1 STATE OF OKLAHOMA
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2 2nd Session of the 59th Legislature (2024)
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3 HOUSE BILL 4038 By: Townley
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6 AS INTRODUCED
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7 An Act relating to revenue and taxation; creating
7 income tax credit for manufacturing employer;
8 creating income tax credit for manufacturing
8 employee; providing conditions for use of credit;
9 specifying amount of tax credit; defining terms;
9 prohibiting use of tax credit to reduce liability to
10 less than zero; providing Oklahoma Tax Commission
10 with authority to create rules; providing when credit
11 may be claimed for eligible wages and travel; and
11 providing an effective date.
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15 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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16 SECTION 1. NEW LAW A new section of law to be codified
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17 in the Oklahoma Statutes as Section 2357.501 of Title 68, unless
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18 there is created a duplication in numbering, reads as follows:
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19 A. 1. Except as otherwise provided in subsection D of this
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20 section, for tax years beginning after December 31, 2024, and ending
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21 before January 1, 2026, there shall be allowed against the tax
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22 imposed by Section 2355 of Title 68 of the Oklahoma Statutes, a
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23 credit for eligible wages paid by a qualified manufacturing employer
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24 to an eligible employee that was laid off by a qualified
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1 manufacturing plant within the last twelve (12) months. The amount
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2 of the credit shall be fifty percent (50%) of the amount of the
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3 gross wages paid to the employee for a period not to exceed one
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4 hundred eighty (180) days but in no event shall the credit exceed
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5 Fifty Thousand Dollars ($50,000.00) for each employee of each
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6 taxpayer. In no event shall the total credit claimed exceed Five
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7 Hundred Thousand Dollars ($500,000.00) in any one (1) year for any
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8 taxpayer.
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9 2. Except as provided in subsection D of this section, for tax
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10 years beginning after December 31, 2024, and ending before January
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11 1, 2026, an eligible employee shall be allowed a credit against the
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12 tax imposed pursuant to Section 2355 of Title 68 of the Oklahoma
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13 Statutes of up to Five Thousand Dollars ($5,000.00) per year for
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14 actual travel expenses incurred in commuting to the location of a
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15 qualified manufacturing employer of up to one hundred twenty (120)
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16 miles per day calculated at the rates provided for in the State
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17 Travel Reimbursement Act.
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18 3. As used in this section:
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19 a. "Eligible wages" means gross compensation and benefits
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20 paid by the taxpayer during the taxable year,
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21 including any employer-paid health care benefits, to
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22 full-time or part-time employees of the qualified
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23 business enterprise, if such employees are full-time
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24 residents of this state as of the time the services
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1 for which such qualified wages are received are
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2 performed;
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3 b. "Qualified manufacturing employer" means a business
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4 whose manufacturing activities are defined or
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5 classified in the North American Industry
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6 Classification System (NAICS) Manual under Industry
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7 Sector Nos. 31, 32, and 33, Industry Group No. 5111 or
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8 Industry No. 11331; and
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9 c. "Qualified manufacturing plant" means those
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10 establishments primarily engaged in manufacturing or
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11 processing operations whose manufacturing activities
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12 are defined or classified in the North American
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13 Industry Classification System (NAICS) Manual under
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14 Industry Sector Nos. 31, 32 and 33, Industry Group No.
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15 5111 or Industry No. 11331.
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16 B. In no event shall the amount of the credit(s) exceed the
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17 amount of any tax liability of the taxpayer.
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18 C. The Oklahoma Tax Commission shall have the authority to
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19 promulgate rules necessary to effectuate the purposes of this
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20 section.
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21 D. Beginning June 1, 2024, the credit authorized by this
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22 section may be claimed for any eligible wages paid or travel claimed
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23 on or after June 1, 2024, according to the provisions of this
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24 section.
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1 SECTION 2. This act shall become effective November 1, 2024.
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3 59-2-9075 AO 01/11/24
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