NY State Senate Bill 2013-S4890

Senate Bill S4890

2013-2014 Legislative Session

Relates to the qualified emerging technology company facilities, operations and training credit

download bill text pdf

Archive: Last Bill Status - In Senate Committee Investigations And Government Operations Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2014	referred to investigations and government operations
Jun 11, 2013	reported and committed to rules
May 21, 2013	reported and committed to finance
Apr 30, 2013	referred to investigations and government operations

Votes

- May 21, 2013 - Investigations And Government Operations Committee Vote
  S4890
  
  9
  
  Aye
  
  0
  
  Nay
  
  0
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Investigations And Government Operations Committee Vote: May 21, 2013
      
      aye (9)
      
      Carlucci
      
      Diaz
      
      Golden
      
      Hoylman-Sigal
      
      Marcellino
      
      Nozzolio
      
      O'Mara
      
      Squadron
      
      Zeldin
  Jun 11, 2013 - Finance Committee Vote
  S4890
  
  30
  
  Aye
  
  1
  
  Nay
  
  5
  
  Aye with Reservations
  
  0
  
  Absent
  
  1
  
  Excused
  
  0
  
  Abstained
  - - Finance Committee Vote: Jun 11, 2013
      
      aye (30)
      
      Bonacic
      
      DeFrancisco
      
      Diaz
      
      Espaillat
      
      Farley
      
      Flanagan
      
      Fuschillo
      
      Gianaris
      
      Golden
      
      Griffo
      
      Grisanti
      
      Hannon
      
      Kennedy
      
      LaValle
      
      Lanza
      
      Larkin
      
      Little
      
      Marcellino
      
      Montgomery
      
      Nozzolio
      
      O'Mara
      
      Parker
      
      Peralta
      
      Ranzenhofer
      
      Robach
      
      Savino
      
      Seward
      
      Stavisky
      
      Valesky
      
      Young
      
      nay (1)
      
      Krueger
      
      aye wr (5)
      
      Breslin
      
      Dilan
      
      Hassell-Thompson
      
      Perkins
      
      Rivera
      
      excused (1)
      
      Squadron

co-Sponsors

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2013-S4890 (ACTIVE) - Details

See Assembly Version of this Bill:: A7264
Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Amd §§210 & 606, Tax L

2013-S4890 (ACTIVE) - Summary

Relates to the qualified emerging technology company facilities, operations and training credit.

2013-S4890 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S4890

TITLE OF BILL:  An act to amend the tax law, in relation to the
qualified emerging technology company facilities, operations and
training credit

PURPOSE: To reinstate the QETC tax credit, which expired in 2011.

SUMMARY OF PROVISIONS: Amends Paragraphs (a), (b) and (h) of
subdivision 12-G of section 210 of the tax law, and Paragraphs 1, 2
and 8 of subsection (nn) of section 606, to reinstate the QETC tax
credit for taxable years beginning January 1, 2013. It makes clear
that the language applies prospectively, and eliminates a clause that
the Tax Department considered ambiguous. Adds provisions to eliminate
the cap on total employment after the qualifying year, so long as 75%
of total employees are locates in New York, and allows a partner in a
company to be considered an employee only if he or she is full time
and meets material participation requirements. Also, the sunset for
the program is eliminated. If enacted, the program would be permanent.

EXISTING LAW:. The QETC expired in 2011.

JUSTIFICATION: To continue incentivizing growth of the emerging
technology sector of New York's economy, this legislation enhances and
makes permanent the Qualified Emerging Technology Company Facilities,
Operations and Training Credit originally enacted in the 2005-6

budget. The credit was an effective tool to encourage the creation,
expansion and retention of these cutting edge firms. In the last year
for which the credit was applicable, the Tax Expenditure report
estimated its value at $22 million. Thus number suggests an investment
of qualified expenses of over $80 million by these firms in New York,
with a much greater return when the companies begin full-fledged
commercial production of their products.

Imitation, it is said, is the sincerest form of flattery. Other states
have seen the success of the credit and are now duplicating it in some
cases at substantially greater levels than was offered in New York
State. The secret to its effectiveness is refundability, which few
other states offer at this time. Refundability is maintained in this
reenactment.

The main body of the program remains intact The credit is the sum of
credits available under the capital (18%), R&D (9%), and training
($4,000 per employee) components of the bill. The credits are
claimable for four years, and cannot total more than $250,000 in any
year. An eligible taxpayer must have 100 or fewer employees, although
in subsequent years this number may increase, so long as 75% of full
time employees are in New York State, have a 6% ration of R&D to net
sales, have gross revenues of $20 million or less, and meet the QETC
activities and product definition. Enactment of this legislation will
reinstate New York's most important and effective program for nascent
high-technology firms.

FISCAL IMPLICATIONS: To be determined

EFFECTIVE DATE:  Immediate.

2013-S4890 (ACTIVE) - Bill Text download pdf

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

                                  4890

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                             April 30, 2013
                               ___________

Introduced   by  Sens.  GOLDEN,  BONACIC,  GALLIVAN,  GRIFFO,  GRISANTI,
  MAZIARZ, RANZENHOFER,  SEWARD,  VALESKY,  ZELDIN  --  read  twice  and
  ordered  printed, and when printed to be committed to the Committee on
  Investigations and Government Operations

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

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

S. 4890                             2

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 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.

S. 4890                             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.

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