Oklahoma Research & Development Tax Credit Glossary
This glossary provides essential definitions for the Oklahoma Research and Development Rebate Program, governed by the Oklahoma Tax Commission (OTC) and the Oklahoma Department of Commerce. It covers key concepts including Qualified Research Expenditures (QREs), the 5% Rebate Percentage, and the $20 million Annual Rebate Cap, as established by legislation such as SB 324. These terms are critical for entities navigating state filing requirements like Form 506 and Federal Form 6765.
| Glossary Term | Definition |
|---|---|
| Research and Development Rebate Program | Oklahoma incentive providing cash rebates for qualified research expenditures incurred within the state. |
| Oklahoma Research and Development Rebate Fund | Revolving fund used by the Tax Commission to pay approved R&D rebate claims. |
| Oklahoma Department of Commerce (ODOC) | State agency responsible for approving applications and administering the R&D rebate program benefits. |
| Qualified Research Expenditures (QREs) | Expenses related to discovery of information that qualifies for federal and state R&D tax benefits. |
| Rebate Percentage (5%) | The specific rate applied to qualified research expenses to calculate the rebate amount payable. |
| Maximum Annual Rebate Cap ($20,000,000) | The statutory limit on the total amount of rebates distributed by the state annually. |
| SB 324 (Legislation Creating Rebate Program) | Legislation that enacted the specific rebate program replacing previous R&D tax credit structures. |
| Establishment (for Rebate Eligibility) | A distinct business unit or location within Oklahoma eligible for specific tax incentives. |
| Federal Form 6765 (Filing Requirement) | IRS form used to claim the credit for increasing research activities, required for state filing. |
| Expenses Incurred in this State | Costs specifically attributable to research activities physically conducted within Oklahoma's borders. |
| Oklahoma Tax Commission (OTC) | The regulatory body overseeing tax compliance and the distribution of the R&D rebate funds. |
| Good Standing with OTC (Eligibility) | Requirement that a business is compliant with all tax laws to receive rebates. |
| Taxable Year | The fiscal period for which the tax return is filed and expenses are claimed. |
| Research and Development Program Attestation | A sworn statement verifying the accuracy of research expenses submitted for the rebate program. |
| Application for Rebate Approval | Formal document submitted to the Department of Commerce to request the R&D rebate payment. |
| First-Come, First-Served Basis (Claim Processing) | The method used to process claims and distribute funds until the annual cap is reached. |
| Non-Appropriated Fund (Rebate Program Status) | Status of the rebate fund indicating it does not rely on annual legislative appropriations. |
| Income Tax Act (Title 68) | The section of Oklahoma statutes governing income tax rules and incentive programs. |
| Title 68, Section 2357.32 (Repealed R&D Credit) | The specific statute authorizing the now-repealed Research and Development Tax Credit. |
| Independent Biomedical Research Institute Credit | Tax incentive for donations made to eligible independent biomedical research organizations in Oklahoma. |
| Cancer Research Institute Credit | Credit available for contributions to institutes focused specifically on cancer research and treatment. |
| Donation to a Research Institute | A charitable contribution to a qualified scientific or medical research body eligible for credits. |
| Maximum Donation Credit Percentage (50%) | The cap on the credit amount, limited to half of the total donated value. |
| Maximum Annual Donation Credit Cap | The total limit on donation credits a taxpayer can claim in a single year. |
| Tax Credit Carryover (4 years - Donation Credit) | Unused donation credits may be carried forward for up to four subsequent tax years. |
| Investment/New Jobs Tax Credit (Alternative Incentive) | An alternative incentive focusing on capital investment and job creation rather than pure R&D. |
| Investment/New Jobs Credit Form 506 | The specific tax form used to calculate and claim the Investment or New Jobs Credit. |
| Qualified Depreciable Property (Form 506) | Tangible assets like machinery used in manufacturing that qualify for investment tax credits. |
| Manufacturing (Form 506 Eligibility) | Industrial process of converting raw materials into finished goods, a key eligibility criterion. |
| Web Search Portal Establishment (Form 506 Eligibility) | A specific business classification eligible for investment credits involving internet search services. |
| Full-Time Employee (Investment/New Jobs) | A worker employed for at least 30 hours per week, counting towards job creation credits. |
| Enterprise Zone (New Jobs Credit Doubling) | Designated distressed area where the New Jobs credit amount is doubled for investors. |
| Out-of-State Buyers or Consumers (Revenue Test) | Customers located outside Oklahoma, crucial for meeting the revenue test for certain credits. |
| Wages Subject to Oklahoma Income Tax Withholding | Employee earnings that are taxable in Oklahoma, used to calculate credit bases. |
| Standard Industrial Classification (SIC) Manual | System used to classify business activities to determine eligibility for specific state incentives. |
| Computer Services and Data Processing (Former Credit) | Business sector formerly eligible for specific tax credits based on job creation. |
| Full-Time Equivalent Employees (Former Credit Base) | Calculation standardizing part-time hours into full-time units for credit eligibility thresholds. |
| Annual Gross Revenues (Out-of-State) | Income derived from sales outside Oklahoma, often required to prove export orientation. |
| Affidavit to Tax Commission (Former Requirement) | A sworn written statement formerly required to verify eligibility for specific tax exemptions. |
| Credit for Donations to Certain Research Institutes | Incentive reducing tax liability based on contributions to specific medical research foundations. |
| Form 511-CR (Other Credits Form) | The summary form for claiming various Oklahoma tax credits on individual income returns. |
| Non-Electing Pass-Through Entities | Business structures where credits flow to owners rather than being taxed at entity level. |
| Allocation to Owners Pro-Rata | Distribution of tax credits to shareholders based on their percentage of ownership interest. |
| Sales to the Federal Government (Out-of-State Revenue) | Transactions with the US government, often counted as out-of-state revenue for eligibility. |
| Research and Development Rebate Fund | Fund designated for paying R&D claims. |
| Qualified Research and Development Company (Former Status) | Former status for firms meeting specific R&D spending and revenue criteria. |
| Qualified Wages (Specific Industry Credit) | Compensation paid to employees directly involved in the qualifying activity, eligible for credits. |
| Qualified Training Expenses (Specific Industry Credit) | Costs associated with training employees, eligible for specific industry tax credits. |
| Maximum Combined Credit Amount (Specific Industry) | The aggregate limit on total credits a taxpayer can claim across multiple programs. |
| Tax Credit Transfer (Zero-Emission Facility Credit) | The ability to sell or assign unused tax credits to another taxpayer, if permitted. |