| Advantages for Partners Who Do Business in the Cherokee Nation
The 14 counties of the Cherokee Nation qualify for special federal tax treatment. Businesses locating or expanding within the Cherokee Nation benefit by accelerated depreciation of investments and by employment tax credits when employing tribal members or their spouses.
Benefits
- Accelerated Federal Property Depreciation Schedule.
- Federal Employment Tax Credits of up to $4,000 per qualifying employee per year.
- Savings of up to 35 percent to 40 percent in depreciation of equipment.
Depreciation Incentives
The depreciation incentive provides a shorter recovery period of about 40 percent for most non-residential depreciable property. This federal tax deferral can substantially increase the after-tax income of businesses. Since Oklahoma’s taxable income is based on federal taxable income, the depreciation benefit will automatically apply for Oklahoma tax purposes.
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In the case of:
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The applicable recover period is:
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3-year property
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2 years
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5-year property
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3 years
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7-year property
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4 years
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10-year property
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6 years
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15-year property
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9 years
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20-year property
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12 years
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Non-residential real
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22 years
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property (39 years)
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Example: The regular depreciation on a commercial building with a cost of $1 million would be $25,641 annually for 39 years. The accelerated depreciation would be $45,454 annually for 22 years. This would substantially increase the taxpayers' present value of available dollars.
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Employee Tax Credit
The employment tax credit is equal to 20 percent of an employee's wages, including health insurance premiums paid by the employer. The tax credit can be claimed on wages not exceeding $45,000.
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