Budget & Taxes (Tax Incentives)

SB 680 modifies Oklahoma's definition of "cigarette" to explicitly include heated tobacco products, expanding the scope of existing tax regulations. The bill provides a tax exemption for these products and requires the Oklahoma Tax Commission to establish rules for compliance. This directly affects manufacturers, distributors, and retailers of heated tobacco products by changing how they are classified under cigarette tax laws. The bill updates statutory definitions and references to align with this new exemption, ensuring heated tobacco products are treated consistently under the tax code.

HB 1602 creates tax credits for Oklahoma vehicle manufacturing companies that hire engineers with ABET-accredited degrees. Employers can claim a 50% credit on tuition reimbursement (capped at $5,000 annually) and 5-10% on salaries (capped at $12,500 annually) for the first 4-5 years of employment. Total credits are limited to $3 million annually for employer credits and $2 million for employee credits. The program expires after 2031.

HB 1205 repeals Oklahoma's tax credit for small wind turbine installations by removing Section 2357.32B from the state's tax code. This change directly affects small wind turbine owners and installers who previously qualified for the credit. The repeal takes effect on November 1, 2025, eliminating the tax incentive for new installations after that date. The bill is procedural and does not create new policy, only removing an existing tax provision.

SB 238 exempts the sale of ammunition from Oklahoma's state sales tax. This directly affects individuals and businesses purchasing ammunition within the state. The bill amends Oklahoma's sales tax code to add ammunition as a specific exempt item under existing tax exemption provisions. This change means ammunition sales will no longer be subject to the state's 4.5% sales tax.

HB 1372 temporarily lowers the gross production tax rate for oil and gas from existing wells (spudded before the law's effective date) to 5% for 36 months, instead of the standard 7%. It also creates two new tax exemptions: 1) 5 years of tax-free production for secondary/tertiary recovery projects approved after July 2022, and 2) a 24-month tax exemption for wells using recycled water (proportional to recycled water usage). For orphaned wells, producers must post a $25,000 surety bond per well to qualify for a 50% tax reduction for 36 months. The bill sets annual refund limits of $15 million for recovery projects and $10 million for recycled water exemptions, requiring producers to apply for refunds through the Tax Commission.