Senate Bill S2021A

                                BILL NUMBER:S2021

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 facili-
ties

PURPOSE:   This legislation  is  consistent  with  our  state's  general
efforts  to  encourage the creation and growth of small business. Compa-
nies 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 commer-
              

cial product of value.

Efforts to develop research ides 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 ides/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:  2011-12 S.3175A/A.5027A; 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, 2013.