BILL NO A02075
SAME AS No same as
SPONSOR Reilich (MS)
COSPNSR Tedisco, Kolb, Butler, Castelli, Montesano, Murray, Katz
MLTSPNSR Amedore, Barclay, Blankenbush, Boyle, Burling, Calhoun, Ceretto,
Conte, Corwin, Crouch, Curran, Duprey, Finch, Giglio, Goodell, Graf,
Hawley, Johns, Jordan, Lopez P, Losquadro, McDonough, McKevitt,
McLaughlin, Miller J, Oaks, Palmesano, Ra, Rabbitt, Raia, Saladino,
Sayward, Smardz, Tenney, Thiele, Tobacco, Walter
Amd SS210, 606, 1210, 1137, 14, 1115, 301-b & 301-c, Tax L; add S959-c, Gen
Muni L; amd S425, RPT L
Enacts the small business relief act; establishes the credit for college to
work program; authorizes certain counties to impose taxes at a lower rate than
the uniform local rate; relates to research and development commercialization
enterprises; exempts equipment with a purchase price of five hundred dollars or
more purchased by any company located in an incubator facility that is
associated with a college; provides a small business electric energy credit;
eliminates the residential restriction on heating exemptions.
TITLE OF BILL: An act to amend the tax law, in relation to the
computation of tax (Part A); to amend the tax law, in relation to the
credit for college work program (Part B); to amend the tax law, in
relation to authorizing counties to impose certain taxes at a lower
rate than the uniform local rate (Part C); to amend the tax law, in
relation to increasing the amount of tax (Part D); to amend the
general municipal law and the tax law, in relation to research and
development commercialization enterprises (Part E); to amend the tax
law, in relation to certain taxes (Part F); to amend the tax law, in
relation to exempting certain equipment from taxes (Part G); to amend
the tax law, in relation to a small business electric energy tax
credit (Part H); to amend the tax law, in relation to eliminating the
residential restriction for heating exemptions (Part I); to amend the
tax law, in relation to establishing a credit for on-the-job training
(Part J); and to amend the real property tax law, in relation to
extending the benefits of the STAR program to small businesses (Part
PURPOSE OR GENERAL IDEA OF BILL: This bill enacts the "Small Business
Relief Act of 2011."
SUMMARY OF SPECIFIC PROVISIONS: Section one enacts the Small Business
Relief Act of 2011.
Part A amends the Tax Law section 210 (1) (a) (iii) and (iv) to reduce
the Corporate Franchise Tax rate for small businesses with net income
less than $200,000 to 5.85 percent. Small businesses with net income
between $200,000 and $390,000 will have their rate reduced to the sum
of (a) eleven thousand seven hundred dollars, (b) 6.85 percent of the
excess of the entire net income base over two hundred thousand dollars
and (c) 5.0 percent of the excess of the entire net income base over
two hundred fifty thousand dollars.
Part B adds a new subdivision 22-A to section 210 of the Tax Law and a
new section 606 of the Tax Law to establish the credit for college to
work program to provide companies that pay college tuition on behalf
of an individual, in exchange for that individual agreeing to work for
the company for a specific number of years, with a tax credit equal to
25% of the tuition paid on behalf of the individual with a maximum
allowable credit of $5,000 per year per individual. The purpose of
this credit is to encourage employers to take an active role in
providing job training to upgrade, retain and improve the skill level
and productivity of their employees.
Part C adds a new paragraph 3-a to section 1210 (a) of the Tax Law to
authorize counties to lower or eliminate the tax on energy sources
imposed on businesses.
Part D amends section 1131 (0 (2) of the Tax Law to increase the sales
tax vendors' credit to 10 percent and raising the maximum credit to
$250 per quarter to help cover compliance costs.
Part E adds a new section 959-c to the General Municipal Law and a new
subdivision (a) to section 14 of the Tax Law to bridge the divide
between State sponsored Research and Development and manufacturing in
New York State. The current tax law penalizes companies that have
created R&D jobs in the State from manufacturing in New York State,
and the Empire Zone program does not afford those companies to be
treated as a new business, thus discouraging expansion. At a time when
the company is looking to expand in New York the tax code should
encourage a company to continue to expand and invest in New York. A
business that is connected through the State's premier academic and
business incubators for research and development will now be afforded
refundable wage and investment tax credits to lure the manufacturer of
that advanced technology to New York State.
Part F Amends section 210 (1) (g) (1) to eliminate the additional
corporate tax imposed on the State's small subchapter S corporations.
This would afford New York's small businesses $20 million to invest in
the New York economy and eliminate this burdensome computation and
filings. As a result, small businesses would only be subject to the
personal income tax as they are in a majority of the other states.
Part G adds anew paragraph (43) to section 1115 (a) of the Tax Law to
grant companies located in academic incubator facilities a state sales
tax exemption for the purchase of equipment costing $500 or more. The
sales tax exemption would reduce equipment costs, which can be an
impediment to the success of these small businesses. This proposal
would save companies $2 million annually in state and local taxes.
Part H establishes an electric energy tax credit for businesses
employing 20 or fewer persons.
Part I extends the current heating fuel tax exemption to
Section two contains a severability clause.
Section three contains the effective date.
JUSTIFICATION: The health of the New York State economy depends in
large part on the health of the State's small businesses. According to
the United States Department of Labor nearly 98 percent of all
businesses in New York are small businesses, and nearly 52 percent of
working New Yorkers are employed by small businesses. If small
businesses are failing then eventually New York's economy is sure to
fail, to the detriment of ail of our citizens.
During 2007, the high cost of doing business in New York was often
cited to the Assembly Minority Task Force on Small Business as the
primary reason that small businesses fail, and the state's onerous tax
burden placed on business is a prime cause of those costs. While broad
based tax relief is desperately needed. across the State, this does
not mean that we should not also promote smaller scale but more
immediate relief for the most vulnerable businesses in New York. The
Small Business Relief Act of 2009 will help to provide some measure of
immediate targeted tax relief for our state's entrepreneurs.
The tax relief contained in Part A will help to address this by
reducing the corporate franchise tax assessed upon small businesses
with a net income of under $200,000 to 5.85 percent, while Part E
corrects an unfair imbalance in our tax law that especially punishes
small business proprietors who file their taxes as subchapter S
corporations. The tax relief proposed in Part C of this legislation
will help address the high energy costs that afflict business in the
state by allowing counties to provide a sales tax exemption for energy
products. The tax breaks proposed in sections E and G will provide
help to start-up high tech manufacturers when they take the critical
step from research and development to production by providing relief
at exactly the time when a new enterprise is most likely to be "cash
Finally, the tax credit offered for the college to work program
contained in Part B will help to both stem the so called "brain drain"
of bright young New Yorkers and to ensure that New York State
businesses will continue to have access to a large pool of intelligent
and well educated workers into the 21st Century, for without that most
critical asset that these individuals represent business in. this
state truly will have no future.
PRIOR LEGISLATIVE HISTORY: 2008: A.5460 referred to Ways and Means
2010: A.6547 held in Ways and Means
FISCAL IMPLICATIONS: To be determined.
EFFECTIVE DATE: This act takes effect immediately.