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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
COMMITTEE SUBSTITUTE
FOR ENGROSSED
SENATE BILL NO. 287 By: Pugh of the Senate
and
Miller and Pae of the House
COMMITTEE SUBSTITUTE
[ income tax – income tax credit – qualified
employers and employees aerospace sector –
institutions of higher education – effective date ]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Sec tion 2357.301, as
amended by Section 1, Chapter 313, O.S.L. 2024 (68 O.S. Supp. 2024,
Section 2357.301), is amended to read as follows:
Section 2357.301. As used in Sections 2357.301 through 2357.304
of this title:
1. "Aerospace sector" means a private o r public organization
located in this state and engaged in the manufacture of aerospace or
defense hardware or software, aerospace maintenance, aerospace
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repair and overhaul, supply of parts to the aerospace industry,
provision of services and support rela ting to the aerospace
industry, research and development of aerospace technology and
systems and the education and training of aerospace personnel;
2. "Compensation" means payments in the form of contract 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 or health -
care benefits, reimbursement for travel, meals, lodging or any other
expense;
3. "Institution" means an institution within 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 liability company,
corporation, other legally recognized business entity or public
entity whose principal business activity involves the aerospace
sector, or an institution of higher education within this state that
has a research, innovation, and education institute dedicated to
aerospace research and technology ;
5. "Qualified employee" means any person, regardless of the
date of hire, employed in this state by or co ntracting in this state
with a qualified employer on or after January 1, 2009, who was not
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employed in the aerospace sector in this state immediately preceding
employment or contracting with a qualified employer, and who has
been either:
a. awarded an undergraduate or graduate degree from a
qualified program by an institution, or
b. licensed as a Professional Engineer by the State Board
of Licensure for Professional 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 employed in the aerospace sector, but not as a full -
time engineer, prior to being awarded an undergraduate or graduate
degree from a qualified program by an institution or an y person who
has been awarded an undergraduate or graduate degree from a
qualified program by an institution and is employed by a
professional staffing company and assigned to work in the aerospace
sector in this state.
Provided, the definition of qualifie d employee for an employee
employed or under contract with an institution of higher education
within this state that has a research and education institute
dedicated to aerospace research and technology only applies to those
individuals actively working wi thin the research, innovation, and
education institute dedicated to aerospace research and technology.
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Beginning on or after January 1, 2024, the definition shall also
not be interpreted to exclude any person (1) who previously
qualified and established th e credit against the tax imposed
pursuant to Section 2355 of this title and becomes employed by a
different qualified employer, or (2) who establishes the credit
against the tax imposed pursuant to Section 2355 of this title for
the first time and becomes employed by a different qualified
employer in subsequent years, provided a person in either case has
not claimed the credit for the lifetime maximum of five (5) years;
6. "Qualified program" means a program at an institution that
includes a graduate or un dergraduate 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 qualified program if either program
is ABET accredited; and
7. "Tuition" means the average annual amount paid by a
qualified employee for enrollment and instruction in a qualified
program. Tuition shall not include the cost of books, fees or room
and board.
SECTION 2. AMENDATORY 68 O.S. 2021, Section 2357.302, is
amended to read as follows:
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Section 2357.302. A. Except as provided in subsection F of
this section, for taxable years beginning after December 31, 2008,
and ending before January 1, 2026 tax years 2009 through 2031 , a
qualified employer shall be allowed a credit against the tax imposed
pursuant to Section 2355 of this title for tuition reimbursed to a
qualified employee.
B. The credit authorized by subsection A of this section may be
claimed only if the qualified employee has been awarded an
undergraduate or graduate degree within one (1) year of commencing
employment with the qualified employer.
C. The credit authorized by subsection A of this section shall
be in the amount of fifty percent (50%) of the tuition reimbursed to
a qualified employee for the first through fourth years of
employment. In no event shall this credit exceed fifty percent
(50%) of the average annual amount paid by a qualified employee for
enrollment and instruction in a qualified program at a public
institution in Oklahoma.
D. The credit authorized by subsection A of this section shall
not be used to reduce the tax liabil ity of the qualified employer to
less than zero (0).
E. No credit authorized by this section shall be claimed after
the fourth year of employment.
F. No credit otherwise authorized by the provisions of this
section may be claimed for any event, transacti on, investment,
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expenditure or other act occurring on or after July 1, 2010, for
which the credit would otherwise be allowable. The provisions of
this subsection shall cease to be operative on July 1, 2011.
Beginning July 1, 2011, the credit authorized b y this section may be
claimed for any event, transaction, investment, expenditure or other
act occurring on or after July 1, 2011, according to the provisions
of this section.
SECTION 3. AMENDATORY 68 O.S. 2021, Section 2357.303, is
amended to read as follows:
Section 2357.303. A. Except as provided in subsection F of
this section, for taxable years beginning after December 31, 2008,
and ending before January 1, 2026 tax years 2009 through 2031 , a
qualified employer shall be allo wed a credit against the tax imposed
pursuant to Section 2355 of this title for compensation paid to a
qualified employee.
B. The credit authorized by subsection A of this section shall
be in the amount of:
1. Ten percent (10%) of the compensation paid f or the first
through fifth years of employment in the aerospace sector 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 a erospace sector if the
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qualified employee graduated from an institution located outside
this state.
C. The credit authorized by this section shall not exceed
Twelve Thousand Five Hundred Dollars ($12,500.00) for each qualified
employee annually.
D. The credit authorized by this section shall not be used to
reduce the tax liability of the qualified employer to less than zero
(0).
E. No credit authorized pursuant to this section shall be
claimed after the fifth year of employment.
F. No credit otherwise a uthorized by the provisions of this
section may be claimed for any event, transaction, investment,
expenditure or other act occurring on or after July 1, 2010, for
which the credit would otherwise be allowable. The provisions of
this subsection shall ceas e to be operative on July 1, 2011.
Beginning July 1, 2011, the credit authorized by this section may be
claimed for any event, transaction, investment, expenditure or other
act occurring on or after July 1, 2011, according to the provisions
of this section.
SECTION 4. AMENDATORY 68 O.S. 2021, Section 2357.304, as
amended by Section 2, Chapter 313, O.S.L. 2024 (68 O.S. Supp. 2024,
Section 2357.304), is amended to read as follows:
Section 2357.304. A. Except as provided in subsect ion D of
this section, for taxable years beginning after December 31, 2008,
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and ending before January 1, 2026 tax years 2009 through 2031 , a
qualified employee shall be allowed a credit against the tax imposed
pursuant to Section 2355 of this title of up t o Five Thousand
Dollars ($5,000.00) per tax year for a period of time not to exceed
five (5) years during the lifetime of the qualified employee. This
credit may be claimed in nonconsecutive tax years.
B. The credit authorized by this section shall not b e used to
reduce the tax liability of the taxpayer to less than zero (0).
C. Any credit claimed, but not used, may be carried over, in
order, to each of the five (5) subsequent taxable years.
D. No credit otherwise authorized by the provisions of this
section may be claimed for any event, transaction, investment,
expenditure or other act occurring on or after July 1, 2010, for
which the credit would otherwise be allowable. The provisions of
this subsection shall cease to be operative on July 1, 2011.
Beginning July 1, 2011, the credit authorized by this section may be
claimed for any event, transaction, investment, expenditure or other
act occurring on or after July 1, 2011, according to the provisions
of this section.
SECTION 5. This act shall become effective November 1, 2025.
COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS AND BUDGET , dated
04/17/2025 - DO PASS, As Amended.