Bill Text: NY A03068 | 2009-2010 | General Assembly | Introduced
Bill Title: An act to amend the tax law, in relation to establishing the micro-enterprise investor tax credit program
Spectrum: Partisan Bill (Democrat 21-0)
Status: (Introduced - Dead) 2010-01-06 - referred to ways and means [A03068 Detail]
Download: New_York-2009-A03068-Introduced.html
S T A T E O F N E W Y O R K ________________________________________________________________________ 3068 2009-2010 Regular Sessions I N A S S E M B L Y January 22, 2009 ___________ Introduced by M. of A. CHRISTENSEN, WEPRIN, SCHIMMINGER, HOYT, CAHILL, CARROZZA, MILLMAN, BING, BENJAMIN, JAFFEE -- Multi-Sponsored by -- M. of A. DelMONTE, DESTITO, GLICK, GORDON, GUNTHER, JOHN, KOON, MAGEE, McENENY, PERRY, SWEENEY, TOWNS -- read once and referred to the Committee on Ways and Means AN ACT to amend the tax law, in relation to establishing the micro-en- terprise investor tax credit program THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: 1 Section 1. Legislative intent. The legislature hereby finds and 2 declares that it is the public policy of the state to stimulate economic 3 growth that encourages micro-enterprise development. Micro-enterprises 4 are a proven, viable grassroots strategy for achieving significant gains 5 in the incomes and assets of citizens excluded from the economic main- 6 stream. Extensive studies have demonstrated that micro-enterprises can 7 play a role in the revitalization of local economies. 8 Moreover, the legislature further finds that in today's economic envi- 9 ronment, there is a segment of the population for whom self-employment 10 is a necessary, and in some cases, the best source of employment and 11 income. By assisting individuals to build businesses and assets, micro- 12 enterprises can open wealth and ownership opportunities to individuals 13 who have been excluded from our economy. 14 The legislature further finds and declares that the welfare of the 15 state is enhanced by a healthy entrepreneurial business environment and 16 that the ready sources of capital necessary to support this environment 17 are not currently available. 18 Therefore the legislature declares that a micro-enterprise investor 19 tax credit would encourage third parties to invest in early stages of 20 wealth-creating businesses in the state as well as expand the economy of 21 the state by enlarging its base of wealth creating businesses. EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD05519-01-9 A. 3068 2 1 S 2. Section 210 of the tax law is amended by adding a new subdivision 2 41 to read as follows: 3 41. NEW YORK MICRO-ENTERPRISE INVESTOR TAX CREDIT. (A) FOR THE 4 PURPOSES OF THIS SUBDIVISION THE FOLLOWING TERMS SHALL HAVE THE FOLLOW- 5 ING MEANINGS: 6 (1) "MICRO-ENTERPRISE" SHALL MEAN A BUSINESS WITH FIVE OR FEWER 7 EMPLOYEES THAT IS LOCATED IN NEW YORK STATE AND IS NOT PRIMARILY ENGAGED 8 IN REAL ESTATE, PROFESSIONAL SERVICES, OR FINANCIAL SERVICES; 9 (2) "PRINCIPAL OWNER" SHALL MEAN ONE OR MORE PERSONS WHO OWN AN AGGRE- 10 GATE OF TWENTY-FIVE PERCENT OR MORE OF THE MICRO-ENTERPRISE; 11 (3) "AT-RISK" SHALL MEAN THAT THE REPAYMENT OF THE INVESTMENT IS NOT 12 SECURED OR GUARANTEED AND IS ENTIRELY DEPENDENT ON THE SUCCESS OF THE 13 MICRO-ENTERPRISE; 14 (4) "QUALIFIED INVESTMENT" SHALL MEAN AN INVESTMENT IN A MICRO-ENTER- 15 PRISE THAT IS AT RISK, PROVIDED THE INVESTOR IS NOT A PRINCIPAL OWNER OF 16 THE MICRO-ENTERPRISE OR ANY RELATED PERSON AS DEFINED IN SECTION 17 465(B)(3)(C) OF THE INTERNAL REVENUE CODE AND IS NOT INVOLVED IN THE 18 OPERATION OF THE MICRO-ENTERPRISE AS A FULL-TIME PROFESSIONAL ACTIVITY, 19 AND PROVIDED FURTHER THAT THE INVESTMENT IN THE MICRO-ENTERPRISE IS 20 MAINTAINED FOR A MINIMUM OF THREE YEARS, AND PROVIDED FURTHER THAT THE 21 INVESTMENT IS USED BY THE MICRO-ENTERPRISE FOR CAPITAL IMPROVEMENTS, 22 MACHINERY AND EQUIPMENT, RESEARCH AND DEVELOPMENT, OR WORKING CAPITAL. 23 (B) A TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY 24 THIS ARTICLE. THE AMOUNT OF THE CREDIT SHALL BE TWENTY-FIVE PERCENT OF 25 THE QUALIFIED INVESTMENT, PROVIDED THAT FIFTEEN PERCENT OF THE QUALIFIED 26 INVESTMENT CAN BE TAKEN AS A CREDIT IN THE TAXABLE YEAR IN WHICH THE 27 INVESTMENT IS MADE AND FIVE PERCENT OF THE QUALIFIED INVESTMENT CAN BE 28 TAKEN AS A CREDIT IN EACH OF THE NEXT TWO TAXABLE YEARS. THE TOTAL 29 AMOUNT OF CREDITS ALLOWABLE TO A TAXPAYER UNDER THIS PARAGRAPH FOR ALL 30 YEARS IS ONE HUNDRED FIFTY THOUSAND DOLLARS. 31 (C) IN NO EVENT SHALL THE CREDIT AND THE CARRYOVER OF SUCH CREDIT 32 ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR, IN THE AGGREGATE, 33 REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE HIGHER OF THE AMOUNTS 34 PRESCRIBED IN PARAGRAPHS (C) AND (D) OF SUBDIVISION ONE OF THIS SECTION. 35 HOWEVER, IF THE AMOUNT OF THE CREDIT OR CARRYOVERS OF SUCH CREDIT, OR 36 BOTH, ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE 37 TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT 38 THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE 39 FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR 40 SUCH YEAR OR YEARS. 41 S 3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 42 of the tax law, as amended by section 2 of part ZZ1 of chapter 57 of the 43 laws of 2008, is amended to read as follows: 44 (B) shall be treated as the owner of a new business with respect to 45 such share if the corporation qualifies as a new business pursuant to 46 paragraph (j) of subdivision twelve of section two hundred ten of this 47 chapter. 48 The corporation's credit base under 49 section two hundred ten or section 50 With respect to the following fourteen hundred fifty-six of this 51 credit under this section: chapter is: 52 (I) Investment tax credit Investment credit base 53 under subsection (a) or qualified 54 rehabilitation A. 3068 3 1 expenditures under 2 subdivision twelve of 3 section two hundred ten 4 (II) Empire zone Cost or other basis 5 investment tax credit under subdivision 6 under subsection (j) twelve-B 7 of section two hundred 8 ten 9 (III) Empire zone Eligible wages under 10 wage tax credit subdivision nineteen of 11 under subsection (k) section two hundred ten 12 or subsection (e) of 13 section fourteen hundred 14 fifty-six 15 (IV) Empire zone Qualified investments 16 capital tax credit and contributions under 17 under subsection (l) subdivision twenty of 18 section two hundred ten 19 or subsection (d) of 20 section fourteen hundred 21 fifty-six 22 (V) Agricultural property tax Allowable school 23 credit under subsection (n) district property taxes under 24 subdivision twenty-two of 25 section two hundred ten 26 (VI) Credit for employment Qualified first-year wages or 27 of persons with dis- qualified second-year wages 28 abilities under under subdivision 29 subsection (o) twenty-three of section 30 two hundred ten 31 or subsection (f) 32 of section fourteen 33 hundred fifty-six 34 (VII) Employment incentive Applicable investment credit 35 credit under subsec- base under subdivision 36 tion (a-1) twelve-D of section two 37 hundred ten 38 (VIII) Empire zone Applicable investment 39 employment credit under sub- 40 incentive credit under division twelve-C 41 subsection (j-1) of section two hundred ten 42 (IX) Alternative fuels credit Cost under subdivision 43 under subsection (p) twenty-four of section two 44 hundred ten 45 (X) Qualified emerging Applicable credit base 46 technology company under subdivision twelve-E A. 3068 4 1 employment credit of section two hundred ten 2 under subsection (q) 3 (XI) Qualified emerging Qualified investments under 4 technology company subdivision twelve-F of 5 capital tax credit section two hundred ten 6 under subsection (r) 7 (XII) Credit for purchase of an Cost of an automated 8 automated external defibrillator external defibrillator under 9 under subsection (s) subdivision twenty-five of 10 section two hundred ten 11 or subsection (j) of section 12 fourteen hundred fifty-six 13 (XIII) Low-income housing Credit amount under 14 credit under subsection (x) subdivision thirty 15 of section two hundred ten or 16 subsection (l) of section 17 fourteen hundred fifty-six 18 (XIV) Credit for transportation Amount of credit under sub- 19 improvement contributions division thirty-two of section 20 under subsection (z) two hundred ten or subsection 21 (n) of section fourteen 22 hundred fifty-six 23 (XV) QEZE credit for real property Amount of credit under 24 taxes under subsection (bb) subdivision twenty-seven of 25 section two hundred ten or 26 subsection (o) of section 27 fourteen hundred fifty-six 28 (XVI) QEZE tax reduction credit Amount of benefit period 29 under subsection (cc) factor, employment increase factor 30 and zone allocation 31 factor (without regard 32 to pro ration) under 33 subdivision twenty-eight of 34 section two hundred ten or 35 subsection (p) of section 36 fourteen hundred fifty-six 37 and amount of tax factor 38 as determined under 39 subdivision (f) of section sixteen 40 (XVII) Green building credit Amount of green building credit 41 under subsection (y) under subdivision thirty-one 42 of section two hundred ten 43 or subsection (m) of section 44 fourteen hundred fifty-six 45 (XVIII) Credit for long-term Qualified costs under 46 care insurance premiums subdivision twenty-five-a of 47 under subsection (aa) section two hundred ten 48 or subsection (k) of section A. 3068 5 1 fourteen hundred fifty-six 2 (XIX) Brownfield redevelopment Amount of credit 3 credit under subsection under subdivision 4 (dd) thirty-three of section 5 two hundred ten 6 or subsection (q) of 7 section fourteen hundred 8 fifty-six 9 (XX) Remediated brownfield Amount of credit under 10 credit for real property subdivision thirty-four 11 taxes for qualified of section two hundred 12 sites under subsection ten or subsection (r) of 13 (ee) section fourteen hundred 14 fifty-six 15 (XXI) Environmental Amount of credit under 16 remediation subdivision thirty-five of 17 insurance credit under section two hundred 18 subsection (ff) ten or subsection 19 (s) of section 20 fourteen hundred 21 fifty-six 22 (XXII) Empire state film Amount of credit for 23 production credit under qualified production costs in 24 subsection (gg) production of a qualified film 25 under subdivision thirty-six 26 of section two hundred ten 27 (XXIII) Qualified emerging Qualifying expenditures and 28 technology company facilities, development activities under 29 operations and training credit subdivision twelve-G of section 30 under subsection (nn) two hundred ten 31 (XXIV) Security training tax Amount of credit 32 credit under under subdivision thirty-seven 33 subsection (ii) of section two hundred ten or 34 under subsection (t) of 35 section fourteen hundred fifty-six 36 (XXV) Credit for qualified fuel Amount of credit under 37 cell electric generating equipment subdivision thirty-seven 38 expenditures under subsection (g-2) of section two hundred ten 39 or subsection (t) of 40 section fourteen hundred 41 fifty-six 42 (XXVI) Empire state commercial Amount of credit for 43 production credit under subsection qualified production 44 (jj) costs in production 45 of a qualified commercial under 46 subdivision thirty-eight of 47 section two hundred ten A. 3068 6 1 (XXVII) Biofuel production Amount of credit 2 tax credit under under subdivision 3 subsection (jj) thirty-eight of 4 section two hundred ten 5 (XXVIII) Clean heating fuel credit Amount of credit under 6 under subsection (mm) subdivision thirty-nine of 7 section two hundred ten 8 (XXIX) Credit for rehabilitation Amount of credit under 9 of historic properties subdivision forty of 10 under subsection (oo) [subsection] SECTION two hundred ten 11 (XXX) Credit for companies who Amount of credit under 12 provide transportation subdivision forty of 13 to individuals section two hundred ten 14 with disabilities 15 under subsection (oo) 16 (XXXI) NEW YORK MICRO- AMOUNT OF CREDIT UNDER 17 ENTERPRISE INVESTOR SUBDIVISION FORTY-ONE OF 18 TAX CREDIT UNDER SECTION TWO HUNDRED TEN 19 SUBSECTION (QQ) 20 S 4. Section 606 of the tax law is amended by adding a new subsection 21 (qq) to read as follows: 22 (QQ) NEW YORK MICRO-ENTERPRISE INVESTOR TAX CREDIT. (1) FOR THE 23 PURPOSES OF THIS SUBSECTION THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING 24 MEANINGS: 25 (A) "MICRO-ENTERPRISE" SHALL MEAN A BUSINESS WITH FIVE OR FEWER 26 EMPLOYEES THAT IS LOCATED IN NEW YORK STATE AND IS NOT PRIMARILY ENGAGED 27 IN REAL ESTATE, PROFESSIONAL SERVICES, OR FINANCIAL SERVICES; 28 (B) "PRINCIPAL OWNER" SHALL MEAN ONE OR MORE PERSONS WHO OWN AN AGGRE- 29 GATE OF TWENTY-FIVE PERCENT OR MORE OF THE MICRO-ENTERPRISE; 30 (C) "AT-RISK" SHALL MEAN THAT THE REPAYMENT OF THE INVESTMENT IS NOT 31 SECURED OR GUARANTEED AND IS ENTIRELY DEPENDENT ON THE SUCCESS OF THE 32 MICRO-ENTERPRISE; 33 (D) "QUALIFIED INVESTMENT" SHALL MEAN AN INVESTMENT IN A MICRO-ENTER- 34 PRISE THAT IS AT RISK, PROVIDED THE INVESTOR IS NOT A PRINCIPAL OWNER OF 35 THE MICRO-ENTERPRISE OR ANY RELATED PERSON AS DEFINED IN SECTION 36 465(B)(3)(C) OF THE INTERNAL REVENUE CODE AND IS NOT INVOLVED IN THE 37 OPERATION OF THE MICRO-ENTERPRISE AS A FULL-TIME PROFESSIONAL ACTIVITY, 38 AND PROVIDED FURTHER THAT THE INVESTMENT IN THE MICRO-ENTERPRISE IS 39 MAINTAINED FOR A MINIMUM OF THREE YEARS, AND PROVIDED FURTHER THAT THE 40 INVESTMENT IS USED BY THE MICRO-ENTERPRISE FOR CAPITAL IMPROVEMENTS, 41 MACHINERY AND EQUIPMENT, RESEARCH AND DEVELOPMENT, OR WORKING CAPITAL. 42 (2) A TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY 43 THIS ARTICLE. THE AMOUNT OF THE CREDIT SHALL BE TWENTY-FIVE PERCENT OF 44 THE QUALIFIED INVESTMENT, PROVIDED THAT FIFTEEN PERCENT OF THE QUALIFIED 45 INVESTMENT CAN BE TAKEN AS A CREDIT IN THE TAXABLE YEAR IN WHICH THE 46 INVESTMENT IS MADE AND FIVE PERCENT OF THE QUALIFIED INVESTMENT CAN BE 47 TAKEN AS A CREDIT IN EACH OF THE NEXT TWO TAXABLE YEARS. THE TOTAL 48 AMOUNT OF CREDITS ALLOWABLE TO A TAXPAYER UNDER THIS PARAGRAPH FOR ALL 49 YEARS IS ONE HUNDRED FIFTY THOUSAND DOLLARS. 50 (3) IF THE AMOUNT OF THE CREDIT AND THE CARRYOVERS OF SUCH CREDIT 51 ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR, IN THE AGGREGATE, A. 3068 7 1 SHALL EXCEED TAXPAYER'S TAX FOR SUCH YEAR, ANY AMOUNT OF THE CREDIT OR 2 CARRYOVERS OF SUCH CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY 3 BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM 4 THE TAX FOR SUCH YEAR OR YEARS. 5 S 5. This act shall take effect immediately; provided, however, that 6 the empire state film production credit under subsection (gg), the 7 empire state commercial production credit under subsection (jj) and the 8 credit for companies who provide transportation to individuals with 9 disabilities under subsection (oo) of section 606 of the tax law 10 contained in section three of this act shall expire on the same date as 11 provided in section 9 of part P of chapter 60 of the laws of 2004, as 12 amended, section 10 of part V of chapter 62 of the laws of 2006, as 13 amended and section 5 of chapter 522 of the laws of 2006, as amended, 14 respectively.