S T A T E O F N E W Y O R K
________________________________________________________________________
4420--A
2017-2018 Regular Sessions
I N A S S E M B L Y
February 2, 2017
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Introduced by M. of A. SCHIMMINGER, JAFFEE, MAGNARELLI, BLAKE, STIRPE,
RIVERA, ENGLEBRIGHT, SKARTADOS, VANEL -- Multi-Sponsored by -- M. of
A. ABBATE, COOK, SOLAGES, THIELE -- read once and referred to the
Committee on Ways and Means -- recommitted to the Committee on Ways
and Means in accordance with Assembly Rule 3, sec. 2 -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
AN ACT to amend the tax law, in relation to the creation of a biotech-
nology research and development investment tax credit
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 24-b to read
as follows:
§ 24-B. BIOSCIENCE AND MEDICAL TECHNOLOGY (BIO/MED) RESEARCH AND
DEVELOPMENT TAX CREDIT. (A) DEFINITIONS. AS USED IN THIS SECTION, THE
FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
(1) "QUALIFIED BIO/MED RESEARCH AND DEVELOPMENT COSTS" MEANS QUALIFIED
RESEARCH EXPENSES AND BASIC RESEARCH PAYMENTS AS DEFINED IN SECTIONS 41
(B) AND (E) OF THE INTERNAL REVENUE CODE, EXCEPT IT DOES NOT INCLUDE
EXPENSES INCURRED FOR QUALIFIED RESEARCH OR BASIC RESEARCH CONDUCTED
OUTSIDE OF NEW YORK STATE, FOR PURPOSES OF DEVELOPING A PRODUCT OR PHAR-
MACEUTICAL, INSTRUMENT, APPARATUS, MACHINE, CONTRIVANCE, IMPLANT OR
OTHER SIMILAR OR RELATED ARTICLE, INCLUDING A COMPONENT PART OR ACCESSO-
RY THAT ARE APPLICABLE TO THE PREVENTION, TREATMENT OR CURE OF A DISEASE
OR CONDITION OF HUMAN BEINGS.
(2) "QUALIFIED BIO/MED COMPANY" IS A CORPORATION, PARTNERSHIP, LIMITED
PARTNERSHIP OR OTHER ENTITY WHICH IS ENGAGED IN THE PRODUCTION OF A
PRODUCT OR PHARMACEUTICAL, INSTRUMENT, APPARATUS, MACHINE, CONTRIVANCE,
IMPLANT OR OTHER SIMILAR OR RELATED ARTICLE, INCLUDING A COMPONENT PART
OR ACCESSORY THAT ARE APPLICABLE TO THE PREVENTION, TREATMENT OR CURE OF
A DISEASE OR CONDITION OF HUMAN BEINGS.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06143-03-8
A. 4420--A 2
(B) (1) ALLOWANCE OF CREDIT. A TAXPAYER WHICH IS A QUALIFIED BIO/MED
COMPANY, SOLE PROPRIETOR OR A MEMBER OF A PARTNERSHIP, AND WHICH IS
SUBJECT TO TAX UNDER ARTICLES NINE-A OR TWENTY-TWO OF THIS CHAPTER,
SHALL BE ALLOWED A CREDIT AGAINST SUCH TAX, PURSUANT TO THE PROVISIONS
REFERENCED IN SUBDIVISION (D) OF THIS SECTION, TO BE COMPUTED AS HEREIN-
AFTER PROVIDED.
(2) THE AMOUNT OF THE CREDIT SHALL BE THE PRODUCT (OR PRO RATA SHARE
OF THE PRODUCT, IN THE CASE OF A MEMBER OF A PARTNERSHIP) OF FIFTEEN
PERCENT AND THE QUALIFIED BIO/MED RESEARCH AND DEVELOPMENT COSTS PAID OR
INCURRED IN THE STATE. THE CREDIT SHALL BE ALLOWED FOR THE TAXABLE YEAR
IN WHICH THE QUALIFIED BIO/MED RESEARCH AND DEVELOPMENT ACTIVITY OCCURS.
IF THE AMOUNT OF THE CREDIT IS AT LEAST ONE MILLION DOLLARS BUT LESS
THAN FIVE MILLION DOLLARS, THE CREDIT SHALL BE CLAIMED OVER A TWO YEAR
PERIOD BEGINNING IN THE FIRST TAXABLE YEAR IN WHICH THE CREDIT MAY BE
CLAIMED AND IN THE NEXT SUCCEEDING TAXABLE YEAR, WITH ONE-HALF OF THE
AMOUNT OF CREDIT ALLOWED BEING CLAIMED IN EACH YEAR. IF THE AMOUNT OF
THE CREDIT IS AT LEAST FIVE MILLION DOLLARS, THE CREDIT SHALL BE CLAIMED
OVER A THREE YEAR PERIOD BEGINNING IN THE FIRST TAXABLE YEAR IN WHICH
THE CREDIT MAY BE CLAIMED AND IN THE NEXT TWO SUCCEEDING TAXABLE YEARS,
WITH ONE-THIRD OF THE AMOUNT OF THE CREDIT ALLOWED BEING CLAIMED IN EACH
YEAR.
(3) NO QUALIFIED BIO/MED RESEARCH AND DEVELOPMENT COSTS USED BY A
TAXPAYER EITHER AS THE BASIS FOR THE ALLOWANCE OF THE CREDIT PROVIDED
FOR UNDER THIS SECTION OR USED IN THE CALCULATION OF THE CREDIT PROVIDED
FOR UNDER THIS SECTION SHALL BE USED BY SUCH TAXPAYER TO CLAIM ANY OTHER
CREDIT ALLOWED PURSUANT TO THIS CHAPTER.
(C) CROSS-REFERENCES. FOR APPLICATION OF THE CREDIT PROVIDED FOR IN
THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
(1) ARTICLE 9-A: SECTION 210-B: SUBDIVISION 53.
(2) ARTICLE 22: SECTION 606: SUBSECTION (CCC).
(D) ALLOCATION OF CREDIT. (1) THE AGGREGATE AMOUNT OF TAX CREDITS
ALLOWED UNDER THIS SECTION, SUBDIVISION FIFTY-THREE OF SECTION TWO
HUNDRED TEN-B AND SUBSECTION (CCC) OF SECTION SIX HUNDRED SIX OF THIS
CHAPTER IN ANY CALENDAR YEAR SHALL BE FIFTY MILLION DOLLARS IN TWO THOU-
SAND EIGHTEEN, AND EACH SUCCEEDING YEAR UP TO AND INCLUDING TWO THOUSAND
TWENTY-ONE.
(2) FOR THE PERIOD TWO THOUSAND NINETEEN THROUGH TWO THOUSAND TWENTY-
TWO, IN ADDITION TO THE AMOUNT OF CREDIT ESTABLISHED IN PARAGRAPH ONE OF
THIS SUBDIVISION, A TAXPAYER SHALL BE ALLOWED A CREDIT EQUAL TO THE
PRODUCT (OR PRO RATA SHARE OF THE PRODUCT, IN THE CASE OF A MEMBER OF A
PARTNERSHIP) OF FIVE PERCENT AND THE AMOUNT OF THE QUALIFIED BIO/MED
RESEARCH AND DEVELOPMENT COSTS BY A QUALIFIED BIO/MED COMPANY IN ONE OF
THE COUNTIES SPECIFIED IN THIS PARAGRAPH. FOR PURPOSES OF THIS ADDI-
TIONAL CREDIT, THE SERVICES MUST BE PERFORMED OR THE PERSONAL PROPERTY
MUST BE INSTALLED IN ONE OR MORE OF THE FOLLOWING COUNTIES: ALBANY,
ALLEGANY, BROOME, CATTARAUGUS, CAYUGA, CHAUTAUQUA, CHEMUNG, CHENANGO,
CLINTON, COLUMBIA, CORTLAND, DELAWARE, DUTCHESS, ERIE, ESSEX, FRANKLIN,
FULTON, GENESEE, GREENE, HAMILTON, HERKIMER, JEFFERSON, LEWIS, LIVING-
STON, MADISON, MONROE, MONTGOMERY, NIAGARA, ONEIDA, ONONDAGA, ONTARIO,
ORLEANS, OSWEGO, OTSEGO, RENSSELAER, SARATOGA, SCHENECTADY, SCHOHARIE,
SCHUYLER, SENECA, ST. LAWRENCE, STEUBEN, SULLIVAN, TIOGA, TOMPKINS,
ULSTER, WARREN, WASHINGTON, WAYNE, WYOMING, OR YATES. THE AGGREGATE
AMOUNT OF TAX CREDITS ALLOWED PURSUANT TO THE AUTHORITY OF THIS PARA-
GRAPH SHALL BE TEN MILLION DOLLARS EACH YEAR DURING THE PERIOD TWO THOU-
SAND NINETEEN THROUGH TWO THOUSAND TWENTY-TWO OF THE ANNUAL ALLOCATION
MADE AVAILABLE TO THE PROGRAM PURSUANT TO THIS SUBDIVISION. IF THE TOTAL
A. 4420--A 3
AMOUNT OF ALLOCATED CREDITS APPLIED FOR UNDER THIS PARAGRAPH IN ANY YEAR
EXCEEDS THE AGGREGATE AMOUNT OF TAX CREDITS ALLOWED FOR SUCH YEAR UNDER
THIS PARAGRAPH, SUCH EXCESS SHALL BE TREATED AS HAVING BEEN APPLIED FOR
ON THE FIRST DAY OF THE NEXT YEAR. IF THE TOTAL AMOUNT OF ALLOCATED TAX
CREDITS APPLIED FOR UNDER THIS PARAGRAPH AT THE CONCLUSION OF ANY YEAR
IS LESS THAN TEN MILLION DOLLARS, THE REMAINDER SHALL BE TREATED AS PART
OF THE ANNUAL ALLOCATION MADE AVAILABLE TO THE PROGRAM PURSUANT TO
SUBDIVISION (D) OF THIS SECTION. HOWEVER, IN NO EVENT MAY THE TOTAL OF
THE CREDITS ALLOCATED UNDER THIS PARAGRAPH EXCEED TEN MILLION DOLLARS IN
ANY YEAR DURING THE PERIOD TWO THOUSAND NINETEEN THROUGH TWO THOUSAND
TWENTY-TWO.
§ 2. Section 210-B of the tax law is amended by adding a new subdivi-
sion 53 to read as follows:
53. BIO/MED RESEARCH AND DEVELOPMENT INVESTMENT CREDIT. A TAXPAYER
SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION TWEN-
TY-FOUR-B OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE. IN
NO EVENT SHALL THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE
YEAR REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE AMOUNT PRESCRIBED
IN PARAGRAPH (D) OF SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF THIS
ARTICLE. HOWEVER, IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT OR IF THE TAXPAYER
OTHERWISE PAYS TAX BASED ON THE FIXED DOLLAR MINIMUM AMOUNT, ANY AMOUNT
OF CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR SHALL BE TREATED AS
AN OVERPAYMENT OF TAX TO BE CREDITED 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.
§ 3. Section 606 of the tax law is amended by adding a new subsection
(ccc) to read as follows:
(CCC) BIO/MED RESEARCH AND DEVELOPMENT INVESTMENT CREDIT. A TAXPAYER
SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION TWEN-
TY-FOUR-B OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE. 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 ACCORD-
ANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED EIGHTY-SIX OF THIS ARTI-
CLE, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
§ 4. This act shall take effect immediately.