Provides an exemption from the tax on sales and the compensating use tax for equipment, with a purchase price of five hundred dollars or greater, purchased by companies located in college incubator facilities or incubator facilities funded by the state.
Ayes (56): Adams, Addabbo, Avella, Ball, Bonacic, Boyle, Breslin, Carlucci, DeFrancisco, Dilan, Farley, Felder, Flanagan, Fuschillo, Gallivan, Gianaris, Gipson, Golden, Griffo, Grisanti, Hannon, Hoylman, Kennedy, Klein, Lanza, Larkin, Latimer, LaValle, Libous, Little, Marcellino, Marchione, Martins, Maziarz, Nozzolio, O'Brien, O'Mara, Parker, Peralta, Ritchie, Rivera, Robach, Sampson, Sanders, Savino, Serrano, Seward, Skelos, Smith, Squadron, Stavisky, Stewart-Cousin, Tkaczyk, Valesky, Young, Zeldin
Nays (5): Diaz, Espaillat, Hassell-Thomps, Krueger, Montgomery
Excused (2): Perkins, Ranzenhofer
TITLE OF BILL: An act to amend the tax law, in relation to providing an exemption from the tax on sales and the compensating use tax for certain equipment purchased by companies located in academic incubator facilities
PURPOSE: This legislation is consistent with our state's general efforts to encourage the creation and growth of small business. Companies in incubators, by their nature, are small and have limited resources. This bill alleviates a small but significant tax burden on these firms by exempting them from sales tax on equipment that costs $500 or more.
SUMMARY OF PROVISIONS:
Section 1 of the bill amends section 1115 of the tax law which provides companies that are located in an academic incubator facility with a sales tax exemption for the purchase of equipment with a price of $500 or more, and provides for the definition of an academic incubator.
JUSTIFICATION: During the last decade, one of the most effective state tools used to encourage job growth and creation has been its investment in high technology incubators. Incubator facilities provide researchers and entrepreneurs with the physical space and support staff necessary to help transfer the technology developed in the laboratory into a commercial product of value.
Efforts to develop research ides into viable products are usually done with limited resources. Costs of operation must be kept at a minimum to allow researchers the opportunity to advance their theories. Incubators certainly provide low cost office space, however, rents are not the only expense that these businesses incur. Equipment costs can also be a major impediment to the success of the business. To help reduce this cost this bill would exempt business. To help rescue this cost this bill would exempt businesses located in incubators from sales tax on equipment purchases. Taxing this equipment is contrary to the general concept of incubators, which is to reduce the cost associated with a start-up firm struggling to develop its ides/research into a product.
The amendment clarifies that the exemption is only for those companies located in an academic incubator facility and the equipment be used in the incubator facility.
LEGISLATIVE HISTORY: 2011-12 S.3175A/A.5027A; 2009-2010 S.1997; 2007-08 S.942B; 2005-06 S.1415A; 2003-04 S.485; 2001-02 S.2341.
FISCAL IMPLICATIONS: Implementation: There would be some loss of state revenue.
EFFECTIVE DATE: This act shall take effect September 1, 2013.
STATE OF NEW YORK ________________________________________________________________________ S. 2021 A. 1929 2013-2014 Regular Sessions S E N A T E - A S S E M B L Y (PREFILED) January 9, 2013 ___________IN SENATE -- Introduced by Sens. LAVALLE, KENNEDY, LARKIN, O'MARA, RANZENHOFER -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations IN ASSEMBLY -- Introduced by M. of A. SCHIMMINGER, SWEENEY, COLTON -- Multi-Sponsored by -- M. of A. KOLB, MAGEE -- read once and referred to the Committee on Ways and Means AN ACT to amend the tax law, in relation to providing an exemption from the tax on sales and the compensating use tax for certain equipment purchased by companies located in academic incubator facilities THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision (a) of section 1115 of the tax law is amended by adding a new paragraph 44 to read as follows: (44) EQUIPMENT WITH A PURCHASE PRICE OF FIVE HUNDRED DOLLARS OR GREAT- ER PURCHASED BY ANY COMPANY LOCATED IN AN INCUBATOR FACILITY THAT IS ASSOCIATED WITH A COLLEGE, AS DEFINED IN SUBDIVISION TWO OF SECTION TWO OF THE EDUCATION LAW, OR AN INCUBATOR FACILITY THAT IS FUNDED BY THE STATE. SUCH EQUIPMENT MUST BE USED DIRECTLY AND PREDOMINATELY WITHIN SUCH INCUBATOR FACILITY. S 2. This act shall take effect September 1, 2013.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD03803-01-3