SB 287: Income tax; modifying tax years for aerospace tax credit. Effective date. - Oklahoma

Floor (House) → Floor (Senate) · 5 edits

MODERATE

The bill was converted from a House version to a Senate version, which introduced significant changes to the aerospace tax credit. The Senate version expands eligibility to include employees with engineering licenses, increases the credit amount for those with in-state degrees, and allows credits to be carried over to future years if not used immediately.

Scope change

The bill's scope expanded to include Professional Engineers and Land Surveyors as eligible employees, and the credit calculation now distinguishes between degrees earned at in-state versus out-of-state institutions.

ELIGIBILITY

Added eligibility for employees licensed as Professional Engineers or Land Surveyors to receive the tax credit.

FISCAL

Changed the credit calculation to award 10% of compensation for in-state degree holders and 5% for out-of-state degree holders, replacing the previous flat 50% tuition reimbursement.

REQUIREMENT

Added a provision allowing unused tax credits to be carried forward to the next five tax years.

DEFINITION

Removed the specific definition of 'Qualified employer' found in the House version, likely because it was incorporated into the main text or deemed unnecessary.

TIMELINE

Changed the effective date from the House version's implied immediate effect to November 1, 2025.

House Committee Substitute for Senate Bill → Floor (House) · 3 edits

MINOR

The bill was converted from a Senate draft to the House Floor version, resulting in significant formatting cleanup and the removal of a specific provision regarding the definition of 'qualified employee' for institutions of higher education. The substantive policy content, including tax credit amounts, eligibility criteria, and effective dates, remains unchanged.

Scope change

The bill's scope remains focused on aerospace and higher education sectors; no new industries or entities were added or removed.

DEFINITION

Deleted a specific clause that previously restricted the 'qualified employee' definition for higher education institutions to only those actively working in the research institute, removing this limitation.

TECHNICAL

Replaced the 'Senate Bill' header with 'House of Representatives - Floor Version' and cleaned up inconsistent spacing and line breaks throughout the document.

Adjusted the page numbering and footer text to reflect the House Floor version rather than the original Senate Committee Substitute format.

Proposed Committee Substitute (sub committee) 1 → House Committee Substitute for Senate Bill · 4 edits

MODERATE

The bill was restructured from a proposed subcommittee version to a House Committee substitute, updating the official title and page references. The most significant substantive change is the addition of new provisions regarding tax credits for employers who reimburse tuition for employees who earn aerospace-related degrees, specifically limiting the credit to the first four years of employment and capping the amount at 50% of the average public tuition rate.

Scope change

The bill now explicitly includes a new tax credit mechanism for qualified employers in the aerospace sector to reimburse employee tuition, whereas the previous version did not contain these specific credit provisions.

FISCAL

Added a new tax credit allowing employers to claim 50% of tuition reimbursed to employees who earn aerospace degrees within one year of hiring, capped at the average public tuition rate.

REQUIREMENT

Established that the tuition credit is only available if the employee earns the degree within one year of starting employment and is limited to the first four years of employment.

DEFINITION

Updated the definition of 'institutions of higher education' to specifically include those accredited by ABET and offering aerospace engineering degrees.

TECHNICAL

Changed the document header from 'Proposed Committee Substitute' to 'Committee Substitute' and updated page reference numbers.

Enrolled (final version) → Proposed Committee Substitute (sub committee) 1 · 5 edits

MODERATE

The bill was completely rewritten to expand the aerospace tax credit program. The new version broadens eligibility to include institutions of higher education with aerospace research institutes and clarifies definitions for 'qualified employee' and 'qualified employer' to cover more entities and job types. It also updates the list of affected tax years and adds specific provisions for employees working through professional staffing companies.

Scope change

The bill's scope expanded from a narrow focus on traditional aerospace employers to include universities with dedicated aerospace research institutes and professional staffing agencies. It also broadened the definition of eligible employers to include various business structures and public entities.

SCOPE

Added 'institutions of higher education' with dedicated aerospace research institutes as eligible employers.

DEFINITION

Added new definitions for 'Aerospace sector', 'Compensation', 'Institution', 'Qualified employer', 'Qualified employee', 'Qualified program', and 'Tuition'.

ELIGIBILITY

Modified the definition of 'Qualified employee' to include those licensed as Professional Engineers and those employed by professional staffing companies assigned to aerospace work.

TIMELINE

Updated the effective date and modified the list of tax years for which credits can be claimed, referencing changes from Chapter 313.

REQUIREMENT

Removed specific dollar caps on tuition reimbursement credits and certain limitations on credit usage found in the original version.

Engrossed → Enrolled (final version) · 4 edits · May 29, 2025

MODERATE

The bill was finalized as an enrolled act, changing the effective date from February 2025 to November 1, 2025. The most significant policy change is in Section 2357.303, which replaced a tuition reimbursement credit with a new compensation credit specifically for aerospace employers. This new credit offers 10% of employee compensation if they graduated from an in-state institution or 5% if they graduated out-of-state, capped at $12,500 annually.

Scope change

The bill's scope expanded to include a new tax incentive for aerospace employers to retain employees who graduated from Oklahoma institutions, replacing the previous tuition reimbursement model.

TIMELINE

The effective date of the act was changed from February 2025 to November 1, 2025, delaying when the new tax provisions begin.

ELIGIBILITY

Section 2357.303 was completely rewritten to create a new credit for aerospace employers based on employee compensation rather than tuition reimbursement, with specific percentages based on whether the employee graduated from an in-state or out-of-state college.

FISCAL

The maximum annual credit amount for qualified aerospace employees was set at $12,500, replacing the previous unlimited tuition reimbursement structure.

REQUIREMENT

The credit is now limited to the first five years of employment and requires the employee to have graduated from an accredited institution within one year of starting their job.

Amended And Engrossed → Engrossed · 5 edits · May 22, 2025

MODERATE

This bill updates the Oklahoma aerospace tax credit program to align with recent legislative changes, primarily by redefining the credit from a tuition reimbursement benefit to a broader compensation credit. It also extends the program's duration and adjusts the credit amounts and eligibility windows to better support the industry.

Scope change

The bill's scope expanded from covering only tuition reimbursement to including general compensation for aerospace employees, and the program timeline was extended to cover tax years through 2031.

FISCAL

The credit mechanism changed from reimbursing tuition costs to providing a credit based on employee compensation (50% of tuition costs for public institutions, or 10%/5% of compensation based on education location).

TIMELINE

The program's end date was extended from 2030 to 2031, and the effective date was set for November 1, 2025.

ELIGIBILITY

Eligibility criteria were updated to allow credits for employees who graduated from out-of-state institutions, whereas previously only in-state graduates qualified for the full credit.

DEFINITION

The definition of 'qualified employee' was broadened to include individuals previously employed in the sector who switch employers, ensuring they can still claim the credit.

REQUIREMENT

The maximum credit amount per employee was increased to $12,500 annually, up from the previous limit.

Introduced → Amended And Engrossed · 6 edits · May 22, 2025

MODERATE

The bill was amended to completely rewrite the text, replacing the original version with a new, more comprehensive structure. The primary changes include expanding the definition of 'qualified employer' to include institutions of higher education with aerospace research institutes, clarifying the definition of 'qualified employee' to include professional engineers, and adjusting the tax credit timeline to extend through 2032. These changes aim to broaden the program's reach and ensure it supports a wider range of workers and organizations in the aerospace sector.

Scope change

The scope of the bill was significantly expanded by redefining eligible employers to include universities with aerospace research institutes and clarifying eligibility for professional engineers, while also extending the tax credit period to 2032.

DEFINITION

The definition of 'qualified employer' was expanded to include institutions of higher education that have a dedicated research, innovation, and education institute for aerospace technology.

The definition of 'qualified employee' was updated to explicitly include individuals licensed as Professional Engineers by the State Board of Licensure for Professional Engineers and Land Surveyors.

New definitions were added for 'compensation' and 'tuition' to clarify what costs are included or excluded from the credit calculation.

TIMELINE

The tax credit period was extended from ending before January 1, 2026, to ending before January 1, 2032, allowing credits to be claimed for tax years through 2031.

ELIGIBILITY

The definition of 'qualified employee' was clarified to exclude individuals who were already employed full-time as engineers in the aerospace sector prior to receiving their degree, while including those hired by professional staffing companies.

REQUIREMENT

The requirement for a degree to be awarded within one year of employment was retained, but the overall structure of the bill was rewritten to incorporate these new definitions and clarifications.

Income tax; modifying tax years for aerospace tax credit. Effective date.

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