The Oklahoma Guide to State Tax Incentives

Running a business in the Sooner State has its tax advantages. Not only does Oklahoma have one of the country’s lowest tax rates for businesses, but it also has a wide array of business incentives, tax credits, and tax exemptions. Keep reading for a complete list of business tax programs available.

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Oklahoma business incentives and tax credits

Employment incentives

Oklahoma Quality Jobs Program

The Oklahoma Quality Jobs Program is a tax incentive program that rewards Oklahoma businesses for creating a certain amount of new, well-paying jobs in the state. Under the program, qualified companies can get cash payments of up to 5% of their new taxable payroll and 6% if at least 10% of their new payroll is made up of military veterans.

To be eligible, businesses have to meet the following requirements:

Be in one of Oklahoma’s qualifying industries:
- Basic industries such as manufacturing, research and development labs, administrative and corporate offices, oil and gas mining, warehouse and distribution operations, flight training services, sports teams and clubs, air transportation, wind power electric generation equipment repair and maintenance, and support for rail and water transport.
- Service industries with 75% of sales out of the state, including rail transportation; motor freight transportation and warehousing; certain communications businesses; grocery wholesale distributing; certain refuse systems; securities, commodities, and investments; insurance carriers and insurance claims processors; adjustment and collection services; equipment rentals; computer programming; business services; medical and diagnostic labs; real estate agents and brokers; engineering and management; agricultural production; professional organizations; alternative energy structure construction; alternative energy equipment installation; and electric service companies.
Pay an average wage for newly created full-time jobs that’s equal to the average county wage or the state threshold wage, whichever is lower.
Achieve $2.5 million new annual taxable payroll within three years of acceptance into the program.
Provide employees with basic health insurance within 180 days of their start date and at least 50% of the premium.

Learn more about the program and how to apply here.

Small Employer Quality Jobs Program

The Small Employer Quality Jobs Program offers small and medium-sized businesses in Oklahoma a cash-back incentive to relocate to or expand within the state and create new high-paying jobs.

Businesses with 500 or fewer employees can receive a 5% cash-back incentive for up to seven years as long as they meet the below requirements:

Create between five and 15 new jobs (the exact amount depends on the business’s size and location).
Pay the new jobs a salary of at least 110% of the average wage in the county where they are located.
Provide employees with basic health insurance within 180 days of their start date and pay at least 50% of the premium.
Demonstrate that at least 35% of the business’s total sales come from out-of-state customers or buyers within two years of applying for the program. After that two years, out-of-state sales must make up 60% of a business’s total sales.

Businesses in the following qualifying industries are eligible to apply for the program:

Basic industries such as manufacturing, research and development labs, administrative and corporate offices, oil and gas mining, warehouse and distribution operations, flight training services, sports teams and clubs, air transportation, wind power electric generation equipment repair and maintenance, and support for rail and water transport.
Service industries with at least 75% of sales out of the state, including rail transportation; motor freight transportation and warehousing; certain communications businesses; grocery wholesale distributing; certain refuse systems; securities, commodities, and investments; insurance carriers and insurance claims processors; adjustment and collection services; equipment rentals; computer programming; business services; medical and diagnostic labs; real estate agents and brokers; engineering and management; agricultural production; professional organizations; alternative energy structure construction; alternative energy equipment installation; and electric service companies.

Get more information on the program here.

21st Century Quality Jobs Program

The 21st Century Quality Jobs Program targets Oklahoma businesses with knowledge-based workforces. Targeted industries include professional, scientific, and technical services companies, music, film, and performing arts companies, and specialty hospitals.

Companies that qualify for the program can get cash back for up to 10% of their new payroll for up to 10 years. To qualify, businesses need to:

Create at least 10 new full-time jobs with an annual average wage of $112,100 or 300% of the county’s average wage, whichever figure is lower.
Achieve an out-of-state sales rate of at least 50% (this applies to most businesses eligible for the program, but not all).

The following industries are eligible for the program:

Basic industries include manufacturing, research and development labs, administrative offices, warehouse and distribution centers, transportation by air, wind power electric generation equipment repair and maintenance, flight training services, specialty hospitals, and performing arts companies.
Service industries with 50% of sales out-of-state, including motor freight transportation and warehousing; the arrangement of passenger transportation; transportation of freight or cargo; certain communications businesses; grocery wholesale distributing; certain refuse systems; insurance carriers and insurance claims processors; adjustment and collection services; equipment rentals; computer programming; business services; medical and diagnostic labs; engineering and management; agricultural production; professional organizations; alternative energy structure construction; alternative energy equipment installation; and electric service companies.
Other industries with 50% of sales out of state, including heavy and civil engineering construction; motion picture and video industries; sound recording industries; securities, commodity contracts, and financial investments; funds, trusts, and other financial vehicles; and professional, scientific, and technical services.

Learn more about the program and apply here.

Quality Jobs and Investment Tax Credits

The Quality Jobs and Investment Tax Credits program is designed to support large manufacturing enterprises in Oklahoma that make capital investments of at least $40 million and create new jobs that pay higher than the state’s average wage.

Companies that qualify for the credit can take a credit of $1,000 per new job they create or 2% of their investment in qualified new depreciable property, whichever amount is greater. Learn more about the program here.

Aerospace Industry Engineer Workforce Tax Credits

Oklahoma’s Aerospace Industry Engineer Workforce Tax Credits—offered until January 1, 2026—are available to aerospace companies in Oklahoma hiring engineers in a variety of disciplines.

Qualified companies can get a tax credit equal to 5% of the engineer’s compensation and 10% if the engineer graduated from an Oklahoma college or university.

Employers who reimburse their employees’ university tuition can also take a credit equal to 50% of that tuition. Plus, the engineer hired receives a tax credit of $5,000 per year until January 1, 2026. Apply for the tax credits here.

Automotive Engineer Workforce Tax Credits

The Automotive Engineer Workforce Tax Credit is available to companies in Oklahoma that manufacture or assemble motor vehicles or automotive parts and hire engineers. Qualified companies can take a corporate income tax credit of up to 10% of the engineer’s compensation, plus an additional tax credit of up to 50% of the tuition reimbursed to an employee.

The hired engineer also gets their own tax credit of $5,000 per year. Get more information on the program here.

Investment and growth incentives

Oklahoma Tourism Development Act

Created to bring more tourism business into the state, the Oklahoma Tourism Development Act gives tax credits to eligible developers and companies undertaking new tourism attraction projects.

Companies that meet the requirements can get a sales tax credit or sales tax incentive payment of 25% of the approved project development costs, for up to 10 years. To qualify for the program, at least 25% of a tourist attraction site’s visitors must be from out of state.

Find out how to qualify for the tax credit here.

Investment/New Jobs Tax Credit Package

Under this program, manufacturers in Oklahoma can receive a tax credit based on their investment in depreciable property or the number of full-time employees they hire to work in manufacturing, processing, or aircraft maintenance.

For investments, the credit equals 1% of the investment total per year, with a minimum investment of $50,000. For hiring, the credit is equal to $500 per new job created. However, companies can get higher credits—2% of their investment and $1,000 per employee—if they’re located in an Enterprise Zone or if their investments exceed $40 million.

Get more information on the program here.

Business Expansion Incentive Program

The Business Expansion Incentive Program rewards Oklahoma companies for making capital investments in depreciable items such as machinery, equipment, and buildings to achieve their expansion goals.

To qualify for the program, companies must make at least $2 million in capital investments and have at least $2 million in total annual payroll. Learn how to apply for the program here.

Oklahoma Innovation Expansion Program

Created to diversify Oklahoma’s economy, the Oklahoma Innovation Expansion Program awards companies for making capital investments and creating new jobs in the state. Qualified companies can get awards of $25,000 or more for meeting all the below requirements:

Invest at least $50,000 in an innovative project in Oklahoma. The project must either target new markets or shorten or strengthen the supply chain for the product being manufactured.
Have a minimum payroll at the project facility of at least $625,000.

Get more information on the program in this guide.

Industry-specific incentives

Zero-Emission Facilities Income Tax Credit

Oklahoma’s Zero-Emission Facilities Income Tax Credit is available to companies in the state that produce electricity at qualified zero-emission facilities.

The credit is $0.0050 for each kilowatt-hour of electricity generated. Companies can take the credit for a period of 10 years. Learn more about how to claim the credit here.

Insurance Premium Tax Credit – Regional Home Office Credit

Oklahoma insurance companies that locate or expand their regional home offices within the state can qualify for a tax credit against their premium insurance tax. The credit is between 15-50% based on the number of employees an insurance company has.

To qualify for the credit, an insurance company needs to employ 200 or more full-time employees year-round. See credit details in this guide.

Credit for Clean-Burning Motor Vehicle Fuel Property

This program—available from 2023 to 2028—gives businesses tax credits for purchasing clean-burning fuel vehicles or delivering clean-burning fuel for commercial purposes.

The credit amount for vehicles ranges from $5,500 to $100,000, depending on the total weight of the vehicle. For delivery properties, the credit amount is equal to 45% of the cost of either the property used to deliver clean-burning fuel for commercial purposes or a metered-for-free public access recharging station for electric vehicles.

Find more information about the credit in the state’s business incentives guide.

Ethanol Fuel Retailer Tax Credit

Oklahoma retailers that sell ethanol-blended fuel can get a motor fuel tax credit equal to $0.016 per gallon of ethanol fuel sold in Oklahoma—as long as the retailer offers the customer a $0.016 discount on ethanol fuel as well. See more details here.

Oklahoma Film Rebate Program

Oklahoma’s Film Rebate Program gives eligible production companies a rebate of 20% of their production costs if they film their principal photography in the state. Production companies can get a rebate up to 30% if they meet additional requirements, like:

Filming in a rural county
Filming in a small municipality
Filming at an Oklahoma-certified soundstage
Being a TV production
Being a multi-film deal
Setting post-production services in the state
Incurring music production expenses in the state

Learn more about the incentive at the Oklahoma Film & Music Office.

General incentives

Historic Rehabilitation Tax Credit

Oklahoma businesses that rehabilitate certified historic structures for business purposes might qualify for the state’s Historic Rehabilitation Tax Credit. The credit amount is 100% of the federal rehabilitation credit.

First, businesses must qualify for the federal Historic Preservation Tax Incentives program, which offers an income tax credit equal to 20% of qualified rehabilitation expenditures.

Oklahoma business tax exemptions

Oklahoma has a variety of business tax exemptions for companies in specific industries or engaged in certain activities, including the following:

Manufacturing Sales Tax Exemption: Manufacturers who qualify for a Manufacturer’s Sales Tax Exemption Permit (MSEP) from the Oklahoma Tax Commission won’t have to pay sales tax on purchases of machinery and equipment, energy, and tangible personal property used in design, development, and manufacturing.
Ad Valorem Exemption: Companies in certain industries can get ad Valorem tax exemptions for up to five years. That includes manufacturers, research and development companies, computer services and data processing companies with significant out-of-state sales, aircraft repair companies, and oil refineries.
Computer Services and Data Processing Sales Tax Exemption: Companies involved in computer services or data processing activities are exempt from paying sales tax on machinery and equipment purchases used in those activities.
Aircraft Maintenance Facility Sales Tax Exemption: Both new and expanding aircraft maintenance and manufacturing facilities are exempt from paying sales tax on aircraft and aircraft parts sales, as well as equipment used in the repair or maintenance of aircraft.
Construction Materials Sales Tax Exemption: Manufacturing companies don’t have to pay sales tax on purchases of tangible personal property used to expand or construct a new manufacturing facility.

You can see a complete breakdown of Oklahoma’s sales tax exemptions here.

City and county business tax credits in Oklahoma

Some cities and counties in Oklahoma have their own business tax programs. Oklahoma City, for example, has its own film tax credit and an investment program available for businesses in certain industries.

Search your city’s online business portal or Department of Economic Development to check out your local tax credit options.

Business financing in Oklahoma

Oklahoma has a variety of business financing resources for startup operations and established businesses alike. If you’re not sure where to start, read through Gusto’s guide to business grants and loans in the Sooner State.