Senate Bill S2812A

                                 BILL NUMBER:  S2812A

 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 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 :

2013-14 S.2021A/A.1929A;
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, 2017.