1 / 27

OKLAHOMA IS:

OKLAHOMA IS: . READY. Presentation to: Task Force for the Study of State Tax Credits and Economic Incentives September 07, 2011. Quality Jobs Program. Created in the legislative session of 1993 Cash payments of up to 5% of new payroll for up to 10 years Jobs must be “new” to the state

april
Download Presentation

OKLAHOMA IS:

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. OKLAHOMA IS: READY Presentation to: Task Force for the Study of State Tax Credits and Economic Incentives September 07, 2011

  2. Quality Jobs Program Created in the legislative session of 1993 Cash payments of up to 5% of new payroll for up to 10 years Jobs must be “new” to the state New jobs must average county wage or $29,745, whichever is lower Company must achieve and maintain a $2.5 million annual payroll within 3 years Company must offer Basic Health Insurance Performance Based-no “up front” benefit to participants 1

  3. Industry Eligibility Participants in the Quality Jobs Program must be classified within a qualifying NAICS code • “Basic” industries targeted • Technical fields-computer, data processing, software development • Headquarters, Administrative Services • Wholesale & Distribution firms-with 40% out of state sales • Selected service companies must have 75% out of state sales • Manufacturing comprises 50% of participants • Retail is excluded 2

  4. Program Responsibilities • By Statute, the Oklahoma Department of Commerce is charged with the application, due diligence, approval and contracting portions of the Quality Jobs Program. • The Oklahoma Tax Commission is charged with the claims processing, payment, and auditing portion of the Quality Jobs Program. 3

  5. What Is a “New” Job? • The program focuses on jobs, not people • Job has not existed in the six months prior to application • Job number is above established job “Baseline” • Meets statutory guidelines including average wage, healthcare program • Continues to be “new” throughout the life of the contract given the above criteria is met 4

  6. General Performance Data Since 1993: • 610 companies are/have participated • $34,619 average wage of new jobs • $15.9 Billion in payroll created 5

  7. New Contracts Approved for the Quality Jobs Program Since 2005 6

  8. Jobs in the Quality Jobs Program Since Inception 7

  9. Average Jobs Claimed by Year 8

  10. Average Annualized Wage for Participating Companies 9

  11. New Payroll Created Compared to Rebate Since Inception Most Recent 4 Quarter Rebate: $51.9 Million Most Recent 4 Quarter Payroll: $1.052 Billion 10

  12. Quality Jobs Process Start Claim made to OTC for “New Jobs” at end of first full quarter OTC processes claim Claim is paid Company applies to Commerce to enter program OTC processes claim in part by matching the withholding tax amounts claimed and actually paid. If there is a match and other checks are satisfied, the claim is paid. The benefits are for jobs created 1 to 4 months earlier. Claim requires listing of jobs, wages, and tax withholdings for new jobs created Due diligence – review approval of application, contract written Company begin “Ramp Up” period, creates new jobs 11

  13. Approval Criteria Due Diligence items checked prior to approval process include: • Industry code (NAICS) verification • Tax Status checked • SOS Good Standing • Withholding Tax contributions • UI Contributions • Out of State Sales, when required • Employment history & wage history 12

  14. Tax Credits Foregone • Sales tax credit for purchase of certain equipment in an aircraft facility • Rebate Sales Tax on Construction Materials • Investment Tax Credit unless investment over $40 million and Positive Net Benefit Rate • Investment in Qualified Venture Capital companies • Investment in Recycling, Reuse, Source Reduction of Hazardous Waste equipment • Clean Burning Motor Fuel-vehicle conversion • Provision of Health Insurance to employees • Sales Tax Exemption for Purchases Computer Services/Data Processing/Research and Development • Tax Credit for jobs created in Computer Services/Data Processing/Research and Development • Creation/Maintaining of Regional Home Office (insurers) • Investment in a Recycling Facility • Development in Commercial Space Industry facility • Participation in Economic Development Pooled Financing 13

  15. Program Trends • Average Wage: Directionally increases annually • Jobs Claimed: Fluctuates; affected by the recent economic climate in the ability to meet program thresholds • Benefit Amount: has increased as the average wage has increased 14

  16. Fiscal Fitness • Cost/benefit analysis ensures revenue neutrality • Average wage requirement • Claims process: claim v. actual contribution • QJP use precludes use of most other incentives • Creates indirect and induced jobs • Origination Fee • Benefits paid are considered “ordinary income” 15

  17. Transparency • Triennial report filed with legislature since 1994 • OTC Website shows benefit payments • Monthly media release from Commerce announcing all new enrollees • Full QJP performance report available from OTC • Commerce Annual Report details annual and historic performance data 16

  18. PrimeWin Program • Part of the Quality Jobs Program, this option allows Prime Contractors to participate • Intent to drive more Federal contracting to Oklahoma and to smaller Oklahoma businesses • Participant qualifies on labor hours, not jobs • Labor hours of both the Prime and subcontractors are eligible for benefits 17

  19. 21st Century Quality Jobs Targets knowledge-based service industries Requires at least 10 fulltime jobs at an annual average wage of the lesser of $93,601 or 300% of the county’s average wage Allows a net benefit rate of up to 10% of payroll for 10 years Reduces the out-of-state sales requirement from 75% to 50% Built within the same framework of the Quality Jobs Program Effective November 1, 2009 First participant, April 2010 (5 total now) 18

  20. Small Employer Quality Jobs Program • Targeted at companies with 90 or fewer jobs at the time of application • Company must create as few as 5, and as many as 15 new jobs within 2 years of the start date • New Jobs must be paid at 110% of the County Average Wage • All companies must have a 75% out of state sales ratio • Health insurance, similar to QJP is required • Program lasts a total of 7 years 19

  21. Small Employer Quality Jobs Program General Performance Data (Since 1998): • 81 Companies are/have participated • $39,992 Average Wage • $141.8 million payroll 20

  22. Triennial Report • Required by Statute • March 2011 was the most recent report • Contains information of New Direct Jobs • Fiscal Analysis of the Costs & Benefits 21

  23. Active Companies and Claimed Jobs FY 2008 – FY 2010 22

  24. Active, Filing Companies by Industry 23

  25. Projected and Actual Wages in the Quality Jobs Program FY 2008-FY 2010 24

  26. Quality Jobs Rebates and State Net Benefits FY 2008-FY 2010 Total Quality Jobs Incentives Paid FY 2008-2010: $168.5 million State Benefit of Jobs Created by QJ Participating Companies: $180.8 million Net Benefit FY 2008-FY 2010: $12.3 million 25

  27. THANK YOU! Richard Schwalbach Quality Jobs program Manager Oklahoma Department of Commerce richard_schwalbach@okcommerce.gov 405.815.5269 Jon Chiappe Deputy Division Director, Research Oklahoma Department of Commerce jon_chiappe@okcommerce.gov 405.815.5210 26 Dave Lopez Secretary of Commerce & Tourism Oklahoma Department of Commerce dave_lopez@okcommerce.gov 405.815.5306 Jonna D. Kauger Kirschner Deputy Director and General Counsel Oklahoma Department of Commerce jonna_kirschner@okcommerce.gov 405.815.5148

More Related