Taxes and Incentives

Oklahoma Business Expansion Incentive Program (Beip, Formerly Economic Development Pooled Finance)

(62 O.S. § 891.1)

The Oklahoma Business Expansion Incentive Program is available for business expansion projects which include job creation and significant investment in facilities, machinery, and equipment. Complete financial information for three years prior, detailed business plan, detailed budget for expansion project, and other financial information will be required. 

A for-profit entity in conjunction with one or more units of local government may make application to the Oklahoma Department of Commerce. The application must move through a competitive scoring process and requires a letter of determination from the Oklahoma Department of Commerce that the project is net benefit positive for the state. If awarded funds, the for-profit entity works through the approval process of the Oklahoma Development Finance Authority (ODFA) to finalize the incentive agreement.

The incentive is in the form of annual cash payments from the State of Oklahoma which are due on a Promissory Note issued by ODFA. Debt (Promissory Note) issued from the Economic Development Pool may be paid from withholdings taxes, and other revenue, at the for?profit entity benefitted by the incentive.

For debt obligations issued under the Oklahoma Community Economic Development Pooled Finance Act, there is a maximum maturity of 25 years and a maximum coupon rate of 14%. Sixty?five percent of the Economic Development Pool shall be used by ODFA for municipalities that do not exceed 300,000 people. The remaining thirty?five percent may be used by the ODFA for any eligible local government.

Effective September 1, 2010 an evergreen clause permits the renewal of issuing capacity by ODFA.

The pooled finance statute is clear that a “business” that benefits from Business Expansion Incentive Program cannot participate in Quality Jobs or claim Investment Tax Credit.

(The relevant section of the statute is as follows: 62 O.S. §891.12 (I) No for-profit business entity that benefits from proceeds of obligations issued by the Authority from the Economic Development Pool may receive or continue to receive incentive payments pursuant to the Oklahoma Quality Jobs Program Act or claim any investment tax credits otherwise authorized pursuant to Section 2357.4 of Title 68 of the Oklahoma Statutes during the period of time that any withholding taxes attributable to the payroll of such entity are being paid to the Community Economic Development Pooled Finance Revolving Fund or in any manner used for the payment of principal, interest or other costs associated with any obligations issued by the Authority pursuant to the provisions of this act.) 

For information contact Martin Roberts with the Oklahoma Department of Commerce at (405) 990-9147 or martin.roberts@okcommerce.gov

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