OKLAHOMA CITY (OBV) – A bill that incentivizes Oklahoma businesses to invest in research and development to grow their business is making strides in the Oklahoma legislature.
Senate Bill 324, written by Sen. Kristen Thompson, R-Edmond, and Rep. Brian Hill, R-Mustang, passed the Oklahoma Senate 33-11 in March.
The bill creates the Oklahoma Research and Development Rebate fund. The fund gives businesses an income tax credit up to 5 percent for their research and development expenses.
SB 324’s purpose is to incentivize businesses to invest in research and development that will help them grow through various expansion efforts, including developing new products and intellectual properties.
“This is a very helpful tool when expanding current Oklahoma businesses,” Thompson said of the bill.
The bill also makes Oklahoma more attractive to research and development companies looking for new states to expand into.
“The way this fund is going to work is it’s basically first come, first serve on qualified expenditures. The dollar amount will remain in the fund until expended,” Thompson said.
Oklahoma is one of 12 states that do not offer businesses a research and development incentive, Thompson said.
“My expectation is this will be a very successful program and we can in the future make it work better for the state of Oklahoma,” Thompson said while answering questions about the bill on the Senate floor.
Sen. Brian Guthrie, R-Bixby, voted against SB 324. He said he did not vote for SB 324 because the bill goes against a mandate this year to cut spending amid high inflation.
“The primary goal this year is to cut spending and shrink government,” Guthrie said. “If we’re deciding what incentives, we’re just growing government, which is the opposite of what we’re trying to accomplish this year.”
Thompson said she does not believe the state would rebate more than the companies pay in taxes.
“They still have employees that are paying taxes here. I think the net benefit in itself, regardless if the company is incorporated here or not, will be a pro-growth measure,” she said.
The bill incentivizes Oklahoma companies and out-of-state companies that have a presence in Oklahoma to invest in research and development in the state.
“We will see Oklahoma companies benefit from this, but we do have some companies now that have a very strong footprint in this state. So, we want to incentivize them to continue to work at places like Tinker and maybe FISTA down in Lawton. Our goal with this is to encourage research and development dollars in the state,” she said.
The bill is now under consideration in the Oklahoma House of Representatives.
