Pandemic or not, attracting and retaining top-flight talent is one of the leading organizational concerns for companies. Two innovative state tax credits in Oklahoma provide employers both a financial and human capital boost in overcoming that.
The newest of the two is the Software/Cybersecurity Workforce Tax Credit, which launched in 2019 and received refinements earlier this year. It provides a tax credit of up to $2,200 annually for cybersecurity or software employees who have received a degree from an accredited institution. While the credit does not directly impact a company’s bottom line, it does become a valuable tool in corporate recruitment and retention efforts.
The software and cybersecurity tax credit is so new, there is no existing data on its impact to date. However, its predecessor from 10 years prior—which still continues to this day—provides a strong barometer of its pending impact.
Approved in 2009 and later extended in 2018, Oklahoma’s Aerospace Engineer Workforce Tax Credit program has generated an estimated economic impact of $1.5 billion to $2 billion for the state, according to a report in The Norman Transcript. The paper also notes that the state tax commission received well over 2,000 tax returns claiming the credit in 2017 alone. The current iteration of the credit lasts through at least 2026.
The aerospace credit goes a step further than the software and cybersecurity version, providing benefits for both employee and employer. Aviation and aerospace companies can receive up to a $12,500 annual state tax credit for each engineer hired and employed for up to five years within Oklahoma. Meanwhile, the qualifying engineer, who must have a degree in engineering from programs accredited by the Engineering Accreditation Commission of the Accreditation Board for Engineering and Technology, qualifies for up to a $5,000 state tax credit annually for a maximum of five years. The engineers don’t have to be aerospace-specific engineers, but they must be employed by an aerospace company.
“The Oklahoma Aerospace Engineering Tax Credit is a clear statement by public policy makers that aerospace engineers are valued and encouraged to pursue professional development in Oklahoma,” Hendrickson says.
Protecting and accelerating the immense growth of the aerospace industry in Oklahoma has been a top priority. The sector now employs more than 120,000 people, generates a $44 billion economic impact and has diversified beyond maintenance, repair and overhaul to also include advanced engineering, weapons systems and unmanned aircraft.
“The engineering tax credits were a significant contributing factor in decisions to expand the Boeing presence in Oklahoma,” says Steve Hendrickson, director of government operations for Boeing. “The Boeing Oklahoma City site has been the fastest growing site in the enterprise the last few years. This credit is unique in the nation and places Oklahoma at a competitive advantage.”
Seeing similar potential for growth among in-demand software and cybersecurity positions nationwide was the impetus for replicating the tax credit for a broader set of companies. Since December 2019, Greater Oklahoma City alone has seen TTEC open a 500-person customer engagement center, Heartland Payment Systems add 400 people to a new $40 million downtown headquarters, and Costco announce a 1,500-person back office operation, putting wind in the sails of the state’s other growing industries.
The pandemic has undoubtedly created significant headwinds for firms of all sizes, but a simple fact remains—attracting and retaining top-flight talent is always a priority for innovative firms. Oklahoma’s Software/Cybersecurity and Aerospace Engineer Workforce Tax Credits provide a valuable tool in that process.
This article is brought to you by the Greater Oklahoma City Partnership, which works closely with business and community leaders to grow existing industries, recruit new companies and develop an active entrepreneurial environment, resulting in quality job creation and a diverse economy for the 10-county region. To learn more about Greater OKC, visit greateroklahomacity.com.