What's happening
The bill exempts certain equipment purchases by companies in college-affiliated or state-funded incubators from sales and use tax.
Why it matters
Encourages innovation and entrepreneurship. by reducing operational costs for startups and early-stage companies in college-affiliated and state-funded incubators, potentially making it easier for them to invest in essential equipment.
Targets state investment to specific business environments. the exemption applies only to equipment costing $500 or more and must be used primarily within the incubator, ensuring the tax benefit directly supports business activities tied to the incubator’s mission.
May help universities and state programs attract and retain high-potential startups. , strengthening the ecosystem for research commercialization and local economic development by making their incubators more financially attractive to entrepreneurs.
Could lead to a modest reduction in state tax revenues. , but this might be offset by the long-term economic benefits of fostering new businesses, job creation, and the commercialization of innovative technologies.
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Who cares
Companies in college-associated incubators
The bill would exempt equipment costing $500 or more from sales and compensating use taxes if used directly and predominantly within the incubator.
Companies in state-funded incubators
The same equipment exemption would apply to companies in state-funded incubators, even without a college affiliation.
College-associated and state-funded incubator operators
The bill would give their tenant companies a tax benefit tied to equipment used directly and predominantly within their facilities.
Headline styles
Tax Break for Startup Equipment
Plain English, a few words. Used as the page title.
Sponsors
3 Co-sponsors
History
- Referred to budget and revenue
- Referred to budget and revenue
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3306
2019-2020 Regular Sessions
IN SENATE
February 5, 2019
Introduced by Sens. LAVALLE, CARLUCCI, RANZENHOFER, SEWARD -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue
AN ACT to amend the tax law, in relation to providing an exemption from the tax on sales and the compensating use tax for certain equipment purchased by companies located in academic incubator facilities
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision (a) of section 1115 of the tax law is amended by adding a new paragraph 45 to read as follows:
(45) Equipment with a purchase price of five hundred dollars or greater purchased by any company located in an incubator facility that is associated with a college, as defined in subdivision two of section two of the education law, or an incubator facility that is funded by the state. Such equipment must be used directly and predominately within such incubator facility.
§ 2. This act shall take effect September 1, 2019.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08375-01-9
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 an exemption from the tax on sales and the compensating use tax for certain equipment purchased by companies located in academic incubator facilities
Purpose
This legislation is consistent with our state's general efforts to encourage the creation and growth of small business. Companies in incu- bators, by their nature, are small and have limited resources. This bill alleviates a small but significant tax burden on these firms by exempting them from sales tax on equipment that costs $500 or more.
Summary of provisions
Section 1 of the bill amends section 1115 of the tax law which provides companies that are located in an academic incubator facility with a sales tax exemption for the purchase of equipment with a price of $500 or more, and provides for the definition of an academic incubator.
Justification
During the last decade, one of the most effective state tools used to encourage job growth and creation has been its investment in high tech- nology incubators. Incubator facilities provide researchers and entre- preneurs with the physical space and support staff necessary to help transfer the technology developed in the laboratory into a commercial product of value.
Efforts to develop research ides into viable products are usually done with limited resources. Costs of operation must be kept at a minimum to allow researchers the opportunity to advance their theories. Incubators certainly provide low cost office space, however, rents are not the only expense that these businesses incur. Equipment costs can also be a major impediment to the success of the business. To help reduce this cost this bill would exempt business. To help rescue this cost this bill would exempt businesses located in incubators from sales tax on equipment purchases. Taxing this equipment is contrary to the general concept of incubators, which is to reduce the cost associated with a start-up firm struggling to develop its ides/research into a product.
The amendment clarifies that the exemption is only for those companies located in an academic incubator facility and the equipment be used in the incubator facility.
Legislative history
2018-19 S.3828/A.3330; 2015-16 S.2812A/A.4035A; 2013-14 S.2021A/A.1929A; 2011-12 S.3175A/A.5027A; 2009-2010 S.1997; 2007-08 S.942B; 2005-06 S.1415A; 2003-04 S.485; 2001-02 S .2341.
Fiscal implications
Implementation: There would be some loss of state revenue.
Effective date
This act shall take effect September 1, 2019.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.