OK
Oklahoma House Bill HB1602

Oklahoma 2025 Regular Session

Oklahoma House Bill HB1602 Compare Versions

Only one version of the bill is available at this time.
OldNewDifferences
11
22
33 Req. No. 11209 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 1st Session of the 60th Legislature (2025)
3131
3232 HOUSE BILL 1602 By: Gise
3333
3434
3535
3636
3737
3838 AS INTRODUCED
3939
4040 An Act relating to revenue and taxation; amending 68
4141 O.S. 2021, Section 2357.404, which relates to income
4242 tax credits for tuition reimburse ment for qualified
4343 employees of vehicle and automotive parts
4444 manufacturing companies; modifying dates to which
4545 credits may be claimed; providing an effective date .
4646
4747
4848
4949
5050 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
5151 SECTION 1. AMENDATORY 68 O.S. 2021, Section 2357.404, is
5252 amended to read as fol lows:
5353 Section 2357.404. Tax credit for tuition reimbursement for
5454 qualified employees of vehicle and automotive parts manufacturing
5555 companies.
5656 A. As used in this section:
5757 1. "Vehicle manufacturing " and "automotive parts manufacturing "
5858 mean a private or public company first placed in operation in this
5959 state after November 1, 2019, which is engaged in the research,
6060 development, design and manufacture of motor vehicles or automotiv e
6161 parts manufacturing which may be driven on the avenues of public
6262 access. For purposes of this section, "motor vehicle" does not
6363
6464 Req. No. 11209 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 include low-speed electric vehicles or motor vehicles manufactured
9090 primarily for off-road use, such as primarily for use on a golf
9191 course;
9292 2. "Compensation" means payments in the form of contract labor
9393 for which the payor is required to provide a Form 1099 to the person
9494 paid, wages subject to withholding tax paid to a part -time employee
9595 or full-time employee, or salary or other remuneration.
9696 Compensation shall not include employer -provided retirement, m edical
9797 or health-care benefits, reimbursement for travel, meals, lodging or
9898 any other expense;
9999 3. "Institution" means an institution within The Oklahoma State
100100 System of Higher Education or any other public or private college or
101101 university that is accredited by a national accrediting body;
102102 4. "Qualified employer" means a sole proprietor, general
103103 partnership, limited partnership, limited liability company,
104104 corporation, other legal ly recognized business entity, or public
105105 entity whose principal business activ ity involves the vehicle
106106 manufacturing as defined in this section;
107107 5. "Qualified employee" means any person, regardless of the
108108 date of hire, employed in this state by or contrac ting in this state
109109 with a qualified employer on or after January 1, 2018, who has been
110110 awarded an undergraduate or graduate degree from a qualified program
111111 by an institution, and who was not employed in vehicle manufacturing
112112 in this state immediately prece ding employment or contracting with a
113113
114114 Req. No. 11209 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 qualified employer. Provided, the defin ition shall not be
140140 interpreted to exclude any person who was employed in vehicle
141141 manufacturing, but not as a full -time engineer, prior to being
142142 awarded an undergraduate or gradua te degree from a qualified program
143143 by an institution or any person who has been awarded an
144144 undergraduate or graduate degree from a qualified program by an
145145 institution and is employed by a professional staffing company and
146146 assigned to work in vehicle manufa cturing in this state;
147147 6. "Qualified program" means a program that awards an
148148 undergraduate or graduate degree and that has been accredited by the
149149 Engineering Accreditation Commission of the Accreditation Board for
150150 Engineering and Technology (ABET); and
151151 7. "Tuition" means the average annual amount paid by a
152152 qualified employee for enrollment and instruction in a qualified
153153 program. Tuition shall not include the cost of books, fees or room
154154 and board.
155155 B. 1. Except as otherwise provided in subsection E of th is
156156 section, for taxable years beginning after December 31, 2018, and
157157 ending before January 1, 2026 2032, a qualified employer shall be
158158 allowed a credit against the tax imposed pursuant to Section 2355 of
159159 Title 68 of the Oklahoma Statutes for tuition reimbu rsed to a
160160 qualified employee.
161161 2. The credit authorized by this subsection may be claimed only
162162 if the qualified employee has been awarded an undergraduate or
163163
164164 Req. No. 11209 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 graduate degree within one (1) year of commencing employment with
190190 the qualified employer.
191191 3. The credit authorized by this subsection shall be in the
192192 amount of fifty percent ( 50%) of the tuition reimbursed to a
193193 qualified employee for the first through fourth years of employment.
194194 In no event shall this credit exceed fifty percent (50%) of the
195195 average annual amount paid by a qualified employee for enrollment
196196 and instruction in a qualified program at a public institution in
197197 Oklahoma.
198198 4. The credit authorized by this subsection shall not be used
199199 to reduce the tax liability of the qualified employer to le ss than
200200 zero (0).
201201 5. No credit authorized by this subsection shall be claimed
202202 after the fourth year of employment.
203203 C. 1. Except as otherwise provided in subsection E of this
204204 section, for taxable years beginning after December 31, 2018, and
205205 ending before January 1, 2026 2032, a qualified employer shall be
206206 allowed a credit against the tax imposed pursuant to Section 2355 of
207207 Title 68 of the Oklahoma Statutes for compensation paid to a
208208 qualified employee.
209209 2. The credit authorized by this subsection shall be in the
210210 amount of:
211211 a. ten percent (10%) of the compensation paid for the
212212 first through fifth years of employment in vehicle
213213
214214 Req. No. 11209 Page 5 1
215215 2
216216 3
217217 4
218218 5
219219 6
220220 7
221221 8
222222 9
223223 10
224224 11
225225 12
226226 13
227227 14
228228 15
229229 16
230230 17
231231 18
232232 19
233233 20
234234 21
235235 22
236236 23
237237 24
238238
239239 manufacturing if the qualified employee graduated from
240240 an institution located in this state, or
241241 b. five percent (5%) of the compensa tion paid for the
242242 first through fifth years of employment in vehicle
243243 manufacturing if the qualified employee graduated from
244244 an institution located outside this state.
245245 3. The credit authorized by this subsection shall not exceed
246246 Twelve Thousand Five Hundre d Dollars ($12,500.00) for each qualified
247247 employee annually.
248248 4. The credit authorized by this subsection shall not be used
249249 to reduce the tax liability of the qualified employer to less than
250250 zero (0).
251251 5. No credit authorized pursuant to this subsection sh all be
252252 claimed after the fifth year of employment.
253253 D. 1. Except as otherwise provided in subsection F of this
254254 section, for taxable years beginning after December 31, 2018, and
255255 ending before January 1, 2026 2032, a qualified employee shall be
256256 allowed a credit against the tax imposed pursuant to Section 2355 of
257257 Title 68 of the Oklah oma Statutes of up to Five Thousand Dollars
258258 ($5,000.00) per year for a period of time not to exceed five (5)
259259 years.
260260 2. The credit authorized by this subsection shall not be used
261261 to reduce the tax liability of the taxpayer to less than zero (0).
262262
263263 Req. No. 11209 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 3. Any credit claimed, but not used, may be carried over, in
289289 order, to each of the five (5) subsequent taxable years.
290290 E. 1. For any tax year during which the credit is allowed, the
291291 total amount of credits authorized by subsections B and C of this
292292 section used to offset tax shall be adjusted annually to limit the
293293 annual amount of credits to Three Million Dollars ($3,000,000.00).
294294 The Tax Commission shall annually calculate and publish a p ercentage
295295 by which the credits authorized by subsections B and C of this
296296 section shall be reduced so the total amount of credits used to
297297 offset tax does not exceed Three Million Dollars ($3,000,000.00) per
298298 year. The formula to be used for the percentage a djustment shall be
299299 Three Million Dollars ($3,000,000.00) divided by the credit s claimed
300300 in the second preceding year.
301301 2. Pursuant to paragraph 1 of this subsection, in the event the
302302 total tax credits authorized by subsections B and C of this section
303303 exceed Three Million Dollars ($3,000,000.00) in any tax year, the
304304 Tax Commission shall permit any excess over Three Million Dollars
305305 ($3,000,000.00), but shall factor such excess into the percentage
306306 adjustment formula for subsequent years.
307307 F. 1. For any tax ye ar during which the credit is allowed, the
308308 total amount of credits authorized by subsection D of this section
309309 used to offset tax shall be adjusted annually to limit the annual
310310 amount of credits to Two Million Dollars ($2,000,000.00). The Tax
311311 Commission shall annually calculate and publish a percentage by
312312
313313 Req. No. 11209 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 which the credits authorized by subsection D of this section shall
339339 be reduced so the total amount of credits used to offset tax does
340340 not exceed Two Million Dollars ($2,000,000.00) per year. The
341341 formula to be used for the percentage adjustment shall be Two
342342 Million Dollars ($2,000,00 0.00) divided by the credits claimed in
343343 the second preceding year.
344344 2. Pursuant to paragraph 1 of this subsection, in the event the
345345 total tax credits authorized by subsection D o f this section exceed
346346 Two Million Dollars ($2,000,000.00) in any tax year, the Tax
347347 Commission shall permit any excess over Two Million Dollars
348348 ($2,000,000.00), but shall factor such excess into the percentage
349349 adjustment formula for subsequent years.
350350 SECTION 2. This act shall become effective November 1, 2025.
351351
352352 60-1-11209 AO 12/27/24