What's happening
This bill, the "Empire Innovation Act," revises the Excelsior research and development tax credit to allow participants to claim credits based on the full cost of R&D expenses in New York, with exceptions if federal credits are claimed.
Why it matters
Expands the potential value of the Excelsior R&D tax credit. by letting eligible businesses claim credits based on the entire amount of their New York research and development spending, rather than tying the state credit to a reduced portion of the federal R&D tax credit. This could make New York significantly more attractive for companies investing in innovation.
Limits “double-dipping” for federal and state credits. by specifying that if a business already claims a federal R&D credit based on the full cost of its New York expenses, then the state credit is capped at 50% of the relevant federal amount. This aims to balance incentivizing R&D while avoiding excessive overlapping subsidies.
Retains and clarifies percentage caps by project type. the credit remains capped at 6% of qualifying expenses for regular projects and 8% for “green” or Green CHIPS projects—helping to focus enhanced benefits on environmentally friendly and semiconductor manufacturing investments.
Broadens eligible expenses to include wages and salaries for R&D jobs. , making it easier for companies with significant in-state employment to benefit and potentially supporting high-skill job creation in New York.
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Who cares
Excelsior Jobs Program participants conducting New York research and development
The bill would base their state research credit on the full cost of New York research expenses, subject to existing caps, unless the specified federal-credit exception applies.
Participants receiving federal research credits calculated on full research costs
They would remain limited to a state credit equal to half the federal credit attributable to New York research expenditures, subject to existing caps.
Green project and Green CHIPS project participants
Their research credits would remain capped at eight percent of New York research expenditures, compared with six percent for other projects.
Headline styles
Expand R&D Tax Credit
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to commerce, economic development and small business
- Referred to commerce, economic development and small business
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
303
2025-2026 Regular Sessions
IN SENATE (Prefiled)
January 8, 2025
Introduced by Sen. RHOADS -- read twice and ordered printed, and when printed to be committed to the Committee on Commerce, Economic Development and Small Business
AN ACT to amend the economic development law, in relation to the excelsior research and development tax credit
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. This act shall be known and may be cited as the "empire innovation act".
§ 2. Subdivision 3 of section 355 of the economic development law as amended by chapter 494 of the laws of 2022, is amended to read as follows:
3. Excelsior research and development tax credit component. A participant in the excelsior jobs program shall be eligible to claim a credit equal to [fifty percent of] the portion of [the participant's federal research and development tax credit that relates to the participant's research and development expenditures in New York state during the taxable year; provided however,] the full cost of the participant's research and development expenses incurred that relates to the participant's research and development expenditures in New York state during the taxable year; provided however, if the participant receives a federal research and development tax credit calculated on the full cost of the participant's research and development expenses that relates to the participant's research and development expenditures in New York state during the taxable year, then said participant shall only be eligible to claim a credit equal to fifty percent of the portion of the participant's federal research and development tax credit that relates to the participant's research and development expenditures in New York state during the taxable year; if not a green project, the excelsior research and development tax credit shall not exceed six percent of the qualified
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01204-01-5
research and development expenditures attributable to activities conducted in New York state, or, if a green project or a Green CHIPS project, the excelsior research and development tax credit shall not exceed eight percent of the research and development expenditures attributable to activities conducted in New York state. If the federal research and development credit has expired, then the research and development expenditures relating to the federal research and development credit shall be calculated as if the federal research and development credit structure and definition in effect in two thousand nine were still in effect. Notwithstanding any other provision of this chapter to the contrary, research and development expenditures in this state, including salary or wage expenses for jobs related to research and development activities in this state, may be used as the basis for the excelsior research and development tax credit component and the qualified emerging technology company facilities, operations and training credit under the tax law.
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the economic development law, in relation to the excels- ior research and development tax credit
Purpose
This legislation expands the Excelsior Research and Development Tax Credit to allow participants in the Excelsior Jobs Program to claim a credit equal to the portion of the full cost of the participant's research and development expenses incurred that relates to the partic- ipant's research and development expenditures in New York State during the taxable year.
Summary of provisions
Section 1 stipulates that this act shall be entitled the "Empire Inno- vation. Act."
Read the full memo (604 words)
Section 2 amends subdivision 3 of section 355 of the economic develop- ment law to enable a participant in the excelsior jobs program to be eligible to claim a credit equal to the portion of the full cost of the participant's research and development expenses incurred that relates to the participant's research and development expenditures in New York state during the taxable year; provided however, if the participant receives a federal research and development tax credit calculated on the full cost of the participant's research and development expenses that relates to the participant's research and development expenditures in New York, state during the taxable year, then said participant shall only be eligible to claim a credit equal to fifty percent of the portion of the participant's federal research and development tax credit that relates to the participant's research and development expenditures in New York state during the taxable year.
Section 3 sets forth the effective date.
Justification
For nearly seventy years, the United States has encouraged robust research and development investment through federal policies, partic- ularly Section 174 of the Internal Revenue Code which allowed for the deduction of qualified research and development expenses from a corpo- ration's tax liability in the year the costs were incurred. Following federal policy changes in 2019, companies will have to amortize such costs over five years for domestic research and development expenses and fifteen years for foreign research and development expenses. This change dramatically increases affected companies' tax liability and removes a major incentive for United States-based companies to conduct R&D by restricting liquidity, raising the cost of capital, and threatening returns on these investments.
Incentivizing innovation must be at the forefront of our collective commitment to promoting economic and technological empowerment, viabil- ity, and prosperity. The Empire. Innovation Act will promote investment in research and development conducted in our State and boldly counter the adverse economic effects and increased revenue costs associated with federal, policy changes which no longer allow for the deduction of, qualified research and development expenses from a corporation's tax liability in the year the costs were incurred. This legislation would expand the Excelsior Research and Development Tax Credit toòallow participants in the Excelsior Jobs Program to claim a credit equal to the portion of the full cost of the participant's research and develop- ment expenses incurred that relates to the participant's research and development expenditures in New York State during the taxable year. The Empire Innovation Act would provide a State-level solution to the current federal disincentives. This legislation would incentivize research and development in New York State, discourage crucial resources and innovation from leaving our State, and lift our beloved, capable, and forward-thinking Excelsior State to even greater heights.
It is incumbent upon us to reinvigorate domestic innovation, attract and retain high-skilled talent, and foster an ecosystem that is conducive to the development of cutting-edge technologies that emerge directly from our own soil.
Legislative history
New bill.
Fiscal implications
To be determined.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.