Wednesday, March 11, 2009

Defense Contractor Incentives Advance

More Oklahoma businesses could become involved in federal defense projects thanks to incentives that have passed the Oklahoma House of Representatives.

House Bill 1468, by state Rep. Mike Jackson, modifies the state Quality Jobs Act by making qualified federal contractors eligible for tax benefits.

“This legislation will encourage contractors doing federal defense work to hire subcontractors in Oklahoma,” said Jackson, R-Enid. “I believe this legislation will bring quality, high-paying jobs to Oklahoma and grow our economy. We have many subcontractors in Oklahoma that would likely be hired as the result of these incentives.”

The Oklahoma Quality Jobs Program provides incentives to companies to locate or expand in Oklahoma. The program provides quarterly cash payments of up to 5 percent of new taxable payroll directly to a qualifying company for up to 10 years.

Officials believe the incentives provided by House Bill 1468 will result in approximately 1,000 new jobs over the next 10 years that each pay about $70,000 annually.

If those estimates are correct, the state would also gain millions of dollars in new tax revenue from the personal and corporate income tax collections generated by the new economic activity.

Although Oklahoma isn’t home to any “prime” contractors – such as Boeing – the state is home to many defense subcontractors, Jackson noted.

“The incentives provided by House Bill 1468 would give our local businesses a step up when competing with subcontractors in other states,” Jackson said.
House Bill 1468 passed the Oklahoma House of Representatives on a 90-8 vote and now proceeds to the state Senate.

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