Back to Home

Government Affairs Albany Update

January 27, 2006

Speaker Silver Announces Committee Chairs

Speaker Silver announced new Committee chairs and changes in Majority Leadership positions for 2006. Of particular note is the change in the Education Committee (Assemblywoman Cathy Nolan) and the Banks Committee (Assemblyman Darryl Towns). Click here for the press release.

Assembly GOP Manufacturing Report
Staff Contact: Ken Pokalsky

The Assembly Minority Task Force on Manufacturing, chaired by Brian Kolb, issued its report this week. Key recommendations included: new tax credits based on investments and/or employment growth; creation of a low interest line of credit program; enhanced benefits for manufacturers located within Empire Zones; broader eligibility for EZ "regionally significant projects;" sate sales tax exemptions for business purchases from in-state businesses; health insurance tax credits for small business; energy-related tax reductions; extension of the Article X process for power plant siting; workforce training initiatives; workers' compensation reform and others. It is not yet available online; copies can be obtained from the Assembly Minority Public Affairs office at (518) 455-5073.

Qualified Emerging Technology Company Credit (QETC Credit)

Chapters 61 and 63 of the Laws of 2005 created the Qualified Emerging Technology Company Credit. This is expected to provide up to $10 million per year in tax credits to help promote the creation of new “spin-off” businesses from academic incubators. Eligible industries include (1) Advanced materials and processing, (2) Engineering, production, and defense, (3) Electronic and photonic devices, (4) Information and communication involving advanced computer software, (5) biotechnologies (scientific manipulation of living organisms, and (6) remanufacturing (restoration of commodities to original performance standards) Recently the Department of Taxation and Finance created the tax form and instructions for filing for the credit. An outline of the credit and the web address for the T&F forms follow.

General Provisions

  • Valid for tax years 2005 through 2012
  • Available for four consecutive tax years
  • Relocation from an academic incubator facility gives the company a fifth year of credit
  • Company employment must be 100 or fewer full-time employees
  • 75% of company employees must work in New York
  • Company must have a ratio of R&D funds to net sales of 6% or greater
  • Company's gross revenues must not exceed $20 million for year immediately preceding credit tax year
  • Credit available to corporations filing Article 9-A (Corporation Franchise Tax)
  • Credit available to sole proprietors, partners, subchapter S corporation shareholders, estate/trust beneficiaries filing Article 22 (PIT)
  • QETC (defined in Public Authorities Law) is a NY company with annual product sales not exceeding $10 million AND,
  • EITHER the company's ratio of R&D funds to net sales is 3.6%* or greater, {* = % threshold redetermined annually}
  • OR the company's products/services are classified as emerging technologies under Public Authorities Law, section 3102-e(1)(b)

Credit Calculation
QETC Credits have three parts. The benefit is capped at $250,000 per taxpayer per year (all three parts together). QETC Credit exceeding tax year liability is treated as a refundable overpayment of taxes.

Part 1 - Research and Development Property
18% of R&D property, costs, and fees incurred in connection with emerging technology activities (broadly defined as all Investment Tax Credit activities [manufacturing, processing, assembling, fabricating, researching and developing,...] PLUS testing, inspecting, quality control, and production/distribution of materials/products resulting from research)

Part 2 - Research Expenses
9% of qualified research expenses (generally associated with (a) in-house research and processes, (b) dissemination of research and development results, and (c) the patent process)

Part 3 - High-technology Training Expenditures
100% of qualified high-technology training expenses limited to $4,000 per employee per year (includes course(s) satisfactorily completed at an accredited, degree-granting, post-secondary college in New York that directly relates to emerging technologies and is intended to upgrade, retrain, or improve productivity or theoretical awareness of the employee)

The tax form (DTF-619) and the tax instructions (DTF-619-I) are available at the Department of Taxation & Finance's website.