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53	53	STATE OF OKLAHOMA
54	54
55	55	1st Session of the 60th Legislature (2025)
56	56
57	57	SENATE BILL 1117 By: Stewart
58	58
59	59
60	60
61	61
62	62
63	63	AS INTRODUCED
64	64
65	65	An Act relating to income tax credit; amending
66	66	Section 1, Chapter 340, O.S.L. 2022, as amended by
67	67	Section 1, Chapter 164, O.S.L. 2024 ( 68 O.S. Supp.
68	68	2024, Section 2357.105), which relates to credit for
69	69	qualified economic development and infrastructure
70	70	expenditures; modifying definition; and providing an
71	71	effective date.
72	72
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77	77	BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
78	78	SECTION 1. AMENDATORY Section 1, Chapter 340, O.S.L.
79	79	2022, as amended by Section 1, Chapter 164, O.S.L. 2024 (68 O.S.
80	80	Supp. 2024, Section 2357.105), is amended to read as follows:
81	81	Section 2357.105. A. As used in this section:
82	82	1. “Eligible entity” means an entity incorporated and located
83	83	in the state with a qualifying project in a qualifying project
84	84	location;
85	85	2. “Qualifying project” means the new construction or expansion
86	86	of an eligible entity or the development of qualified initia l
87	87	infrastructure to serve an eligible entity in a qualifying project
88	88	location;
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140	140	3. “Qualifying project location ” means a project located in an
141	141	industrial park, economic development zone, or port located within a
142	142	county in this state with a population of le ss than one hundred
143	143	thousand (100,000) persons according to the latest Federal Decennial
144	144	Census for expenditures made prior to tax year 2026 , and four
145	145	hundred thousand (400,000) persons according to the latest Federal
146	146	Decennial Census for expenditures made in tax year 2026 and
147	147	subsequent tax years (“Qualified Area”), or a project located
148	148	adjacent to a terminal, switching, or Class II or III railroad as
149	149	defined by the federal Surface Transportation Board;
150	150	4. “Project sponsor” means a local economic developm ent
151	151	organization or authority, port authority, qualified industrial
152	152	park, or a terminal, switching, or Class II or III railroad;
153	153	5. “Project application” means an application submitted by a
154	154	project sponsor on behalf of a qualifying project for an allocati on
155	155	of qualifying strategic industrial development enhancement (SIDE)
156	156	tax credits. Project applications must include a description of the
157	157	qualifying project, project location, detailed project costs, and a
158	158	summary of expected economic benefits and job crea tion;
159	159	6. “Qualified economic development expenditures ” means
160	160	expenditures for land improvements, building construction, building
161	161	improvements and expansion, port terminal improvements, and the
162	162	purchase of certain machinery and equipment;
163	163
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214	214	7. “Qualified initial infrastructure expenditures ” means
215	215	expenditures for new rail infrastructu re and improvements, which
216	216	includes the acquisition of right -of-way, engineering,
217	217	rehabilitation of existing inactive track to reinstate operation,
218	218	construction of new track suc h as industrial leads, switches, spurs,
219	219	and sidings, loading dock improvements, and transloading structures
220	220	involved with providing rail service to a qualifying project; and
221	221	8. “Project tax credit amount ” means the amount of tax credits
222	222	allocated by Oklahoma Department of Commerce to a qualifying project
223	223	for qualified economic devel opment and initial infrastructure
224	224	expenditures.
225	225	B. For tax years beginning after December 31, 2022, and ending
226	226	not later than December 31, 2027, there shall be allowed a credit
227	227	against the tax imposed pursuant to Section 2355 of this title in an
228	228	amount not to exceed ten percent (10%) of an eligible entity ’s
229	229	qualified economic development expenditures, subject to limitations,
230	230	determination, and allocation by the Oklahoma Departme nt of
231	231	Commerce.
232	232	C. The total project tax credit amount may not exceed ten
233	233	percent (10%) of the qualified economic development expenditures,
234	234	except for qualified initial infrastructure expenditures the project
235	235	tax credit amount is earned at the rate of fif ty percent (50%) of
236	236	qualified initial infrastructure expenditures.
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288	288	D. 1. The project tax credit amount for qualified economic
289	289	development expenditures may not exceed Six Million Dollars
290	290	($6,000,000.00) per qualifying project.
291	291	2. The project tax credit a mount for qualified initial
292	292	infrastructure expenditures may not exceed Three Mi llion Dollars
293	293	($3,000,000.00) per qualifying project.
294	294	Projects are eligible to combine qualified economic development
295	295	and qualified initial infrastructure expenditures, but the total
296	296	project tax credit amount may not exceed Six Million Dollars
297	297	($6,000,000.00) per qualifying project in aggregate.
298	298	E. The issuance of the project tax credit amount shall be
299	299	subject to review of eligible expenditures and qualifying project
300	300	status by the Oklahoma Department of Commerce.
301	301	F. The credits authorized pursuant to this section may not be
302	302	used to reduce the tax liability of the taxpayer to less than zero
303	303	(0).
304	304	G. The credits allowed pursuant to this section that are not
305	305	used may be assigned to a qualifying project affiliate by written
306	306	agreement at any time during the tax year in which the credit is
307	307	earned or the five (5) years following the tax year the qualified
308	308	expenditures are incurred. For purposes of this subsection, a
309	309	“qualifying project affiliate” shall include a customer, vendor,
310	310	project investor, or strategic fi nance partner of the eligible
311	311	entity subject to the Oklahoma corporate or individual income tax.
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363	363	The eligible taxpayer and the qualifying project affiliate must
364	364	jointly file a copy of the written assignment agreement with the
365	365	Oklahoma Tax Commission within thirty (30) days of the assignment.
366	366	The written agreement must contain the name, address, and taxpayer
367	367	identification number of the parties to the assignment, the tax year
368	368	the eligible taxpayer incurred the qualified expenditures, the
369	369	amount of credit being assigned, and the tax year or years for which
370	370	the credit may be claimed.
371	371	H. To the extent not used, the tax credit authorized by this
372	372	section may be carried over, in order , to each of the five (5)
373	373	subsequent taxable years.
374	374	I. Credits allocated by the Department shall not exceed Twelve
375	375	Million Dollars ($12,000,000.00) in a tax year. Qualifying projects
376	376	that have submitted an application and are not allocated all or part
377	377	of credit for qualified economic development expenditures or
378	378	qualified initial in frastructure expenditures shall be eligible for
379	379	credit in subsequent tax years.
380	380	J. 1. The Oklahoma Tax Commission may promulgate rules, forms,
381	381	and regulations as are necessary to implement and administer the
382	382	provisions of this section and certify the tax credit amount
383	383	generated by each qualifying project annually.
384	384	2. The Oklahoma Department of Commerce shall promulgate rules
385	385	to permit verification of the eligibility of a quali fying project
386	386	for the purpose of claiming the credit. The rules shall provide for
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438	438	the approval of qualified economic development expenditures prior to
439	439	commencement of a project and provide a certificate of verification
440	440	upon completion of a project that us es qualified economic
441	441	development expenditures. The certificate of verification shall
442	442	satisfy all requirements of the Oklahoma Tax Commission pertaining
443	443	to the eligibility of the eligible taxpayer claiming the credit.
444	444	SECTION 2. This act shall become effective November 1, 2025.
445	445
446	446	60-1-1142 QD 1/16/2025 3:48:27 PM

Oklahoma 2025 Regular Session

Oklahoma Senate Bill SB1117 Compare Versions