Small Business Tax Incentives in Oklahoma:
Your Complete Guide

(1) Why Tax Incentives Matter

Oklahoma offers a rich environment of tax incentives designed to help small businesses scale, hire, and innovate. Additionally, Oklahoma has some of the lowest tax rates and some of the best tax incentives in the nation. The below programs offer payroll rebates, tax credits, and exemptions – helping your businesses boost cash flow and stay ahead of the competition.

(2) Key Incentive Programs

Quality Jobs Program

Provides a cash rebate to companies that create well-paying jobs and promote economic development. The program offers quarterly cash payments of up to 5–10% of newly created payroll for up to 10 years. Learn more.

Small Employer Quality Jobs Program

For companies with 500 employees or less, provides quarterly incentive payments to qualifying small businesses. Quarterly payments may be as much as 5% of payroll for up to 7 years. Explore program.

21st Century Quality Jobs Program

Oklahoma’s 21st Century Quality Jobs Program offers cash incentives (up to 10% of payroll for 10 years) for businesses creating high-wage jobs in select industries. The program supports highly-skilled job creation and reduces out of state sales requirements for qualifying sectors. See if you’re eligible.

Investment / New Jobs Tax Credit

Offers a significant tax credit for growing manufacturers, which can be used for capital investment and job creation. Can also be combined with other incentives. See program details.

Business Expansion Incentive Program

The Business Expansion Incentive Program assists Oklahoma companies who are expanding their business through investments in projects relating to certain assets, including machinery, equipment and buildings. Details here.

Aerospace Engineer Workforce Tax Credit

For aerospace companies hiring engineers, this program provides tax credits equal to 5% of employee compensation – or 10% if the employee graduated from an Oklahoma university. The engineer-employee can also get a personal tax credits of up to $5,000 per year. Find out how to qualify.

New Products Development Income Tax Exemption

The Oklahoma New Products Development Income Tax Exemption is a state incentive designed to encourage innovation and manufacturing within Oklahoma. This exemption offers tax benefits to both inventors and manufacturers of new products in Oklahoma, promoting innovation and production within the state. Apply now.

Opportunity Zones

The Opportunity Zone program is a federal tax program allowing investors to realize significant federal tax benefits through investing capital gains in qualified Opportunity Zones. OZ incentives have no maximum and can be applied to a wide range of investments. Additionally, profits from Opportunity Zone investments are tax-free after 10 years. Learn how to invest in Federal OZs, or browse this map to find available properties in Oklahoma’s Opportunity Zones.

(3) Eligibility and Application

• Programs may require a minimum investment or job creation
• Applications are submitted to the Oklahoma Department of Commerce
• Annual reports or benchmarks may be required
• Visit the OK Commerce website to learn more

(4) Combining Federal, State, and Local Benefits

Pair state credits with federal programs like Work Opportunity Tax Credit (WOTC), SBA-backed grants, or USDA rural incentives for stronger returns. Combining federal, state, and local tax credits can offer significant benefits, such as:

• Reducing Overall Costs: Tax credits directly lower your tax liability, meaning you pay less in taxes. Combining credits from multiple levels of government can further reduce the net cost of investments or projects.
• Encouraging Investment and Job Creation: Governments at all levels use tax incentives to stimulate economic activity, such as business investment and job growth. Combining incentives can make these initiatives more attractive and effective.
• Improving Project Feasibility: For projects with high upfront costs, such as renewable energy installations or historic building renovations, stacking tax credits from different sources can provide the necessary capital to make the project financially viable.
• Promoting Specific Policy Goals: Governments utilize tax incentives to encourage activities that align with their policy objectives, such as promoting clean energy, affordable housing, or revitalizing distressed communities. Combining these incentives can amplify their impact in achieving these goals.
• Encouraging Investment and Job Creation: Governments at all levels use tax incentives to stimulate economic activity, such as business investment and job growth. Combining incentives can make these initiatives more attractive and effective.
• Improving Project Feasibility: For projects with high upfront costs, such as renewable energy installations or historic building renovations, stacking tax credits from different sources can provide the necessary capital to make the project financially viable.
• Promoting Specific Policy Goals: Governments utilize tax incentives to encourage activities that align with their policy objectives, such as promoting clean energy, affordable housing, or revitalizing distressed communities. Combining these incentives can amplify their impact in achieving these goals.

(5) Maximizing Incentives

By strategically combining incentives, taxpayers can maximize the financial benefits of their investments or projects, reducing their tax burden and potentially generating a greater return on investment.

Be Aware of Stacking Rules. It is crucial to understand the specific rules and regulations regarding the stacking of tax credits from different levels of government. Some federal credits may be compatible with state and local programs, while others may have restrictions.

• Plan ahead—review incentive thresholds early in your budgeting process
• Work with qualified accountants or advisors to avoid clawbacks
• Maintain clear records for audit and verification purposes

(6) Final Takeaway

Oklahoma offers a wide range of tax credits and rebates to help your small business grow. Whether you’re hiring, investing in property, or expanding operations, strategic use of these programs can save thousands annually. To ensure you’re eligible (and to apply properly) contact Cantrell Law Firm for a free consultation.

Disclaimer: This blog post is intended for general educational use and does not replace legal or tax advice. For customized assistance, schedule an appointment with Cantrell Law Firm today.