating to the assessment of property, and all property,
10541054 real or personal, which may be entitled to exemption hereunder shall
10551055 be valued and assessed as is other like prope rty and as provided by
10561056 law. The valuation and assessment of property for which an
10571057
10581058 Req. No. 9290 Page 22 1
10591059 2
10601060 3
10611061 4
10621062 5
10631063 6
10641064 7
10651065 8
10661066 9
10671067 10
10681068 11
10691069 12
10701070 13
10711071 14
10721072 15
10731073 16
10741074 17
10751075 18
10761076 19
10771077 20
10781078 21
10791079 22
10801080 23
10811081 24
10821082
10831083 exemption is granted hereunder shall be performed by the Tax
10841084 Commission using one or more of the cost, income and expense and
10851085 sales comparison approaches to estimate fair ca sh value in
10861086 accordance with the Unifor m Standards of Professional Appraisal
10871087 Practice.
10881088 H. The Tax Commission shall have the authority and duty to
10891089 prescribe forms and to promulgate rules as may be necessary to car ry
10901090 out and administer the terms and provisio ns of this section.
10911091 SECTION 2. This act shall become effective November 1, 2022.
10921092
10931093 58-2-9290 AQH 01/05/22