What's happening
This bill provides a tax credit of up to $200 for individuals' expenses in developing and releasing open source or free software.
Why it matters
Encourages individual software innovation. By providing a direct financial incentive for individuals, this bill aims to lower the personal cost of developing and releasing open source or free software, potentially increasing the diversity and volume of publicly available tools.
Targets bona fide open/free licenses. The tax credit only applies to software released under licenses recognized by the Open Source Initiative or Free Software Foundation, ensuring that only genuinely open or free projects benefit and maintaining standards of openness.
Non-refundable but flexible credit. Since the credit cannot exceed the taxpayer’s liability in a given year but can be carried forward, it benefits individuals with fluctuating income and helps ensure the incentive isn’t wasted if not fully used immediately.
One-time benefit per project per person. The provision that each individual can only claim the credit once per program discourages double-dipping and focuses the benefit on supporting new or substantially new software contributions.
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Who cares
Headline styles
Tax Credit for Open Source
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to investigations and government operations
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Tax Credit for Open Source
In Assembly Committee · Ways And Means · Sponsor Dan Quart
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
490
2017-2018 Regular Sessions
IN SENATE (Prefiled)
January 4, 2017
Introduced by Sen. SQUADRON -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations
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
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 606 of the tax law is amended by adding a new subsection (ccc) to read as follows:
(ccc) Open source or free license credit. (1) A taxpayer shall be allowed a credit, to be computed as provided in this subsection, against the tax imposed pursuant to section six hundred one of this part. The amount of credit shall equal up to twenty percent of the total out-ofpocket expenses of the taxpayer used in the development of a program that is provided to the public under an open source or free software license, up to a maximum of two hundred dollars.
(2) For the purposes of this subsection, a program shall qualify for the credit provided by this subsection if the code for such program has been released under an open source license recognized by the Open Source Initiative, or has been released under a free software license recognized by the Free Software Foundation.
(3) This subsection shall apply to any individual for any taxable year only if such individual elects to have this section apply for such taxable year. An election to have this section apply may not be made for any taxable year if such election is in effect with respect to such individual for any other taxable year and pertaining to the same program or any portion thereof.
(4) In no event shall the amount of the credit provided by this subsection exceed the taxpayer's tax for the taxable year. However, if
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00854-01-7
S. 490 2
the amount of credit otherwise allowable pursuant to this subsection for any taxable year results in such excess amount, any amount of credit not deductible in such taxable year may be carried over to the following year or years and may be deducted from the taxpayer's tax for such year or years.
§ 2. This act shall 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.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
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 education. 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
2016: S161/A2102 - COMMITTED TO FINANCE/ referred to ways and means 2015: S161/A2102 - REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS/ referred to ways and means 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.
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