BILL NUMBER:  S161

 TITLE OF BILL :  An act to amend the tax law, in relation to
providing a tax credit to individuals for up to two hundred dollars of
expenses related to the development and posting of an open source or
free license program

 PURPOSE :

The purpose of this bill is to incentivize individuals to develop Open
Source Software with a tax credit.

 SUMMARY OF PROVISIONS :

Amends § 606 of the Tax Law by providing for an Open Source tax credit
to the creators of Open Source software. (2) amends § 606 of the Tax
Law by providing for the type of programs that qualify for the Open
Source tax credit. (3) amends § 606 of the Tax Law by providing to
whom the Open Source tax credit applies. (4) amends § 606 of the Tax
Law by providing the limits and regulations of the tax credit itself.

 JUSTIFICATION :

"Open Source" refers to software offered for free online download
along with its instruction set ("source code"). The New York State
Assembly currently uses Open Source programs such as Mozilla for
              

email, Firefox for web browsing, and WebCal for electronic calendars.
The Assembly's use of this software has led to significant cost
savings for the Assembly's operating budget. Once an Open Source
program is downloaded with its source code, anyone can view the
instructions, modify the program, and redistribute it with the same
freedoms". A 2006 report authorized by John Irons and Carl Malamud
from the Center for American Progress details how Open Source software
provides a high social value amongst the group, but a relatively low
economic incentive for individual developers. By allowing open access
to the technology's source code, Open Source software enhances a
broader dissemination of knowledge and ideas Although large
corporations such as IBM develop and use Open Source programs, most
Open Source software is written by individuals volunteering from home.
Currently, corporations and self-employed individuals who create Open
Source technology are eligible for a tax deduction for their software
development costs. The vast majority of Open Source software creators
(individual volunteers), however, do not receive this tax credit. This
legislation creates a similar tax credit incentive for individuals who
currently have no means to deduct these expenses. The tax credit would
apply only to out-of-pocket expenses such as Internet hosting and
depreciated cost of capital expenses such as computers and educa-
tion. The increased incentive for individuals would attract more Open
Source developers to New York State, resulting in job creation and a
reinvigoration of our State's technology sector. Additionally, an
influx of Open Source software would lower operating costs for larger
agencies (such as the Assembly), by providing usable software without
charge.

 LEGISLATIVE HISTORY :

2013-2014: S173-A - REFERRED TO INVESTIGATIONS AND GOVERNMENT
OPERATIONS
2011-2012: S43 - REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
2009-10: S4046/A6380 - REFERRED TO INVESTIGATIONS AND GOVERNMENT
OPERATIONS/referred to ways and means

 FISCAL IMPLICATIONS :

To be determined.

 LOCAL FISCAL IMPLICATIONS :

None.

 EFFECTIVE DATE :
This act will take effect immediately and shall apply to taxable years
beginning on and after the first of January next succeeding the date
on which it shall have become a law.