Taxes and Incentives

Ad Valorem Tax Exemptions

Ad Valorem Exemption

(68 O.S. § 2902)

Except as otherwise provided by subsection H of Section 3658 of this title, the exemption authorized by this section may be claimed a qualifying manufacturing concern as defined by Section 6B of Article X of the Oklahoma Constitution. As further defined herein, new, expanded or acquired manufacturing facilities (including facilities engaged in research and development) shall be exempt from the levy of any ad valorem taxes, for a period of five (5) years.

The provisions of Section 6B of Article X of the Oklahoma Constitution (requiring an existing facility to have been unoccupied for a period of twelve (12) months prior to acquisition) shall be construed as a qualification for a facility to initially receive an exemption, and shall not be deemed to be a qualification for that facility to continue to receive an exemption in each of the four (4) years following the initial year for which the exemption was granted. Such facilities are hereby classified for the purposes of taxation as provided in Section 22 of Article X of the Oklahoma Constitution.

New and expanding manufacturers, research and development companies, computer services and data processing companies with significant out-of-state sales, aircraft repair companies, oil refineries, and certain wind power generators may be eligible for ad valorem tax exemptions for up to five years.

Firms must make an annual application to the County Assessor by March 15th of the year in which the exemption is requested. Upon approval of the application, the state will reimburse tax dollars to local taxing jurisdictions, which they would have otherwise received. As a result, although application for the exemption is made to the County Assessor, Oklahoma Tax Commission personnel are involved in the final review to determine the exemption. It is the responsibility of a company to apply for the exemption each year by March 15th. 

Ad Valorem Exemption For Warehousing And Distribution Facilities

(68 O.S. § 2902, B. 1. e)

Warehousing and Distribution Facilities may be eligible for a 5 year exemption from Ad Valorem Tax. Establishments primarily engaged in distribution as defined under Industry Numbers 49311, 49312, 49313 and 49319 and Industry Sector Number 42 of the NAICS Manual, latest revision, and which meet the following qualifications: (1) construction with an initial capital investment of at least Five Million Dollars ($5,000,000.00); (2) employment of at least one hundred (100) full-time-equivalent employees, as certified by the Oklahoma Employment Security Commission; (3) payment of wages or salaries to its employees at a wage which equals or exceeds one hundred seventy-five percent (175%) of the federally mandated minimum wage, as certified by the Oklahoma Employment Security Commission may be eligible for exemption from ad valorem tax. Applicants must apply for this exemption at their local county assessor office as outlined above.

For more information, contact the Oklahoma Tax Commission, Ad Valorem Division at (405) 319-8200 or otcmaster@tax.ok.gov. For forms, visit www.tax.ok.gov or contact a local County Assessor to discuss what property may qualify for the exemption.

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