S T A T E O F N E W Y O R K
________________________________________________________________________
3068
2009-2010 Regular Sessions
I N A S S E M B L Y
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:
Section 1. Legislative intent. The legislature hereby finds and
declares that it is the public policy of the state to stimulate economic
growth that encourages micro-enterprise development. Micro-enterprises
are a proven, viable grassroots strategy for achieving significant gains
in the incomes and assets of citizens excluded from the economic main-
stream. Extensive studies have demonstrated that micro-enterprises can
play a role in the revitalization of local economies.
Moreover, the legislature further finds that in today's economic envi-
ronment, there is a segment of the population for whom self-employment
is a necessary, and in some cases, the best source of employment and
income. By assisting individuals to build businesses and assets, micro-
enterprises can open wealth and ownership opportunities to individuals
who have been excluded from our economy.
The legislature further finds and declares that the welfare of the
state is enhanced by a healthy entrepreneurial business environment and
that the ready sources of capital necessary to support this environment
are not currently available.
Therefore the legislature declares that a micro-enterprise investor
tax credit would encourage third parties to invest in early stages of
wealth-creating businesses in the state as well as expand the economy of
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
S 2. Section 210 of the tax law is amended by adding a new subdivision
41 to read as follows:
41. NEW YORK MICRO-ENTERPRISE INVESTOR TAX CREDIT. (A) FOR THE
PURPOSES OF THIS SUBDIVISION THE FOLLOWING TERMS SHALL HAVE THE FOLLOW-
ING MEANINGS:
(1) "MICRO-ENTERPRISE" SHALL MEAN A BUSINESS WITH FIVE OR FEWER
EMPLOYEES THAT IS LOCATED IN NEW YORK STATE AND IS NOT PRIMARILY ENGAGED
IN REAL ESTATE, PROFESSIONAL SERVICES, OR FINANCIAL SERVICES;
(2) "PRINCIPAL OWNER" SHALL MEAN ONE OR MORE PERSONS WHO OWN AN AGGRE-
GATE OF TWENTY-FIVE PERCENT OR MORE OF THE MICRO-ENTERPRISE;
(3) "AT-RISK" SHALL MEAN THAT THE REPAYMENT OF THE INVESTMENT IS NOT
SECURED OR GUARANTEED AND IS ENTIRELY DEPENDENT ON THE SUCCESS OF THE
MICRO-ENTERPRISE;
(4) "QUALIFIED INVESTMENT" SHALL MEAN AN INVESTMENT IN A MICRO-ENTER-
PRISE THAT IS AT RISK, PROVIDED THE INVESTOR IS NOT A PRINCIPAL OWNER OF
THE MICRO-ENTERPRISE OR ANY RELATED PERSON AS DEFINED IN SECTION
465(B)(3)(C) OF THE INTERNAL REVENUE CODE AND IS NOT INVOLVED IN THE
OPERATION OF THE MICRO-ENTERPRISE AS A FULL-TIME PROFESSIONAL ACTIVITY,
AND PROVIDED FURTHER THAT THE INVESTMENT IN THE MICRO-ENTERPRISE IS
MAINTAINED FOR A MINIMUM OF THREE YEARS, AND PROVIDED FURTHER THAT THE
INVESTMENT IS USED BY THE MICRO-ENTERPRISE FOR CAPITAL IMPROVEMENTS,
MACHINERY AND EQUIPMENT, RESEARCH AND DEVELOPMENT, OR WORKING CAPITAL.
(B) A TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY
THIS ARTICLE. THE AMOUNT OF THE CREDIT SHALL BE TWENTY-FIVE PERCENT OF
THE QUALIFIED INVESTMENT, PROVIDED THAT FIFTEEN PERCENT OF THE QUALIFIED
INVESTMENT CAN BE TAKEN AS A CREDIT IN THE TAXABLE YEAR IN WHICH THE
INVESTMENT IS MADE AND FIVE PERCENT OF THE QUALIFIED INVESTMENT CAN BE
TAKEN AS A CREDIT IN EACH OF THE NEXT TWO TAXABLE YEARS. THE TOTAL
AMOUNT OF CREDITS ALLOWABLE TO A TAXPAYER UNDER THIS PARAGRAPH FOR ALL
YEARS IS ONE HUNDRED FIFTY THOUSAND DOLLARS.
(C) IN NO EVENT SHALL THE CREDIT AND THE CARRYOVER OF SUCH CREDIT
ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR, IN THE AGGREGATE,
REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE HIGHER OF THE AMOUNTS
PRESCRIBED IN PARAGRAPHS (C) AND (D) OF SUBDIVISION ONE OF THIS SECTION.
HOWEVER, IF THE AMOUNT OF THE CREDIT OR CARRYOVERS OF SUCH CREDIT, OR
BOTH, ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE
TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT
THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE
FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR
SUCH YEAR OR YEARS.
S 3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
of the tax law, as amended by section 2 of part ZZ1 of chapter 57 of the
laws of 2008, is amended to read as follows:
(B) shall be treated as the owner of a new business with respect to
such share if the corporation qualifies as a new business pursuant to
paragraph (j) of subdivision twelve of section two hundred ten of this
chapter.
The corporation's credit base under
section two hundred ten or section
With respect to the following fourteen hundred fifty-six of this
credit under this section: chapter is:
(I) Investment tax credit Investment credit base
under subsection (a) or qualified
rehabilitation
A. 3068 3
expenditures under
subdivision twelve of
section two hundred ten
(II) Empire zone Cost or other basis
investment tax credit under subdivision
under subsection (j) twelve-B
of section two hundred
ten
(III) Empire zone Eligible wages under
wage tax credit subdivision nineteen of
under subsection (k) section two hundred ten
or subsection (e) of
section fourteen hundred
fifty-six
(IV) Empire zone Qualified investments
capital tax credit and contributions under
under subsection (l) subdivision twenty of
section two hundred ten
or subsection (d) of
section fourteen hundred
fifty-six
(V) Agricultural property tax Allowable school
credit under subsection (n) district property taxes under
subdivision twenty-two of
section two hundred ten
(VI) Credit for employment Qualified first-year wages or
of persons with dis- qualified second-year wages
abilities under under subdivision
subsection (o) twenty-three of section
two hundred ten
or subsection (f)
of section fourteen
hundred fifty-six
(VII) Employment incentive Applicable investment credit
credit under subsec- base under subdivision
tion (a-1) twelve-D of section two
hundred ten
(VIII) Empire zone Applicable investment
employment credit under sub-
incentive credit under division twelve-C
subsection (j-1) of section two hundred ten
(IX) Alternative fuels credit Cost under subdivision
under subsection (p) twenty-four of section two
hundred ten
(X) Qualified emerging Applicable credit base
technology company under subdivision twelve-E
A. 3068 4
employment credit of section two hundred ten
under subsection (q)
(XI) Qualified emerging Qualified investments under
technology company subdivision twelve-F of
capital tax credit section two hundred ten
under subsection (r)
(XII) Credit for purchase of an Cost of an automated
automated external defibrillator external defibrillator under
under subsection (s) subdivision twenty-five of
section two hundred ten
or subsection (j) of section
fourteen hundred fifty-six
(XIII) Low-income housing Credit amount under
credit under subsection (x) subdivision thirty
of section two hundred ten or
subsection (l) of section
fourteen hundred fifty-six
(XIV) Credit for transportation Amount of credit under sub-
improvement contributions division thirty-two of section
under subsection (z) two hundred ten or subsection
(n) of section fourteen
hundred fifty-six
(XV) QEZE credit for real property Amount of credit under
taxes under subsection (bb) subdivision twenty-seven of
section two hundred ten or
subsection (o) of section
fourteen hundred fifty-six
(XVI) QEZE tax reduction credit Amount of benefit period
under subsection (cc) factor, employment increase factor
and zone allocation
factor (without regard
to pro ration) under
subdivision twenty-eight of
section two hundred ten or
subsection (p) of section
fourteen hundred fifty-six
and amount of tax factor
as determined under
subdivision (f) of section sixteen
(XVII) Green building credit Amount of green building credit
under subsection (y) under subdivision thirty-one
of section two hundred ten
or subsection (m) of section
fourteen hundred fifty-six
(XVIII) Credit for long-term Qualified costs under
care insurance premiums subdivision twenty-five-a of
under subsection (aa) section two hundred ten
or subsection (k) of section
A. 3068 5
fourteen hundred fifty-six
(XIX) Brownfield redevelopment Amount of credit
credit under subsection under subdivision
(dd) thirty-three of section
two hundred ten
or subsection (q) of
section fourteen hundred
fifty-six
(XX) Remediated brownfield Amount of credit under
credit for real property subdivision thirty-four
taxes for qualified of section two hundred
sites under subsection ten or subsection (r) of
(ee) section fourteen hundred
fifty-six
(XXI) Environmental Amount of credit under
remediation subdivision thirty-five of
insurance credit under section two hundred
subsection (ff) ten or subsection
(s) of section
fourteen hundred
fifty-six
(XXII) Empire state film Amount of credit for
production credit under qualified production costs in
subsection (gg) production of a qualified film
under subdivision thirty-six
of section two hundred ten
(XXIII) Qualified emerging Qualifying expenditures and
technology company facilities, development activities under
operations and training credit subdivision twelve-G of section
under subsection (nn) two hundred ten
(XXIV) Security training tax Amount of credit
credit under under subdivision thirty-seven
subsection (ii) of section two hundred ten or
under subsection (t) of
section fourteen hundred fifty-six
(XXV) Credit for qualified fuel Amount of credit under
cell electric generating equipment subdivision thirty-seven
expenditures under subsection (g-2) of section two hundred ten
or subsection (t) of
section fourteen hundred
fifty-six
(XXVI) Empire state commercial Amount of credit for
production credit under subsection qualified production
(jj) costs in production
of a qualified commercial under
subdivision thirty-eight of
section two hundred ten
A. 3068 6
(XXVII) Biofuel production Amount of credit
tax credit under under subdivision
subsection (jj) thirty-eight of
section two hundred ten
(XXVIII) Clean heating fuel credit Amount of credit under
under subsection (mm) subdivision thirty-nine of
section two hundred ten
(XXIX) Credit for rehabilitation Amount of credit under
of historic properties subdivision forty of
under subsection (oo) [subsection] SECTION two hundred ten
(XXX) Credit for companies who Amount of credit under
provide transportation subdivision forty of
to individuals section two hundred ten
with disabilities
under subsection (oo)
(XXXI) NEW YORK MICRO- AMOUNT OF CREDIT UNDER
ENTERPRISE INVESTOR SUBDIVISION FORTY-ONE OF
TAX CREDIT UNDER SECTION TWO HUNDRED TEN
SUBSECTION (QQ)
S 4. Section 606 of the tax law is amended by adding a new subsection
(qq) to read as follows:
(QQ) NEW YORK MICRO-ENTERPRISE INVESTOR TAX CREDIT. (1) FOR THE
PURPOSES OF THIS SUBSECTION THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING
MEANINGS:
(A) "MICRO-ENTERPRISE" SHALL MEAN A BUSINESS WITH FIVE OR FEWER
EMPLOYEES THAT IS LOCATED IN NEW YORK STATE AND IS NOT PRIMARILY ENGAGED
IN REAL ESTATE, PROFESSIONAL SERVICES, OR FINANCIAL SERVICES;
(B) "PRINCIPAL OWNER" SHALL MEAN ONE OR MORE PERSONS WHO OWN AN AGGRE-
GATE OF TWENTY-FIVE PERCENT OR MORE OF THE MICRO-ENTERPRISE;
(C) "AT-RISK" SHALL MEAN THAT THE REPAYMENT OF THE INVESTMENT IS NOT
SECURED OR GUARANTEED AND IS ENTIRELY DEPENDENT ON THE SUCCESS OF THE
MICRO-ENTERPRISE;
(D) "QUALIFIED INVESTMENT" SHALL MEAN AN INVESTMENT IN A MICRO-ENTER-
PRISE THAT IS AT RISK, PROVIDED THE INVESTOR IS NOT A PRINCIPAL OWNER OF
THE MICRO-ENTERPRISE OR ANY RELATED PERSON AS DEFINED IN SECTION
465(B)(3)(C) OF THE INTERNAL REVENUE CODE AND IS NOT INVOLVED IN THE
OPERATION OF THE MICRO-ENTERPRISE AS A FULL-TIME PROFESSIONAL ACTIVITY,
AND PROVIDED FURTHER THAT THE INVESTMENT IN THE MICRO-ENTERPRISE IS
MAINTAINED FOR A MINIMUM OF THREE YEARS, AND PROVIDED FURTHER THAT THE
INVESTMENT IS USED BY THE MICRO-ENTERPRISE FOR CAPITAL IMPROVEMENTS,
MACHINERY AND EQUIPMENT, RESEARCH AND DEVELOPMENT, OR WORKING CAPITAL.
(2) A TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY
THIS ARTICLE. THE AMOUNT OF THE CREDIT SHALL BE TWENTY-FIVE PERCENT OF
THE QUALIFIED INVESTMENT, PROVIDED THAT FIFTEEN PERCENT OF THE QUALIFIED
INVESTMENT CAN BE TAKEN AS A CREDIT IN THE TAXABLE YEAR IN WHICH THE
INVESTMENT IS MADE AND FIVE PERCENT OF THE QUALIFIED INVESTMENT CAN BE
TAKEN AS A CREDIT IN EACH OF THE NEXT TWO TAXABLE YEARS. THE TOTAL
AMOUNT OF CREDITS ALLOWABLE TO A TAXPAYER UNDER THIS PARAGRAPH FOR ALL
YEARS IS ONE HUNDRED FIFTY THOUSAND DOLLARS.
(3) IF THE AMOUNT OF THE CREDIT AND THE CARRYOVERS OF SUCH CREDIT
ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR, IN THE AGGREGATE,
A. 3068 7
SHALL EXCEED TAXPAYER'S TAX FOR SUCH YEAR, ANY AMOUNT OF THE CREDIT OR
CARRYOVERS OF SUCH CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY
BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM
THE TAX FOR SUCH YEAR OR YEARS.
S 5. This act shall take effect immediately; provided, however, that
the empire state film production credit under subsection (gg), the
empire state commercial production credit under subsection (jj) and the
credit for companies who provide transportation to individuals with
disabilities under subsection (oo) of section 606 of the tax law
contained in section three of this act shall expire on the same date as
provided in section 9 of part P of chapter 60 of the laws of 2004, as
amended, section 10 of part V of chapter 62 of the laws of 2006, as
amended and section 5 of chapter 522 of the laws of 2006, as amended,
respectively.