What's happening
This bill creates a tax credit for small businesses in New York based on their business-related electricity usage.
Why it matters
Targets truly small businesses. The credit is only available to businesses with 19 or fewer full-time equivalent employees (including affiliates and related entities), ensuring the benefit is focused on small-scale operations rather than larger firms with more resources.
Excludes certain businesses. Sole proprietors operating out of their homes, businesses already certified under specific municipal programs, and those receiving other state economic development incentives are ineligible. This prevents "double-dipping" and focuses the credit on businesses not already benefiting from other state programs.
Direct tie to verified energy usage. The credit is calculated as two cents per kilowatt hour based on business-related electricity usage at the primary business location, with requirements for verification through utility bills. This means the incentive scales with actual business activity and energy consumption, potentially encouraging energy tracking and efficiency.
Refundable/creditable structure. If the credit exceeds a business's tax liability, the excess is treated as an overpayment and can be refunded (though no interest is paid). This design ensures even businesses with low or no tax liability can still benefit, improving cash flow for the smallest firms.
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Who cares
Headline styles
Tax Credit for Small Businesses
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to budget and revenue
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
7702
IN SENATE
February 10, 2020
Introduced by Sens. KENNEDY, KAPLAN -- 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 a small business electric energy tax credit
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 210-B of the tax law is amended by adding a new subdivision 55 to read as follows:
55. Small business electric energy tax credit. (a) A taxpayer that is eligible under the limitations specified in paragraph (b) of this subdivision shall be allowed a credit against the tax imposed by this article. The amount of the credit shall be equal to the product of two cents per kilowatt hour for all business related electricity usage at the taxpayer's primary business location.
(b) An eligible taxpayer shall (i) have no more than nineteen full time equivalent employees in New York state, including any related members or affiliates, (ii) not be a sole-proprietorship if such soleproprietor's primary business location is sited in or part of such soleproprietor's place of residence, (iii) not be certified pursuant to article eighteen-B of the general municipal law, and (iv) not be receiving any allocation or award pursuant to any program authorized under article six of the economic development law.
(c) (i) The term "business related electricity usage" shall refer to electrical power usage used to further the economic activity of the taxpayer at the primary business location that is clearly delimited from any shared electrical power usage cost. (ii) The term "primary business location" shall mean the physical site of the taxpayer within the state of New York where the majority of the taxpayer's economic activity is generated or coordinated through. (iii) The term "related members" shall have the same meaning as set forth in clauses (A) and (B) of subparagraph one of paragraph (o) of subdivision nine of section two hundred eight of this article, and the term "affiliates" shall mean those corporations that are members of the same affiliated group (as
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00570-04-0
S. 7702 2
defined in section fifteen hundred four of the internal revenue code) as the taxpayer.
(d) The eligible usage level shall be the total kilowatt hour usage of the taxpayer for business related electricity usage during the taxpayer's taxable year as verified through bills or other form of usage chart provided to the taxpayer by the taxpayer's electricity power service provider.
(e) In no event shall the credit provided for in this subdivision be allowed in an amount which will reduce the tax payable to less than the fixed dollar minimum amount prescribed in paragraph (d) of subdivision one of section two hundred ten of this article. However, if the amount of credit allowed under this subdivision for any taxable year reduces the tax to such amount, any amount of credit not deductible in such taxable year shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section ten hundred eighty-six of this chapter. Provided, however, the provisions of subsection (c) of section ten hundred eighty-eight of this chapter notwithstanding, no interest shall be paid thereon.
§ 2. Section 606 of the tax law is amended by adding a new subsection (kkk) to read as follows:
(kkk) Small business electric energy tax credit. (1) A taxpayer that is eligible under the limitations specified in paragraph two of this subsection shall be allowed a credit against the tax imposed by this article. The amount of the credit shall be equal to the product (or pro rata share of the product in the case of a partnership) of two cents per kilowatt hour for all business related electricity usage at the taxpayer's primary business location.
(2) An eligible taxpayer shall (i) have no more than nineteen full time equivalent employees in New York state, including any related members or affiliates, (ii) shall not be a sole-proprietorship if such sole-proprietor's primary business location is sited in or part of such sole-proprietor's place of residence, (iii) not be certified pursuant to article eighteen-B of the general municipal law, and (iv) not be receiving any allocation or award pursuant to any program authorized under article six of the economic development law.
(3) (i) The term "business related electricity usage" shall refer to electrical power usage used to further the economic activity of the taxpayer at the primary business location that is clearly delimited from any shared electrical power usage cost. (ii) The term "primary business location" shall mean the physical site of the taxpayer within the state of New York where the majority of the taxpayer's economic activity is generated or coordinated through. (iii) The term "related members" shall have the same meaning as set forth in clauses (A) and (B) of subparagraph one of paragraph (o) of subdivision nine of section two hundred eight of this chapter, and the term "affiliates" shall mean those corporations that are members of the same affiliated group (as defined in section fifteen hundred four of the internal revenue code) as the taxpayer.
(4) The eligible usage level shall be the total kilowatt hour usage of the taxpayer for business related electricity usage during the taxpayer's taxable year as verified through bills or other form of usage chart provided to the taxpayer by the taxpayer's electricity power service provider.
(5) If the amount of credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess shall be treated as an overpayment of tax to be credited or refunded in
S. 7702 3
accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon.
§ 3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 of the tax law is amended by adding a new clause (xlvi) to read as follows: (xlvi) Small business electric Qualifying electricity usage energy tax credit under subdivision fifty-five under subsection (kkk) of section two hundred ten-B
§ 4. This act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2019.
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 a small business electric energy tax credit
Summary of provisions
Section 1 amends Section 210-b of the Tax Law, relating to franchise taxes on business corporations, by adding a new subdivision 46 creating a small business electric energy tax credit. The section defines eligi- bility and other restrictions and requirements, and provides for a tax credit equal to the product of two cents per kilowatt hour for all busi- ness-related electricity usage at the taxpayer's primary business location.
Section 2 amends Section 606 of the Tax Law, relating to personal income tax, by adding a new subsection (vv). This subsection provides for a small business electric energy tax credit. The section defines eligibil- ity and other restrictions and requirements, and provides for a tax credit equal to the product of two cents per kilowatt hour for all busi- ness-related electricity usage at the taxpayer's primary business location
Section 3 amends subparagraph (B) of paragraph 1 of subsection (i) of Section 606 of the tax law, by adding a new clause (xliii) to read as follows: (xli) small business electricity energy credit under subsection (ccc) and qualifying electricity usage under subdivision 49 of section two hundred ten-b.
Section 4 provides for the effective date.
Purpose and justification
Small businesses are critical to the economic health and growth of our state. Small businesses are a powerful engine of new job growth, and a source of innovation that will keep our state competitive around the world. Energy costs have risen faster than many small businesses could have predicted or planned for, and as a result, many find themselves under financial pressure. The bill applies to companies with less than 20 employees. It is estimated that 366,000 businesses employing 1.4 million New Yorkers will be impacted by this legislation. This bill will help to offset these increased costs by offering a tax credit, and help to ensure that our small businesses will remain healthy and productive. These tax credits will also help to hold overhead down and make our small businesses better able to compete both nationally and interna- tionally.
Prior legislative history
2017-18: S. 5420/A.400 Referred to Investigations/Referred to Ways and Means
2015-16: A1953 referred to Ways and Means
2013-14: A1619 referred to Ways and Means
2011-12: A.2309 referred to Ways and Means
2009-10: A.902 referred to Ways and Means
2007-08: A.10728 referred to Ways and Means/S1671 Passed Senate
2005-06: 5.6566 passed Senate
Fiscal implications
To be determined.
Effective date
This act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2019.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.