Senate Bill S3175A

                                BILL NUMBER:S3175

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 business. To help rescue 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:
2009-2010, S.1997; 2007-08, S.942B; 2005-06, S.1415A; 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, 2011.