Investment/New Jobs Tax Credit

The Investment/New Job tax credit is a credit allowed on Oklahoma income tax. The credit can be claimed either on an investment in depreciable property or on the addition of full-time-equivalent employees engaged in manufacturing, processing, or aircraft maintenance.

The tax credit can be claimed for up to five years on the greater of 1 percent per year of investment in new depreciable property or $500 per new employee. The credit doubles in officially-designated enterprise zones or if investment exceeds $40 million. In most cases, this credit cannot be claimed in conjunction with Quality Jobs incentives.

In 2022, the credit was claimed on 625 tax returns for a total of $24.3 million, according to data from the Oklahoma Tax Commission’s 2024 Tax Expenditure Report. Unused credits can be carried over to future years; as of Tax Year 2020, there was $734.1 million of unused carried forward credits, according to a 2022 report of the Incentive Evaluation Commission. In response to this accumulation, a temporary $25 million annual cap was applied to the program for 2016-2018.

In its 2022 report, the Incentive Evaluation Commission recommended that the carryforward period for capital investment credits be limited to seven years and called for the New Job Tax Credit’s repeal in favor of incentivizing manufacturing job creation through the Quality Jobs Program.The New Job Tax Credit was faulted especially for having outdated job creation requirements, including a minimum annual pay of only $7,000 and a requirement of only one new job to be eligible.