Overview
Oklahoma courts data centers with sales and property tax exemptions, but eligibility hinges on meeting out-of-state revenue thresholds and industry classification codes. The state repealed an older sales tax refund program in 2022, leaving a narrower set of incentives anchored in SIC and NAICS codes. A 2025 effort to expand property tax breaks for mega-projects stalled in committee.
Incentives
Sales Tax Exemption on Equipment
Data centers can claim a sales tax exemption on machinery and equipment, but the details depend on industry classification.[1][2] Facilities classified under NAICS 518210 (data processing and hosting) qualify for exemptions on equipment but not electricity. Facilities under NAICS 519130 or 519290 qualify for exemptions on both equipment and electricity. All qualifying operations must derive at least 80% of annual revenue from out-of-state customers.[1]
Five-Year Property Tax Exemption
Oklahoma offers a five-year ad valorem (property) tax exemption for new, expanded, or acquired data processing facilities.[3] Key requirements include:
- $500,000 minimum investment for assets placed in service in 2022, adjusted annually for inflation
- Out-of-state revenue thresholds: 50% for NAICS 5112/5415/334611/519130 or 80% for NAICS 5182
- Annual affidavits to the Oklahoma Tax Commission to maintain eligibility
- Exemption applies only to new investment, not routine repair or maintenance
Bitcoin Mining Sales Tax Exemption
Starting November 1, 2024, commercial bitcoin mining operations (NAICS 518210) qualify for a sales tax exemption on critical equipment including transformers, servers, processors, software, electricity, and cabling.[1]
Quality Jobs Cash Rebate
The Quality Jobs Program offers data center operators a cash rebate of up to 5% of quarterly payroll for up to 10 years.[1] To qualify, projects must create $2.5 million in new annual payroll within three years and meet average wage thresholds.
Requirements and Conditions
Out-of-State Revenue Thresholds
All major incentives require that a majority of the data center’s revenue come from out-of-state customers. The threshold is 50% for certain software and R&D classifications (NAICS 5112, 5415, 334611, 519130) and 80% for data processing and hosting (NAICS 5182).[2][3]
Industry Classification Accuracy
Eligibility for both sales and property tax exemptions depends on correct SIC or NAICS coding. Facilities classified under NAICS 518210 are excluded from sales tax exemptions on electricity, while those under NAICS 519130/519290 receive broader exemptions.[1][2] Operators should verify classification with the Oklahoma Tax Commission before claiming benefits.
Annual Compliance
The five-year property tax exemption requires annual affidavits to the Tax Commission certifying continued eligibility.[3] Failure to file can disqualify the exemption.
What to Watch
- Failed SB 689 (2025): A bill that would have expanded the property tax exemption to data centers with at least $1 billion in capital expenditures failed in the Senate Revenue and Taxation Committee on February 10, 2025.[4][5] Similar legislation could return in future sessions.
- Incentive Evaluation Commission reviews: The Commission’s 2023 evaluation noted the older sales tax refund program (68 O.S. §§ 54001-54006) had not been used in five years before its 2022 repeal.[2] Future reviews may assess whether current incentives are effective at attracting new projects.
Sources
[1] Oklahoma Department of Commerce, “Oklahoma Data Center Industry Tax Incentives,” n.d., https://www.okcommerce.gov/wp-content/uploads/Data-Center-Industry-Tax-Incentives.pdf (accessed 2026-01-08).
[2] Oklahoma Office of Management and Enterprise Services, Incentive Evaluation Commission, “Evaluation: Computer Services, Data Processing and Research and Development Tax Exemption,” November 17, 2023, https://oklahoma.gov/content/dam/ok/en/omes/documents/iec/archive/support/2023/ComputerDataExemptionEvaluation11172023.pdf (accessed 2026-01-08).
[3] Oklahoma Office of Management and Enterprise Services, Incentive Evaluation Commission, “Five Year Ad Valorem Tax Exemption Final Draft Evaluation,” November 14, 2024, https://oklahoma.gov/content/dam/ok/en/omes/documents/AdValoremExemptionFinalDraft11142024.pdf (accessed 2026-01-08).
[4] Oklahoma Legislature, “SB 689 Bill Summary (Introduced),” January 15, 2025, https://www.oklegislature.gov/cf_pdf/2025-26%20SUPPORT%20DOCUMENTS/BILLSUM/Senate/SB689%20INT%20BILLSUM.PDF (accessed 2026-01-08).
[5] Oklahoma Legislature, “Bill Information for SB 689,” 2025, https://www.oklegislature.gov/BillInfo.aspx?Bill=SB689 (accessed 2026-01-08).