This “cash-back” job creation incentive has moved the State of Oklahoma to the forefront as a location for new manufacturing and service industry investment. The innovative Oklahoma Quality Jobs Program allows qualifying businesses which are creating new quality jobs to receive a special incentive to locate or expand in Oklahoma.
The program provides quarterly cash payments of up to 5% of new taxable payroll directly to a qualifying company, for up to ten years.
To qualify, a company must be a central administrative office, manufacturer, researcher and developer or engaged in an industry NAICS code listed below. Service companies must prove 75% out of state sales to qualify. A company must achieve $2.5 million in new taxable payroll for any four consecutive quarters during the first 12 quarters in the program and have an average wage equal to or above the average county wage in which the company is locating or expanding. Presently, wage requirements do not exceed $31,297 in any county, regardless of the average county wage. The minimum wage requirements do not apply to opportunity zones. Once the company achieves the threshold, it may remain in the program for the remainder of the ten-year period. Once the threshold is achieved, a company must maintain the $2.5 million payroll, including the average wage requirement, to qualify for incentive payments during any quarter.
A lower payroll threshold requirement of $1.5 million is available for certain food processing and research and development projects, including:
• Food processors with 75% out-of-state sales see NAICS Code Nos. 3111 through 3119.
• Firms performing Research, Development and Testing Services as described in NAICS Code Nos. 541710 and 541380.
• Auxiliary Research and Development Labs of large enterprises.
• Firms that locate on certain former military bases
All businesses must offer basic health insurance coverage to all employees, and 80% of employees must work at least 30 hours per week.
The net benefit rate is determined through a cost-benefit analysis prepared by the Oklahoma Department of Commerce. Payments cannot exceed 5% of payroll and, for most businesses, will be in the 4% range. Companies that have participated in the program for at least 12 months, and which are expanding again, may receive a net benefit rate of up to a 6% on a new contract provided all thresholds are met and the wage level is at least 150% of current wages.
Companies that receive incentive payments also may be eligible for the five-year ad valorem tax exemption (manufacturing, research and development, certain computer services and data processing, aircraft repair, free industry training program, workforce recruiting assistance, foreign trade zone, freeport inventory benefits and other technical/financial assistance programs). Firms that receive incentive payments under the Quality Jobs Program cannot utilize the new jobs or investment tax credit, sales tax exemptions for construction, and certain additional tax credits and exemptions.
Qualifying Basic Industries for the Quality Jobs Cash Payments Programs:
Upon your request, the Oklahoma Department of Commerce will provide a preliminary Quality Jobs Project Analysis based on your specific project parameters. This confidential report, outlining a projected ten-year payout, can be prepared and sent to you on a same-day basis.
1. Contact an Oklahoma Quality Jobs representative at the Oklahoma Department of Commerce, 800-879-6552, to request a preliminary cost-benefit analysis. This analysis estimates the payments that a project may be eligible to obtain.
2. If your company wishes to pursue application for the program, you then submit a formal application to Commerce. Commerce determines eligibility for the initial contract and makes the formal contract offer to qualifying companies.
Technical assistance regarding program concepts, eligible companies, application guidelines and other information pertaining to the Quality Jobs Program is available upon request and encouraged.