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An Act
ENROLLED SENATE
BILL NO. 1992 By: Hall of the Senate
and
Caldwell (Trey) of the
House
An Act relating to income tax; amending Section 1,
Chapter 340, O.S.L. 2022, as amended by Section 1,
Chapter 164, O.S.L. 2024 (68 O.S. Supp. 2025, Section
2357.105), which relates to income tax credit for
qualified project expenditures; defining term;
requiring the Oklahoma Department of Commerce to
promulgate certain rules; and providing an effective
date.
SUBJECT: Qualified economic development expenditures
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY Section 1, Chapter 340, O.S.L.
2022, as amended by Section 1, Chapter 164, O.S.L. 2024 (68 O.S.
Supp. 2025, Section 2357.105), is amended to read as follows:
Section 2357.105. A. As used in this section:
1. “Eligible entity” means an entity incorporated and located
in the state with a qualifying project in a qualifying project
location;
2. “Qualifying project” means the new construction or expansion
of an eligible entity or the development of qualified initial
infrastructure to serve an eligible entity in a qualifying project
location;
3. “Qualifying project location” means a project located in an
industrial park, economic development zone, or port located within a
ENR. S. B. NO. 1992 Page 2
county in this state with a population of less than one hundred
thousand (100,000) persons (“Qualified Area”), or a project located
adjacent to a terminal, switching, or Class II or III railroad as
defined by the federal Surface Transportation Board;
4. “Project sponsor” means a local economic development
organization or authority, port authority, qualified industrial
park, or a terminal, switching, or Class II or III railroad;
5. “Project application” means an application submitted by a
project sponsor on behalf of a qualifying project for an allocation
of qualifying strategic industrial development enhancement (SIDE)
tax credits. Project applications must include a description of the
qualifying project, project location, detailed project costs, and a
summary of expected economic benefits and job creation;
6. “Qualified economic development expenditures” means
expenditures for land improvements, building construction, building
improvements and expansion, port terminal improvements, and the
purchase of certain machinery and equipment;
7. “Qualified initial infrastructure expenditures” means
expenditures for new rail infrastructure and improvements, which
includes the acquisition of right-of-way, engineering,
rehabilitation of existing inactive track to reinstate operation,
construction of new track such as industrial leads, switches, spurs,
and sidings, loading dock improvements, and transloading structures
involved with providing rail service to a qualifying project; and
8. “Project tax credit amount” means the amount of tax credits
allocated by Oklahoma Department of Commerce to a qualifying project
for qualified economic development and initial infrastructure
expenditures; and
9. “Strategic finance partner” means any entity, regardless of
legal form, that provides capital to a qualifying project. Capital
contributions may include, but are not limited to, cash, loans,
guarantees, other financial instruments, or services that support
the eligible entity in the completion of a qualifying project. A
strategic finance partner shall be subject to the Oklahoma corporate
or individual income tax to qualify as a qualifying project
affiliate.
ENR. S. B. NO. 1992 Page 3
B. For tax years beginning after December 31, 2022, and ending
not later than December 31, 2027, there shall be allowed a credit
against the tax imposed pursuant to Section 2355 of this title in an
amount not to exceed ten percent (10%) of an eligible entity’s
qualified economic development expenditures, subject to limitations,
determination, and allocation by the Oklahoma Department of
Commerce.
C. The total project tax credit amount may not exceed ten
percent (10%) of the qualified economic development expenditures,
except for qualified initial infrastructure expenditures the project
tax credit amount is earned at the rate of fifty percent (50%) of
qualified initial infrastructure expenditures.
D. 1. The project tax credit amount for qualified economic
development expenditures may not exceed Six Million Dollars
($6,000,000.00) per qualifying project.
2. The project tax credit amount for qualified initial
infrastructure expenditures may not exceed Three Million Dollars
($3,000,000.00) per qualifying project.
Projects are eligible to combine qualified economic development
and qualified initial infrastructure expenditures, but the total
project tax credit amount may not exceed Six Million Dollars
($6,000,000.00) per qualifying project in aggregate.
E. The issuance of the project tax credit amount shall be
subject to review of eligible expenditures and qualifying project
status by the Oklahoma Department of Commerce.
F. The credits authorized pursuant to this section may not be
used to reduce the tax liability of the taxpayer to less than zero
(0).
G. The credits allowed pursuant to this section that are not
used may be assigned to a qualifying project affiliate by written
agreement at any time during the tax year in which the credit is
earned or the five (5) years following the tax year the qualified
expenditures are incurred. For purposes of this subsection, a
“qualifying project affiliate” shall include a customer, vendor,
ENR. S. B. NO. 1992 Page 4
project investor, or strategic finance partner of the eligible
entity subject to the Oklahoma corporate or individual income tax.
The eligible taxpayer and the qualifying project affiliate must
jointly file a copy of the written assignment agreement with the
Oklahoma Tax Commission within thirty (30) days of the assignment.
The written agreement must contain the name, address, and taxpayer
identification number of the parties to the assignment, the tax year
the eligible taxpayer incurred the qualified expenditures, the
amount of credit being assigned, and the tax year or years for which
the credit may be claimed.
H. To the extent not used, the tax credit authorized by this
section may be carried over, in order, to each of the five (5)
subsequent taxable years.
I. Credits allocated by the Department shall not exceed Twelve
Million Dollars ($12,000,000.00) in a tax year. Qualifying projects
that have submitted an application and are not allocated all or part
of credit for qualified economic development expenditures or
qualified initial infrastructure expenditures shall be eligible for
credit in subsequent tax years.
J. 1. The Oklahoma Tax Commission may promulgate rules, forms,
and regulations as are necessary to implement and administer the
provisions of this section and certify the tax credit amount
generated by each qualifying project annually.
2. The Oklahoma Department of Commerce shall promulgate rules
to permit verification of the eligibility of a qualifying project
for the purpose of claiming the credit. The rules shall provide for
the approval of qualified economic development expenditures prior to
commencement of a project, provide for the approval of a strategic
finance partner, and provide a certificate of verification upon
completion of a project that uses qualified economic development
expenditures. The certificate of verification shall satisfy all
requirements of the Oklahoma Tax Commission pertaining to the
eligibility of the eligible taxpayer claiming the credit.
SECTION 2. This act shall become effective November 1, 2026.
ENR. S. B. NO. 1992 Page 5
Passed the Senate the 23rd day of March, 2026.
Presiding Officer of the Senate
Passed the House of Representatives the 13th day of April, 2026.
Presiding Officer of the House
of Representatives
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this ____________________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________
Approved by the Governor of the State of Oklahoma this _________
day of ___________________, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this __________
day of __________________, 20 _______, at _______ o'clock _______ M.
By: _________________________________