BILL NUMBER: S3306

SPONSOR: LAVALLE
 
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 incu-
bators, 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 tech-
nology incubators. Incubator facilities provide researchers and entre-
preneurs 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:

2018-19 S.3828/A.3330;
2015-16 S.2812A/A.4035A;
2013-14 S.2021A/A.1929A;
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, 2019.