S T A T E O F N E W Y O R K
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5403
2021-2022 Regular Sessions
I N S E N A T E
March 4, 2021
___________
Introduced by Sen. OBERACKER -- read twice and ordered printed, and when
printed to be committed to the Committee on Commerce, Economic Devel-
opment and Small Business
AN ACT to amend the economic development law and the tax law, in
relation to establishing the small business pandemic job retention tax
credit
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The economic development law is amended by adding a new
article 23 to read as follows:
ARTICLE 23
SMALL BUSINESS PANDEMIC JOB RETENTION TAX CREDIT PROGRAM
SECTION 450. SHORT TITLE.
451. STATEMENT OF LEGISLATIVE FINDINGS AND DECLARATION.
452. DEFINITIONS.
453. ELIGIBILITY CRITERIA.
454. APPLICATION AND APPROVAL PROCESS.
455. SMALL BUSINESS PANDEMIC JOB RETENTION TAX CREDIT.
456. POWERS AND DUTIES OF THE COMMISSIONER.
457. MAINTENANCE OF RECORDS.
458. REPORTING.
459. CAP ON TAX CREDIT.
§ 450. SHORT TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS
THE "SMALL BUSINESS PANDEMIC JOB RETENTION TAX CREDIT PROGRAM ACT".
§ 451. STATEMENT OF LEGISLATIVE FINDINGS AND DECLARATION. IT IS HEREBY
FOUND AND DECLARED THAT NEW YORK STATE NEEDS TO PROVIDE ASSISTANCE TO
SMALL BUSINESSES WHO HAVE SUFFERED ECONOMIC HARM AS A RESULT OF THE
COVID-19 PANDEMIC. THE SMALL BUSINESS PANDEMIC JOB RETENTION TAX CREDIT
PROGRAM IS DESIGNED TO PROVIDE RELIEF TO BUSINESSES WHO MAINTAINED
STAFFING LEVELS DESPITE SUFFERING SIGNIFICANT LOSS OF REVENUE DUE TO THE
PANDEMIC.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09365-01-1
S. 5403 2
§ 452. DEFINITIONS. FOR THE PURPOSES OF THIS ARTICLE:
1. "AVERAGE FULL-TIME EMPLOYMENT" SHALL MEAN THE AVERAGE NUMBER OF
FULL-TIME EQUIVALENT POSITIONS EMPLOYED BY AN ELIGIBLE BUSINESS ENTITY
DURING A GIVEN PERIOD.
2. "AVERAGE STARTING FULL-TIME EMPLOYMENT" SHALL BE CALCULATED AS THE
AVERAGE NUMBER OF FULL-TIME EQUIVALENT POSITIONS EMPLOYED BY A BUSINESS
ENTITY IN AN ELIGIBLE INDUSTRY BETWEEN JANUARY FIRST, TWO THOUSAND TWEN-
TY, AND MARCH FIRST, TWO THOUSAND TWENTY.
3. "AVERAGE ENDING FULL-TIME EMPLOYMENT" SHALL BE CALCULATED AS THE
AVERAGE NUMBER OF FULL-TIME EQUIVALENT POSITIONS EMPLOYED BY A BUSINESS
ENTITY IN AN ELIGIBLE INDUSTRY BETWEEN APRIL FIRST, TWO THOUSAND TWEN-
TY-ONE, AND DECEMBER THIRTY-FIRST, TWO THOUSAND TWENTY-ONE.
4. "CERTIFICATE OF TAX CREDIT" MEANS THE DOCUMENT ISSUED TO A BUSINESS
ENTITY BY THE DEPARTMENT AFTER THE DEPARTMENT HAS VERIFIED THAT THE
BUSINESS ENTITY HAS MET ALL APPLICABLE ELIGIBILITY CRITERIA IN THIS
ARTICLE. THE CERTIFICATE SHALL SPECIFY THE EXACT AMOUNT OF THE TAX CRED-
IT UNDER THIS ARTICLE THAT A BUSINESS ENTITY MAY CLAIM, PURSUANT TO
SECTION FOUR HUNDRED FIFTY-FIVE OF THIS ARTICLE.
§ 453. ELIGIBILITY CRITERIA. 1. TO BE ELIGIBLE FOR A TAX CREDIT UNDER
THE SMALL BUSINESS PANDEMIC JOB RETENTION TAX CREDIT PROGRAM, A BUSINESS
ENTITY MUST:
(A) BE A SMALL BUSINESS AS DEFINED IN SECTION ONE HUNDRED THIRTY-ONE
OF THIS CHAPTER AND HAVE FEWER THAN ONE HUNDRED FULL-TIME JOB EQUIV-
ALENTS IN NEW YORK STATE AS OF APRIL FIRST, TWO THOUSAND TWENTY-ONE;
(B) OPERATE A BUSINESS LOCATION IN NEW YORK STATE THAT CHARGES ADMIS-
SION AND/OR ACCEPTS PAYMENT FOR GOODS AND/OR SERVICES FROM IN-PERSON
CUSTOMERS;
(C) HAVE EXPERIENCED ECONOMIC HARM AS A RESULT OF THE COVID-19 EMER-
GENCY AS EVIDENCED BY A YEAR-TO-YEAR DECREASE OF AT LEAST FORTY PERCENT
IN NEW YORK STATE BETWEEN THE SECOND QUARTER OF TWO THOUSAND NINETEEN
AND THE SECOND QUARTER OF TWO THOUSAND TWENTY OR THE THIRD QUARTER OF
TWO THOUSAND NINETEEN AND THE THIRD QUARTER OF TWO THOUSAND TWENTY FOR
GROSS RECEIPTS; AND
(D) HAVE DEMONSTRATED A FLAT AVERAGE LEVEL OF EMPLOYEES, WHO HAVE BEEN
PAID WAGES AT A RATE EQUAL TO NO LESS THAN SEVENTY-FIVE PERCENT OF THEIR
RATE OF PAY DURING THE TIME PERIOD DESCRIBED IN SUBDIVISION TWO OF
SECTION FOUR HUNDRED FIFTY-TWO OF THIS ARTICLE.
2. A BUSINESS ENTITY MUST BE IN SUBSTANTIAL COMPLIANCE WITH ANY EMER-
GENCY RESTRICTIONS OR PUBLIC HEALTH ORDERS IMPACTING THE INDUSTRY SECTOR
OR OTHER LAWS AND REGULATIONS AS DETERMINED BY THE COMMISSIONER. IN
ADDITION, A BUSINESS ENTITY MAY NOT OWE PAST DUE STATE TAXES OR LOCAL
PROPERTY TAXES UNLESS THE BUSINESS ENTITY IS MAKING PAYMENTS AND COMPLY-
ING WITH AN APPROVED BINDING PAYMENT AGREEMENT ENTERED INTO WITH THE
TAXING AUTHORITY.
§ 454. APPLICATION AND APPROVAL PROCESS. 1. A BUSINESS ENTITY MUST
SUBMIT A COMPLETE APPLICATION AS PRESCRIBED BY THE COMMISSIONER.
2. THE COMMISSIONER SHALL ESTABLISH PROCEDURES AND A TIMEFRAME FOR
BUSINESS ENTITIES TO SUBMIT APPLICATIONS. AS PART OF THE APPLICATION,
EACH BUSINESS ENTITY MUST:
(A) PROVIDE EVIDENCE IN A FORM AND MANNER PRESCRIBED BY THE COMMIS-
SIONER OF ITS BUSINESS ELIGIBILITY;
(B) AGREE TO ALLOW THE DEPARTMENT OF TAXATION AND FINANCE TO SHARE THE
BUSINESS ENTITY'S TAX INFORMATION WITH THE DEPARTMENT; PROVIDED, HOWEV-
ER, THAT ANY INFORMATION SHARED AS A RESULT OF THE SMALL BUSINESS
PANDEMIC JOB RETENTION TAX CREDIT PROGRAM SHALL NOT BE AVAILABLE FOR
DISCLOSURE OR INSPECTION UNDER THE STATE FREEDOM OF INFORMATION LAW;
S. 5403 3
(C) AGREE TO ALLOW THE DEPARTMENT OF LABOR TO SHARE ITS TAX AND
EMPLOYER INFORMATION WITH THE DEPARTMENT; PROVIDED, HOWEVER, THAT ANY
INFORMATION SHARED AS A RESULT OF THE SMALL BUSINESS PANDEMIC JOB
RETENTION TAX CREDIT PROGRAM SHALL NOT BE AVAILABLE FOR DISCLOSURE OR
INSPECTION UNDER THE STATE FREEDOM OF INFORMATION LAW;
(D) ALLOW THE DEPARTMENT AND ITS AGENTS ACCESS TO ANY AND ALL BOOKS
AND RECORDS THE DEPARTMENT MAY REQUIRE TO MONITOR COMPLIANCE;
(E) CERTIFY THAT IT IS IN SUBSTANTIAL COMPLIANCE WITH ALL EMERGENCY
ORDERS OR PUBLIC HEALTH REGULATIONS CURRENTLY REQUIRED OF SUCH ENTITY,
AND LOCAL AND STATE TAX LAWS; AND
(F) AGREE TO PROVIDE ANY ADDITIONAL INFORMATION REQUIRED BY THE
DEPARTMENT RELEVANT TO THIS ARTICLE.
3. AFTER REVIEWING A BUSINESS ENTITY'S COMPLETED FINAL APPLICATION AND
DETERMINING THAT THE BUSINESS ENTITY MEETS THE ELIGIBILITY CRITERIA AS
SET FORTH IN THIS ARTICLE, THE DEPARTMENT MAY ISSUE TO THAT BUSINESS
ENTITY A CERTIFICATE OF TAX CREDIT. A BUSINESS ENTITY MAY CLAIM THE TAX
CREDIT IN THE TAXABLE YEAR THAT INCLUDES DECEMBER THIRTY-FIRST, TWO
THOUSAND TWENTY-ONE.
§ 455. SMALL BUSINESS PANDEMIC JOB RETENTION TAX CREDIT. 1. A BUSINESS
ENTITY IN THE SMALL BUSINESS PANDEMIC JOB RETENTION TAX CREDIT PROGRAM
THAT MEETS THE ELIGIBILITY REQUIREMENTS OF SECTION FOUR HUNDRED FIFTY-
THREE OF THIS ARTICLE MAY BE ELIGIBLE TO CLAIM A CREDIT OF UP TO TEN
THOUSAND DOLLARS.
2. A BUSINESS ENTITY, INCLUDING A PARTNERSHIP, LIMITED LIABILITY
COMPANY AND SUBCHAPTER S CORPORATION, MAY NOT RECEIVE IN EXCESS OF TEN
THOUSAND DOLLARS IN TAX CREDITS UNDER THIS PROGRAM.
3. THE CREDIT SHALL BE ALLOWED AS PROVIDED IN SECTION FORTY-FIVE,
SUBDIVISION FIFTY-FIVE OF SECTION TWO HUNDRED TEN-B AND SUBSECTION (KKK)
OF SECTION SIX HUNDRED SIX OF THE TAX LAW.
§ 456. POWERS AND DUTIES OF THE COMMISSIONER. 1. THE COMMISSIONER MAY
PROMULGATE REGULATIONS ESTABLISHING AN APPLICATION PROCESS AND ELIGIBIL-
ITY CRITERIA, THAT WILL BE APPLIED CONSISTENT WITH THE PURPOSES OF THIS
ARTICLE, SO AS NOT TO EXCEED THE ANNUAL CAP ON TAX CREDITS SET FORTH IN
SECTION FOUR HUNDRED FIFTY-NINE OF THIS ARTICLE WHICH, NOTWITHSTANDING
ANY PROVISIONS TO THE CONTRARY IN THE STATE ADMINISTRATIVE PROCEDURE
ACT, MAY BE ADOPTED ON AN EMERGENCY BASIS.
2. THE COMMISSIONER SHALL, IN CONSULTATION WITH THE DEPARTMENT OF
TAXATION AND FINANCE, DEVELOP A CERTIFICATE OF TAX CREDIT THAT SHALL BE
ISSUED BY THE COMMISSIONER TO ELIGIBLE BUSINESSES. SUCH CERTIFICATE
SHALL CONTAIN SUCH INFORMATION AS REQUIRED BY THE DEPARTMENT OF TAXATION
AND FINANCE.
3. THE COMMISSIONER SHALL SOLELY DETERMINE THE ELIGIBILITY OF ANY
APPLICANT APPLYING FOR ENTRY INTO THE PROGRAM AND SHALL REMOVE ANY BUSI-
NESS ENTITY FROM THE PROGRAM FOR FAILING TO MEET ANY OF THE REQUIREMENTS
SET FORTH IN SECTION FOUR HUNDRED FIFTY-THREE OF THIS ARTICLE, OR FOR
FAILING TO MEET THE REQUIREMENTS SET FORTH IN SUBDIVISION ONE OF SECTION
FOUR HUNDRED FIFTY-FOUR OF THIS ARTICLE.
§ 457. MAINTENANCE OF RECORDS. EACH BUSINESS ENTITY PARTICIPATING IN
THE PROGRAM SHALL KEEP ALL RELEVANT RECORDS FOR THEIR DURATION OF
PROGRAM PARTICIPATION FOR AT LEAST THREE YEARS.
§ 458. REPORTING. EACH BUSINESS ENTITY PARTICIPATING IN THIS PROGRAM
MUST SUBMIT A PERFORMANCE REPORT TO THE DEPARTMENT AT A TIME PRESCRIBED
IN REGULATIONS BY THE COMMISSIONER.
§ 459. CAP ON TAX CREDIT. THE TOTAL AMOUNT OF TAX CREDITS LISTED ON
CERTIFICATES OF TAX CREDIT ISSUED BY THE COMMISSIONER PURSUANT TO THIS
ARTICLE MAY NOT EXCEED ONE HUNDRED MILLION DOLLARS.
S. 5403 4
§ 2. The tax law is amended by adding a new section 45 to read as
follows:
§ 45. SMALL BUSINESS PANDEMIC JOB RETENTION TAX CREDIT. (A) ALLOWANCE
OF CREDIT. A TAXPAYER SUBJECT TO TAX UNDER ARTICLE NINE-A OR TWENTY-TWO
OF THIS CHAPTER SHALL BE ALLOWED A CREDIT AGAINST SUCH TAX, PURSUANT TO
THE PROVISIONS REFERENCED IN SUBDIVISION (F) OF THIS SECTION. THE AMOUNT
OF THE CREDIT IS EQUAL TO THE AMOUNT DETERMINED PURSUANT TO SECTION FOUR
HUNDRED FIFTY-FIVE OF THE ECONOMIC DEVELOPMENT LAW. NO COST OR EXPENSE
PAID OR INCURRED BY THE TAXPAYER WHICH IS INCLUDED AS PART OF THE CALCU-
LATION OF THIS CREDIT SHALL BE THE BASIS OF ANY OTHER TAX CREDIT ALLOWED
UNDER THIS CHAPTER.
(B) ELIGIBILITY. TO BE ELIGIBLE FOR THE SMALL BUSINESS PANDEMIC JOB
RETENTION TAX CREDIT, THE TAXPAYER SHALL HAVE BEEN ISSUED A CERTIFICATE
OF TAX CREDIT BY THE DEPARTMENT OF ECONOMIC DEVELOPMENT PURSUANT TO
SUBDIVISION THREE OF SECTION FOUR HUNDRED FIFTY-FOUR OF THE ECONOMIC
DEVELOPMENT LAW, WHICH CERTIFICATE SHALL SET FORTH THE AMOUNT OF THE
CREDIT THAT MAY BE CLAIMED FOR THE TAXABLE YEAR. THE TAXPAYER SHALL BE
ALLOWED TO CLAIM ONLY THE AMOUNT LISTED ON THE CERTIFICATE OF TAX CREDIT
FOR THAT TAXABLE YEAR. A TAXPAYER THAT IS A PARTNER IN A PARTNERSHIP,
MEMBER OF A LIMITED LIABILITY COMPANY OR SHAREHOLDER IN A SUBCHAPTER S
CORPORATION THAT HAS RECEIVED A CERTIFICATE OF TAX CREDIT SHALL BE
ALLOWED ITS PRO RATA SHARE OF THE CREDIT EARNED BY THE PARTNERSHIP,
LIMITED LIABILITY COMPANY OR SUBCHAPTER S CORPORATION.
(C) TAX RETURN REQUIREMENT. THE TAXPAYER SHALL BE REQUIRED TO ATTACH
TO ITS TAX RETURN, IN THE FORM PRESCRIBED BY THE COMMISSIONER, PROOF OF
RECEIPT OF ITS CERTIFICATE OF TAX CREDIT ISSUED BY THE COMMISSIONER OF
THE DEPARTMENT OF ECONOMIC DEVELOPMENT.
(D) INFORMATION SHARING. NOTWITHSTANDING ANY PROVISION OF THIS CHAP-
TER, EMPLOYEES OF THE DEPARTMENT OF ECONOMIC DEVELOPMENT AND THE DEPART-
MENT SHALL BE ALLOWED AND ARE DIRECTED TO SHARE AND EXCHANGE:
(1) INFORMATION DERIVED FROM TAX RETURNS OR REPORTS THAT IS RELEVANT
TO A TAXPAYER'S ELIGIBILITY TO PARTICIPATE IN THE SMALL BUSINESS PANDEM-
IC JOB RETENTION TAX CREDIT PROGRAM;
(2) INFORMATION REGARDING THE CREDIT APPLIED FOR, ALLOWED OR CLAIMED
PURSUANT TO THIS SECTION AND TAXPAYERS THAT ARE APPLYING FOR THE CREDIT
OR THAT ARE CLAIMING THE CREDIT; AND
(3) INFORMATION CONTAINED IN OR DERIVED FROM CREDIT CLAIM FORMS
SUBMITTED TO THE DEPARTMENT AND APPLICATIONS FOR ADMISSION INTO THE
SMALL BUSINESS PANDEMIC JOB RETENTION TAX CREDIT PROGRAM. EXCEPT AS
PROVIDED IN PARAGRAPH TWO OF THIS SUBDIVISION, ALL INFORMATION EXCHANGED
BETWEEN THE DEPARTMENT OF ECONOMIC DEVELOPMENT AND THE DEPARTMENT SHALL
NOT BE SUBJECT TO DISCLOSURE OR INSPECTION UNDER THE STATE'S FREEDOM OF
INFORMATION LAW.
(E) CREDIT RECAPTURE. IF A CERTIFICATE OF TAX CREDIT ISSUED BY THE
DEPARTMENT OF ECONOMIC DEVELOPMENT UNDER ARTICLE TWENTY-FOUR OF THE
ECONOMIC DEVELOPMENT LAW IS REVOKED BY SUCH DEPARTMENT, THE AMOUNT OF
CREDIT DESCRIBED IN THIS SECTION AND CLAIMED BY THE TAXPAYER PRIOR TO
THAT REVOCATION SHALL BE ADDED BACK TO TAX IN THE TAXABLE YEAR IN WHICH
ANY SUCH REVOCATION BECOMES FINAL.
(F) 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 55;
(2) ARTICLE 22: SECTION 606, SUBSECTION (KKK).
§ 3. Section 210-B of the tax law is amended by adding a new subdivi-
sion 55 to read as follows:
S. 5403 5
55. SMALL BUSINESS PANDEMIC JOB RETENTION TAX CREDIT. (A) ALLOWANCE OF
CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED
IN SECTION FORTY-FIVE OF THIS CHAPTER, AGAINST THE TAXES IMPOSED BY THIS
ARTICLE.
(B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR THE TAXABLE YEAR SHALL NOT 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 CRED-
IT ALLOWED UNDER THIS SUBDIVISION FOR THE 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 OR
REFUNDED 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 WILL BE PAID THEREON.
§ 4. Section 606 of the tax law is amended by adding a new subsection
(kkk) to read as follows:
(KKK) SMALL BUSINESS PANDEMIC JOB RETENTION TAX CREDIT. (1) ALLOWANCE
OF CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS
PROVIDED IN SECTION FORTY-FIVE OF THIS CHAPTER, AGAINST THE TAX IMPOSED
BY THIS ARTICLE.
(2) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWED UNDER
THIS SUBSECTION FOR THE TAXABLE YEAR EXCEEDS THE TAXPAYER'S TAX FOR SUCH
YEAR, THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDIT-
ED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED
EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST WILL BE
PAID THEREON.
§ 5. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
of the tax law is amended by adding a new clause (xlvi) to read as
follows:
(XLVI) SMALL BUSINESS PANDEMIC AMOUNT OF CREDIT
JOB RETENTION TAX CREDIT UNDER SUBDIVISION
FIFTY-FIVE OF SECTION
TWO HUNDRED TEN-B
§ 6. This act shall take effect immediately.
