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1 STATE OF OKLAHOMA
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2 1st Session of the 60th Legislature (2025)
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3 SENATE BILL 296 By: Pugh
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6 AS INTRODUCED
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7 An Act relating to income tax; amending 68 O.S. 2021,
7 Section 2357.301, as amended by Section 1, Chapter
8 313, O.S.L. 2024 (68 O.S. Supp. 2024, Section
8 2357.301), which relates to definitions; defining
9 term; amending 68 O.S. 2021, Sections 2357.303 and
9 2357.304, as amended by Section 2, Chapter 313,
10 O.S.L. 2024 (68 O.S. Supp. 2024, Section 2357.304),
10 which relate to credit for qualified employers and
11 qualified employees; expanding credit to include
11 instructor pilots; and providing an effective date.
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14 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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15 SECTION 1. AMENDATORY 68 O.S. 2021, Section 2357.301, as
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16 amended by Section 1, Chapter 313, O.S.L. 2024 (68 O.S. Supp. 2024,
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17 Section 2357.301), is amended to read as follows:
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18 Section 2357.301. As used in Sections 2357.301 through 2357.304
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19 of this title:
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20 1. "Aerospace sector" means a private or public organization
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21 located in this state and engaged in the manufacture of aerospace or
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22 defense hardware or software, aerospace maintenance, aerospace
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23 repair and overhaul, supply of parts to the aerospace industry,
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24 provision of services and support relating to the aerospace
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1 industry, research and development of aerospace technology and
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2 systems and the education and training of aerospace personnel;
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3 2. "Compensation" means payments in the form of contract labor
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4 for which the payor is required to provide a Form 1099 to the person
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5 paid, wages subject to withholding tax paid to a part-time employee
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6 or full-time employee or salary or other remuneration. Compensation
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7 shall not include employer-provided retirement, medical or health-
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8 care benefits, reimbursement for travel, meals, lodging or any other
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9 expense;
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10 3. "Institution" means an institution within The Oklahoma State
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11 System of Higher Education or any other public or private college or
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12 university that is accredited by a national accrediting body;
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13 4. "Instructor pilot" means any person who is licensed as a
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14 Certified Flight Instructor by the Federal Aviation Administration
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15 and is employed in this state in support of a contract with the
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16 federal government to provide instruction either live or on a flight
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17 simulator who was not employed as an instructor pilot in the
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18 aerospace sector in this state immediately preceding employment or
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19 contracting with a qualified employer. The definition shall not be
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20 interpreted to exclude any person (1) who previously qualified and
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21 established the credit against the tax imposed pursuant to Section
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22 2355 of this title and becomes employed by a different qualified
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23 employer, or (2) who establishes the credit against the tax imposed
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24 pursuant to Section 2355 of this title for the first time and
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1 becomes employed by a different qualified employer in subsequent
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2 years, provided a person in either case has not claimed the credit
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3 for the lifetime maximum of five (5) years;
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4 5. "Qualified employer" means a sole proprietor, general
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5 partnership, limited partnership, limited liability company,
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6 corporation, other legally recognized business entity or public
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7 entity whose principal business activity involves the aerospace
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8 sector;
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9 5. 6. "Qualified employee" means any person, regardless of the
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10 date of hire, employed in this state by or contracting in this state
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11 with a qualified employer on or after January 1, 2009, who was not
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12 employed in the aerospace sector in this state immediately preceding
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13 employment or contracting with a qualified employer, and who has
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14 been either:
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15 a. awarded an undergraduate or graduate degree from a
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16 qualified program by an institution, or
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17 b. licensed as a Professional Engineer by the State Board
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18 of Licensure for Professional Engineers and Land
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19 Surveyors pursuant to Section 475.15 of Title 59 of
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20 the Oklahoma Statutes.
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21 Provided, the definition shall not be interpreted to exclude any
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22 person who was employed in the aerospace sector, but not as a full-
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23 time engineer, prior to being awarded an undergraduate or graduate
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24 degree from a qualified program by an institution or any person who
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1 has been awarded an undergraduate or graduate degree from a
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2 qualified program by an institution and is employed by a
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3 professional staffing company and assigned to work in the aerospace
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4 sector in this state.
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5 Beginning on or after January 1, 2024, the definition shall also
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6 not be interpreted to exclude any person (1) who previously
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7 qualified and established the credit against the tax imposed
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8 pursuant to Section 2355 of this title and becomes employed by a
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9 different qualified employer, or (2) who establishes the credit
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10 against the tax imposed pursuant to Section 2355 of this title for
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11 the first time and becomes employed by a different qualified
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12 employer in subsequent years, provided a person in either case has
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13 not claimed the credit for the lifetime maximum of five (5) years;
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14 6. 7. "Qualified program" means a program at an institution
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15 that includes a graduate or undergraduate program that has been
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16 accredited by the Engineering Accreditation Commission of the
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17 Accreditation Board for Engineering and Technology (ABET) and that
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18 awards an undergraduate or graduate degree. Both the undergraduate
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19 and graduate programs of the same discipline of engineering at an
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20 institution shall be part of the qualified program if either program
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21 is ABET accredited; and
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22 7. 8. "Tuition" means the average annual amount paid by a
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23 qualified employee for enrollment and instruction in a qualified
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1 program. Tuition shall not include the cost of books, fees or room
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2 and board.
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3 SECTION 2. AMENDATORY 68 O.S. 2021, Section 2357.303, is
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4 amended to read as follows:
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5 Section 2357.303. A. Except as provided in subsection F of
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6 this section, for taxable years beginning after December 31, 2008,
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7 and ending before January 1, 2026, a qualified employer shall be
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8 allowed a credit against the tax imposed pursuant to Section 2355 of
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9 this title for compensation paid to a qualified employee and, for
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10 tax year 2025, an instructor pilot.
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11 B. The credit authorized by subsection A of this section shall
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12 be in the amount of:
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13 1. Ten percent (10%) of the compensation paid for the first
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14 through fifth years of employment in the aerospace sector if the
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15 qualified employee graduated from an institution located in this
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16 state; or
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17 2. Five percent (5%) of the compensation paid for the first
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18 through fifth years of employment in the aerospace sector if the
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19 qualified employee graduated from an institution located outside
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20 this state.
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21 C. The credit authorized by this section shall not exceed
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22 Twelve Thousand Five Hundred Dollars ($12,500.00) for each qualified
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23 employee annually.
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1 D. The credit authorized by this section shall not be used to
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2 reduce the tax liability of the qualified employer to less than zero
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3 (0).
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4 E. No credit authorized pursuant to this section shall be
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5 claimed after the fifth year of employment.
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6 F. No credit otherwise authorized by the provisions of this
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7 section may be claimed for any event, transaction, investment,
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8 expenditure or other act occurring on or after July 1, 2010, for
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9 which the credit would otherwise be allowable. The provisions of
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10 this subsection shall cease to be operative on July 1, 2011.
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11 Beginning July 1, 2011, the credit authorized by this section may be
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12 claimed for any event, transaction, investment, expenditure or other
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13 act occurring on or after July 1, 2011, according to the provisions
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14 of this section.
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15 SECTION 3. AMENDATORY 68 O.S. 2021, Section 2357.304, as
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16 amended by Section 2, Chapter 313, O.S.L. 2024 (68 O.S. Supp. 2024,
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17 Section 2357.304), is amended to read as follows:
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18 Section 2357.304. A. Except as provided in subsection D of
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19 this section, for taxable years beginning after December 31, 2008,
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20 and ending before January 1, 2026, a qualified employee and, for tax
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21 year 2025, an instructor pilot shall be allowed a credit against the
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22 tax imposed pursuant to Section 2355 of this title of up to Five
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23 Thousand Dollars ($5,000.00) per tax year for a period of time not
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1 to exceed five (5) years during the lifetime of the qualified
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2 employee. This credit may be claimed in nonconsecutive tax years.
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3 B. The credit authorized by this section shall not be used to
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4 reduce the tax liability of the taxpayer to less than zero (0).
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5 C. Any credit claimed, but not used, may be carried over, in
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6 order, to each of the five (5) subsequent taxable years.
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7 D. No credit otherwise authorized by the provisions of this
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8 section may be claimed for any event, transaction, investment,
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9 expenditure or other act occurring on or after July 1, 2010, for
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10 which the credit would otherwise be allowable. The provisions of
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11 this subsection shall cease to be operative on July 1, 2011.
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12 Beginning July 1, 2011, the credit authorized by this section may be
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13 claimed for any event, transaction, investment, expenditure or other
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14 act occurring on or after July 1, 2011, according to the provisions
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15 of this section.
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16 SECTION 4. This act shall become effective November 1, 2025.
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18 60-1-1249 QD 12/30/2024 11:25:34 PM
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Req. No. 1249 Page 7Every fact on this page links to its source, starting with the official bill record.