S T A T E   O F   N E W   Y O R K
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                                  4156

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                            February 1, 2011
                               ___________

Introduced  by M. of A. MORELLE -- read once and referred to the Commit-
  tee on Ways and Means

AN ACT to amend the tax law, in relation to establishing  a  credit  for
  employers  for  wages  associated with information technology security
  employees, and providing a deduction for businesses for  the  expenses
  of certain other security-related measures

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

  Section 1. The tax law is amended by adding a new section 35  to  read
as follows:
  S  35.  INFORMATION  TECHNOLOGY SECURITY WAGE CREDIT. (A) ALLOWANCE OF
CREDIT. A TAXPAYER WHICH IS SUBJECT TO TAX UNDER ARTICLE  NINE-A,  TWEN-
TY-TWO,  THIRTY-TWO,  OR THIRTY-THREE OF THIS CHAPTER SHALL BE ALLOWED A
CREDIT AGAINST SUCH TAX, PURSUANT TO THE PROVISIONS REFERENCED IN SUBDI-
VISION (E) OF THIS SECTION, TO BE COMPUTED AS  PROVIDED  IN  SUBDIVISION
(D) OF THIS SECTION.
  (B)  QUALIFIED  EMPLOYEE.  THE  TERM "QUALIFIED EMPLOYEE" SHALL MEAN A
PERSON HIRED AND EMPLOYED FOR THE SOLE PURPOSE OF PROVIDING  INFORMATION
TECHNOLOGY SECURITY.
  (C) QUALIFIED INFORMATION SECURITY WAGES. THE TERM "QUALIFIED INFORMA-
TION  SECURITY  WAGES"  SHALL  MEAN  THE TOTAL AMOUNT OF THE SALARIES OR
WAGES PAID TO QUALIFIED EMPLOYEES DURING A TAXABLE YEAR.
  (D) AMOUNT OF CREDIT. THE AMOUNT  OF  THE  CREDIT  SHALL  EQUAL  FIFTY
PERCENT OF THE TOTAL AMOUNT OF QUALIFIED INFORMATION SECURITY WAGES PAID
TO QUALIFIED EMPLOYEES.
  (E)  CROSS-REFERENCES.  FOR  APPLICATION OF THE CREDIT PROVIDED FOR IN
THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
  (1) SUBDIVISION FORTY-THREE OF SECTION TWO HUNDRED TEN OF  THIS  CHAP-
TER;
  (2) SUBSECTION (SS) OF SECTION SIX HUNDRED SIX OF THIS CHAPTER;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05488-01-1

              

A. 4156                             2

  (3) SUBSECTION (X) OF SECTION FOURTEEN HUNDRED FIFTY-SIX OF THIS CHAP-
TER;
  (4)  SUBDIVISION  (AA) OF SECTION FIFTEEN HUNDRED ELEVEN OF THIS CHAP-
TER.
  S 2. Paragraph (a) of subdivision 9 of section 208 of the tax  law  is
amended by adding a new subparagraph 18 to read as follows:
  (18)  THE AMOUNT DEDUCTIBLE PURSUANT TO PARAGRAPH (R) OF THIS SUBDIVI-
SION.
  S 3. Subdivision 9 of section 208 of the tax law is amended by  adding
a new paragraph (r) to read as follows:
  (R)  (A)  FOR THE PURPOSES OF THIS PARAGRAPH THE FOLLOWING TERMS SHALL
HAVE THE FOLLOWING DEFINITIONS:
  (I) "BUSINESS" MEANS BOTH PRIVATE AND NOT-FOR-PROFIT BUSINESSES.
  (II) "INFORMATION TECHNOLOGY  SECURITY  SOFTWARE  OR  HARDWARE"  MEANS
COMPUTER  SOFTWARE  OR HARDWARE THAT IS USED TO PROTECT AGAINST COMPUTER
VIRUSES, WORMS OR DELETERIOUS INSTRUCTIONS AND SOFTWARE OR PRODUCTS THAT
PROTECT AGAINST COMPUTER HACKING OR COMPUTER WORMS OR VIRUSES.
  (B) ANY BUSINESS THAT PURCHASES AND  INSTALLS  INFORMATION  TECHNOLOGY
SOFTWARE  OR HARDWARE MAY DEDUCT FIFTY PERCENT OF THE FULL AMOUNT OF THE
EXPENSES RELATED TO THE PURCHASE AND INSTALLATION OF  SUCH  SOFTWARE  OR
HARDWARE WITHIN THE APPLICABLE TAXABLE YEAR.
  (C)  THE  COMMISSIONER  SHALL  PROMULGATE RULES AND REGULATIONS DEEMED
NECESSARY TO CARRY OUT THE  PROVISIONS  OF  THIS  PARAGRAPH  BY  JANUARY
FIRST, TWO THOUSAND TWELVE.
  (D)  THE  PROVISIONS  OF  THIS  PARAGRAPH SHALL APPLY TO TAXABLE YEARS
BEGINNING ON AND AFTER JANUARY FIRST, TWO THOUSAND TWELVE.
  S 4. Section 210 of the tax law is amended by adding a new subdivision
43 to read as follows:
  43. INFORMATION TECHNOLOGY SECURITY  WAGE  CREDIT.  (A)  ALLOWANCE  OF
CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED
IN  SECTION  THIRTY-FIVE  OF  THIS CHAPTER, AGAINST THE TAXES IMPOSED BY
THIS ARTICLE.
  (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER  THIS  SUBDIVISION
FOR  ANY TAXABLE YEAR SHALL NOT 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 CREDIT
ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE  TAX  TO
SUCH  AMOUNT,  ANY  AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE
YEAR SHALL BE TREATED AS  AN  OVERPAYMENT  OF  TAX  TO  BE  CREDITED  OR
REFUNDED  IN  ACCORDANCE  WITH  THE  PROVISIONS  OF SECTION ONE THOUSAND
EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
SUBSECTION  (C)  OF  SECTION  ONE  THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
  S 5. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
of  the  tax  law  is  amended by adding a new clause (xxxii) to read as
follows:

(XXXII) INFORMATION                  AMOUNT OF CREDIT UNDER
TECHNOLOGY  SECURITY                 SUBDIVISION FORTY-THREE OF
WAGE CREDIT UNDER                    SECTION TWO HUNDRED TEN OR
SUBSECTION (SS)                      SUBSECTION (X) OF SECTION
                                     FOURTEEN HUNDRED FIFTY-SIX
  S 6. Section 606 of the tax law is amended by adding a new  subsection
(ss) to read as follows:

A. 4156                             3

  (SS)  INFORMATION  TECHNOLOGY  SECURITY  WAGE CREDIT. (1) ALLOWANCE OF
CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED
IN SECTION THIRTY-FIVE OF THIS CHAPTER, AGAINST  THE  TAXES  IMPOSED  BY
THIS ARTICLE.
  (2)  APPLICATION  OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWED UNDER
THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR
SUCH YEAR, THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF  TAX  TO  BE
CREDITED  OR  REFUNDED  IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX
HUNDRED EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER, THAT NO  INTEREST
SHALL BE PAID THEREON.
  S 7. Subsection (c) of section 612 of the tax law is amended by adding
a new paragraph 39 to read as follows:
  (39)  THE  AMOUNT  DEDUCTIBLE PURSUANT TO PARAGRAPH (R) OF SUBDIVISION
NINE OF SECTION TWO HUNDRED EIGHT OF THIS CHAPTER.
  S 8. Subsection (e) of section 1453 of  the  tax  law  is  amended  by
adding a new paragraph 19 to read as follows:
  (19)  THE  AMOUNT  DEDUCTIBLE PURSUANT TO PARAGRAPH (R) OF SUBDIVISION
NINE OF SECTION TWO HUNDRED EIGHT OF THIS CHAPTER.
  S 9. Section 1456 of the tax law is amended by adding a new subsection
(x) to read as follows:
  (X) INFORMATION TECHNOLOGY SECURITY  WAGE  CREDIT.  (1)  ALLOWANCE  OF
CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED
IN  SECTION  THIRTY-FIVE  OF  THIS CHAPTER, AGAINST THE TAXES IMPOSED BY
THIS ARTICLE.
  (2) APPLICATION OF CREDIT. THE CREDIT ALLOWED  UNDER  THIS  SUBSECTION
FOR  ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE MINIMUM TAX FIXED BY SUBSECTION (B) OF SECTION FOURTEEN HUNDRED
FIFTY-FIVE OF THIS ARTICLE. HOWEVER, IF THE  AMOUNT  OF  CREDIT  ALLOWED
UNDER  THIS  SUBSECTION  FOR  ANY  TAXABLE  YEAR REDUCES THE TAX TO SUCH
AMOUNT, THEN ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE  IN  SUCH  TAXABLE
YEAR  SHALL  BE  TREATED  AS  AN  OVERPAYMENT  OF  TAX TO BE CREDITED OR
REFUNDED IN ACCORDANCE WITH  THE  PROVISIONS  OF  SECTION  ONE  THOUSAND
EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
SUBSECTION (C) OF SECTION ONE  THOUSAND  EIGHTY-EIGHT  OF  THIS  CHAPTER
NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
  S  10.  Paragraph 3 of subdivision (b) of section 1503 of the tax law,
as amended by chapter 61 of the laws of 1989,  is  amended  to  read  as
follows:
  (3)  In  determining  entire net income, there shall be subtracted, to
the extent not deductible in determining federal taxable income:
  (A) interest on indebtedness incurred  or  continued  to  purchase  or
carry  obligations or securities the income from which is subject to tax
under this article but exempt from federal income tax;
  (B) ordinary and necessary expenses paid or incurred during the  taxa-
ble year attributable to income which is subject to tax under this arti-
cle but exempt from federal income tax; [and]
  (C)  the amortizable bond premium for the taxable year on any bond the
interest on which is subject to tax under this article but  exempt  from
federal income tax; AND
  (D)  THE  AMOUNT  DEDUCTIBLE  PURSUANT TO PARAGRAPH (R) OF SUBDIVISION
NINE OF SECTION TWO HUNDRED EIGHT OF THIS CHAPTER.
  S 11. Section 1511 of the tax law is amended by adding a new  subdivi-
sion (aa) to read as follows:
  (AA)  INFORMATION  TECHNOLOGY  SECURITY  WAGE CREDIT. (1) ALLOWANCE OF
CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED

A. 4156                             4

IN SECTION THIRTY-FIVE OF THIS CHAPTER, AGAINST  THE  TAXES  IMPOSED  BY
THIS ARTICLE.
  (2)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO  LESS
THAN  THE  MINIMUM FIXED BY PARAGRAPH FOUR OF SUBDIVISION (A) OF SECTION
FIFTEEN HUNDRED TWO OF THIS ARTICLE. HOWEVER, IF THE  AMOUNT  OF  CREDIT
ALLOWED  UNDER  THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX TO
SUCH AMOUNT, THEN ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXA-
BLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX  TO  BE  CREDITED  OR
REFUNDED  IN  ACCORDANCE  WITH  THE  PROVISIONS  OF SECTION ONE THOUSAND
EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
SUBSECTION  (C)  OF  SECTION  ONE  THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
  S 12. This act shall take effect immediately.