STATE OF NEW YORK
________________________________________________________________________
10115
IN ASSEMBLY
March 4, 2010
___________
Introduced by M. of A. ALESSI, MORELLE, GABRYSZAK, DelMONTE, LUPARDO,
MAGNARELLI -- Multi-Sponsored by -- M. of A. MILLMAN -- read once and
referred to the Committee on Ways and Means
AN ACT to amend the tax law, in relation to creating the qualified
emerging technology commercialization tax credit
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 210 of the tax law is amended by adding a new
2 subdivision 12-H to read as follows:
3 12-H. Qualified emerging technology commercialization tax credit. (a)
4 As used in this subdivision:
5 (1) "qualified emerging technology company" shall mean a company
6 located in New York state: (i) whose primary products or services are
7 classified as emerging technologies and whose total annual product sales
8 are ten million dollars or less; or (ii) a company which has research
9 and development activities in New York state and whose ratio of research
10 and development funds to net sales equals or exceeds the average ratio
11 for all surveyed companies classified as determined by the National
12 Science Foundation in the most recent published results from its survey
13 of industry research and development, or any comparable successor survey
14 as determined by the department, and whose total annual product sales
15 are ten million dollars or less. The definition of "research and devel-
16 opment funds" shall be the same as that used by the National Science
17 Foundation in the aforementioned survey.
18 (2) "qualified commercialization expenses" means testing; prototyping;
19 designing; necessary materials and fixtures, or laboratory equipment;
20 incorporation fees and legal expenses; attorney fees; fees for licensing
21 of technologies developed at universities; transactional legal expenses
22 related to licensing university technologies; trade show and conference
23 fees; and product promotion and market research expenses.
24 (b) A taxpayer that is a qualified emerging technology company (and
25 specifically for the activities referenced in paragraph (b) of subdivi-
26 sion one of section thirty-one hundred two-e of the public authorities
27 law), and that meets the eligibility requirements in paragraph (c) of
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD16157-01-0
A. 10115 2
1 this subdivision, shall be allowed a credit against the tax imposed by
2 this article.
3 (c) An eligible taxpayer shall (1) have no more than one hundred full-
4 time employees, of which at least seventy-five percent are employed in
5 New York state, (2) have a ratio of research and development funds to
6 net sales, as referred to in section thirty-one hundred two-e of the
7 public authorities law, which equals or exceeds six percent during its
8 taxable year, and (3) have gross revenues, along with the gross revenues
9 of its affiliates and related members, not exceeding twenty million
10 dollars for the taxable year immediately preceding the year the taxpayer
11 is allowed a credit under this subdivision. For purposes of this para-
12 graph, the term "related member" shall have the same meaning as set
13 forth in clauses (A) and (B) of subparagraph one of paragraph (o) of
14 subdivision nine of section two hundred eight of this article, and the
15 term "affiliates" shall mean those corporations that are members of the
16 same affiliated group (as defined in section fifteen hundred four of the
17 internal revenue code) as the taxpayer.
18 (d) An eligible taxpayer shall be allowed a credit for fifteen per
19 centum of "qualified commercialization expenses" paid or incurred by the
20 taxpayer in the taxable year. The credit shall be allowed for "qualified
21 commercialization expenses" associated with in-house expenses or for
22 contract expenses involving outside paid consultants. An eligible
23 taxpayer may claim credits under this subdivision for four consecutive
24 taxable years. In no case shall the credit allowed by this subdivision
25 to a taxpayer exceed one hundred thousand dollars per year.
26 (e) The credit allowed under this subdivision for any taxable year
27 shall not reduce the tax due for such year to less than the higher of
28 the amounts prescribed in paragraphs (c) and (d) of subdivision one of
29 this section. However, if the amount of credit allowed under this subdi-
30 vision for any taxable year reduces the tax to such amount, any amount
31 of credit not deductible in such taxable year shall be treated as an
32 overpayment of tax to be credited or refunded in accordance with the
33 provisions of section one thousand eighty-six of this chapter. Provided,
34 however, the provisions of subsection (c) of section one
35 thousand eighty-eight of this chapter notwithstanding, no interest
36 shall be paid thereon.
37 § 2. Section 606 of the tax law is amended by adding a new subsection
38 (qq) to read as follows:
39 (qq) Qualified emerging technology commercialization tax credit. (1)
40 As used in this subsection:
41 (i) "Qualified emerging technology company" shall mean a company
42 located in New York state: (1) whose primary products or services are
43 classified as emerging technologies and whose total annual product sales
44 are ten million dollars or less; or (2) a company which has research and
45 development activities in New York state and whose ratio of research and
46 development funds to net sales equals or exceeds the average ratio for
47 all surveyed companies classified as determined by the National Science
48 Foundation in the most recent published results from its survey of
49 industry research and development, or any comparable successor survey as
50 determined by the department, and whose total annual product sales are
51 ten million dollars or less. The definition of "research and development
52 funds" shall be the same as that used by the National Science Foundation
53 in the aforementioned survey.
54 (ii) "Qualified commercialization expenses" means testing; prototyp-
55 ing; designing; necessary materials and fixtures, or laboratory equip-
56 ment; incorporation fees and legal expenses; attorney fees; fees for
A. 10115 3
1 licensing of technologies developed at universities; transactional legal
2 expenses related to licensing university technologies; trade show and
3 conference fees; and product promotion and market research expenses.
4 (2) A taxpayer that is a qualified emerging technology company (and
5 specifically for the activities referenced in paragraph (b) of subdivi-
6 sion one of section thirty-one hundred two-e of the public authorities
7 law), and that meets the eligibility requirements in paragraph three of
8 this subsection, shall be allowed a credit against the tax imposed by
9 this article.
10 (3) An eligible taxpayer shall (i) have no more than one hundred full-
11 time employees, of which at least seventy-five percent are employed in
12 New York state, (ii) have a ratio of research and development funds to
13 net sales, as referred to in section thirty-one hundred two-e of the
14 public authorities law, which equals or exceeds six percent during its
15 taxable year, and (iii) have gross revenues, along with the gross reven-
16 ues of its affiliates and related members, not exceeding twenty million
17 dollars for the taxable year immediately preceding the year the taxpayer
18 is allowed a credit under this subsection. For purposes of this para-
19 graph, the term "related member" shall have the same meaning as set
20 forth in clauses (A) and (B) of subparagraph one of paragraph (o) of
21 subdivision nine of section two hundred eight of this chapter, and the
22 term "affiliates" shall mean those corporations that are members of the
23 same affiliated group (as defined in section fifteen hundred four of the
24 internal revenue code) as the taxpayer.
25 (4) The amount of credit shall be equal to the amount (or pro rata
26 share of the amount in the case of a partnership) specified in paragraph
27 five of this subsection, subject to the limitations in paragraph six of
28 this subsection.
29 (5) An eligible taxpayer shall be allowed a credit for fifteen per
30 centum of "qualified commercialization expenses" paid or incurred by the
31 taxpayer in the taxable year. The credit shall be allowed for "qualified
32 commercialization expenses" associated with in-house expenses or for
33 contract expenses involving outside paid consultants.
34 (6) An eligible taxpayer may claim credits under this subsection for
35 four consecutive taxable years. In no case shall the credit allowed by
36 this subsection to a taxpayer exceed one hundred thousand dollars per
37 year.
38 (7) If the amount of credit allowed under this subsection for any
39 taxable year shall exceed the taxpayer's tax for such year, the excess
40 shall be treated as an overpayment of tax to be credited or refunded in
41 accordance with the provisions of section six hundred eighty-six of this
42 article, provided, however, that no interest shall be paid thereon.
43 § 3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
44 of the tax law is amended by adding a new clause (xxxi) to read as
45 follows:
46 (xxxi) Qualified emergingAmount of credit under
47 technology commercialization taxsubdivision twelve-H of section
48 credit under subsection (qq)two hundred ten
49 § 4. This act shall take effect immediately and shall apply to taxable
50 years beginning on or after January 1, 2010.
