Oklahoma Senate Bill SB296

Oklahoma 2026 Regular Session

• Introduced: 2/3/25
• Refer: 2/4/25

Caption

Income tax; expanding credit to include instructor pilots. Effective date.

Summary

SB296 amends Oklahoma’s aerospace income tax credit statutes to add “instructor pilots” as a covered category for tax year 2025. The bill defines an instructor pilot as a federally licensed Certified Flight Instructor employed in Oklahoma to provide instruction under a federal contract, including live instruction or flight simulator instruction, and ties that definition to the existing aerospace-sector credit framework. It also updates related definitions in the aerospace credit statutes, including the definitions of qualified employer, qualified employee, qualified program, compensation, and tuition. Under the bill, qualified employers in the aerospace sector may claim a credit against Oklahoma income tax for compensation paid to qualified employees, and for tax year 2025, to instructor pilots as well. The employer credit remains generally 10% of compensation for employees who graduated from an in-state institution and 5% for those who graduated from an out-of-state institution, capped at $12,500 per qualified employee per year and limited to the first five years of employment. The employee-side credit remains up to $5,000 per year for up to five years, with carryforward rules and no reduction below zero tax liability. The bill also preserves the existing five-year lifetime cap and makes the new provisions effective November 1, 2025.

Impact

SB296 would amend 68 O.S. Sections 2357.301, 2357.303, and 2357.304 to expand Oklahoma’s aerospace-related income tax credit program to include instructor pilots for tax year 2025. The practical effect is to extend both the employer credit and the employee credit to a new class of aviation professionals working under federal contracts in Oklahoma, while leaving the existing aerospace-sector structure, limits, and eligibility rules largely intact. The bill does not create a new tax program; it broadens the scope of an existing one.

Sentiment

Based on the bill text and available legislative context, the measure appears to be generally supportive of Oklahoma’s aerospace and aviation workforce development goals. There are no recorded committee transcripts or votes in the provided materials showing opposition or debate, and the caption and amendments suggest a targeted, technical expansion rather than a controversial policy shift. The overall tone is pro-industry and pro-workforce retention, aimed at strengthening recruitment and retention in a specialized sector.

Contention

The main policy issue is the narrow expansion of the credit to instructor pilots, which may raise questions about whether the tax incentive should be extended to this specific occupation and whether the state should continue or broaden targeted tax credits. Another possible point of discussion is the bill’s use of tax incentives for workforce development, including the cost to state revenue versus the benefit of supporting aerospace employers and training pipelines. No specific opposition, amendments, or committee objections are provided in the available record.