S173-2013 Actions

• Jan 9, 2013: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

S173-2013 Memo

BILL NUMBER:S173

TITLE OF BILL:
An act
to amend the tax law, in relation to providing a tax credit to
individuals for up to two hundred dollars of expenses related to the
development and posting of an open source or free license program

PURPOSE:
The purpose of this bill is to incentivize individuals to develop Open
Source Software with a tax credit.

SUMMARY OF PROVISIONS:
New subsection (aaa) (1) amends � 606 of the Tax Law by providing for an
Open Source tax credit to the creators of Open Source software. (2)
amends � 606 of the Tax Law by providing for the type of programs
that qualify for the Open Source tax credit. (3) amends � 606 of the
Tax Law by providing to whom the Open Source tax credit applies. (4)
amends � 606 of the Tax Law by providing the limits and regulations
of the tax credit itself.

JUSTIFICATION:
"Open Source" refers to software offered for free online download
along with its instruction set ("source code"). The New York State
Assembly currently uses Open Source programs such as Mozilla for
email, Firefox for web browsing, and WebCal for electronic
calendars.. The Assembly's use of this software has led to
significant cost savings for the Assembly's operating budget. Once
an Open Source program is downloaded with its source code, anyone can
view the instructions, modify the program, and redistribute it with
the same freedoms". A 2006 report authorized by John Irons and Carl
Malamud from the Center for American Progress details how Open Source
software provides a high social value amongst the group, but a
relatively low economic incentive for individual developer"s. By
allowing open access to the technology's source code, Open Source
software enhances a broader dissemination of knowledge and ideas
Although large corporations such as IBM develop and use Open Source
programs, most Open Source software is written by individuals
volunteering from home. Currently, corporations and self-employed
individuals who create Open Source technology are eligible for a tax
deduction for their software development costs. The vast majority
of Open Source software creators (individual volunteers), however,
do not receive this tax credit. This legislation creates a similar
tax credit incentive for individuals who currently have no means to
deduct these expenses. The tax credit would apply only to
out-of-pocket expenses such as Internet hosting and depreciated cost
of capital expenses such as computers and education. The increased
incentive for individuals would attract more Open
Source developers to New York State, resulting in job creation and a
reinvigoration of our State's technology sector. Additionally, an
influx of Open Source software would lower operating costs for larger
agencies (such as the Assembly), by providing usable software without
charge.

LEGISLATIVE HISTORY:


2009-10: S.4046 (Squadron) - Finance, A.6380 (Bing) - Ways and Means.
2012:    Referred to Investigations and Government Operations

FISCAL IMPLICATIONS:
To be determined.

LOCAL FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This act will take effect immediately and shall apply to taxable years
beginning on and after the first of January next succeeding the date
on which it shall have become a law.

S173-2013 Text

 S T A T E   O F   N E W   Y O R K
 
 
                                          173
 2013-2014 Regular Sessions
 I N  SENATE
 (PREFILED)
 January 9, 2013
 
 Introduced  by Sen. SQUADRON -- read twice and ordered printed, and when
 printed to be committed to the Committee on Investigations and Govern
 ment Operations
 

AN ACT to amend the tax law, in relation to providing a  tax  credit  to
 individuals  for  up to two hundred dollars of expenses related to the
 development and posting of an open source or free license program
 THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM
 BLY, DO ENACT AS FOLLOWS:

 

Section  1. 

Section  606  of  the  tax law is amended by adding a new
 subsection (aaa) to read as follows:

 (AAA) OPEN SOURCE OR FREE LICENSE CREDIT.  (1)  A  TAXPAYER  SHALL  BE
 ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN THIS SUBSECTION, AGAINST
 THE  TAX  IMPOSED  PURSUANT TO SECTION SIX HUNDRED ONE OF THIS PART. THE
 AMOUNT OF  CREDIT  SHALL  EQUAL  UP  TO  TWENTY  PERCENT  OF  THE  TOTAL
 OUT-OF-POCKET  EXPENSES  OF  THE  TAXPAYER  USED IN THE DEVELOPMENT OF A
 PROGRAM THAT IS PROVIDED TO THE PUBLIC UNDER  AN  OPEN  SOURCE  OR  FREE
 SOFTWARE LICENSE, UP TO A MAXIMUM OF TWO HUNDRED DOLLARS.
 (2)  FOR  THE PURPOSES OF THIS SUBSECTION, A PROGRAM SHALL QUALIFY FOR
 THE CREDIT PROVIDED BY THIS SUBSECTION IF THE CODE FOR SUCH PROGRAM  HAS
 BEEN RELEASED UNDER AN OPEN SOURCE LICENSE RECOGNIZED BY THE OPEN SOURCE
 INITIATIVE,  OR  HAS  BEEN RELEASED UNDER A FREE SOFTWARE LICENSE RECOG
 NIZED BY THE FREE SOFTWARE FOUNDATION.
 (3) THIS SUBSECTION SHALL APPLY TO ANY INDIVIDUAL FOR ANY TAXABLE YEAR
 ONLY IF SUCH INDIVIDUAL ELECTS TO HAVE THIS SECTION APPLY FOR SUCH TAXA
 BLE YEAR. AN ELECTION TO HAVE THIS SECTION APPLY MAY NOT BE MADE FOR ANY
 TAXABLE YEAR IF SUCH ELECTION IS IN EFFECT WITH RESPECT TO SUCH INDIVID
 UAL FOR ANY OTHER TAXABLE YEAR AND PERTAINING TO THE SAME PROGRAM OR ANY
 PORTION THEREOF.
 (4) IN NO EVENT SHALL THE  AMOUNT  OF  THE  CREDIT  PROVIDED  BY  THIS
 SUBSECTION  EXCEED  THE TAXPAYER'S TAX FOR THE TAXABLE YEAR. HOWEVER, IF
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD00298-01-3
 
       S. 173                              2
 THE AMOUNT OF CREDIT OTHERWISE ALLOWABLE PURSUANT TO THIS SUBSECTION FOR
 ANY TAXABLE YEAR RESULTS IN SUCH EXCESS AMOUNT, ANY AMOUNT OF CREDIT NOT
 DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED  OVER  TO  THE  FOLLOWING
 YEAR  OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR
 OR YEARS.
 

S 2. This act shall take effect immediately and shall apply to taxable
 years beginning on and after the first of January  next  succeeding  the
 date on which it shall have become a law.

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