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.