Incentive Spotlight
Oklahoma Five-Year Ad Valorem Tax Exemption for Manufacturing and R&D Facilities

Program Overview

The Oklahoma Five-Year Ad Valorem Tax Exemption offers a full property tax exemption for manufacturing and R&D facilities in Oklahoma on new, expanded, or acquired facilities. The program is designed to stimulate capital investment and job creation across the state.

Benefits

The program provides a full exemption from ad valorem taxes on qualifying real and personal property for a period of five years. This exemption significantly reduces operating costs, making it easier for businesses to invest in facility development, expansion, or acquisition in Oklahoma.

The exemption period begins on January 1 following the year in which the facility becomes operational and meets all eligibility requirements.

Eligibility

To qualify for the exemption, businesses must meet the following criteria:

• Facility Type: Must be new, expanded, or acquired for use in manufacturing or R&D
• Investment Threshold: Must meet a minimum capital investment amount, adjusted annually based on the Consumer Price Index
• Payroll Increase: Must demonstrate a payroll increase over the initial year, with specific thresholds depending on county population
• Wage Standards: New direct jobs created must meet or exceed the average wage requirement defined in the Oklahoma Quality Jobs Program Act
• Annual Compliance: Companies must file annual reports with county assessors detailing job creation and payroll data

Aerospace Exception

Aerospace parts manufacturers that filed an initial exemption application between January 1, 2020, and March 16, 2021, may qualify for a waiver of the payroll growth requirement, allowing them to maintain exemption status even if growth targets were not met during that period.