Bill Text: NY A04680 | 2019-2020 | General Assembly | Introduced


Bill Title: Enacts Invest-NY by implementing various tax benefits for businesses.

Spectrum: Partisan Bill (Republican 9-0)

Status: (Introduced) 2020-01-08 - referred to ways and means [A04680 Detail]

Download: New_York-2019-A04680-Introduced.html


                STATE OF NEW YORK
        ________________________________________________________________________
                                          4680
                               2019-2020 Regular Sessions
                   IN ASSEMBLY
                                    February 5, 2019
                                       ___________
        Introduced  by  M.  of  A.  KOLB,  MONTESANO,  PALMESANO,  RAIA, HAWLEY,
          BARCLAY, FINCH, DiPIETRO -- Multi-Sponsored by -- M. of A. BLANKENBUSH
          -- read once and referred to the Committee on Ways and Means
        AN ACT to amend the tax law, in relation to  expanding  eligibility  for
          the  investment tax credit to all businesses in the state (Part A); to
          amend the tax law, in relation to a qualified emerging technology  tax
          credit  (Part  B);  to amend the general municipal law, in relation to
          certified startup business enterprises; and to amend the tax  law,  in
          relation to the angel tax credit (Part C)
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. This act enacts into law components of legislation relating
     2  to "Invest-NY".  Each component is wholly contained within a Part  iden-
     3  tified  as  Parts  A  through  C. The effective date for each particular
     4  provision contained within such Part is set forth in the last section of
     5  such Part. Any provision in any section contained within a Part, includ-
     6  ing the effective date of the Part, which makes a reference to a section
     7  "of this act", when used in connection with that  particular  component,
     8  shall  be  deemed  to mean and refer to the corresponding section of the
     9  Part in which it is found. Section three of  this  act  sets  forth  the
    10  general effective date of this act.
    11                                   PART A
    12    Section  1.    Subparagraph  (i)  of paragraph (b) of subdivision 1 of
    13  section 210-B of the tax law, as amended by section 2 of part P of chap-
    14  ter 59 of the laws of 2017, is amended to read as follows:
    15    (i) A credit shall be allowed under this subdivision with  respect  to
    16  tangible personal property and other tangible property, including build-
    17  ings  and  structural  components  of  buildings, which are: depreciable
    18  pursuant to section one hundred  sixty-seven  of  the  internal  revenue
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD06094-01-9

        A. 4680                             2
     1  code, have a useful life of four years or more, are acquired by purchase
     2  as  defined  in  section  one  hundred  seventy-nine (d) of the internal
     3  revenue code, have a situs in this state and are (A) principally used by
     4  the  taxpayer  in  the production of goods by manufacturing, processing,
     5  assembling, refining, mining, extracting, farming,  agriculture,  horti-
     6  culture, floriculture, viticulture or commercial fishing, (B) industrial
     7  waste  treatment facilities or air pollution control facilities, used in
     8  the taxpayer's trade or business, (C) research and development property,
     9  [or] (D) principally used in the ordinary course of the taxpayer's trade
    10  or business as a broker or dealer in connection  with  the  purchase  or
    11  sale  (which  shall include but not be limited to the issuance, entering
    12  into, assumption,  offset,  assignment,  termination,  or  transfer)  of
    13  stocks,  bonds  or  other  securities as defined in section four hundred
    14  seventy-five (c)(2) of the Internal Revenue Code, or of  commodities  as
    15  defined in section four hundred seventy-five (e) of the Internal Revenue
    16  Code,  (E)  principally  used  in  the ordinary course of the taxpayer's
    17  trade or business of providing investment advisory services for a  regu-
    18  lated  investment  company as defined in section eight hundred fifty-one
    19  of the Internal Revenue Code, or lending, loan arrangement or loan orig-
    20  ination services to customers in connection with the  purchase  or  sale
    21  (which  shall include but not be limited to the issuance, entering into,
    22  assumption, offset, assignment, termination, or transfer) of  securities
    23  as  defined  in section four hundred seventy-five (c)(2) of the Internal
    24  Revenue Code, (F) principally used in the ordinary course of the taxpay-
    25  er's business  as  an  exchange  registered  as  a  national  securities
    26  exchange  within the meaning of sections 3(a)(1) and 6(a) of the Securi-
    27  ties Exchange Act of 1934 or a board of trade as defined in subparagraph
    28  one of paragraph (a) of section fourteen hundred ten of the not-for-pro-
    29  fit corporation law or as an entity that is wholly owned by one or  more
    30  such  national securities exchanges or boards of trade and that provides
    31  automation or technical services thereto, [or] (G) principally used as a
    32  qualified film production facility including qualified  film  production
    33  facilities  having a situs in an empire zone designated as such pursuant
    34  to article eighteen-B of the general municipal law, where  the  taxpayer
    35  is  providing  three  or  more services to any qualified film production
    36  company using the facility, including such services as a studio lighting
    37  grid, lighting and grip equipment, multi-line phone  service,  broadband
    38  information  technology  access,  industrial  scale electrical capacity,
    39  food services, security  services,  and  heating,  ventilation  and  air
    40  conditioning,  or  (H)  principally  used  in the ordinary course of any
    41  trade or business of the taxpayer not otherwise described in clauses (A)
    42  through (G) of this subparagraph. For purposes of clauses (D),  (E)  and
    43  (F)  of  this  subparagraph, property purchased by a taxpayer affiliated
    44  with a regulated broker, dealer, registered investment advisor, national
    45  securities exchange or board of trade, is allowed a  credit  under  this
    46  subdivision  if the property is used by its affiliated regulated broker,
    47  dealer, registered investment advisor, national securities  exchange  or
    48  board  of  trade  in  accordance  with this subdivision. For purposes of
    49  determining if the property is principally used in qualifying uses,  the
    50  uses  by  the taxpayer described in clauses (D) and (E) of this subpara-
    51  graph may be aggregated. In addition, the  uses  by  the  taxpayer,  its
    52  affiliated  regulated  broker,  dealer and registered investment advisor
    53  under either or both of  those  clauses  may  be  aggregated.  Provided,
    54  however,  a taxpayer shall not be allowed the credit provided by clauses
    55  (D), (E) and (F) of this  subparagraph  unless  the  property  is  first
    56  placed  in  service  before  October first, two thousand fifteen and (i)

        A. 4680                             3
     1  eighty percent or more of the employees  performing  the  administrative
     2  and  support  functions resulting from or related to the qualifying uses
     3  of such equipment are located in this state or (ii) the  average  number
     4  of  employees  that  perform  the  administrative  and support functions
     5  resulting from or related to the qualifying uses of such  equipment  and
     6  are  located  in this state during the taxable year for which the credit
     7  is claimed is equal to or greater than ninety-five percent of the  aver-
     8  age  number of employees that perform these functions and are located in
     9  this state during the thirty-six months immediately preceding  the  year
    10  for  which  the  credit  is  claimed,  or  (iii) the number of employees
    11  located in this state during the taxable year for which  the  credit  is
    12  claimed  is  equal  to  or  greater than ninety percent of the number of
    13  employees located in  this  state  on  December  thirty-first,  nineteen
    14  hundred ninety-eight or, if the taxpayer was not a calendar year taxpay-
    15  er  in  nineteen hundred ninety-eight, the last day of its first taxable
    16  year ending after December thirty-first, nineteen hundred  ninety-eight.
    17  If  the  taxpayer becomes subject to tax in this state after the taxable
    18  year beginning in nineteen hundred ninety-eight, then  the  taxpayer  is
    19  not  required  to  satisfy the employment test provided in the preceding
    20  sentence of this subparagraph for its first taxable year.  For  purposes
    21  of  clause  (iii) of this subparagraph the employment test will be based
    22  on the number of employees located in this state on the last day of  the
    23  first  taxable year the taxpayer is subject to tax in this state. If the
    24  uses of the property must be aggregated to determine whether the proper-
    25  ty is principally used in qualifying uses, then  either  each  affiliate
    26  using  the property must satisfy this employment test or this employment
    27  test must be satisfied through the aggregation of the employees  of  the
    28  taxpayer,  its  affiliated  regulated  broker,  dealer,  and  registered
    29  investment adviser using the property. For purposes  of  clause  (A)  of
    30  this subparagraph, tangible personal property and other tangible proper-
    31  ty  shall  not  include property principally used by the taxpayer in the
    32  production or distribution of electricity, natural gas after  extraction
    33  from wells, steam, or water delivered through pipes and mains.
    34    §  2. Subparagraph (A) of paragraph 2 of subsection (a) of section 606
    35  of the tax law, as amended by section 3 of part P of chapter 59  of  the
    36  laws of 2017, is amended to read as follows:
    37    (A)  A  credit  shall be allowed under this subsection with respect to
    38  tangible personal property and other tangible property, including build-
    39  ings and structural components  of  buildings,  which  are:  depreciable
    40  pursuant  to  section  one  hundred  sixty-seven of the internal revenue
    41  code, have a useful life of four years or more, are acquired by purchase
    42  as defined in section one  hundred  seventy-nine  (d)  of  the  internal
    43  revenue code, have a situs in this state and are (i) principally used by
    44  the  taxpayer  in  the production of goods by manufacturing, processing,
    45  assembling, refining, mining, extracting, farming,  agriculture,  horti-
    46  culture,  floriculture,  viticulture  or commercial fishing, (ii) indus-
    47  trial waste treatment facilities or air  pollution  control  facilities,
    48  used in the taxpayer's trade or business, (iii) research and development
    49  property, (iv) principally used in the ordinary course of the taxpayer's
    50  trade  or business as a broker or dealer in connection with the purchase
    51  or sale (which shall include but not be limited to the issuance,  enter-
    52  ing  into,  assumption, offset, assignment, termination, or transfer) of
    53  stocks, bonds or other securities as defined  in  section  four  hundred
    54  seventy-five  (c)(2)  of the Internal Revenue Code, or of commodities as
    55  defined in section 475(e) of the Internal Revenue Code, (v)  principally
    56  used  in  the  ordinary  course  of  the taxpayer's trade or business of

        A. 4680                             4
     1  providing investment advisory services for a regulated investment compa-
     2  ny as defined in section eight hundred fifty-one of the Internal Revenue
     3  Code, or lending, loan  arrangement  or  loan  origination  services  to
     4  customers  in  connection with the purchase or sale (which shall include
     5  but not be limited to the issuance, entering into,  assumption,  offset,
     6  assignment,  termination,  or  transfer)  of  securities  as  defined in
     7  section four hundred seventy-five (c)(2) of the Internal  Revenue  Code,
     8  [or]  (vi)  principally  used  as  a  qualified film production facility
     9  including qualified film production facilities  having  a  situs  in  an
    10  empire  zone  designated  as  such pursuant to article eighteen-B of the
    11  general municipal law, where the taxpayer is  providing  three  or  more
    12  services  to  any  qualified film production company using the facility,
    13  including such services as a studio lighting  grid,  lighting  and  grip
    14  equipment,  multi-line  phone  service, broadband information technology
    15  access, industrial scale electrical capacity,  food  services,  security
    16  services,  and heating, ventilation and air conditioning, or (vii) prin-
    17  cipally used in the ordinary course of any  trade  or  business  of  the
    18  taxpayer  not  otherwise  described  in clauses (i) through (vi) of this
    19  subparagraph. For purposes of clauses (iv) and (v) of this subparagraph,
    20  property purchased by a taxpayer affiliated  with  a  regulated  broker,
    21  dealer,  or registered investment adviser is allowed a credit under this
    22  subsection if the property is used by its affiliated  regulated  broker,
    23  dealer   or  registered  investment  adviser  in  accordance  with  this
    24  subsection. For purposes of determining if the property  is  principally
    25  used  in  qualifying uses, the uses by the taxpayer described in clauses
    26  (iv) and (v) of this subparagraph may be aggregated.  In  addition,  the
    27  uses by the taxpayer, its affiliated regulated broker, dealer and regis-
    28  tered  investment  adviser  under either or both of those clauses may be
    29  aggregated. Provided, however, a taxpayer shall not be allowed the cred-
    30  it provided by clauses (iv) and (v)  of  this  subparagraph  unless  (I)
    31  eighty  percent  or  more of the employees performing the administrative
    32  and support functions resulting from or related to the  qualifying  uses
    33  of  such equipment are located in this state, or (II) the average number
    34  of employees that  perform  the  administrative  and  support  functions
    35  resulting  from  or related to the qualifying uses of such equipment and
    36  are located in this state during the taxable year for which  the  credit
    37  is  claimed is equal to or greater than ninety-five percent of the aver-
    38  age number of employees that perform these functions and are located  in
    39  this  state  during the thirty-six months immediately preceding the year
    40  for which the credit is  claimed,  or  (III)  the  number  of  employees
    41  located  in  this  state during the taxable year for which the credit is
    42  claimed is equal to or greater than ninety  percent  of  the  number  of
    43  employees  located  in  this  state  on  December thirty-first, nineteen
    44  hundred ninety-eight or, if the taxpayer was not a calendar year taxpay-
    45  er in nineteen hundred ninety-eight, the last day of its  first  taxable
    46  year  ending after December thirty-first, nineteen hundred ninety-eight.
    47  If the taxpayer becomes subject to tax in this state after  the  taxable
    48  year  beginning  in  nineteen hundred ninety-eight, then the taxpayer is
    49  not required to satisfy the employment test provided  in  the  preceding
    50  sentence  of  this  subparagraph  for  its  first  taxable year. For the
    51  purposes of clause (III) of this subparagraph the employment  test  will
    52  be  based  on  the number of employees located in this state on the last
    53  day of the first taxable year the taxpayer is subject  to  tax  in  this
    54  state.  If  the  uses  of  the  property must be aggregated to determine
    55  whether the property is principally used in qualifying uses, then either
    56  each affiliate using the property must satisfy this employment  test  or

        A. 4680                             5
     1  this  employment  test  must be satisfied through the aggregation of the
     2  employees of the taxpayer, its affiliated regulated broker, dealer,  and
     3  registered investment adviser using the property. For purposes of clause
     4  (i)  of this subparagraph, tangible personal property and other tangible
     5  property shall not include property principally used by the taxpayer  in
     6  the  production  or  distribution  of  electricity,  natural  gas  after
     7  extraction from wells, steam,  or  water  delivered  through  pipes  and
     8  mains.
     9    § 3. This act shall take effect immediately and apply to taxable years
    10  ending on or after January 1, 2019.
    11                                   PART B
    12    Section  1.  Subparagraph  (vii)  of paragraph (a) of subdivision 1 of
    13  section 210 of the tax law, as amended by section 12 of part T of  chap-
    14  ter 59 of the laws of 2015, is amended to read as follows:
    15    (vii) For a taxpayer that is defined as a qualified emerging technolo-
    16  gy  company under paragraph (c) of subdivision one of section thirty-one
    17  hundred two-e of the  public  authorities  law  regardless  of  the  ten
    18  million  dollar  limitation  expressed in subparagraph one of such para-
    19  graph (c) the amount prescribed by this paragraph shall be  computed  at
    20  the  rate of 5.7 percent for taxable years beginning on or after January
    21  first, two thousand fifteen  and  before  January  first,  two  thousand
    22  [sixteen,  5.5]  twenty, and zero percent for taxable years beginning on
    23  or after January first, two thousand [sixteen and before January  first,
    24  two  thousand eighteen, and 4.875 percent for taxable years beginning on
    25  or after January first, two thousand eighteen] twenty.  In the case of a
    26  combined report, each corporation included in the combined  report  must
    27  qualify  as a qualified emerging technology company in order for the tax
    28  rates provided by this subparagraph to apply.
    29    § 2. This act shall take effect immediately.
    30                                   PART C
    31    Section 1. The general municipal  law  is  amended  by  adding  a  new
    32  section 959-c to read as follows:
    33    § 959-c. Certified startup business enterprise. (a) Certification. (i)
    34  The commissioner shall approve applications for qualification of a busi-
    35  ness  enterprise as a certified startup business enterprise. As a condi-
    36  tion for approval of such application, the commissioner is authorized to
    37  specify certain requirements to be satisfied as a condition for approval
    38  of a business enterprise as a certified startup business  enterprise  as
    39  the  commissioner deems necessary to ensure the qualifying angel invest-
    40  ment will make a substantial contribution to the economic development of
    41  this state, including the use of  a  system  of  evaluation  of  various
    42  applicant business enterprises in a competitive fashion.
    43    (ii)  With  respect  to an approved application for qualification of a
    44  business enterprise as a  certified  startup  business  enterprise,  the
    45  commissioner  shall  issue  to such business enterprise a certificate of
    46  qualification as a certified startup business enterprise  setting  forth
    47  the  effective  date  of  the certification and the amount of qualifying
    48  angel investment awarded to such business enterprise, which amount shall
    49  be no less than one hundred  thousand  dollars  and  no  more  than  two
    50  million dollars.
    51    (iii)  For  the  period July first, two thousand nineteen through June
    52  thirtieth, two thousand twenty, the commissioner may certify up to twen-

        A. 4680                             6
     1  ty million dollars in qualifying angel investment. For the  period  July
     2  first,  two thousand twenty through June thirtieth, two thousand twenty-
     3  one, the commissioner may certify up to twenty million dollars in quali-
     4  fying  angel investment. For the period July first, two thousand twenty-
     5  one through June thirtieth, two thousand  twenty-two,  the  commissioner
     6  may certify up to twenty million dollars in qualifying angel investment.
     7    (b)  Definitions.  As  used in this section, the following terms shall
     8  have the following meanings:
     9    (i) "Certified startup business  enterprise"  shall  mean  a  business
    10  enterprise located in New York state:
    11    (1) with less than five million dollars in annual revenues;
    12    (2)  whose  primary  activity  consists  of a qualifying technology or
    13  innovation activity; and
    14    (3) that has been certified as a certified startup business enterprise
    15  by the commissioner.
    16    (ii) "Qualifying technology or innovation activity" shall mean:
    17    (1) biotechnologies, which shall be defined as technologies  involving
    18  the  scientific  manipulation  of  living  organisms,  especially at the
    19  molecular and/or the sub-molecular genetic level,  to  produce  products
    20  conducive  to  improving  the  lives  and health of plants, animals, and
    21  humans; and the associated scientific research, pharmacological, mechan-
    22  ical, and computational applications and services connected  with  these
    23  improvements;
    24    (2)  information and communication technologies, equipment and systems
    25  that involve advanced  computer  software  and  hardware,  visualization
    26  technologies, and human interface technologies;
    27    (3)  advanced  materials  and processing technologies that involve the
    28  development, modification, or improvement of one or  more  materials  or
    29  methods  to  produce  devices  and  structures with improved performance
    30  characteristics or special functional attributes, or to activate,  speed
    31  up, or otherwise alter chemical, biochemical, or medical processes;
    32    (4)  electronic and photonic devices and components for use in produc-
    33  ing electronic, optoelectronic, mechanical  equipment  and  products  of
    34  electronic distribution with interactive media content;
    35    (5)  energy  efficiency,  renewable energy and environmental technolo-
    36  gies, products, devices and services;
    37    (6) small scale systems integration and packaging; or
    38    (7) manufacturing;
    39    (iii) "Qualifying angel investment" shall mean a contribution  to  the
    40  capital  of  a certified startup business enterprise, provided that such
    41  contribution to capital is made within twelve months after the effective
    42  date of the certified technology venture's certificate of  qualification
    43  as  a  certified  technology venture and such contribution is applied by
    44  the certified startup business  enterprise  against  its  allocation  of
    45  qualifying  angel  investment.  Together with all other qualifying angel
    46  investments made to a single certified startup business enterprise,  the
    47  total  qualifying  angel  investment may not exceed two million dollars.
    48  Nothing herein shall prohibit a person making a qualifying angel invest-
    49  ment from making additional contributions to the capital of  the  certi-
    50  fied startup business enterprise or making loans to or other investments
    51  in  the  certified  startup business enterprise, provided, however, that
    52  such other contributions, loans and investments shall not be treated  as
    53  qualifying angel investments.
    54    §  2. Section 210-B of the tax law is amended by adding a new subdivi-
    55  sion 53 to read as follows:

        A. 4680                             7
     1    53. Angel tax credit. (a) Allowance of credit.  A  taxpayer  that  has
     2  made a qualifying angel investment, as such term is defined in paragraph
     3  (iii)  of  subdivision  (b)  of section nine hundred fifty-nine-c of the
     4  general municipal law, shall be allowed a credit equal to fifty  percent
     5  of the amount of such qualifying angel investment.
     6    (b)  Application  of credit. The credit allowed under this subdivision
     7  for any taxable year shall not reduce the tax due for such year to  less
     8  than  the  amount  prescribed  in  paragraph  (d)  of subdivision one of
     9  section two hundred ten of this article.   However,  if  the  amount  of
    10  credit  allowed  under this subdivision for any taxable year reduces the
    11  tax to such amount, any amount of credit thus  not  deductible  in  such
    12  taxable year shall be treated as an overpayment of tax to be credited or
    13  refunded  in  accordance  with  the  provisions  of section one thousand
    14  eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of
    15  subsection  (c)  of  section  one  thousand eighty-eight of this chapter
    16  notwithstanding, no interest shall be paid thereon.
    17    § 3. Section 606 of the tax law is amended by adding a new  subsection
    18  (jjj) to read as follows:
    19    (jjj)  Angel  tax credit. (1) Allowance of credit. A taxpayer that has
    20  made a qualifying angel investment, as such term is defined in paragraph
    21  (iii) of subdivision (b) of section nine  hundred  fifty-nine-c  of  the
    22  general  municipal  law,  or  that is a member of a partnership that has
    23  made a qualifying angel investment, shall be allowed a credit  equal  to
    24  fifty  percent  of the amount of such qualifying angel investment or, in
    25  the case of a taxpayer who is a member of a partnership that has made  a
    26  qualifying  angel investment, a portion of such qualifying angel invest-
    27  ment equal to the portion of items of income, gain, loss  and  deduction
    28  associated  with  the  qualifying angel investment properly allocable to
    29  such taxpayer under section 704 of the Internal  Revenue  Code  for  the
    30  taxable year.
    31    (2)  Application  of credit. If the amount of the credit allowed under
    32  this subsection for any taxable year shall exceed the taxpayer's tax for
    33  such year, the excess shall be treated as an overpayment of  tax  to  be
    34  credited  or  refunded  in accordance with the provisions of section six
    35  hundred eighty-six of this article, provided, however, that no  interest
    36  shall be paid thereon.
    37    §  4.  Section 1511 of the tax law is amended by adding a new subdivi-
    38  sion (dd) to read as follows:
    39    (dd) Angel tax credit. (1) Allowance of credit. A  taxpayer  that  has
    40  made a qualifying angel investment, as such term is defined in paragraph
    41  (iii)  of  subdivision  (b)  of section nine hundred fifty-nine-c of the
    42  general municipal law, shall be allowed a credit equal to fifty  percent
    43  of the amount of such qualifying angel investment.
    44    (2)  Application  of credit. The credit allowed under this subdivision
    45  for any taxable year shall not reduce the tax due for such year to  less
    46  than  the  minimum  tax  fixed  by  paragraph four of subdivision (a) of
    47  section fifteen hundred two  of  this  article  or  by  section  fifteen
    48  hundred  two-a of this article, whichever is applicable. However, if the
    49  amount of credit allowed under this subdivision  for  any  taxable  year
    50  reduces  the  tax  to  such  amount,  then any amount of credit thus not
    51  deductible in such taxable year shall be treated as  an  overpayment  of
    52  tax  to  be  credited  or  refunded in accordance with the provisions of
    53  section one thousand eighty-six of this chapter. Provided, however,  the
    54  provisions  of  subsection  (c)  of section one thousand eighty-eight of
    55  this chapter notwithstanding, no interest shall be paid thereon.

        A. 4680                             8
     1    § 5. This act shall take effect immediately and apply to taxable years
     2  after January 1, 2019.
     3    § 2. Severability. If any clause, sentence, paragraph, section or part
     4  of  this act shall be adjudged by any court of competent jurisdiction to
     5  be invalid and after exhaustion of  all  further  judicial  review,  the
     6  judgment  shall not affect, impair, or invalidate the remainder thereof,
     7  but shall be confined in its operation to the  clause,  sentence,  para-
     8  graph,  section or part of this act directly involved in the controversy
     9  in which the judgment shall have been rendered.
    10    § 3. This act shall take effect immediately  provided,  however,  that
    11  the  applicable effective date of Parts A through C of this act shall be
    12  as specifically set forth in the last section of such Parts.
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