Bill Text: NY A10115 | 2009-2010 | General Assembly | Introduced


Bill Title: Creates the qualified emerging technology commercialization tax credit; eligible taxpayer shall receive a credit for 15 percent of qualified commercialization expenses.

Spectrum: Partisan Bill (Democrat 8-0)

Status: (Introduced - Dead) 2010-07-01 - held for consideration in ways and means [A10115 Detail]

Download: New_York-2009-A10115-Introduced.html
                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         10115
                                 I N  A S S E M B L Y
                                     March 4, 2010
                                      ___________
       Introduced  by  M.  of A. ALESSI, MORELLE, GABRYSZAK, DelMONTE, LUPARDO,
         MAGNARELLI -- Multi-Sponsored by -- M. of A. MILLMAN -- read once  and
         referred to the Committee on Ways and Means
       AN  ACT  to  amend  the  tax  law, in relation to creating the qualified
         emerging technology commercialization tax credit
         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section  1.  Section  210  of  the  tax law is amended by adding a new
    2  subdivision 12-H to read as follows:
    3    12-H. QUALIFIED EMERGING TECHNOLOGY COMMERCIALIZATION TAX CREDIT.  (A)
    4  AS USED IN THIS SUBDIVISION:
    5    (1)  "QUALIFIED  EMERGING  TECHNOLOGY  COMPANY"  SHALL  MEAN A COMPANY
    6  LOCATED IN NEW YORK STATE: (I) WHOSE PRIMARY PRODUCTS  OR  SERVICES  ARE
    7  CLASSIFIED AS EMERGING TECHNOLOGIES AND WHOSE TOTAL ANNUAL PRODUCT SALES
    8  ARE  TEN  MILLION  DOLLARS OR LESS; OR (II) A COMPANY WHICH HAS RESEARCH
    9  AND DEVELOPMENT ACTIVITIES IN NEW YORK STATE AND WHOSE RATIO OF RESEARCH
   10  AND DEVELOPMENT FUNDS TO NET SALES EQUALS OR EXCEEDS THE  AVERAGE  RATIO
   11  FOR  ALL  SURVEYED  COMPANIES  CLASSIFIED  AS DETERMINED BY THE NATIONAL
   12  SCIENCE FOUNDATION IN THE MOST RECENT PUBLISHED RESULTS FROM ITS  SURVEY
   13  OF INDUSTRY RESEARCH AND DEVELOPMENT, OR ANY COMPARABLE SUCCESSOR SURVEY
   14  AS  DETERMINED  BY  THE DEPARTMENT, AND WHOSE TOTAL ANNUAL PRODUCT SALES
   15  ARE TEN MILLION DOLLARS OR LESS. THE DEFINITION OF "RESEARCH AND  DEVEL-
   16  OPMENT  FUNDS"  SHALL  BE  THE SAME AS THAT USED BY THE NATIONAL SCIENCE
   17  FOUNDATION IN THE AFOREMENTIONED SURVEY.
   18    (2) "QUALIFIED COMMERCIALIZATION EXPENSES" MEANS TESTING; PROTOTYPING;
   19  DESIGNING; NECESSARY MATERIALS AND FIXTURES,  OR  LABORATORY  EQUIPMENT;
   20  INCORPORATION FEES AND LEGAL EXPENSES; ATTORNEY FEES; FEES FOR LICENSING
   21  OF  TECHNOLOGIES DEVELOPED AT UNIVERSITIES; TRANSACTIONAL LEGAL EXPENSES
   22  RELATED TO LICENSING UNIVERSITY TECHNOLOGIES; TRADE SHOW AND  CONFERENCE
   23  FEES; AND PRODUCT PROMOTION AND MARKET RESEARCH EXPENSES.
   24    (B)  A  TAXPAYER  THAT IS A QUALIFIED EMERGING TECHNOLOGY COMPANY (AND
   25  SPECIFICALLY FOR THE ACTIVITIES REFERENCED IN PARAGRAPH (B) OF  SUBDIVI-
   26  SION  ONE  OF SECTION THIRTY-ONE HUNDRED TWO-E OF THE PUBLIC AUTHORITIES
   27  LAW), AND THAT MEETS THE ELIGIBILITY REQUIREMENTS IN  PARAGRAPH  (C)  OF
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD16157-01-0
       A. 10115                            2
    1  THIS  SUBDIVISION,  SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY
    2  THIS ARTICLE.
    3    (C)  AN  ELIGIBLE  TAXPAYER  SHALL  (1)  HAVE NO MORE THAN ONE HUNDRED
    4  FULL-TIME EMPLOYEES, OF WHICH AT LEAST SEVENTY-FIVE PERCENT ARE EMPLOYED
    5  IN NEW YORK STATE, (2) HAVE A RATIO OF RESEARCH AND DEVELOPMENT FUNDS TO
    6  NET SALES, AS REFERRED TO IN SECTION THIRTY-ONE  HUNDRED  TWO-E  OF  THE
    7  PUBLIC  AUTHORITIES  LAW, WHICH EQUALS OR EXCEEDS SIX PERCENT DURING ITS
    8  TAXABLE YEAR, AND (3) HAVE GROSS REVENUES, ALONG WITH THE GROSS REVENUES
    9  OF ITS AFFILIATES AND RELATED  MEMBERS,  NOT  EXCEEDING  TWENTY  MILLION
   10  DOLLARS FOR THE TAXABLE YEAR IMMEDIATELY PRECEDING THE YEAR THE TAXPAYER
   11  IS  ALLOWED  A CREDIT UNDER THIS SUBDIVISION. FOR PURPOSES OF THIS PARA-
   12  GRAPH, THE TERM "RELATED MEMBER" SHALL HAVE  THE  SAME  MEANING  AS  SET
   13  FORTH  IN  CLAUSES  (A)  AND (B) OF SUBPARAGRAPH ONE OF PARAGRAPH (O) OF
   14  SUBDIVISION NINE OF SECTION TWO HUNDRED EIGHT OF THIS ARTICLE,  AND  THE
   15  TERM  "AFFILIATES" SHALL MEAN THOSE CORPORATIONS THAT ARE MEMBERS OF THE
   16  SAME AFFILIATED GROUP (AS DEFINED IN SECTION FIFTEEN HUNDRED FOUR OF THE
   17  INTERNAL REVENUE CODE) AS THE TAXPAYER.
   18    (D) AN ELIGIBLE TAXPAYER SHALL BE ALLOWED A  CREDIT  FOR  FIFTEEN  PER
   19  CENTUM OF "QUALIFIED COMMERCIALIZATION EXPENSES" PAID OR INCURRED BY THE
   20  TAXPAYER IN THE TAXABLE YEAR. THE CREDIT SHALL BE ALLOWED FOR "QUALIFIED
   21  COMMERCIALIZATION  EXPENSES"  ASSOCIATED  WITH  IN-HOUSE EXPENSES OR FOR
   22  CONTRACT  EXPENSES  INVOLVING  OUTSIDE  PAID  CONSULTANTS.  AN  ELIGIBLE
   23  TAXPAYER  MAY  CLAIM CREDITS UNDER THIS SUBDIVISION FOR FOUR CONSECUTIVE
   24  TAXABLE YEARS. IN NO CASE SHALL THE CREDIT ALLOWED BY  THIS  SUBDIVISION
   25  TO A TAXPAYER EXCEED ONE HUNDRED THOUSAND DOLLARS PER YEAR.
   26    (E)  THE  CREDIT  ALLOWED  UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR
   27  SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN  THE  HIGHER  OF
   28  THE  AMOUNTS  PRESCRIBED IN PARAGRAPHS (C) AND (D) OF SUBDIVISION ONE OF
   29  THIS SECTION. HOWEVER, IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBDI-
   30  VISION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT,  ANY  AMOUNT
   31  OF  CREDIT  NOT  DEDUCTIBLE  IN SUCH TAXABLE YEAR SHALL BE TREATED AS AN
   32  OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED  IN  ACCORDANCE  WITH  THE
   33  PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. PROVIDED,
   34  HOWEVER,   THE   PROVISIONS   OF   SUBSECTION   (C)   OF   SECTION   ONE
   35  THOUSAND  EIGHTY-EIGHT OF  THIS  CHAPTER  NOTWITHSTANDING,  NO  INTEREST
   36  SHALL BE PAID THEREON.
   37    S  2. Section 606 of the tax law is amended by adding a new subsection
   38  (qq) to read as follows:
   39    (QQ) QUALIFIED EMERGING TECHNOLOGY COMMERCIALIZATION TAX CREDIT.   (1)
   40  AS USED IN THIS SUBSECTION:
   41    (I)  "QUALIFIED  EMERGING  TECHNOLOGY  COMPANY"  SHALL  MEAN A COMPANY
   42  LOCATED IN NEW YORK STATE: (1) WHOSE PRIMARY PRODUCTS  OR  SERVICES  ARE
   43  CLASSIFIED AS EMERGING TECHNOLOGIES AND WHOSE TOTAL ANNUAL PRODUCT SALES
   44  ARE TEN MILLION DOLLARS OR LESS; OR (2) A COMPANY WHICH HAS RESEARCH AND
   45  DEVELOPMENT ACTIVITIES IN NEW YORK STATE AND WHOSE RATIO OF RESEARCH AND
   46  DEVELOPMENT  FUNDS  TO NET SALES EQUALS OR EXCEEDS THE AVERAGE RATIO FOR
   47  ALL SURVEYED COMPANIES CLASSIFIED AS DETERMINED BY THE NATIONAL  SCIENCE
   48  FOUNDATION  IN  THE  MOST  RECENT  PUBLISHED  RESULTS FROM ITS SURVEY OF
   49  INDUSTRY RESEARCH AND DEVELOPMENT, OR ANY COMPARABLE SUCCESSOR SURVEY AS
   50  DETERMINED BY THE DEPARTMENT, AND WHOSE TOTAL ANNUAL PRODUCT  SALES  ARE
   51  TEN MILLION DOLLARS OR LESS. THE DEFINITION OF "RESEARCH AND DEVELOPMENT
   52  FUNDS" SHALL BE THE SAME AS THAT USED BY THE NATIONAL SCIENCE FOUNDATION
   53  IN THE AFOREMENTIONED SURVEY.
   54    (II)  "QUALIFIED  COMMERCIALIZATION EXPENSES" MEANS TESTING; PROTOTYP-
   55  ING; DESIGNING; NECESSARY MATERIALS AND FIXTURES, OR  LABORATORY  EQUIP-
   56  MENT;  INCORPORATION  FEES  AND  LEGAL EXPENSES; ATTORNEY FEES; FEES FOR
       A. 10115                            3
    1  LICENSING OF TECHNOLOGIES DEVELOPED AT UNIVERSITIES; TRANSACTIONAL LEGAL
    2  EXPENSES RELATED TO LICENSING UNIVERSITY TECHNOLOGIES;  TRADE  SHOW  AND
    3  CONFERENCE FEES; AND PRODUCT PROMOTION AND MARKET RESEARCH EXPENSES.
    4    (2)  A  TAXPAYER  THAT IS A QUALIFIED EMERGING TECHNOLOGY COMPANY (AND
    5  SPECIFICALLY FOR THE ACTIVITIES REFERENCED IN PARAGRAPH (B) OF  SUBDIVI-
    6  SION  ONE  OF SECTION THIRTY-ONE HUNDRED TWO-E OF THE PUBLIC AUTHORITIES
    7  LAW), AND THAT MEETS THE ELIGIBILITY REQUIREMENTS IN PARAGRAPH THREE  OF
    8  THIS  SUBSECTION,  SHALL  BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY
    9  THIS ARTICLE.
   10    (3) AN ELIGIBLE TAXPAYER SHALL (I)  HAVE  NO  MORE  THAN  ONE  HUNDRED
   11  FULL-TIME EMPLOYEES, OF WHICH AT LEAST SEVENTY-FIVE PERCENT ARE EMPLOYED
   12  IN  NEW  YORK STATE, (II) HAVE A RATIO OF RESEARCH AND DEVELOPMENT FUNDS
   13  TO NET SALES, AS REFERRED TO IN SECTION THIRTY-ONE HUNDRED TWO-E OF  THE
   14  PUBLIC  AUTHORITIES  LAW, WHICH EQUALS OR EXCEEDS SIX PERCENT DURING ITS
   15  TAXABLE YEAR, AND (III) HAVE GROSS REVENUES, ALONG WITH THE GROSS REVEN-
   16  UES OF ITS AFFILIATES AND RELATED MEMBERS, NOT EXCEEDING TWENTY  MILLION
   17  DOLLARS FOR THE TAXABLE YEAR IMMEDIATELY PRECEDING THE YEAR THE TAXPAYER
   18  IS  ALLOWED  A  CREDIT UNDER THIS SUBSECTION. FOR PURPOSES OF THIS PARA-
   19  GRAPH, THE TERM "RELATED MEMBER" SHALL HAVE  THE  SAME  MEANING  AS  SET
   20  FORTH  IN  CLAUSES  (A)  AND (B) OF SUBPARAGRAPH ONE OF PARAGRAPH (O) OF
   21  SUBDIVISION NINE OF SECTION TWO HUNDRED EIGHT OF THIS CHAPTER,  AND  THE
   22  TERM  "AFFILIATES" SHALL MEAN THOSE CORPORATIONS THAT ARE MEMBERS OF THE
   23  SAME AFFILIATED GROUP (AS DEFINED IN SECTION FIFTEEN HUNDRED FOUR OF THE
   24  INTERNAL REVENUE CODE) AS THE TAXPAYER.
   25    (4) THE AMOUNT OF CREDIT SHALL BE EQUAL TO THE  AMOUNT  (OR  PRO  RATA
   26  SHARE OF THE AMOUNT IN THE CASE OF A PARTNERSHIP) SPECIFIED IN PARAGRAPH
   27  FIVE  OF THIS SUBSECTION, SUBJECT TO THE LIMITATIONS IN PARAGRAPH SIX OF
   28  THIS SUBSECTION.
   29    (5) AN ELIGIBLE TAXPAYER SHALL BE ALLOWED A  CREDIT  FOR  FIFTEEN  PER
   30  CENTUM OF "QUALIFIED COMMERCIALIZATION EXPENSES" PAID OR INCURRED BY THE
   31  TAXPAYER IN THE TAXABLE YEAR. THE CREDIT SHALL BE ALLOWED FOR "QUALIFIED
   32  COMMERCIALIZATION  EXPENSES"  ASSOCIATED  WITH  IN-HOUSE EXPENSES OR FOR
   33  CONTRACT EXPENSES INVOLVING OUTSIDE PAID CONSULTANTS.
   34    (6) AN ELIGIBLE TAXPAYER MAY CLAIM CREDITS UNDER THIS  SUBSECTION  FOR
   35  FOUR  CONSECUTIVE  TAXABLE YEARS. IN NO CASE SHALL THE CREDIT ALLOWED BY
   36  THIS SUBSECTION TO A TAXPAYER EXCEED ONE HUNDRED  THOUSAND  DOLLARS  PER
   37  YEAR.
   38    (7)  IF  THE  AMOUNT  OF  CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY
   39  TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR,  THE  EXCESS
   40  SHALL  BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN
   41  ACCORDANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED EIGHTY-SIX OF THIS
   42  ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
   43    S 3. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
   44  of  the  tax  law  is  amended  by adding a new clause (xxxi) to read as
   45  follows:
   46  (XXXI) QUALIFIED EMERGING               AMOUNT OF CREDIT UNDER
   47  TECHNOLOGY COMMERCIALIZATION TAX        SUBDIVISION TWELVE-H OF SECTION
   48  CREDIT UNDER SUBSECTION (QQ)            TWO HUNDRED TEN
   49    S 4. This act shall take effect immediately and shall apply to taxable
   50  years beginning on or after January 1, 2010.
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