Senate Bill S1997

                                 BILL NUMBER:  S1997

 TITLE OF BILL :

An act to amend the tax law, in relation to providing an exemption
from the tax on sales and the compensating use tax for certain
equipment purchased by companies located in academic incubator
facilities


 PURPOSE :

This legislation is consistent with our state's general efforts to
encourage the creation and growth of small business. Companies in
incubators, by their nature, are small and have limited resources.
This bill alleviates a small but significant tax burden on these firms
by exempting them from sales tax on equipment that costs $500 or more.

 SUMMARY OF PROVISIONS :

Section 1 of the bill amends section 1115 of the tax law which
provides companies that are located in an academic incubator facility
with a sales tax exemption for the purchase of equipment with a price
of $500 or more, and provides for the definition of an academic
incubator.

              

 JUSTIFICATION :

During the last decade, one of the most effective state tools used to
encourage job growth and creation has been its investment in high
technology incubators. Incubator facilities provide researchers and
entrepreneurs with the physical space and support staff necessary to
help transfer the technology developed in the laboratory into a
commercial product of value.

Efforts to develop research ideas into viable products are usually
done with limited resources.  Costs of operation must be kept at a
minimum to allow researchers the opportunity to advance their
theories. Incubators certainly provide low cost office space, however,
rents are not the only expense that these businesses incur. Equipment
costs can also be a major impediment to the success of the business.
To help reduce this cost this bill would exempt businesses located in
incubators from sales tax on equipment purchases. Taxing this
equipment is contrary to the general concept of incubators, which is
to reduce the cost associated with a start-up firm struggling to
develop its ideas/research into a product.

The amendment clarifies that the exemption is only for those companies
located in an academic incubator facility and the equipment be used in
the incubator facility.

 LEGISLATIVE HISTORY :

2007-08:   S.942-B
2005-06:   S.1415-A
2003-04:   S.485
2001-02:   S.2341

 FISCAL IMPLICATIONS :

Implementation: There would be some loss of state revenue.

 EFFECTIVE DATE :
This act shall take effect September 1, 2009.