A. 6091 2
million dollars for the taxable year immediately preceding the year the
taxpayer is allowed a credit under this subdivision. For purposes of
this paragraph, the term "related member" shall have the same meaning as
set forth in clauses (A) and (B) of subparagraph one of paragraph (o) of
subdivision nine of section two hundred eight of this article, and the
term "affiliates" shall mean those corporations that are members of the
same affiliated group (as defined in section fifteen hundred four of the
internal revenue code) as the taxpayer.
(c) An eligible taxpayer shall be allowed a credit for eighteen per
centum of the cost or other basis for federal income tax purposes of
research and development property as defined in paragraph (b) of subdi-
vision twelve of this section that is acquired by the taxpayer by
purchase as defined in section 179(d) of the internal revenue code and
placed in service during the taxable year. Provided, however, for the
purposes of this paragraph only, an eligible taxpayer shall be allowed a
credit for such percentage of the (i) cost or other basis for federal
income tax purposes for property used in the testing or inspection of
materials and products,
(ii) the costs or expenses associated with quality control of the
research and development,
(iii) fees for use of sophisticated technology facilities and proc-
esses,
(iv) fees for the production or eventual commercial distribution of
materials and products resulting from the activities of an eligible
taxpayer as long as such activities [fall under the activities listed in
paragraph (b) of subdivision one of section thirty-one hundred two-e of
the public authorities law] ARE DIRECTLY RELATED TO THE PRIMARY PRODUCTS
AND SERVICES OF THE TAXPAYER CLASSIFIED AS EMERGING TECHNOLOGIES PURSU-
ANT TO THE PROVISIONS OF PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION
THIRTY-ONE HUNDRED TWO-E OF THE PUBLIC AUTHORITIES LAW. The costs,
expenses and other amounts for which a credit is allowed and claimed
under this paragraph shall not be used in the calculation of any other
credit allowed under this article.
(d) An eligible taxpayer shall be allowed a credit for nine per centum
of "qualified research expenses" paid or incurred by the taxpayer in the
taxable year. "Qualified research expenses" shall mean expenses associ-
ated with in-house research and processes, and costs associated with the
dissemination of the results of the products that directly result from
such research and development activities; provided, however, that such
costs shall not include advertising or promotion through media. In addi-
tion, costs associated with the preparation of patent applications,
patent application filing fees, patent research fees, patent examina-
tions fees, patent post allowance fees, patent maintenance fees, and
grant application expenses and fees shall be eligible for such credit.
In no case shall the credit allowed under this paragraph apply to
expenses for litigation or the challenge of another entity's intellectu-
al property rights, or for contract expenses involving outside paid
consultants.
(e) An eligible taxpayer shall be allowed a credit for qualified high-
technology training expenditures as described in this paragraph paid or
incurred by the taxpayer. (i) The amount of credit shall be one hundred
percent of the training expenses described in subparagraph (iii) of this
paragraph, subject to a limitation of no more than four thousand dollars
per employee per year for such training expenses.
(ii) Qualified high-technology training shall include a course or
courses taken and satisfactorily completed by an employee of the taxpay-
A. 6091 3
er at an accredited, degree granting post-secondary college or universi-
ty in New York state that (A) directly relates to the [activities
referred to in paragraph (b) of subdivision one of section thirty-one
hundred two-e of the public authorities law] PRIMARY PRODUCTS AND
SERVICES OF THE TAXPAYER CLASSIFIED AS EMERGING TECHNOLOGIES PURSUANT TO
THE PROVISIONS OF PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION THIRTY-ONE
HUNDRED TWO-E OF THE PUBLIC AUTHORITIES LAW, and
(B) is intended to upgrade, retrain or improve the productivity or
theoretical awareness of the employee. Such course or courses may
include, but are not limited to, instruction or research relating to
techniques, meta, macro, or micro-theoretical or practical knowledge
bases or frontiers, or ethical concerns related to such activities. Such
course or courses shall not include classes in the disciplines of
management, accounting or the law or any class designed to fulfill the
discipline specific requirements of a degree program at the associate,
baccalaureate, graduate or professional level of these disciplines.
Satisfactory completion of a course or courses shall mean the earning
and granting of credit or equivalent unit, with the attainment of a
grade of "B" or higher in a graduate level course or courses, a grade of
"C" or higher in an undergraduate level course or courses, or a similar
measure of competency for a course that is not measured according to a
standard grade formula.
(iii) Qualified high-technology training expenditures shall include
expenses for tuition and mandatory fees, software required by the insti-
tution, fees for textbooks or other literature required by the institu-
tion offering the course or courses, minus applicable scholarships and
tuition or fee waivers not granted by the taxpayer or any affiliates of
the taxpayer, that are paid or reimbursed by the taxpayer. Qualified
high-technology expenditures do not include room and board, computer
hardware or software not specifically assigned for such course or cours-
es, late-charges, fines or membership dues and similar expenses. Such
qualified expenditures shall not be eligible for the credit provided by
this section unless the employee for whom the expenditures are disbursed
is continuously employed by the taxpayer in a full-time, full-year posi-
tion primarily located at a qualified site during the period of such
coursework and lasting through at least one hundred eighty days after
the satisfactory completion of the qualifying course-work. Qualified
high-technology training expenditures shall not include expenses for
in-house or shared training outside of a New York state higher education
institution or the use of consultants outside of credit granting cours-
es, whether such consultants function inside of such higher education
institution or not.
(iv) If a taxpayer relocates from an academic business incubator
facility partnered with an accredited post-secondary education institu-
tion located within New York state, which provides space and business
support services to taxpayers, to another site, the credit provided in
this section shall be allowed for all expenditures referenced in subpar-
agraph (iii) of this paragraph paid or incurred in the two preceding
taxable years that the taxpayer was located in such an incubator facili-
ty for employees of the taxpayer who also relocate from said incubator
facility to such New York site and are employed and primarily located by
the taxpayer in New York. Such expenditures in the two preceding years
shall be added to the amounts otherwise qualifying for the credit
provided by this subdivision that were paid or incurred in the taxable
year that the taxpayer relocates from such a facility. Such expendi-
tures shall include expenses paid for an eligible employee who is a
A. 6091 4
full-time, full-year employee of said taxpayer during the taxable year
that the taxpayer relocated from an incubator facility notwithstanding
(i) that such employee was employed full or part-time as an officer,
staff-person or paid intern of the taxpayer when such taxpayer was
located at such incubator facility or (ii) that such employee was not
continuously employed when such taxpayer was located at the incubator
facility during the one hundred eighty day period referred to in subpar-
agraph (iii) of this paragraph, provided such employee received wages or
equivalent income for at least seven hundred fifty hours during any
twenty-four month period when the taxpayer was located at the incubator
facility. Such expenditures shall include payments made to such employee
after the taxpayer has relocated from the incubator facility for quali-
fied expenditures if such payments are made to reimburse an employee for
expenditures paid by the employee during such two preceding years. The
credit provided under this subparagraph shall be allowed in any taxable
year that the taxpayer qualifies as an eligible taxpayer.
(v) For purposes of this subdivision the term "academic year" shall
mean the annual period of sessions of a post-secondary college or
university.
(vi) For the purposes of this subdivision the term "academic incubator
facility" shall mean a facility providing low-cost space, technical
assistance, support services and educational opportunities, including
but not limited to central services provided by the manager of the
facility to the tenants of the facility, to an entity located in New
York state. Such entity's primary [activity] PRODUCTS AND SERVICES must
be [an activity described in] CLASSIFIED AS EMERGING TECHNOLOGIES PURSU-
ANT TO paragraph (b) of subdivision one of section thirty-one hundred
two-e of the public authorities law, and such entity must be in the
formative stage of development. The academic incubator facility and the
entity must act in partnership with an accredited post-secondary college
or university located in New York state. An academic incubator facili-
ty's mission shall be to promote job creation, entrepreneurship, tech-
nology transfer, and provide support services to incubator tenants,
including, but not limited to, business planning, management assistance,
financial-packaging, linkages to financing services, and coordinating
with other sources of assistance.
(f) An eligible taxpayer may claim credits under this subdivision for
four consecutive taxable years, except, if a taxpayer is located in an
academic incubator facility and relocates within New York state to a
nonacademic incubator site, then the taxpayer (i) may make a revocable
election to defer the credit provided under this subdivision to the
first taxable year beginning after the taxpayer relocates from an
academic incubator facility, and (ii) shall be eligible for such credit
for five consecutive taxable years. In no case shall the credit allowed
by this subdivision to a taxpayer exceed two hundred [and] fifty thou-
sand dollars per year. If the taxpayer is a partner in a partnership or
shareholder of a New York S corporation, then the limit imposed by the
preceding sentence shall be applied at the entity level, so that the
aggregate credit allowed to all the partners or shareholders of each
such entity in the taxable year does not exceed two hundred [and] fifty
thousand dollars.
(g) 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 subdi-
vision for any taxable year reduces the tax to such amount, any amount
A. 6091 5
of credit 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 ten hundred eighty-six of this chapter. Provided,
however, the provisions of subsection (c) of section ten hundred eight-
y-eight of this chapter notwithstanding, no interest shall be paid ther-
eon.
(h) The credit allowed under this subdivision shall not be applicable
for taxable years beginning on or after January first, two thousand
[twelve] SEVENTEEN.
S 2. Subsection (nn) of section 606 of the tax law, as amended by
section 1-a of part A of chapter 63 of the laws of 2005 and paragraph 6
as amended by section 3 of part A of chapter 57 of the laws of 2010, is
amended to read as follows:
(nn) Qualified emerging technology company facilities, operations and
training credit. (1) A taxpayer that is a qualified emerging technology
company pursuant to the provisions of [section thirty-one hundred two-e
(and specifically for the activities referenced in paragraph (b) of
subdivision one of such section thirty-one hundred two-e) of the public
authorities law, and that meets the eligibility requirements in] para-
graph two of this subsection, AND WHOSE PRIMARY PRODUCTS AND SERVICES
ARE CLASSIFIED AS EMERGING TECHNOLOGIES PURSUANT TO THE PROVISIONS OF
PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION THIRTY-ONE HUNDRED TWO-E OF
THE PUBLIC AUTHORITIES LAW, shall be allowed a credit against the tax
imposed by this article. The amount of credit shall be equal to the sum
(or pro rata share of the sum in the case of a partnership) of the
amounts specified in paragraphs three, four, and five of this
subsection, subject to the limitations in paragraph six of this
subsection.
(2) An eligible taxpayer shall (i) have no more than one hundred full-
time employees, of which at least seventy-five percent are employed in
New York state,
(ii) have a ratio of research and development funds to net sales, as
referred to in section thirty-one hundred two-e of the public authori-
ties law, which equals or exceeds six percent during its taxable year,
[and]
(iii) HAVE TOTAL ANNUAL PRODUCT SALES OF TEN MILLION DOLLARS OR LESS,
AND
(IV) have gross revenues, along with the gross revenues of its affil-
iates and related members, not exceeding twenty million dollars for the
taxable year immediately preceding the year the taxpayer is allowed a
credit under this subsection. For purposes of this paragraph, the term
"related member" shall have the same meaning as set forth in clauses (A)
and (B) of subparagraph one of paragraph (o) of subdivision 9 of section
two hundred eight of this chapter, and the term "affiliates" shall mean
those corporations that are members of the same affiliated group (as
defined in section fifteen hundred four of the internal revenue code) as
the taxpayer.
(3) An eligible taxpayer shall be allowed a credit for eighteen per
centum of the cost or other basis for federal income tax purposes of
research and development property as defined in subparagraph (B) of
paragraph two of subsection (a) of this section that is acquired by the
taxpayer by purchase as defined in section 179(d) of the internal reven-
ue code and is placed in service during the taxable year. Provided,
however, for the purposes of this paragraph only, an eligible taxpayer
shall be allowed a credit for such percentage of the (i) cost or other
A. 6091 6
basis for federal income purposes for property used in the testing or
inspection of materials and products,
(ii) the costs or expenses associated with quality control of the
research and development,
(iii) fees for use of sophisticated technology facilities and proc-
esses, and
(iv) fees for production or eventual commercial distribution of mate-
rials and products resulting from the activities of an eligible taxpayer
as long as such activities [fall under the activities listed in para-
graph (b) of subdivision one of section thirty-one hundred two-e of the
public authorities law] ARE DIRECTLY RELATED TO THE PRIMARY PRODUCTS AND
SERVICES OF THE TAXPAYER CLASSIFIED AS EMERGING TECHNOLOGIES PURSUANT TO
THE PROVISIONS OF PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION THREE
THOUSAND ONE HUNDRED TWO-E OF THE PUBLIC AUTHORITIES LAW. The costs,
expenses and other amounts for which a credit is allowed and claimed
under this paragraph shall not be used in the calculation of any other
credit allowed under this article.
(4) An eligible taxpayer shall be allowed a credit for nine percentum
of "qualified research expenses", paid or incurred by the taxpayer in
the taxable year. "Qualified research expenses" shall mean expenses
associated with in-house research, use of sophisticated technology
facilities and processes, and costs associated with the dissemination of
the results of the products that directly result from such research and
development activities; provided, however, that such costs shall not
include advertising or promotion through media. In addition, costs asso-
ciated with the preparation of patent applications, patent application
filing fees, patent research fees, patent examinations fees, patent post
allowance fees, patent maintenance fees, and grant application expenses
and fees shall be eligible for such credit. In no case shall the credit
allowed by this paragraph apply to expenses for litigation or the chal-
lenge of another entity's intellectual property rights, or for contract
expenses involving outside paid consultants.
(5) An eligible taxpayer shall be allowed a credit for qualified high-
technology training expenditures as described in this paragraph paid or
incurred by the taxpayer.
(a) The amount of credit shall be one hundred percent of the training
expenses described in subparagraph (c) of this paragraph, subject to a
limitation of no more than four thousand dollars per employee per year
for such training expenses.
(b) Qualified high-technology training shall include a course or
courses taken and satisfactorily completed by an employee of the taxpay-
er at an accredited, degree granting post-secondary college or universi-
ty in New York state that
(i) directly relates to the [activities referred to in paragraph (b)
of subdivision one of section thirty-one hundred two-e of the public
authorities law] PRIMARY PRODUCTS AND SERVICES OF THE TAXPAYER CLASSI-
FIED AS EMERGING TECHNOLOGIES PURSUANT TO THE PROVISIONS OF PARAGRAPH
(B) OF SUBDIVISION ONE OF SECTION THIRTY-ONE HUNDRED TWO-E OF THE PUBLIC
AUTHORITIES LAW, and
(ii) is intended to upgrade, retrain or improve the productivity or
theoretical awareness of the employee. Such course or courses may
include, but are not limited to, instruction or research relating to
techniques, meta, macro, or micro-theoretical or practical knowledge
bases or frontiers, or ethical concerns related to such activities. Such
course or courses shall not include classes in the disciplines of
management, accounting or the law or any class designed to fulfill the
A. 6091 7
discipline specific requirements of a degree program at the associate,
baccalaureate, graduate or professional level of these disciplines.
Satisfactory completion of a course or courses shall mean the earning
and granting of credit or equivalent unit, with the attainment of a
grade of "B" or higher in a graduate level course or courses, a grade of
"C" or higher in an undergraduate level course or courses, or a similar
measure of competency for a course that is not measured according to a
standard grade formula.
(c) Qualified high-technology training expenditures shall include
expenses for tuition and mandatory fees, and software required by the
institution, fees for textbooks or other literature required by the
institution offering the course or courses, minus applicable scholar-
ships and tuition or fee waivers not granted by the taxpayer or any
affiliate of the taxpayer, paid or reimbursed by the taxpayer. Quali-
fied high technology expenditures do not include room and board, comput-
er hardware or software not specifically assigned for such course or
courses, late-charges, fines or membership dues and similar expenses.
Such qualified expenditures shall not be eligible for the credit allowed
by this subsection unless the employee for whom the expenditures are
disbursed is continuously employed by the taxpayer in a full-time, full-
year position primarily located at a qualified site during the period of
such coursework and lasting through at least one hundred [and] eighty
days after the satisfactory completion of the qualifying course-work.
Qualified high-technology training expenditures shall not include
expenses for in house or shared training outside of a New York state
higher education institution or the use of consultants outside of credit
granting courses whether such consultants function inside of such higher
education institution or not.
(d) If a taxpayer relocates from an academic business incubator facil-
ity partnered with an accredited post-secondary education institution
located within New York state, which provides space and business support
services to taxpayers, to another site, the credit provided in this
subsection shall be allowed for all expenditures referenced in subpara-
graph (c) of this paragraph paid or incurred in the two preceding taxa-
ble years that the taxpayer was located in such an incubator facility
for employees of the taxpayer who also relocate from said incubator
facility to such New York site and are employed and primarily located by
the taxpayer in New York. Such expenditures in the two preceding years
shall be added to the amounts otherwise qualifying for the credit
provided by this subsection that were paid or incurred in the taxable
year that the taxpayer relocated from such a facility. Such expenditures
shall include expenses paid or incurred for an eligible employee who is
a full-time, full-year employee of said taxpayer during the taxable year
that the taxpayer relocated from an incubator facility notwithstanding
(i) that such employee was employed full or part-time as an officer,
staff-person or paid intern of the taxpayer when such taxpayer was
located at such incubator facility or (ii) that such employee was not
continuously employed when such taxpayer was located at the incubator
facility during the one hundred eighty day period referenced in subpara-
graph (c) of this paragraph, provided such employee received wages or
equivalent income for at least seven hundred fifty hours during any
twenty-four month period when the taxpayer was located at the incubator
facility. Such expenditures shall include payments made to such an
employee after the taxpayer has relocated from the incubator facility
for qualified expenditures if such payments are made to reimburse such
an employee for qualified expenditures paid by the employee during such
A. 6091 8
two preceding years. The credit provided under this subparagraph shall
be allowed, in any year that said taxpayer qualifies as an eligible
taxpayer.
(e) For purposes of this subsection the term "academic year" shall
mean the annual period of sessions of a post-secondary college or
university.
(f) For the purposes of this subsection the term "academic incubator
facility" shall mean a facility providing low-cost space, technical
assistance, support services and educational opportunities, including
but not limited to central services provided by the manager of the
facility to the tenants of the facility, to an entity located in New
York state. Such entity's primary [activity] PRODUCTS AND SERVICES must
be [an activity described in] CLASSIFIED AS EMERGING TECHNOLOGIES PURSU-
ANT TO paragraph (b) of subdivision one of section thirty-one hundred
two-e of the public authorities law, and such entity must be in the
formative stage of development. The academic incubator facility and the
entity must act in partnership with an accredited post-secondary college
or university located in New York state. An academic incubator facili-
ty's mission shall be to promote job creation, entrepreneurship, tech-
nology transfer, and provide support services to incubator tenants,
including, but not limited to, business planning, management assistance,
financial-packaging, linkages to financing services, and coordinating
with other sources of assistance.
(6) An eligible taxpayer may claim credits under this subsection for
four consecutive taxable years, except, if a taxpayer is located in an
academic incubator facility and relocates within New York state to a
nonacademic incubator site, then the taxpayer (i) may make a revocable
election to defer the credit provided under this subsection to the first
taxable year beginning after the taxpayer relocates from an academic
incubator facility, and (ii) shall be eligible for such credit for five
consecutive years. In no case shall the credit allowed by this
subsection to a taxpayer exceed two hundred fifty thousand dollars per
year. If the taxpayer is a partner in a partnership or shareholder of a
New York S corporation, then the limit imposed by the preceding sentence
shall be applied at the entity level, so that the aggregate credit
allowed to all the partners or shareholders of each such entity in the
taxable year does not exceed two hundred fifty thousand dollars.
(7) If the amount of 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.
(8) The credit allowed under this subsection shall not be applicable
for taxable years beginning on or after January first, two thousand
[twelve] EIGHTEEN.
S 3. This act shall take effect immediately and shall apply to taxable
years beginning on or after January 1, 2013.