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ENGROSSED SENATE
BILL NO. 311 By: Rader and Bergstrom of the
Senate
and
Boatman of the House
An Act relating to income tax incentives; amending 74
O.S. 2021, Section 5064.7, which relates to
incentives for products developed and ma nufactured in
this state; limiting qualification; limiting c ertain
credit and exemption to certain taxable years; and
providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OK LAHOMA:
SECTION 1. AMENDATORY 74 O.S. 2021, Section 5064.7, is
amended to read as follows:
Section 5064.7. A. The following incentives shall be available
to inventors for products developed and manufactured in this state
and to instate manufacturers of said products; provided, to qualify
for the incentives, the product shall be patented or have patent
pending pursuant to federal law and shall be registered with the
Oklahoma Center for the Adv ancement of Science and Technology
(OCAST) before November 1, 2023:
1. Royalty earned by an inventor from a product developed and
manufactured in this state shall be exempt from state income tax for
a period of seven (7) years from January 1 of the first year in
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which such royalty is received as long as the manufacturer remains
in the state; and
2. An instate manufacturer of a product develop ed in this state
by an inventor shall be eligible for a tax credit, as provided for
in Section 2357.4 of Title 68 o f the Oklahoma Statutes , for property
placed in service during tax years 1987 through 2 023. In addition
such manufacturer may exclude from Oklahoma taxable income, or in
the case of an individual, the Oklaho ma adjusted gross income,
sixty-five percent (65%) of the cost of depreciable property
purchased and utilized directly in manufacturing the product. The
maximum exclusion shall not exceed Five Hundred Thousand Dollars
($500,000.00). If the exclusion allo wed by this paragraph exceeds
the Oklahoma taxable income, or in the case of an indivi dual, the
Oklahoma adjusted gross income, the amo unt of the exclusion that is
in excess of such income may be carried forward as an exclusion
against subsequent Oklahoma taxable income or in the case of an
individual, subsequent Oklahoma adjusted gross inc ome, for a period
not to exceed four (4) years. For the purposes of this paragraph,
“depreciable property ” means machinery, fixtures, equipment,
buildings, or substantia l improvements thereto, placed in service in
this state during the taxable year years 1987 through 2023.
B. The Oklahoma Tax Commissio n, in conjunction with the
Oklahoma Center for the Advancement of Science and Technology, shall
promulgate rules to implement the provisions of t his section.
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SECTION 2. This act shall become effective November 1, 2023.
Passed the Senate the 20th day of March, 2023.
Presiding Officer of the Senate
Passed the House of Representatives the ____ day of __________,
2023.
Presiding Officer of the House
of Representatives