Creates the qualified emerging technology commercialization tax credit

5 Co-sponsors

• Joseph Morelle
• Dennis H. Gabryszak
• Francine DelMonte
• Donna Lupardo
• William Magnarelli

1 Multi-sponsor

• Joan Millman

BILL NUMBER:A10115

Title of bill

An act to amend the tax law, in relation to creating the qualified emerging technology commercialization tax credit

PURPOSE OR GENERAL IDEA OF BILL:; This legislation would allow a commer- cialization tax credit for small companies engaged in high-technology fields.

Summary of specific provisions

The New York State tax law is amended by adding a new subdivision 12-H to section 210. Additionally section 606 of the New York State tax law is amended by adding a new subsection (qq), and by adding a new clause (xxxi) to subparagraph (B) of paragraph 1 of subsection (i) of this section.

This legislation provides a commercialization tax credit for qualified emerging technology companies meeting certain eligibility conditions. The commercialization tax credit allowed is for fifteen percent of qual- ified commercialization expenses paid or incurred in the taxable year. The tax credit may be claimed for four consecutive taxable years, up to $100,000 per company per year.

The act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2010.

Justification

The recent report of the Governor's Taskforce on Indus- try-Higher Education Partnerships notes that New York universities rank second nationally in total research spending with nearly $4B spent annu- ally. Further, New York has consistently ranked in the top tier of states in regard to receipt of federal R&D funds by the state's research institutions.

Over the past decade, the state has spent hundreds of millions to assure that New York's research institutions can offer state-of-the art facili- ties to attract federal research dollars. Where the state falls down is in the area of providing support for commercialization and start-up capital for companies that "spin-out" of research and development activ- ities. According to the National Association for Seed and Venture Funds, New York ranks 25th in providing this type of assistance. The Governor's recent report also states that New York's colleges incubate fewer new companies and our state is home to fewer fast-growing technology compa- nies than our competitor states; California and Massachusetts.

A credit for commercialization expenses will directly aid companies seeking to bring products to market, and fills a needed niche in the array of incentives available to small technology companies. At this juncture, it is appropriate to focus on how the State can capitalize on public research investments so that innovations developed in our research institutions are brought to the marketplace within the State, creating jobs for New Yorkers.

Prior legislative history

None.

Fiscal implications

Estimated tax implications are $6 million in fiscal year 2010-2011.

Effective date

This act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2010.