Relates to tax credits for start-up high technology companies to allow such companies in existence for 8 or less taxable years to receive refunds of unused investment tax credit carry forwards.
TITLE OF BILL: An act to amend the tax law, in relation to start-up high technology companies
PURPOSE OR GENERAL IDEA OF BILL: This legislation expands the availability of tax credit refunds for start-up technology companies to help them overcome certain barriers to the commercialization within New York State of scientific and technological discoveries from nonprofit research entities located in the State.
SUMMARY OF SPECIFIC PROVISIONS: Section 1: Amends subparagraph 3 of paragraph (j) of subdivision 12 of section 210 of the tax law, as amended by section 1 of part CC of chapter 85 of the laws of 2002 to include that if a taxpayer is a start-up high technology company or a small high technology company as defined in section 3102 of the public authorities law, then they shall be allowed a credit for eight taxable years. current law would only allow these companies to obtain a refund of ITC carry forwards if they had been in business for five or less taxable years.
Section 2: Establishes the effective date.
JUSTIFICATION: One of the cornerstones of economic growth in New York State is research and development in science and technology at nonprofit research institutions in the State that may have commercial potential and that can result in the formation of knowledge-based industries. Such industries generate products and processes with significant national and international markets which lead to increased State exports and the creation of long-term jobs with good wages and benefits. However, the economic benefits of R&D at nonprofit research institutions can be lost to the State if the intellectual property rights resulting from the R&D are licensed to companies that use such rights to produce products or services outside of New York State. This bill would encourage the development and growth of companies that commercialize on R&D discoveries from nonprofit research institutions in the State. A small high-technology company is a company that produces new and innovative emerging technology products or services; has 100 or fewer employees, at least 80% of whom work in New York state; has, together with its affiliates, gross revenues of $5 million or less on a consolidated basis; and, has an agreement or contract to purchase intellectual property rights created or developed at a nonprofit research institution in New York State for the purpose of commercializing such property in facilities located in the State.
PRIOR LEGISLATIVE HISTORY: Passed Senate in 2010 - S.1229
FISCAL IMPLICATIONS: No fiscal impact in the current year, two million dollars when fully implemented.
EFFECTIVE DATE: This act shall take effect on the first of January next succeeding the date on which it shall have become law and shall apply to taxable years beginning on or after such date.
STATE OF NEW YORK ________________________________________________________________________ 2408 2011-2012 Regular Sessions IN SENATE January 20, 2011 ___________Introduced by Sen. GRISANTI -- 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 start-up high technology companies THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subparagraph 3 of paragraph (j) of subdivision 12 of section 210 of the tax law, as amended by section 1 of part CC of chap- ter 85 of the laws of 2002, is amended to read as follows: (3) has been subject to tax under this article for more than five taxable years (excluding short taxable years) PROVIDED, HOWEVER, IF THE TAXPAYER IS A START-UP HIGH TECHNOLOGY COMPANY OR A SMALL HIGH TECHNOLO- GY COMPANY PURSUANT TO THE PROVISIONS OF SECTION THIRTY-ONE HUNDRED TWO-E OF THE PUBLIC AUTHORITIES LAW, THE REFERENCE TO "FIVE TAXABLE YEARS" IN THE PRECEDING SENTENCE SHALL BE READ AS "EIGHT TAXABLE YEARS". S 2. This act shall take effect on the first of January next succeed- ing the date on which it shall have become a law and shall apply to taxable years beginning on or after such date.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD07931-01-1