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1 STATE OF OKLAHOMA
1
2 1st Session of the 60th Legislature (2025)
2
3 SENATE BILL 689 By: Hall
3
4
4
5
5
6 AS INTRODUCED
6
7 An Act relating to ad valorem tax; amending 68 O.S.
7 2021, Section 2902, as last amended by Section 1,
8 Chapter 390, O.S.L. 2022 (68 O.S. Supp. 2024, Section
8 2902), which relates to the exemption from ad valorem
9 tax for manufacturing facilities; modifying payroll
9 requirement for certain industry; modifying
10 definitions; defining terms; prescribing certain
10 payroll calculation; prescribing application of
11 certain amendments; requiring the Oklahoma Tax
11 Commission to rescind certain denial and
12 determination upon request; updating statutory
12 language; and declaring an emergency.
13
13
14
14
15 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
15
16 SECTION 1. AMENDATORY 68 O.S. 2021, Section 2902, as
16
17 last amended by Section 1, Chapter 390, O.S.L. 2022 (68 O.S. Supp.
17
18 2024, Section 2902), is amended to read as follows:
18
19 Section 2902. A. Except as otherwise provided by subsection H
19
20 of Section 3658 of this title pursuant to which the exemption
20
21 authorized by this section may not be claimed, a qualifying
21
22 manufacturing concern, as defined by Section 6B of Article X of the
22
23 Oklahoma Constitution, and as further defined herein, shall be
23
24 exempt from the levy of any ad valorem taxes upon new, expanded or
24
Req. No. 1278 Page 1
1 acquired manufacturing facilities including facilities engaged in
1
2 research and development, for a period of five (5) years. The
2
3 provisions of Section 6B of Article X of the Oklahoma Constitution
3
4 requiring an existing facility to have been unoccupied for a period
4
5 of twelve (12) months prior to acquisition shall be construed as a
5
6 qualification for a facility to initially receive an exemption, and
6
7 shall not be deemed to be a qualification for that facility to
7
8 continue to receive an exemption in each of the four (4) years
8
9 following the initial year for which the exemption was granted.
9
10 Such facilities are hereby classified for the purposes of taxation
10
11 as provided in Section 22 of Article X of the Oklahoma Constitution.
11
12 B. For purposes of this section, the following definitions
12
13 shall apply:
13
14 1. "Manufacturing facilities" means facilities engaged in the
14
15 mechanical or chemical transformation of materials or substances
15
16 into new products and except as provided by paragraph 6 of
16
17 subsection C of this section shall include:
17
18 a. establishments which have received a manufacturer
18
19 exemption permit pursuant to the provisions of Section
19
20 1359.2 of this title,
20
21 b. facilities including repair and replacement parts,
21
22 primarily engaged in aircraft repair, building and
22
23 rebuilding whether or not on a factory basis,
23
24
24
Req. No. 1278 Page 2
1 c. establishments primarily engaged in computer services
1
2 and data processing as defined under Industrial Group
2
3 Numbers 5112 and 5415, and U.S. Industry Number 334611
3
4 and 519130 of the NAICS Manual, latest revision, and
4
5 which derive at least fifty percent (50%) of their
5
6 annual gross revenues from the sale of a product or
6
7 service to an out-of-state buyer or consumer, and as
7
8 defined under Industrial Group Number 5182 of the
8
9 NAICS Manual, latest revision, which derive at least
9
10 eighty percent (80%) of their annual gross revenues
10
11 from the sale of a product or service to an out-of-
11
12 state buyer or consumer. Eligibility as a
12
13 manufacturing facility pursuant to this subparagraph
13
14 shall be established, subject to review by the
14
15 Oklahoma Tax Commission, by annually filing an
15
16 affidavit with the Tax Commission stating that the
16
17 facility so qualifies and such other information as
17
18 required by the Tax Commission. For purposes of
18
19 determining whether annual gross revenues are derived
19
20 from sales to out-of-state buyers, all sales to the
20
21 federal government shall be considered to be an out-
21
22 of-state buyer,
22
23 d. facilities that the investment cost of the
23
24 construction, acquisition or expansion is Five Hundred
24
Req. No. 1278 Page 3
1 Thousand Dollars ($500,000.00) or more with respect to
1
2 assets placed into service during calendar year 2022.
2
3 For subsequent calendar years, the investment required
3
4 shall be increased annually by a percentage equal to
4
5 the previous year's increase in the Consumer Price
5
6 Index-All Urban Consumers ("CPI-U") and such adjusted
6
7 amount shall be the required investment cost in order
7
8 to qualify for the exemption authorized by this
8
9 section. The Oklahoma Department of Commerce shall
9
10 determine the amount of the increase, if any, on
10
11 January 1 of each year. The Oklahoma Tax Commission
11
12 shall publish on its website at least annually the
12
13 adjusted dollar amount in order to qualify for the
13
14 exemption authorized by this section and shall include
14
15 the adjusted dollar amount in any of its relevant
15
16 forms or publications with respect to the exemption.
16
17 Provided, "investment cost" shall not include the cost
17
18 of direct replacement, refurbishment, repair or
18
19 maintenance of existing machinery or equipment, except
19
20 that "investment cost" investment cost shall include
20
21 capital expenditures for direct replacement,
21
22 refurbishment, repair or maintenance of existing
22
23 machinery or equipment that qualifies for depreciation
23
24 and/or amortization pursuant to the Internal Revenue
24
Req. No. 1278 Page 4
1 Code of 1986, as amended, and such expenditures shall
1
2 be eligible as a part of an "expansion" expansion that
2
3 otherwise qualifies under this section,
3
4 e. establishments primarily engaged in distribution as
4
5 defined under Industry Numbers 49311, 49312, 49313 and
5
6 49319 and Industry Sector Number 42 of the NAICS
6
7 Manual, latest revision, and which meet the following
7
8 qualifications:
8
9 (1) construction with an initial capital investment
9
10 of at least Five Million Dollars ($5,000,000.00),
10
11 (2) employment of at least one hundred (100) full-
11
12 time-equivalent employees, as certified by the
12
13 Oklahoma Employment Security Commission,
13
14 (3) payment of wages or salaries to its employees at
14
15 a wage which equals or exceeds the average wage
15
16 requirements in the Oklahoma Quality Jobs Program
16
17 Act for the year in which the real property was
17
18 placed into service, and
18
19 (4) commencement of construction on or after November
19
20 1, 2007, with construction to be completed within
20
21 three (3) years from the date of the commencement
21
22 of construction,
22
23 f. facilities engaged in the manufacturing, compounding,
23
24 processing or fabrication of materials into articles
24
Req. No. 1278 Page 5
1 of tangible personal property according to the special
1
2 order of a customer (custom order manufacturing) by
2
3 manufacturers classified as operating in North
3
4 American Industry Classification System (NAICS)
4
5 Sectors 32 and 33, but does not include such custom
5
6 order manufacturing by manufacturers classified in
6
7 other NAICS code sectors, and
7
8 g. with respect to any entity making an application for
8
9 the exemption authorized by this section on or after
9
10 January 1, 2023, the establishment making application
10
11 for exempt treatment of real or personal property
11
12 acquired or improved beginning January 1, 2022, and
12
13 for any calendar year thereafter, the entity shall be
13
14 required to pay new direct jobs, as defined by Section
14
15 3603 of this title for purposes of the Oklahoma
15
16 Quality Jobs Program Act, an average annualized wage
16
17 which equals or exceeds the average wage requirement
17
18 in the Oklahoma Quality Jobs Program Act for the year
18
19 in which the real or personal property was placed into
19
20 service. The Oklahoma Tax Commission may request
20
21 verification from the Oklahoma Department of Commerce
21
22 that an establishment seeking an exemption for real or
22
23 personal property pays an average annualized wage that
23
24 equals or exceeds the average wage requirement in
24
Req. No. 1278 Page 6
1 effect for the year in which the real or personal
1
2 property was placed into service. For purposes of
2
3 this subparagraph, it shall not be necessary for the
3
4 establishment to qualify for incentive payments
4
5 pursuant to the Oklahoma Quality Jobs Program Act, but
5
6 the establishment shall be subject to the wage
6
7 requirements of the Oklahoma Quality Jobs Program Act
7
8 with respect to new direct jobs in order to qualify
8
9 for the exempt treatment authorized by this section.
9
10 Eligibility as a manufacturing facility pursuant to this
10
11 subparagraph shall be established, subject to review by the Tax
11
12 Commission, by annually filing an affidavit with the Tax Commission
12
13 stating that the facility so qualifies and containing such other
13
14 information as required by the Tax Commission.
14
15 Provided, eating and drinking places, as well as other retail
15
16 establishments, shall not qualify as manufacturing facilities for
16
17 purposes of this section, nor shall centrally assessed properties.
17
18 Eligibility as a manufacturing facility pursuant to this
18
19 subparagraph shall be established, subject to review by the Tax
19
20 Commission, by annually filing an application with the Tax
20
21 Commission stating that the facility so qualifies and containing
21
22 such other information as required by the Tax Commission;
22
23 2. "Facility" and "facilities", except as otherwise provided by
23
24 this section, means and includes the land, buildings, structures and
24
Req. No. 1278 Page 7
1 improvements used directly and exclusively in the manufacturing
1
2 process. Effective January 1, 2022, and for each calendar year
2
3 thereafter, for establishments which have received a manufacturer
3
4 exemption permit pursuant to the provisions of Section 1359.2 of
4
5 this title, or facilities engaged in manufacturing activities
5
6 defined or classified in the NAICS Manual under Industry Nos. 311111
6
7 through 339999, inclusive, but for no other establishments, facility
7
8 and facilities means and includes the land, buildings, structures,
8
9 improvements, machinery, fixtures, equipment and other personal
9
10 property used directly and exclusively in the manufacturing process;
10
11 and
11
12 3. "Research and development" means activities directly related
12
13 to and conducted for the purpose of discovering, enhancing,
13
14 increasing or improving future or existing products or processes or
14
15 productivity.
15
16 C. The following provisions shall apply:
16
17 1. A manufacturing concern shall be entitled to the exemption
17
18 herein provided for each new manufacturing facility constructed,
18
19 each existing manufacturing facility acquired and the expansion of
19
20 existing manufacturing facilities on the same site, as such terms
20
21 are defined by Section 6B of Article X of the Oklahoma Constitution
21
22 and by this section;
22
23 2. No manufacturing concern shall receive more than one five-
23
24 year exemption for any one manufacturing facility unless the
24
Req. No. 1278 Page 8
1 expansion which qualifies the manufacturing facility for an
1
2 additional five-year exemption meets the requirements of paragraph 4
2
3 of this subsection and the employment level established for any
3
4 previous exemption is maintained;
4
5 3. Any exemption as to the expansion of an existing
5
6 manufacturing facility shall be limited to the increase in ad
6
7 valorem taxes directly attributable to the expansion;
7
8 4. All initial applications for any exemption for a new,
8
9 acquired or expanded manufacturing facility shall be granted only
9
10 if:
10
11 a. there is a net increase in annualized base payroll, or
11
12 for establishments primarily engaged in computer
12
13 services and data processing as defined under
13
14 Industrial Group Number 5182 of the NAICS Manual,
14
15 latest revision, with not less than One Billion
15
16 Dollars ($1,000,000,000.00) in existing capital
16
17 expenditures in the county in which the facility or
17
18 facilities are located, there is a net increase in
18
19 annual payroll, as defined in subparagraph c of
19
20 paragraph 5 of this subsection, over the initial
20
21 payroll of at least Two Hundred Fifty Thousand Dollars
21
22 ($250,000.00) if the facility is located in a county
22
23 with a population of fewer than seventy-five thousand
23
24 (75,000), according to the most recent Federal
24
Req. No. 1278 Page 9
1 Decennial Census, while maintaining or increasing base
1
2 payroll in subsequent years, or at least One Million
2
3 Dollars ($1,000,000.00) if the facility is located in
3
4 a county with a population of seventy-five thousand
4
5 (75,000) or more, according to the most recent Federal
5
6 Decennial Census, while maintaining or increasing base
6
7 payroll in subsequent years; provided, the payroll
7
8 requirement of this subparagraph shall be waived for
8
9 claims for exemptions including claims previously
9
10 denied or on appeal on March 3, 2010, for all initial
10
11 applications for exemption filed on or after January
11
12 1, 2004, and on or before March 31, 2009, and all
12
13 subsequent annual exemption applications filed related
13
14 to the initial application for exemption, for an
14
15 applicant, if the facility has been located in
15
16 Oklahoma for at least fifteen (15) years engaged in
16
17 marine engine manufacturing as defined under U.S.
17
18 Industry Number 333618 of the NAICS Manual, latest
18
19 revision, and has maintained an average employment of
19
20 five hundred (500) or more full-time-equivalent
20
21 employees over a ten-year period. Any applicant that
21
22 qualifies for the payroll requirement waiver as
22
23 outlined in the previous sentence and subsequently
23
24 closes its Oklahoma manufacturing plant prior to
24
Req. No. 1278 Page 10
1 January 1, 2012, may be disqualified for exemption and
1
2 subject to recapture. For an applicant engaged in
2
3 paperboard manufacturing as defined under U.S.
3
4 Industry Number 322130 of the NAICS Manual, latest
4
5 revision, union master payouts paid by the buyer of
5
6 the facility to specified individuals employed by the
6
7 facility at the time of purchase, as specified under
7
8 the purchase agreement, shall be excluded from payroll
8
9 for purposes of this section.
9
10 In order to provide certainty with respect to
10
11 investments in manufacturing facilities pertaining to
11
12 all initial applications for exemption filed on or
12
13 after January 1, 2016, the following definitions shall
13
14 apply:
14
15 (1) except as otherwise provided in subparagraph c of
15
16 paragraph 5 of this subsection, "base payroll"
16
17 shall mean total payroll adjusted for any
17
18 nonrecurring bonuses, exercise of stock option or
18
19 stock rights and other nonrecurring,
19
20 extraordinary items included in total payroll,
20
21 and
21
22 (2) except as otherwise provided in subparagraph c of
22
23 paragraph 5 of this subsection, "initial payroll"
23
24 shall mean base payroll for the year immediately
24
Req. No. 1278 Page 11
1 preceding the initial construction, acquisition,
1 or expansion.
2 The Tax Commission shall verify payroll
2 information through the Oklahoma Employment
3 Security Commission by using reports from the
3 Oklahoma Employment Security Commission for the
4 calendar year immediately preceding the year for
4 which initial application is made for base-line
5 payroll, which must be maintained or increased
5 for each subsequent year; provided, a
6 manufacturing facility shall have the option of
6 excluding from its payroll, for purposes of this
7 section:
7
8 i. payments to sole proprietors, members
8 of a partnership, members of a limited
9 liability company who own at least ten
9 percent (10%) of the capital of the
10 limited liability company or
10 stockholder-employees of a corporation
11 who own at least ten percent (10%) of
11 the stock in the corporation, and
12
12 ii. any nonrecurring bonuses, exercise of
13 stock option or stock rights or other
13 nonrecurring, extraordinary items
14
14 Page 12
15
15
16
16
17
17
18
18
19
19
20
20
21
21
22
22
23
23
24
24
Req. No. 1278
1 included in total payroll numbers as
1
2 reported by the Oklahoma Employment
2
3 Security Commission. A manufacturing
3
4 facility electing either option shall
4
5 indicate such election upon its
5
6 application for an exemption under this
6
7 section. Any manufacturing facility
7
8 electing either option shall submit
8
9 such information as the Tax Commission
9
10 may require in order to verify payroll
10
11 information. Payroll information
11
12 submitted pursuant to the provisions of
12
13 this paragraph shall be submitted to
13
14 the Tax Commission and shall be subject
14
15 to the provisions of Section 205 of
15
16 this title, and
16
17 b. the facility offers, or will offer within one hundred
17
18 eighty (180) days of the date of employment, a basic
18
19 health benefits plan to the full-time-equivalent
19
20 employees of the facility, which is determined by the
20
21 Oklahoma Department of Commerce to consist of the
21
22 elements specified in subparagraph b of paragraph 1 of
22
23 subsection A of Section 3603 of this title or elements
23
24 substantially equivalent thereto.
24
Req. No. 1278 Page 13
1 For purposes of this section, calculation of the amount of
1
2 increased base payroll, or annual payroll for initial and renewal
2
3 applications for exemptions filed on or after January 1, 2019, by
3
4 establishments primarily engaged in computer services and data
4
5 processing as defined under Industrial Group Number 5182 of the
5
6 NAICS Manual, latest revision, with not less than One Billion
6
7 Dollars ($1,000,000,000.00) in existing capital expenditures in the
7
8 county in which the facility or facilities are located, shall be
8
9 measured from the start of initial construction or expansion to the
9
10 completion of such construction or expansion or for three (3) years
10
11 from the start of initial construction or expansion, whichever
11
12 occurs first. The amount of increased base or annual payroll shall
12
13 include payroll for full-time-equivalent employees in this state who
13
14 are employed by an entity other than the facility which has
14
15 previously or is currently qualified to receive an exemption
15
16 pursuant to the provisions of this section and who are leased or
16
17 otherwise provided to the facility, if such employment did not exist
17
18 in this state prior to the start of initial construction or
18
19 expansion of the facility. The manufacturing concern shall submit
19
20 an affidavit to the Tax Commission, signed by an officer, stating
20
21 that the construction, acquisition or expansion of the facility will
21
22 result in a net increase in the annualized base payroll or annual
22
23 payroll as required by this paragraph and that full-time-equivalent
23
24 employees of the facility are or will be offered a basic health
24
Req. No. 1278 Page 14
1 benefits plan as required by this paragraph. If, after the
1
2 completion of such construction or expansion or after three (3)
2
3 years from the start of initial construction or expansion, whichever
3
4 occurs first, the construction, acquisition or expansion has not
4
5 resulted in a net increase in the amount of annualized base payroll,
5
6 if required, or any other qualification specified in this paragraph
6
7 has not been met, the manufacturing concern shall pay an amount
7
8 equal to the amount of any exemption granted including penalties and
8
9 interest thereon, to the Tax Commission for deposit to the Ad
9
10 Valorem Reimbursement Fund;
10
11 5. a. Except as otherwise provided by this paragraph, any
11
12 new, acquired or expanded computer data processing,
12
13 data preparation or information processing services
13
14 provider classified in U.S. Industry Number 518210 of
14
15 the North American Industrial Classification System
15
16 (NAICS) Manual, 2017 revision, may apply for
16
17 exemptions under this section for each year in which
17
18 new, acquired, or expanded capital improvements to the
18
19 facility are made for assets placed in service not
19
20 later than December 31, 2021, if:
20
21 a. (1) there is a net increase in annualized
21
22 payroll or annual payroll of the applicant at any
22
23 facility or facilities of the applicant in this
23
24 state of at least Two Hundred Fifty Thousand
24
Req. No. 1278 Page 15
1 Dollars ($250,000.00), which is attributable to
1
2 the capital improvements, while maintaining or
2
3 increasing base payroll, or a net increase of
3
4 Seven Million Dollars ($7,000,000.00) or more in
4
5 capital improvements, while maintaining or
5
6 increasing payroll or initial payroll at the
6
7 facility or facilities in this state which are
7
8 included in the application, and
8
9 b. (2) the facility offers, or will offer within
9
10 one hundred eighty (180) days of the date of
10
11 employment of new employees attributable to the
11
12 capital improvements, a basic health benefits
12
13 plan to the full-time-equivalent employees of the
13
14 facility, which is determined by the Oklahoma
14
15 Department of Commerce to consist of the elements
15
16 specified in subparagraph b of paragraph 1 of
16
17 subsection A of Section 3603 of this title or
17
18 elements substantially equivalent thereto.,
18
19 b. An establishment described by this paragraph, the
19
20 primary business activity of which is described by
20
21 Industry No. 518210 of the North American Industry
21
22 Classification System (NAICS) Manual, 2017 revision,
22
23 that has applied for and been granted an exemption for
23
24 personal property at any time within five (5) years
24
Req. No. 1278 Page 16
1 prior to November 1, 2021, may apply for exemptions
1
2 for items of eligible personal property to be located
2
3 within improvements to real property and such real
3
4 property and improvements having been exempt from ad
4
5 valorem taxation prior to November 1, 2021, pursuant
5
6 to the provisions of this section if such personal
6
7 property is placed in service not later than December
7
8 31, 2036. No additional personal property of such
8
9 establishment placed in service after such date shall
9
10 qualify for the exempt treatment otherwise authorized
10
11 pursuant to this paragraph,
11
12 c. For all initial and renewal applications for exemption
12
13 filed on or after January 1, 2019, by establishments
13
14 primarily engaged in computer services and data
14
15 processing as defined under Industrial Group Number
15
16 5182 of the NAICS Manual, latest revision, with not
16
17 less than One Billion Dollars ($1,000,000,000.00) in
17
18 existing capital expenditures in the county in which
18
19 the facility or facilities are located, the following
19
20 definitions shall apply:
20
21 (1) "annual payroll" means total payroll adjusted for
21
22 any nonrecurring bonuses, exercise of stock
22
23 option or stock rights, and other nonrecurring,
23
24 extraordinary items included in total payroll,
24
Req. No. 1278 Page 17
1 (2) "initial payroll" means the average annual
1
2 payroll for the three (3) years immediately
2
3 preceding the initial construction, acquisition,
3
4 or expansion, and
4
5 (3) "base payroll" means initial payroll plus
5
6 $250,000.00 if the facility is located in a
6
7 county with a population of fewer than seventy-
7
8 five thousand (75,000), or initial payroll plus
8
9 One Million Dollars ($1,000,000.00) if the
9
10 facility is located in a county with a population
10
11 of seventy-five thousand (75,000) or more
11
12 according to the latest Federal Decennial Census,
12
13 d. The Tax Commission shall verify the annual payroll,
13
14 initial payroll, and base payroll, as defined in this
14
15 paragraph, information through the Oklahoma Employment
15
16 Security Commission by using reports from the Oklahoma
16
17 Employment Security Commission, and
17
18 e. The amendments to this section made upon the effective
18
19 date of this act shall apply to all initial and
19
20 renewal applications submitted in the year 2024 and
20
21 prospectively, including without limitation any
21
22 renewal application relating to property for which an
22
23 initial or renewal application in a previous year was
23
24 denied so long as the property would have qualified
24
Req. No. 1278 Page 18
1 for the exemption in that previous year under the
1
2 amendments to this section upon the effective date of
2
3 this act if the amendments applied in that year;
3
4 provided, however, the amendments shall not apply to
4
5 any application submitted by an establishment in the
5
6 year 2024 if the application of the amendments would
6
7 invalidate an exemption under this section for which
7
8 the manufacturing concern qualified on the effective
8
9 date of this act. The Tax Commission or county
9
10 assessor, as applicable, is hereby directed, upon
10
11 request, to rescind the following:
11
12 (1) any application denial, or
12
13 (2) any determination that an exemption was
13
14 erroneously or unlawfully granted in the year
14
15 2024 that is inconsistent with this subparagraph;
15
16 6. Effective January 1, 2017, an entity engaged in electric
16
17 power generation by means of wind, as described by the North
17
18 American Industry Classification System, No. 221119, shall not be
18
19 defined as a qualifying manufacturing concern for purposes of the
19
20 exemption otherwise authorized pursuant to Section 6B of Article X
20
21 of the Oklahoma Constitution or qualify as a "manufacturing
21
22 facility" manufacturing facility as defined in this section. No
22
23 initial application for exemption shall be filed by or accepted from
23
24
24
Req. No. 1278 Page 19
1 an entity engaged in electric power generation by means of wind on
1
2 or after January 1, 2018;
2
3 7. An entity or applicant engaged in an industry as defined
3
4 under U.S. Industry Number 324110 of the NAICS Manual, latest
4
5 revision, which has applied for or been granted an exemption for a
5
6 time period which began on or after calendar year 2012 and before
6
7 calendar year 2016 but which did not meet the payroll requirements
7
8 of subparagraph a of paragraph 4 of this subsection because of
8
9 nonrecurring bonuses, exercise of stock option or stock rights or
9
10 other nonrecurring, extraordinary items included in total payroll in
10
11 the previous year, shall be allowed an exemption, beginning with
11
12 calendar year 2016, for the number of years including the calendar
12
13 year for which the exemption was denied, remaining in the entity's
13
14 five-year exemption period, provided such entity attains or
14
15 increases payroll at or above the initial or base payroll
15
16 established for the exemption;
16
17 8. A facility engaged in manufacturing defined under U.S.
17
18 Industry Number 327310 of the NAICS Manual shall have the payroll
18
19 requirements of paragraph 4 of this subsection waived for tax year
19
20 2021, which is based in part on the 2020 calendar year payroll
20
21 reported to the Oklahoma Employment Security Commission, and may
21
22 continue to receive the exemption for the five-year period provided
22
23 in this section only if all other requirements of this section are
23
24 met; and
24
Req. No. 1278 Page 20
1 9. A facility engaged in manufacturing which otherwise
1
2 qualifies for the exemption or exemptions pursuant to the provisions
2
3 of this section shall have the payroll requirements of paragraph 4
3
4 of this subsection waived for tax year 2021, which is based in part
4
5 on the 2020 calendar year payroll reported to the Oklahoma
5
6 Employment Security Commission, and for tax year 2022, which is
6
7 based in part on the 2021 calendar year payroll reported to the
7
8 Oklahoma Employment Security Commission, and may continue to receive
8
9 the exemption for the five-year period provided in this section only
9
10 if all other requirements of this section are met.
10
11 D. 1. Except as provided in paragraph 2 of this subsection,
11
12 the five-year period of exemption from ad valorem taxes for any
12
13 qualifying manufacturing facility property shall begin on January 1
13
14 following the initial qualifying use of the property in the
14
15 manufacturing process.
15
16 2. The five-year period of exemption from ad valorem taxes for
16
17 any qualifying manufacturing facility, as specified in subparagraphs
17
18 a and b of this paragraph, which is located within a tax incentive
18
19 district created pursuant to the Local Development Act by a county
19
20 having a population of at least five hundred thousand (500,000),
20
21 according to the most recent Federal Decennial Census, shall begin
21
22 on January 1 following the expiration or termination of the ad
22
23 valorem exemption, abatement, or other incentive provided through
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Req. No. 1278 Page 21
1 the tax incentive district. Facilities qualifying pursuant to this
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2 subsection shall include:
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3 a. a manufacturing facility as defined in subparagraph c
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4 of paragraph 1 of subsection B of this section, and
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5 b. an establishment primarily engaged in distribution as
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6 defined under Industry Number 49311 of the North
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7 American Industry Classification System for which the
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8 initial capital investment was at least One Hundred
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9 Eighty Million Dollars ($180,000,000.00); provided,
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10 that the qualifying job creation and depreciable
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11 property investment occurred prior to calendar year
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12 2017 but not earlier than calendar year 2013.
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13 E. Any person, firm or corporation claiming the exemption
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14 herein provided for shall file each year for which exemption is
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15 claimed, an application therefor with the county assessor of the
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16 county in which the new, expanded or acquired facility is located.
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17 The application shall be on a form or forms prescribed by the Tax
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18 Commission, and shall be filed on or before March 15, except as
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19 provided in Section 2902.1 of this title, of each year in which the
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20 facility desires to take the exemption or within thirty (30) days
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21 from and after receipt by such person, firm or corporation of notice
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22 of valuation increase, whichever is later. In a case where
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23 completion of the facility or facilities will occur after January 1
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24 of a given year, a facility may apply to claim the ad valorem tax
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Req. No. 1278 Page 22
1 exemption for that year. If such facility is found to be qualified
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2 for exemption, the ad valorem tax exemption provided for herein
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3 shall be granted for that entire year and shall apply to the ad
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4 valorem valuation as of January 1 of that given year. For
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5 applicants who qualify under the provisions of subparagraph b of
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6 paragraph 1 of subsection B of this section, the application shall
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7 include a copy of the affidavit and any other information required
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8 to be filed with the Tax Commission.
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9 F. The application shall be examined by the county assessor and
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10 approved or rejected in the same manner as provided by law for
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11 approval or rejection of claims for homestead exemptions. The
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12 taxpayer shall have the same right of review by and appeal from the
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13 county board of equalization, in the same manner and subject to the
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14 same requirements as provided by law for review and appeals
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15 concerning homestead exemption claims. Approved applications shall
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16 be filed by the county assessor with the Tax Commission no later
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17 than June 15, except as provided in Section 2902.1 of this title, of
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18 the year in which the facility desires to take the exemption.
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19 Incomplete applications and applications filed after June 15 will be
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20 declared null and void by the Tax Commission. In the event that a
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21 taxpayer qualified to receive an exemption pursuant to the
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22 provisions of this section shall make payment of ad valorem taxes in
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23 excess of the amount due, the county treasurer shall have the
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24 authority to credit the taxpayer's real or personal property tax
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Req. No. 1278 Page 23
1 overpayment against current taxes due. The county treasurer may
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2 establish a schedule of up to five (5) years of credit to resolve
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3 the overpayment.
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4 G. Nothing herein shall in any manner affect, alter or impair
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5 any law relating to the assessment of property, and all property,
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6 real or personal, which may be entitled to exemption hereunder shall
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7 be valued and assessed as is other like property and as provided by
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8 law. The valuation and assessment of property for which an
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9 exemption is granted hereunder shall be performed by the Tax
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10 Commission using one or more of the cost, income and expense and
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11 sales comparison approaches to estimate fair cash value in
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12 accordance with the Uniform Standards of Professional Appraisal
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13 Practice.
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14 H. The Tax Commission shall have the authority and duty to
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15 prescribe forms and to promulgate rules as may be necessary to carry
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16 out and administer the terms and provisions of this section.
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17 SECTION 2. It being immediately necessary for the preservation
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18 of the public peace, health or safety, an emergency is hereby
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19 declared to exist, by reason whereof this act shall take effect and
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20 be in full force from and after its passage and approval.
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22 60-1-1278 QD 1/19/2025 5:41:25 AM
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Req. No. 1278 Page 24Every fact on this page links to its source, starting with the official bill record.