Establishes the micro-enterprise investor tax credit program; defines terms; allows a credit of twenty-five percent of the qualified investment up to one hundred fifty thousand dollars.
STATE OF NEW YORK
________________________________________________________________________
3068
2009-2010 Regular Sessions
IN ASSEMBLY
January 22, 2009
___________
Introduced by M. of A. CHRISTENSEN, WEPRIN, SCHIMMINGER, HOYT, CAHILL,
CARROZZA, MILLMAN, BING, BENJAMIN, JAFFEE -- Multi-Sponsored by -- M.
of A. DelMONTE, DESTITO, GLICK, GORDON, GUNTHER, JOHN, KOON, MAGEE,
McENENY, PERRY, SWEENEY, TOWNS -- read once and referred to the
Committee on Ways and Means
AN ACT to amend the tax law, in relation to establishing the micro-en-
terprise investor tax credit program
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Legislative intent. The legislature hereby finds and
2 declares that it is the public policy of the state to stimulate economic
3 growth that encourages micro-enterprise development. Micro-enterprises
4 are a proven, viable grassroots strategy for achieving significant gains
5 in the incomes and assets of citizens excluded from the economic main-
6 stream. Extensive studies have demonstrated that micro-enterprises can
7 play a role in the revitalization of local economies.
8 Moreover, the legislature further finds that in today's economic envi-
9 ronment, there is a segment of the population for whom self-employment
10 is a necessary, and in some cases, the best source of employment and
11 income. By assisting individuals to build businesses and assets, micro-
12 enterprises can open wealth and ownership opportunities to individuals
13 who have been excluded from our economy.
14 The legislature further finds and declares that the welfare of the
15 state is enhanced by a healthy entrepreneurial business environment and
16 that the ready sources of capital necessary to support this environment
17 are not currently available.
18 Therefore the legislature declares that a micro-enterprise investor
19 tax credit would encourage third parties to invest in early stages of
20 wealth-creating businesses in the state as well as expand the economy of
21 the state by enlarging its base of wealth creating businesses.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05519-01-9
A. 3068 2
1 § 2. Section 210 of the tax law is amended by adding a new subdivision
2 41 to read as follows:
3 41. New York micro-enterprise investor tax credit. (a) For the
4 purposes of this subdivision the following terms shall have the follow-
5 ing meanings:
6 (1) "micro-enterprise" shall mean a business with five or fewer
7 employees that is located in New York state and is not primarily engaged
8 in real estate, professional services, or financial services;
9 (2) "principal owner" shall mean one or more persons who own an aggre-
10 gate of twenty-five percent or more of the micro-enterprise;
11 (3) "at-risk" shall mean that the repayment of the investment is not
12 secured or guaranteed and is entirely dependent on the success of the
13 micro-enterprise;
14 (4) "qualified investment" shall mean an investment in a micro-enter-
15 prise that is at risk, provided the investor is not a principal owner of
16 the micro-enterprise or any related person as defined in section
17 465(b)(3)(C) of the internal revenue code and is not involved in the
18 operation of the micro-enterprise as a full-time professional activity,
19 and provided further that the investment in the micro-enterprise is
20 maintained for a minimum of three years, and provided further that the
21 investment is used by the micro-enterprise for capital improvements,
22 machinery and equipment, research and development, or working capital.
23 (b) A taxpayer shall be allowed a credit against the tax imposed by
24 this article. The amount of the credit shall be twenty-five percent of
25 the qualified investment, provided that fifteen percent of the qualified
26 investment can be taken as a credit in the taxable year in which the
27 investment is made and five percent of the qualified investment can be
28 taken as a credit in each of the next two taxable years. The total
29 amount of credits allowable to a taxpayer under this paragraph for all
30 years is one hundred fifty thousand dollars.
31 (c) In no event shall the credit and the carryover of such credit
32 allowed under this subdivision for any taxable year, in the aggregate,
33 reduce the tax due for such year to less than the higher of the amounts
34 prescribed in paragraphs (c) and (d) of subdivision one of this section.
35 However, if the amount of the credit or carryovers of such credit, or
36 both, allowed under this subdivision for any taxable year reduces the
37 tax to such amount, any amount of credit or carryovers of such credit
38 thus not deductible in such taxable year may be carried over to the
39 following year or years and may be deducted from the taxpayer's tax for
40 such year or years.
41 § 3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
42 of the tax law, as amended by section 2 of part ZZ1 of chapter 57 of the
43 laws of 2008, is amended to read as follows:
44 (B) shall be treated as the owner of a new business with respect to
45 such share if the corporation qualifies as a new business pursuant to
46 paragraph (j) of subdivision twelve of section two hundred ten of this
47 chapter.
48 The corporation's credit base under
49 section two hundred ten or section
50 With respect to the following fourteen hundred fifty-six of this
51 credit under this section: chapter is:
52 (i) Investment tax credit Investment credit base
53 under subsection (a) or qualified
54 rehabilitation
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1 expenditures under
2 subdivision twelve of
3 section two hundred ten
4 (ii) Empire zone Cost or other basis
5 investment tax credit under subdivision
6 under subsection (j) twelve-B
7 of section two hundred
8 ten
9 (iii) Empire zone Eligible wages under
10 wage tax credit subdivision nineteen of
11 under subsection (k) section two hundred ten
12 or subsection (e) of
13 section fourteen hundred
14 fifty-six
15 (iv) Empire zone Qualified investments
16 capital tax credit and contributions under
17 under subsection (l) subdivision twenty of
18 section two hundred ten
19 or subsection (d) of
20 section fourteen hundred
21 fifty-six
22 (v) Agricultural property tax Allowable school
23 credit under subsection (n) district property taxes under
24 subdivision twenty-two of
25 section two hundred ten
26 (vi) Credit for employment Qualified first-year wages or
27 of persons with dis- qualified second-year wages
28 abilities under under subdivision
29 subsection (o) twenty-three of section
30 two hundred ten
31 or subsection (f)
32 of section fourteen
33 hundred fifty-six
34 (vii) Employment incentive Applicable investment credit
35 credit under subsec- base under subdivision
36 tion (a-1) twelve-D of section two
37 hundred ten
38 (viii) Empire zone Applicable investment
39 employment credit under sub-
40 incentive credit under division twelve-C
41 subsection (j-1) of section two hundred ten
42 (ix) Alternative fuels credit Cost under subdivision
43 under subsection (p) twenty-four of section two
44 hundred ten
45 (x) Qualified emerging Applicable credit base
46 technology company under subdivision twelve-E
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1 employment credit of section two hundred ten
2 under subsection (q)
3 (xi) Qualified emerging Qualified investments under
4 technology company subdivision twelve-F of
5 capital tax credit section two hundred ten
6 under subsection (r)
7 (xii) Credit for purchase of an Cost of an automated
8 automated external defibrillator external defibrillator under
9 under subsection (s) subdivision twenty-five of
10 section two hundred ten
11 or subsection (j) of section
12 fourteen hundred fifty-six
13 (xiii) Low-income housing Credit amount under
14 credit under subsection (x) subdivision thirty
15 of section two hundred ten or
16 subsection (l) of section
17 fourteen hundred fifty-six
18 (xiv) Credit for transportation Amount of credit under sub-
19 improvement contributions division thirty-two of section
20 under subsection (z) two hundred ten or subsection
21 (n) of section fourteen
22 hundred fifty-six
23 (xv) QEZE credit for real property Amount of credit under
24 taxes under subsection (bb) subdivision twenty-seven of
25 section two hundred ten or
26 subsection (o) of section
27 fourteen hundred fifty-six
28 (xvi) QEZE tax reduction credit Amount of benefit period
29 under subsection (cc) factor, employment increase factor
30 and zone allocation
31 factor (without regard
32 to pro ration) under
33 subdivision twenty-eight of
34 section two hundred ten or
35 subsection (p) of section
36 fourteen hundred fifty-six
37 and amount of tax factor
38 as determined under
39 subdivision (f) of section sixteen
40 (xvii) Green building credit Amount of green building credit
41 under subsection (y) under subdivision thirty-one
42 of section two hundred ten
43 or subsection (m) of section
44 fourteen hundred fifty-six
45 (xviii) Credit for long-term Qualified costs under
46 care insurance premiums subdivision twenty-five-a of
47 under subsection (aa) section two hundred ten
48 or subsection (k) of section
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1 fourteen hundred fifty-six
2 (xix) Brownfield redevelopment Amount of credit
3 credit under subsection under subdivision
4 (dd) thirty-three of section
5 two hundred ten
6 or subsection (q) of
7 section fourteen hundred
8 fifty-six
9 (xx) Remediated brownfield Amount of credit under
10 credit for real property subdivision thirty-four
11 taxes for qualified of section two hundred
12 sites under subsection ten or subsection (r) of
13 (ee) section fourteen hundred
14 fifty-six
15 (xxi) Environmental Amount of credit under
16 remediation subdivision thirty-five of
17 insurance credit under section two hundred
18 subsection (ff) ten or subsection
19 (s) of section
20 fourteen hundred
21 fifty-six
22 (xxii) Empire state film Amount of credit for
23 production credit under qualified production costs in
24 subsection (gg) production of a qualified film
25 under subdivision thirty-six
26 of section two hundred ten
27 (xxiii) Qualified emerging Qualifying expenditures and
28 technology company facilities, development activities under
29 operations and training credit subdivision twelve-G of section
30 under subsection (nn) two hundred ten
31 (xxiv) Security training tax Amount of credit
32 credit under under subdivision thirty-seven
33 subsection (ii) of section two hundred ten or
34 under subsection (t) of
35 section fourteen hundred fifty-six
36 (xxv) Credit for qualified fuel Amount of credit under
37 cell electric generating equipment subdivision thirty-seven
38 expenditures under subsection (g-2) of section two hundred ten
39 or subsection (t) of
40 section fourteen hundred
41 fifty-six
42 (xxvi) Empire state commercial Amount of credit for
43 production credit under subsection qualified production
44 (jj) costs in production
45 of a qualified commercial under
46 subdivision thirty-eight of
47 section two hundred ten
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1 (xxvii) Biofuel production Amount of credit
2 tax credit under under subdivision
3 subsection (jj) thirty-eight of
4 section two hundred ten
5 (xxviii) Clean heating fuel credit Amount of credit under
6 under subsection (mm) subdivision thirty-nine of
7 section two hundred ten
8 (xxix) Credit for rehabilitation Amount of credit under
9 of historic properties subdivision forty of
10 under subsection (oo) [subsection] section two hundred ten
11 (xxx) Credit for companies who Amount of credit under
12 provide transportation subdivision forty of
13 to individuals section two hundred ten
14 with disabilities
15 under subsection (oo)
16 (xxxi) New York micro-Amount of credit under
17 enterprise investorsubdivision forty-one of
18 tax credit undersection two hundred ten
19 subsection (qq)
20 § 4. Section 606 of the tax law is amended by adding a new subsection
21 (qq) to read as follows:
22 (qq) New York micro-enterprise investor tax credit. (1) For the
23 purposes of this subsection the following terms shall have the following
24 meanings:
25 (A) "micro-enterprise" shall mean a business with five or fewer
26 employees that is located in New York state and is not primarily engaged
27 in real estate, professional services, or financial services;
28 (B) "principal owner" shall mean one or more persons who own an aggre-
29 gate of twenty-five percent or more of the micro-enterprise;
30 (C) "at-risk" shall mean that the repayment of the investment is not
31 secured or guaranteed and is entirely dependent on the success of the
32 micro-enterprise;
33 (D) "qualified investment" shall mean an investment in a micro-enter-
34 prise that is at risk, provided the investor is not a principal owner of
35 the micro-enterprise or any related person as defined in section
36 465(b)(3)(C) of the internal revenue code and is not involved in the
37 operation of the micro-enterprise as a full-time professional activity,
38 and provided further that the investment in the micro-enterprise is
39 maintained for a minimum of three years, and provided further that the
40 investment is used by the micro-enterprise for capital improvements,
41 machinery and equipment, research and development, or working capital.
42 (2) A taxpayer shall be allowed a credit against the tax imposed by
43 this article. The amount of the credit shall be twenty-five percent of
44 the qualified investment, provided that fifteen percent of the qualified
45 investment can be taken as a credit in the taxable year in which the
46 investment is made and five percent of the qualified investment can be
47 taken as a credit in each of the next two taxable years. The total
48 amount of credits allowable to a taxpayer under this paragraph for all
49 years is one hundred fifty thousand dollars.
50 (3) If the amount of the credit and the carryovers of such credit
51 allowed under this subsection for any taxable year, in the aggregate,
A. 3068 7
1 shall exceed taxpayer's tax for such year, any amount of the credit or
2 carryovers of such credit thus not deductible in such taxable year may
3 be carried over to the following year or years and may be deducted from
4 the tax for such year or years.
5 § 5. This act shall take effect immediately; provided, however, that
6 the empire state film production credit under subsection (gg), the
7 empire state commercial production credit under subsection (jj) and the
8 credit for companies who provide transportation to individuals with
9 disabilities under subsection (oo) of section 606 of the tax law
10 contained in section three of this act shall expire on the same date as
11 provided in section 9 of part P of chapter 60 of the laws of 2004, as
12 amended, section 10 of part V of chapter 62 of the laws of 2006, as
13 amended and section 5 of chapter 522 of the laws of 2006, as amended,
14 respectively.
