Oklahoma law provides tax breaks for qualifying aircraft facilities

The law provides sales tax exemptions for certain purchases and aircraft work connected to qualifying facilities. A qualified aircraft maintenance or manufacturing facility must be new or expanding, mainly repair or rebuild aircraft, cost more than $5 million to build, and employ at least 250 new full-time-equivalent workers when complete. A qualified aircraft maintenance facility must be operated by an air common carrier, have at least 2,000 full-time-equivalent workers in the preceding year, and mainly work on commercial aircraft or parts used in air cargo Purchases covered by the exemption must total at least $2 million. Construction materials may be bought by a contractor or subcontractor that has a contract with the facility. Aircraft and parts sales, and listed repair, remodeling, and maintenance work, must take place at a qualified aircraft maintenance facility. The law takes effect January 1, 2027.

The law allows a qualified facility to receive a refund of state and local sales taxes paid on materials used in its construction or expansion. The refund covers a qualified aircraft maintenance or manufacturing facility’s construction or expansion materials, including qualifying materials bought by its contractor or subcontractor. The Oklahoma Tax Commission must approve the claim before paying the refund. The facility must submit invoices, required affidavits, and other required documents. If a contractor or subcontractor paid the tax, the facility must provide that contractor’s or subcontractor’s affidavit. The refund may include interest and cannot exceed the sales taxes paid plus accrued interest. The facility must file its claim documents within 36 months of each purchase and its employment certification within 60 months of its first purchase.