Enacts the NYS innovation investment act to provide tax benefits for eligible high-tech enterprises

Title of bill

An act to amend the economic development law, in relation to the New York state innovation investment act; and to amend the tax law, in relation to certain credits for eligible high-tech enterprises

Purpose or general idea of bill

To foster the development of a high-tech industrial base of businesses centered on the innovation, invention, and manufacture of high-tech devices and components (including computer chips, nanoelectronics, and photovoltaics) by offering special incentives and assistance that will promote the development of new high-tech businesses, the expansion of existing high-tech businesses and to do so without encouraging the relocation of business investment from other areas of the state.

Summary of specific provisions

The Act provides tax credits for high-tech enterprises in New York State which meet certain requirements. An enterprise qualifies on the basis of its investment, and no credit will be allowed until the enterprise has placed $10 million of tangible property in service.

An eligible High-Tech Enterprises must be engaged in the development or manufacture of computer chips, nanoelectronics, or photovoltaics, be situated in New York State, and make a total investment in tangible personal property or other tangible property, equal to or in excess of $10 million (including buildings and structural components of buildings, and capital equipment). In addition, a short application to the Commissioner of Economic Development is required for an Eligible High-Tech Enterprise to receive benefits, which will require the Enterprise to identify the location of the investment project.

Eligible High-Tech Enterprises which meet the above requirements will receive the following tax credits: (a) Innovation Technology Tax Reduction Credit in the amount of the product of (i) the benefit period factor, (ii) the employment increase factor, (iii) the location allocation factor and (iv) the tax factor; (b) Innovation Technology Real Property Tax Credit based on investment and employment, but not to exceed the amount of real property taxes or payments in lieu of taxes; (c) Innovation Technology Investment Tax Credit in the amount of 10% of qualified investments placed in service for C-corporations (8% for all other entity structures); (d) Innovation Technology Employment Incentive Credit in the amount of 30% of the Innovation Technology Investment Tax Credit; (e) Innovation Technology Wage Tax Credit in the amount of $1,500 per employee and $3,000 per certain targeted employees.

The Innovation Technology Tax Reduction Credit, Real Property Tax Credit, and Investment Tax Credit are available for ten years, while the Employment Incentive Credit is available for three years after the Investment Tax Credit is claimed, and the Wage Tax Credit are available for five years. Furthermore, an unused portion of the Real Property Tax Credit is fully refundable, and unused portions of the Investment Tax Credit, the Employment Incentive Credit, and the Wage Tax Credit are fifty percent refundable, There cannot be an unused portion of the Innovation Technology Tax Reduction Credit.

Justification

There is an urgent need for development throughout the state of a high-tech industrial base of businesses centered on the innovation, invention, and manufacture of high-tech devices to spur job growth and economic activity in New York State. This bill is narrowly tailored to ensure that these incentives are targeted at achieving job growth and economic activity and to ensure that business investment is not relocated from other areas of the state. PRIOR LEGISLATIVE HISTORY : None.

Fiscal implications

To be determined.

Effective date

This act shall take effect immediately.