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STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022)
SENATE BILL 1858 By: David
AS INTRODUCED
An Act relating to income tax credit; defining terms;
providing tax credit for certain tuition
reimbursements; requiring the award of certain degree
to claim credit; providing amount of credit;
providing credit for certain compensation paid to
qualified employee in hydrogen manufacturing
industry; providing amount of credit; limiting amou nt
of credit; prohibiting use of credit to reduce tax
liability below zero; providing ma ximum number of tax
years credit can be claimed; authorizing carryover of
credit for certain amount of years ; providing for
codification; and providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STA TE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 2357.407 of Title 68, unless
there is created a duplication in numb ering, reads as follows:
A. As used in this section:
1. "Compensation" means payments in the form of co ntract labor
for which the payor is required to provide a Form 1099 to the person
paid, wages subject to withholding tax paid to a part -time employee
or full-time employee, or salary or other remuneration.
Compensation shall not include employer -provided retirement, medical
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or health-care benefits, reimbursement for travel, meals, lodging ,
or any other expense;
2. "Hydrogen manufacturing industry" means establishments whose
principal business activity involve s hydrogen manufacturing, as
defined or classified in the NAICS Manual u nder Industry Group No.
325120;
3. "Institution" means an institution withi n The Oklahoma State
System of Higher Education or any other public or private college or
university that is accredited by a national accrediting body;
4. "Qualified employer" means a sole proprietor, general
partnership, limited partnership, limited liab ility company,
corporation, other lega lly recognized business entity, or public
entity whose principal business activity involves hydrogen
manufacturing, as defined or classified in the NAICS Man ual under
Industry Group No. 325120;
5. "Qualified employee" means any person, regardless of the
date of hire, employe d in this state by or contracting in this state
with a qualified employer on or after January 1, 2023, who was not
employed in the hydrogen manufacturing industry in this state
immediately preceding employment or contracting w ith a qualified
employer, and who has been either:
a. awarded an undergraduate or graduate degree from a
qualified program by an institution, or
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b. licensed as a professional engineer by the State Board
of Licensure for Profess ional Engineers and Land
Surveyors pursuant to Section 475. 15 of Title 59 of
the Oklahoma Statutes.
Provided, the definition shall not be interpreted to exclude any
person who was not a full-time engineer and was employed in the
hydrogen manufacturing industry prior to being awarded an
undergraduate or graduate degree from a qualified program by an
institution or any person who has been awarded an undergraduate or
graduate degree from a qualified program by an institution and is
employed by a professional s taffing company and assigned to work in
the hydrogen manufacturing industry in this state;
6. "Qualified program" means a program at an institution that
includes a graduate or undergraduate program that has been
accredited by the Engineering Accreditation Commission of the
Accreditation Board for Engineering and Technology (ABET) and that
awards an undergraduate or graduate degree. Both the undergraduate
and graduate programs of the same discipline of engineering at an
institution shall be part of the qua lified program if either program
is ABET accredited; and
7. "Tuition" means the average annual amount paid b y a
qualified employee for enrollment and instruction in a qualified
program. Tuition shall not include the cost o f books, fees, or room
and board.
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B. For tax years 2023 through 2033 , a qualified employer shall
be allowed a credit agains t the tax imposed pursuant to Section 2355
of Title 68 of the Oklahoma Statutes for tuition reimbursed to a
qualified employee.
C. The credit authorized by subsection B of this section may be
claimed only if the qualified employee has been awarde d an
undergraduate or grad uate degree within one (1) year of commencing
employment with the qualified employer.
D. The credit authoriz ed by subsection B of this section shall
be in the amount of fifty percent (50%) of the tuition r eimbursed to
a qualified employee for the first th rough fourth years of
employment. In no event shall this credit exceed fifty percent
(50%) of the average an nual amount paid by a qualified employee for
enrollment and instruction in a qualified program at a public
institution in Oklahoma.
E. For tax years 2023 through 2033, a qualified employer shall
be allowed a credit against the tax imposed pursuant to Sect ion 2355
of Title 68 of the Oklahoma Statutes for compensation paid to a
qualified employee.
F. The credit authorized by subsection E of this section shall
be in the amount of:
1. Ten percent (10%) of the compensation paid for the first
through fifth years of employment in the hydrogen manufacturing
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industry if the qualified employee graduated from an institution
located in this state; or
2. Five percent (5%) of the compensation paid for the first
through fifth years of employment in the hydrogen manufacturing
industry if the qualified employee graduated from an institution
located outside this state.
G. The credit authorized by subsection E of this section shall
not exceed Twelve Thousand Five Hundred Dollars ($12,500 .00) for
each qualified employee annually.
H. The credit authorized by subsections B and E of this section
shall not be used to reduce the tax liability of the qualified
employer to less than zero (0).
I. No credit authorized by this section shall be claimed after
the fifth year of employment.
J. Any credit authorized by subsections B and E of this section
claimed, but not used, may be carried over, in order, to each of the
five (5) subsequent taxable years
SECTION 2. This act shall become effective November 1, 2022.
58-2-3113 QD 1/20/2022 10:31:31 PM