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STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
SENATE BILL 296 By: Pugh
AS INTRODUCED
An Act relating to income tax; amending 68 O.S. 2021,
Section 2357.301, as amended by Section 1, Chapter
313, O.S.L. 2024 (68 O.S. Supp. 20 24, Section
2357.301), which relates to definitions; defining
term; amending 68 O.S. 2021, Sections 2357.303 and
2357.304, as amended by Section 2, Chapter 313,
O.S.L. 2024 (68 O.S. Supp. 2024, Section 2357.304) ,
which relate to credit for qualified employ ers and
qualified employees; expanding credit to include
instructor pilots; an d providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 2357.301, a s
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 or public organiz ation
located in this state and engaged in the manufacture of aerospace or
defense hardware or software, aerospace maintenance, aerospace
repair and overhaul, supply of parts to the aerospace industry,
provision of services and support relating to the aero space
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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 th e 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, mea ls, 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. “Instructor pilot” means any person who is licensed as a
Certified Flight Instructor by the Federal Aviation Administration
and is employed in this state in support of a contract with the
federal government to provide instruction either live or on a flight
simulator who was not employed as an instructor pilot in the
aerospace sector in this state immediately preceding employment or
contracting with a qualified employer . The definition shall not be
interpreted to exclude any person (1) who previously qualified and
established the credit against the tax imposed pursuant to Section
2355 of this title and be comes 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
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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 ;
5. “Qualified employer” means a sole proprietor, general
partnership, limited partnersh ip, limited liability company,
corporation, other legally recognized business entity or public
entity whose principal business activity involves the aerospace
sector;
5. 6. “Qualified employee” means any person, regardless of the
date of hire, employed in this state by or contracting in this state
with a qualified employer on or after January 1, 2009, who was not
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 a n 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 any person who
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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.
Beginning on or after January 1, 2024, the definition shall also
not be interpreted to exclude any person (1) who previously
qualified and established the credit against the tax imposed
pursuant to Section 2355 of this title and becomes employed by a
different qualified e mployer, 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. 7. “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 grad uate 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. 8. “Tuition” means the average annual amount paid by a
qualified employee for enrollment and instruction in a qualified
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program. Tuition shall not include the cost of books, fees or room
and board.
SECTION 2. 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, a qualified emplo yer shall be
allowed a credit against the tax imposed pursuant to Section 2355 of
this title for compensation paid to a qualified employee and, for
tax year 2025, an instructor pilot .
B. The credit authorized by subsection A 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 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 aerospace sector if the
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.
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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 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 otherwis e 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 a fter July 1, 2011, according to the provisions
of this section.
SECTION 3. 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 subsection D of
this section, for taxable years beginning after December 31, 2008,
and ending before January 1, 2026, a qualified employee and, for tax
year 2025, an instructor pilot shall be allowed a credit against the
tax imposed pursuant to Section 2355 of this title of up to Five
Thousand Dollars ($5,000.00) per tax year for a period of time not
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to exceed five (5) years during the lifetime of the qualified
employee. This credit may be claimed in no nconsecutive tax years.
B. The credit authorized by this section shall not be 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 t axable 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 p rovisions 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, acc ording to the provisions
of this section.
SECTION 4. This act shall become effective November 1, 2025.
60-1-1249 QD 12/30/2024 11:25:34 PM