Expands the availability of tax credit refunds for start-up high technology companies

2 Co-sponsors

• John A. DeFrancisco
• George D. Maziarz

BILL NUMBER:S2408

Title of bill

An act to amend the tax law, in relation to start-up high technology companies

Purpose or general idea of bill

This legislation expands the availability of tax credit refunds for start-up technology companies to help them overcome certain barriers to the commercialization within New York State of scientific and technological discoveries from nonprofit research entities located in the State.

Summary of specific provisions

Section 1: Amends subparagraph 3 of paragraph (j) of subdivision 12 of section 210 of the tax law, as amended by section 1 of part CC of chapter 85 of the laws of 2002 to include that if a taxpayer is a start-up high technology company or a small high technology company as defined in section 3102 of the public authorities law, then they shall be allowed a credit for eight taxable years. current law would only allow these companies to obtain a refund of ITC carry forwards if they had been in business for five or less taxable years.

Section 2: Establishes the effective date.

Justification

One of the cornerstones of economic growth in New York State is research and development in science and technology at nonprofit research institutions in the State that may have commercial potential and that can result in the formation of knowledge-based industries. Such industries generate products and processes with significant national and international markets which lead to increased State exports and the creation of long-term jobs with good wages and benefits. However, the economic benefits of R&D at nonprofit research institutions can be lost to the State if the intellectual property rights resulting from the R&D are licensed to companies that use such rights to produce products or services outside of New York State. This bill would encourage the development and growth of companies that commercialize on R&D discoveries from nonprofit research institutions in the State. A small high-technology company is a company that produces new and innovative emerging technology products or services; has 100 or fewer employees, at least 80% of whom work in New York state; has, together with its affiliates, gross revenues of $5 million or less on a consolidated basis; and, has an agreement or contract to purchase intellectual property rights created or developed at a nonprofit research institution in New York State for the purpose of commercializing such property in facilities located in the State.

Prior legislative history

Passed Senate in 2010 - S.1229

Fiscal implications

No fiscal impact in the current year, two million dollars when fully implemented.

Effective date

This act shall take effect on the first of January next succeeding the date on which it shall have become law and shall apply to taxable years beginning on or after such date.