1 Oklahoma Quality Jobs Program 2019 Guidelines 900 N. Stiles Ave. Oklahoma City, OK 73104 1
2 Oklahoma's Quality Jobs Program cash back incentive has placed the State at the forefront as a location for new or expanding businesses. The business incentive gives qualifying enrolled companies quarterly cash rebates, of up to state has enrolled five percent of newly creat ed taxable payroll, for 10 years. Since inception, the more than 829 companies that have received over $1.2 billion in wage rebates. The program, targeted to manufacturers and certain service companies that project having a new payroll investment of $2.5 million or more, is a valuable asset to improving a company’s bottom line and a primary reason A fully executed contract, with the Department of Commerce, must be in why Oklahoma ranks high in incentives. place before any new jobs can be included in the new taxable payroll. THRESHOLD REQUIREMENTS The following requirements must be met before an application will be reviewed: BASIC INDUSTRY All applicants must be within a qualifying basic industry in order to receive benefits (see Attachment A). Regardless of a company’s overall North American Industry Classification System number (NAICS No.), the activities and functions of new direct j obs must be within a qualifying basic industry. D NEW PAYROLL THRESHOL A qualified company must achieve $2.5 million in new annualized payroll, for new fulltime employees, during any four consecutive quarters in its first 12 quarters in the program. If the payroll threshold is not achieved, payments cease. Payments received to date, however, do not have to be paid back to the State. These new positions must be located within the state of Oklahoma. rtain food processing and research and development A lower payroll threshold of $1.5 million is available for ce projects or to firms that locate on certain former military bases. A no payroll threshold is available to businesses locating within 10 acres that are on Superfund sites or the National Priorities List. Sites may still qualify if not on the list, if they have been formally deferred to the State, or if –up plan approved by the Department of Environmental Quality. they are being remediated pursuant to a clean ERAGE HEALTH INSURANCE COV All businesses must off er basic health insurance coverage to all employees working 30 hours or more per week, whose pay is included in the payroll for qualification. Employees must pay no more than 50% of the premium cost. Employees must be allowed access to the coverage 180 days of employment. within MENT AVERAGE WAGE REQUIRE Minimum average wage requirements, based on the Average County Wage where the jobs are located, apply (see . Attachment B). The maximum required in any county, regardless of the average county wage, is $34,263 Zones, designated by the Department of Commerce, are exempted from the pportunity Applicants located in O requirement. Eighty percent of employees, whose pay is included in the new payroll, must work at least 30 hours per week. Under certain circumstances , leased employees may be included in payroll calculations. While a company has three years to ramp up to the $2.5 million payroll threshold, they must meet the average wage first quarter after the requirement quarter by quarter. New jobs and wages are tracked beginning with the company enters the program.
3 APPLICATION REQUIREM ENTS APPLICATION Applicants must provide responses to all application form questions and satisfy all documentation requirements. An original must be signed by a n officer of the company and submitted to the Department of Commerce prior to hiring any new employees whose payroll will be claimed for benefits. Note: the application packet provides a line by line instruction sheet to assist in preparation of the form. Technical assistance i n completing the application and other necessary documents is provided at no charge by persons associated with the Oklahoma Department of Commerce. NEW HIRE SUMMARY Applications must include a breakdown of the proposed new hires by job title and average wa ge for both first and third year. Only eligible new direct jobs and average taxable wages should be used in the calculation. Even though rd year projected average wage is shown on the only the 3 jobs may be projected for a total of five years, application a nd used to base benefits on. OES - 3 REPORTS OES-3 reports are filed with the Oklahoma Employment Security Commission each quarter. The reports list the th of each month during a calendar quarter a nd the number of employees on the payroll of a business as of the 12 dollar amount of payroll for those employees during that time period. Along with the Application, the most recent four quarterly reports must be provided. The average number of employees, for the three months reported on each of the four quarterly s ummary reports, should be the numbers used on the Application. EE HEALTH PLAN MAJOR MEDICAL EMPLOY Along with the Application, a current copy of the company’s health benefits plan must be included. A statement, e’s portion of the plan, the waiting period before the plan is indicating the percentage paid for the employe offered, and the number of hours worked per week to be eligible for coverage should be attached. Additionally, applicants are required to indicate that some coverage for basic hospital care, ph ysician care, mental health care, substance abuse treatment, maternity and prescription drugs is provided. ORM COMPANY BACKGROUND F At a minimum, company background information must consist of product/service descriptions, a projected growth listing of other locations, a corporate family organizational chart, annual sales figures and explanation, a investment projections (see Attachment C). The information, used as an indication of a company’s preparedness to create the new jobs projected, is confidential. - OF - OUT TION STATE SALES VERIFICA Companies required to provide proof of out-of-state sales may do so by submitting a breakdown of annual sales by state, delineating the Oklahoma percentage of total sales. Sales to the federal government and to in-state cust omers who resell to an out-of-state consumer may be included. The applicant will be required to sign an affidavit asserting that the out-of -state sales requirement will be achieved and maintained throughout the life of ith Oklahoma operations are applicable. the contract. Only sales associated w
4 TECHNICAL ASSISTANCE Technical assistance regarding program concepts, eligible companies, application guidelines and other information pertaining to the Quality Jobs Program is available upon request and encouraged. Questions may be directed to representatives within the Department of Commerce’s National Recruiting and Business Customer Services Teams at (405) 815-5227. The Oklahoma Department of Commerce offers a free service to assist companies in completing the Quality Jobs Program application. ON APPLICATION SUBMISSI Applications are submitted via a Department of Commerce Quality Jobs representative. This person will assist you the Quality Jobs Program office at with the application process. To contact a representative to assist you please call 405-815-5227, or toll free at 800-879-6552, x5227. The Department of Commerce accepts Quality Jobs Program Applications throughout the year since there are no specific deadlines. Applications are evaluated and acted upon as expediently as possible, depending upon their satisfactory completion. APPROVAL PROCESS Once an application is returned to the Department of Commerce with the required documentation, program ost/benefit analysis to determine the percentage of new administrators will verify eligibility and prepare a final c Oklahoma payroll that will be rebated and a maximum amount for the applicant’s project. The information is then presented to an internal review team that makes a recommendation, for approval or denial , to forward the application to the next level of review. If the applicant passes the first internal review, a representative from the company will be required to attend an external hearing of the Incentive Approval Committee, consisting of Department of , Office of Management and Enterprise Services and from the Tax Commission representatives Commerce. The committee will make a recommendation, for approval or denial, to the Executive Director of the Oklahoma Department of Commerce. ive offer, in contractual form, is issued to the company for acceptance. A corporate Once approved, an incent official, who is authorized to bind the company contractually, must sign the contract. At this point, only the ew jobs, NAICS No., benefit rate and maximum company’s name, municipality location, number of projected n benefit amount become public information. All approved companies must be registered to do business in Oklahoma and in good standing with the Secretary of State’s Office, Tax Commission, and Employment Security Commission. CLAIMS FOR PAYMENT The Oklahoma Tax Commission is the primary contact for submitting benefit claims under the contract. Once a contract is returned to the Department of Commerce it is forwarded to the Tax Commission to set up a reimbursement a ccount in order to monitor jobs, payroll and pay qualifying claims. The company will be proactively contacted regarding reporting arrangements. ars. Claims are made quarterly for three years. If threshold is achieved, they may extend for an additional seven ye Note: while the company has three years to reach the $2.5 million threshold, the company must meet the average wage requirement quarter by quarter. At the time the first incentive payment is made, the Department of Commerce is paid a $1000 origination fee.
5 INCENTIVES EXCLUDED Companies enrolled in the Quality Jobs Program may not be eligible to receive certain credits or exemptions in conjunction with the same activity. They include the following: • Sales of Electronics to Qualified Aircraft Maintenance Facilities • Sale of Property to Qualified Manufacturer • Investment/New Jobs Tax Credit • Investment in Qualified Venture Capital Companies Recycle, Reuse, Source Reduction Tax Credits • Investment in Clean Burning Motor Vehicle • • Tax Credit for Employer Provided Health Plans • Purchase of Equipment when primary activity is Computer/Data Processing Income Tax Credit for net Increase in Computer and R&D jobs • Insurance Premium Tax Credit • • Tax Credit for Recycling Facility • Operations Tax Credit for Commercial Space Oklahoma Quality Investment Act • • Business Expansion Incentive Program All applicants should consult with a tax advisor to determine the most appropriate incentive plan based on value epartment of Commerce and financial goals. Additionally, a comparative estimate is available from D representatives. DISCLAIMER The materials contained in this document have been prepared by the Oklahoma Department of Commerce for change based informational purposes only and do not constitute legal or tax advice. This information is subject to on judicial interpretation and legislative action. The application of the information is subject to your unique facts and circumstances. YOU SHOULD NOT ACT UPON ANY INFORMATION CONTAINED IN THESE MATERIALS WITHOUT SEEKING YOUR AL LEGAL AND TAX ADVICE. OWN PROFESSION
6 Attachment A S PROGRAM QUALIFYING OKLAHOMA QUALITY JOB INDUSTRIES BASIC INDUSTRIES Manufacturing Industries classified under NAICS Manual Nos. 31, 32, 33, 5111 or 11331. Research and Development and Testing Laboratories 1711, 541712 and 541380. See NAICS Manual Nos. 54 Central Administrative Offices, Corporate Offices and Technical Services See NAICS Manual Nos. 5611, 5612, 51821, 519130, 52232, 56142, 524291, 551114. Certain jobs related to the mining of oil and gas See NAICS No. 2111, 213111 and 213112; 486 Certain Warehouse/Distribution Operations See NAICS manual 42 where 40% of inventory is shipped out of state. Transportation by Air or 75% See NAICS Manual No. 4811 if corporate headquarters and some reservation activities are within the state of air transport sales are to out -of-state consumers. Flight Training Services See NAICS No. 611512 Federal Civilian Workforce of the Federal Aviation Administration re Where jobs are migrating to Oklahoma from other Federal sites, or expansion he Other Support Activities for Air Transportation See NAICS Manual No. 488190 Wind Power Electric Generation Equipment Repair & Maintenance See NAICS Manual No. 811310 Support Activities for Rail and Water Transport See NAICS Manual Nos. 4882, 4883 Sports Teams & Clubs See NAICS Manual No. 711211
7 Attachment A SERVICE INDUSTRIES -of-state: The program also covers the following service companies, if 75% of sales are out Rail Transportation Computer Programming, Data Processing and Other See NAICS Nos. 482 Computer Related Services See NAICS Nos. 5112, 5182, 5191, 519130, and 5415 Motor Freight Transportation and Warehousing -4889 See NAICS Nos. 493, 484, 4884 Miscellaneous Business Services See NAICS Nos. 561410, 56142, and 51911 Arrangement of Passenger Transportation See NAICS Nos. 561510, 561599 Offices of Real Estate Agents & Brokers See NAICS No. 53120 (and 75% of transactions are Transportation of Freight or Cargo out of state) See NAICS No. 541614 Medical and Diagnostic Laboratories Certain Com munications Services See NAICS No. 6215 See NAICS Nos. 517110, 51741 and 51791 Engineering, Management and Related Services Certain Refuse Systems that distribute methane gas See NAICS Nos. 5412, 5414 -5417, 54131, 54133, See NAICS No. 5622 54136, 54137, and 541990 Grocery Wholesale Distributing Agricultural Production See NAICS Nos. 4244 and 4245 See NAICS Nos. 112120 Securities, Commodities, Investments Professional Organizations See NAICS No. 523 See NAICS No. 813920 Insur ance Carriers Alternative Energy Structure Construction See NAICS No. 5241 See NAICS No. 237130 Insurance Claims Processors Only Alternative Energy Equipment Installation Included in NAICS Nos. 524210 and 524292 See NAICS Nos. 238160, 238220 Adjustment and Collection Services Electric Ser vice Companies -of-state See NAICS No. 561440 (75% of loans to out The program also applies to electric services debtors) - -221122 companies within NAICS Nos. 221111 Miscellaneous Equipment Rental Exempt Electric Wholesale Generators, if 90% of 24 See NAICS Nos. 53 energy input is consumed from in -state sources and -of-state. 90% of sales are out
8 B Attachment 2019 QUALIT Y JOBS AVERAGE COUNTY WAGE Year 2017 data to be used February 1, 2019 to January 31, 2020 $45,997 State Average Wage (QJ+ITC): State Threshold Wage: $34,263. 110% 100% County 125% 110% 100% County 125% Wage Wage Wage Wage Wage Wage $47,184 $37,747 Le Flore $41,903 $36,874 $33,522 Adair $41,522 Lincoln $45,563 $40,095 $36,450 Alfalfa $40,820 $44,902 $51,025 $38,085 $34,623 $42,126 $43,279 Atoka $33,701 $37,071 Logan $37,443 Love $42,549 $34,039 Beaver $41,392 $45,531 $51,740 $40,767 $37,061 $59,954 $52,759 $47,963 Beckham $46,326 McClain $52,845 McCurtain $45,756 Blaine $36,605 $42,276 $46,504 $40,266 $47,735 $42,007 $38,188 Bryan $30,509 $38,136 McIntosh $33,560 $39,900 $50,746 Major $43,890 $49,875 Caddo $40,597 $44,657 $47,653 $54,151 $37,897 Marshall $47,371 $41,687 $43,321 Canadian $43,595 $54,494 Mayes Carter $42,722 $46,994 $53,403 $47,955 $36,146 $45,486 $40,028 $45,183 $39,761 $36,389 Cherokee Murray $32,433 Choctaw Muskogee $40,441 $44,485 $40,541 $35,676 $50,551 Noble $56,379 $45,103 $49,613 $43,146 $37,969 $34,517 Cimarron $42,900 Cleveland $49,383 $34,320 $39,506 Nowata $43,457 $37,752 $30,609 $38,261 Coal $33,778 $37,156 $42,223 $33,670 Okfuskee Comanche $43,475 $47,823 Oklahoma $52,600 $65,750 $57,860 $54,344 $42,885 $45,350 Cotton $36,280 Okmulgee $34,308 $37,739 $39,908 $37,050 $46,313 $40,755 $45,264 $36,211 Craig Osage $39,832 Creek $33,209 Ottawa $41,511 $36,530 $53,246 $46,857 $42,597 $46,096 $52,513 $46,211 Custer Pawnee $40,565 $36,877 $42,010 $36,090 $32,809 Delaware $38,133 Payne $47,666 $41,946 $41,011 $45,148 $55,568 $48,899 Pittsburg $56,435 $49,663 Dewey $44,454 Ellis $46,169 Pontotoc $52,465 $41,972 $49,866 $43,882 $39,893 $44,560 $38,976 $55,700 $49,016 $44,291 $35,433 Garfield Pottawatomie $30,940 Garvin $45,429 $49,972 $56,786 $38,675 $34,034 Pushmataha $41,150 $46,761 $38,827 $42,710 $48,534 $37,409 Roger Mills Grady Grant Rogers $49,147 $60,015 $52,813 $48,012 $44,679 $55,849 Greer Seminole $32,006 $35,207 $40,814 $40,008 $46,380 $37,104 $32,284 $29,349 $36,686 Harmon $33,921 $37,313 $42,401 Sequoyah $45,150 $43,231 $41,045 $51,306 Harper Stephens $34,585 $38,044 Haskell Texas $30,580 $33,638 $38,225 $44,172 $40,156 $50,195 Tillman $46,565 $38,100 $33,528 $30,480 $37,252 Hughes $40,977 $45,437 $41,306 $62,969 $51,633 $50,375 Tulsa $55,413 Jackson $43,790 Jefferson Wagoner $33,217 $36,539 $41,521 $39,809 $49,761 $31,115 Washington $35,358 $50,686 $28,286 Johnston $63,358 $55,755 $38,249 $42,074 Washita $47,811 $52,684 $46,362 $42,147 Kay $57,716 $50,790 $43,260 $47,586 $46,173 Kingfisher Woods $54,075 Woodward $43,393 $38,185 $34,714 Kiowa $52,641 $59,819 $47,855 Latimer $41,223 $45,345 $51,529 Source: US Department of Commerce, Bureau of Economic Analysis, Table CAINC30 Note: The 125% wage threshold is used in change -in-control scenarios.
9 C Attachment COMPANY BACKGROUND nt. Please provide detailed information related to the Quality Jobs Program applica 1. Describe the company’s line(s) of business. 2. Outline the reason for expansion or new lines of business and projected growth. 3. List other locations within and outside Oklahoma. 4. Provide most current fiscal year sales and anticipated growth. 5. Furnish new investment projections applicable to current project. company, 6. Please furnish a CORPORATE organizational chart showing any sister companies, subsidiaries, parent etc. DO NOT provide individual names or job titles, only the parent-subsidiary structure if the entity has common ownership.