What would happen if Oklahoma universities could no longer offer scholarships to athletes? Would their teams remain competitive? Just as scholarships are a powerful recruitment tool for universities, the manufacturing sales tax exemption is a recruitment tool for attracting jobs and investment.

Manufacturing accounts for most of Oklahoma’s privately produced output, provides some of our state’s highest-paying and highest-skilled jobs and helps diversify our economy. According to a recent study from the State Chamber of Oklahoma Research Foundation, manufacturing will increase our state’s economic output by 33 percent in 2019.

Maintaining the manufacturing sales tax exemption is critical for our state to continue to enjoy the benefits of our robust manufacturing economy. Ongoing growth in manufacturing, including manufacturing related to aerospace, agriculture, transportation, computer components, energy and more depends on maintaining this exemption.

Nearly all states offer a manufacturing sales tax exemption similar to Oklahoma’s. Even the discussion of eliminating this exemption puts Oklahoma at a competitive disadvantage.

Equally troubling is the sentiment that the exemption should be removed because it benefits out-of-state companies and customers. This is simply not true. For every 10 jobs created in manufacturing, an additional eight jobs are created. The exemption creates jobs in Oklahoma, and local investment generates wealth.

Sound tax policy fuels the economy. Tenuous, volatile tax policy hurts the economy. It’s that simple. Taxes should focus on outputs, like profits and the final sale of products, not on the inputs.

We need to incentivize what we want to encourage. If we want companies to invest here and create jobs, we have to enact policies to encourage that. Oklahoma’s economic development professionals work hard to create economic growth and jobs, and a competitive tax policy is an essential tool for their recruitment efforts.

Oklahoma is blessed with abundant and diverse natural resources. Adding value to those resources allows us to diversify our economy, expand our tax base and provide stable jobs to our citizens.

Nationally, manufacturing jobs and investment are trending upward. We need to position Oklahoma and our citizens to benefit from these opportunities, not make it easy for our competitors to keep Oklahoma on the sidelines. Keep the manufacturing sales tax exemption and keep Oklahoma in the game.

Column by Mike Jackson, State Chamber Executive Vice President Government & Political Affairs, published in The Journal Record on February 16, 2018