S T A T E   O F   N E W   Y O R K
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                                  7264

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                               May 8, 2013
                               ___________

Introduced  by M. of A. LUPARDO, SCHIMMINGER, ROSENTHAL -- read once and
  referred to the Committee on Ways and Means

AN ACT to amend the tax law, in relation to the qualified emerging tech-
  nology company facilities, operations and training credit

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. Paragraphs (a), (b) and (h) of subdivision 12-G of section
210 of the tax law, as amended by section 1-a of part A of chapter 63 of
the laws of 2005, are amended to read as follows:
  (a) [A taxpayer that is a qualified emerging technology company pursu-
ant to the provisions of section thirty-one hundred two-e  (and  specif-
ically for the activities referenced in paragraph (b) of subdivision one
of such section thirty-one hundred two-e) of the public authorities law,
and  that  meets  the  eligibility requirements in paragraph (b) of this
subdivision, shall be allowed a credit against the tax imposed  by  this
article.  The  amount of credit shall be equal to the sum of the amounts
specified in paragraphs (c), (d), and (e) of this subdivision subject to
the limitations in paragraph (f) of this subdivision] FOR TAXABLE  YEARS
BEGINNING  ON AND AFTER JANUARY FIRST, TWO THOUSAND THIRTEEN, A TAXPAYER
THAT  IS  A  QUALIFIED  EMERGING  TECHNOLOGY  COMPANY  PURSUANT  TO  THE
PROVISIONS  OF  SUBPARAGRAPH  ONE OF PARAGRAPH (C) OF SUBDIVISION ONE OF
SECTION THIRTY-ONE HUNDRED TWO-E OF THE PUBLIC AUTHORITIES LAW, AND THAT
MEETS THE ELIGIBILITY REQUIREMENTS IN PARAGRAPH (B) OF THIS SUBDIVISION,
SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS  ARTICLE.  THE
AMOUNT  OF  CREDIT SHALL BE EQUAL TO THE SUM OF THE AMOUNTS SPECIFIED IN
PARAGRAPHS (C), (D), AND (E) OF THIS SUBDIVISION SUBJECT TO THE  LIMITA-
TIONS IN PARAGRAPH (F) OF THIS SUBDIVISION.
  (b) An eligible taxpayer shall (i) have no more than one hundred full-
time  employees,  of which at least seventy-five percent are employed in
New York state, EXCEPT AS OTHERWISE PROVIDED  IN  THIS  PARAGRAPH,  (ii)
have a ratio of research and development funds to net sales, as referred

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10461-01-3
              

A. 7264                             2

to  in  section  thirty-one hundred two-e of the public authorities law,
which equals or exceeds six percent during its taxable year,  and  (iii)
have gross revenues, along with the gross revenues of its affiliates and
related  members,  not  exceeding twenty million dollars for the taxable
year immediately preceding the year the taxpayer  is  allowed  a  credit
under  this  subdivision.  For  purposes  of  this  paragraph,  the term
"related member" 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 defined in section fifteen hundred four of the internal reven-
ue code) as the taxpayer. FOR PURPOSES OF SUBPARAGRAPH (I) OF THIS PARA-
GRAPH,  EMPLOYEES  WHO ARE EMPLOYED OUTSIDE THE UNITED STATES DURING THE
TAXABLE YEAR SHALL NOT BE CONSIDERED; A TAXPAYER THAT MEETS THE  EMPLOY-
MENT  REQUIREMENTS  IN  SUBPARAGRAPH  (I) OF THIS PARAGRAPH IN THE FIRST
YEAR IN WHICH THE CREDIT ALLOWED BY THIS SUBDIVISION IS CLAIMED WILL NOT
BE CONSIDERED INELIGIBLE SOLELY AS A RESULT  OF  HAVING  MORE  THAN  ONE
HUNDRED  FULL-TIME  EMPLOYEES IN OTHER TAXABLE YEARS IN WHICH THE CREDIT
IS CLAIMED, PROVIDED AT LEAST  SEVENTY-FIVE  PERCENT  OF  THE  FULL-TIME
EMPLOYEES IN THE OTHER TAXABLE YEARS ARE EMPLOYED IN NEW YORK STATE; AND
AN  INDIVIDUAL  WHO  IS  A  PARTNER IN A PARTNERSHIP THAT IS A QUALIFIED
EMERGING TECHNOLOGY COMPANY WILL BE CONSIDERED A FULL-TIME  EMPLOYEE  IF
THE  INDIVIDUAL  PARTNER  PARTICIPATES IN THE PARTNERSHIP ON A FULL-TIME
BASIS DURING THE TAXABLE YEAR AND  THE  INVOLVEMENT  OF  THE  INDIVIDUAL
PARTNER  IN  THE  ACTIVITIES  OF THE PARTNERSHIP DURING THE TAXABLE YEAR
SATISFIES THE REQUIREMENTS FOR MATERIAL PARTICIPATION FOR THE SAME TAXA-
BLE YEAR WITHIN THE MEANING OF SUBSECTION (H)  OF  SECTION  469  OF  THE
INTERNAL REVENUE CODE.
  [(h) The credit allowed under this subdivision shall not be applicable
for  taxable  years  beginning  on  or after January first, two thousand
twelve.]
  S 2. Paragraphs 1, 2 and 8 of subsection (nn) of section  606  of  the
tax  law,  as amended by section 1-a of part A of chapter 63 of the laws
of 2005, are amended to read as follows:
  (1) [A taxpayer that is a qualified emerging technology company pursu-
ant to the provisions of section thirty-one hundred two-e  (and  specif-
ically for the activities referenced in paragraph (b) of subdivision one
of such section thirty-one hundred two-e) of the public authorities law,
and  that  meets  the  eligibility requirements in paragraph two of this
subsection, shall be allowed a credit against the tax  imposed  by  this
article.  The  amount  of  credit shall be equal to the sum (or pro rata
share of the sum in the case of a partnership) of the amounts  specified
in  paragraphs  three, four, and five of this subsection, subject to the
limitations in paragraph six  of  this  subsection]  FOR  TAXABLE  YEARS
BEGINNING  ON AND AFTER JANUARY FIRST, TWO THOUSAND THIRTEEN, A TAXPAYER
THAT  IS  A  QUALIFIED  EMERGING  TECHNOLOGY  COMPANY  PURSUANT  TO  THE
PROVISIONS  OF  SUBPARAGRAPH  ONE OF PARAGRAPH (C) OF SUBDIVISION ONE OF
SECTION THIRTY-ONE HUNDRED TWO-E OF THE PUBLIC AUTHORITIES LAW, AND THAT
MEETS THE ELIGIBILITY REQUIREMENTS IN PARAGRAPH TWO OF THIS  SUBSECTION,
SHALL  BE  ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE. THE
AMOUNT OF CREDIT SHALL BE EQUAL TO THE SUM (OR PRO RATA SHARE OF THE SUM
IN THE CASE OF A PARTNERSHIP) OF THE  AMOUNTS  SPECIFIED  IN  PARAGRAPHS
THREE,  FOUR, AND FIVE OF THIS SUBSECTION, SUBJECT TO THE LIMITATIONS IN
PARAGRAPH SIX OF THIS SUBSECTION.

A. 7264                             3

  (2) An eligible taxpayer shall (i) have no more than one hundred full-
time employees, of which at least seventy-five percent are  employed  in
New York state, EXCEPT AS OTHERWISE PROVIDED IN THIS PARAGRAPH,
  (ii)  have  a ratio of research and development funds to net sales, as
referred to in section thirty-one hundred two-e of the  public  authori-
ties  law,  which equals or exceeds six percent during its taxable year,
and
  (iii) have gross revenues, along with the gross revenues of its affil-
iates and related members, not exceeding twenty million dollars for  the
taxable  year  immediately  preceding the year the taxpayer is allowed a
credit under this subsection. For purposes of this paragraph,  the  term
"related member" shall have the same meaning as set forth in clauses (A)
and  (B) of subparagraph one of paragraph (o) of subdivision [9] 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 reven-
ue code) as the taxpayer. FOR PURPOSES OF SUBPARAGRAPH (I) OF THIS PARA-
GRAPH, EMPLOYEES WHO ARE EMPLOYED OUTSIDE THE UNITED STATES  DURING  THE
TAXABLE  YEAR SHALL NOT BE CONSIDERED; A TAXPAYER THAT MEETS THE EMPLOY-
MENT REQUIREMENTS IN SUBPARAGRAPH (I) OF THIS  PARAGRAPH  IN  THE  FIRST
YEAR  IN WHICH THE CREDIT ALLOWED BY THIS SUBSECTION IS CLAIMED WILL NOT
BE CONSIDERED INELIGIBLE SOLELY AS A RESULT  OF  HAVING  MORE  THAN  ONE
HUNDRED  FULL-TIME  EMPLOYEES IN OTHER TAXABLE YEARS IN WHICH THE CREDIT
IS CLAIMED, PROVIDED AT LEAST  SEVENTY-FIVE  PERCENT  OF  THE  FULL-TIME
EMPLOYEES IN THE OTHER TAXABLE YEARS ARE EMPLOYED IN NEW YORK STATE; AND
AN  INDIVIDUAL  WHO  IS  A  PARTNER IN A PARTNERSHIP THAT IS A QUALIFIED
EMERGING TECHNOLOGY COMPANY WILL BE CONSIDERED A FULL-TIME  EMPLOYEE  IF
THE  INDIVIDUAL  PARTNER  PARTICIPATES IN THE PARTNERSHIP ON A FULL-TIME
BASIS DURING THE TAXABLE YEAR AND  THE  INVOLVEMENT  OF  THE  INDIVIDUAL
PARTNER  IN  THE  ACTIVITIES  OF THE PARTNERSHIP DURING THE TAXABLE YEAR
SATISFIES THE REQUIREMENTS FOR MATERIAL PARTICIPATION FOR THE SAME TAXA-
BLE YEAR WITHIN THE MEANING OF SUBSECTION (H)  OF  SECTION  469  OF  THE
INTERNAL REVENUE CODE.
  [(8)  The credit allowed under this subsection shall not be applicable
for taxable years beginning on or  after  January  first,  two  thousand
twelve.]
  S  3. This act shall take effect immediately; provided that the amend-
ments to paragraph (b) of subdivision 12-G of section 210 of the tax law
made by section one of this act and the amendments  to  paragraph  2  of
subsection  (nn)  of  section  606 of the tax law made by section two of
this act shall apply to taxable years beginning January 1, 2013.