Provides a maximum $200 tax credit for taxpayer expenses associated with the development of open source and free software license programs

1 Co-sponsor

• Ruth Hassell-Thompson

Title of bill

An act to amend the tax law, in relation to providing a tax credit to individuals for up to two hundred dollars of expenses related to the development and posting of an open source or free license program

Purpose

The purpose of this bill is to incentivize individuals to develop Open Source Software with a tax credit.

Summary of provisions

Amends § 606 of the Tax Law by providing for an Open Source tax credit to the creators of Open Source software. (2) amends § 606 of the Tax Law by providing for the type of programs that qualify for the Open Source tax credit. (3) amends § 606 of the Tax Law by providing to whom the Open Source tax credit applies. (4) amends § 606 of the Tax Law by providing the limits and regulations of the tax credit itself.

Justification

"Open Source" refers to software offered for free online download along with its instruction set ("source code"). The New York State Assembly currently uses Open Source programs such as Mozilla for email, Firefox for web browsing, and WebCal for electronic calendars. The Assembly's use of this software has led to significant cost savings for the Assembly's operating budget. Once an Open Source program is downloaded with its source code, anyone can view the instructions, modify the program, and redistribute it with the same freedoms". A 2006 report authorized by John Irons and Carl Malamud from the Center for American Progress details how Open Source software provides a high social value amongst the group, but a relatively low economic incentive for individual developers. By allowing open access to the technology's source code, Open Source software enhances a broader dissemination of knowledge and ideas Although large corporations such as IBM develop and use Open Source programs, most Open Source software is written by individuals volunteering from home. Currently, corporations and self-employed individuals who create Open Source technology are eligible for a tax deduction for their software development costs. The vast majority of Open Source software creators (individual volunteers), however, do not receive this tax credit. This legislation creates a similar tax credit incentive for individuals who currently have no means to deduct these expenses. The tax credit would apply only to out-of-pocket expenses such as Internet hosting and depreciated cost of capital expenses such as computers and educa- tion. The increased incentive for individuals would attract more Open Source developers to New York State, resulting in job creation and a reinvigoration of our State's technology sector. Additionally, an influx of Open Source software would lower operating costs for larger agencies (such as the Assembly), by providing usable software without charge.

Legislative history

2013-2014: S173-A - REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS 2011-2012: S43 - REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS 2009-10: S4046/A6380 - REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS/referred to ways and means

Fiscal implications

To be determined.

Local fiscal implications

None.

Effective date

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