Relates to the excelsior research and development tax credit
Summary
This bill, titled the "Empire Innovation Act," amends the Economic Development Law to change how the Excelsior Research and Development Tax Credit is calculated for participants in the Excelsior Jobs Program. Under current law, the credit is tied to a portion of the participant’s federal research and development tax credit. The bill would instead base the state credit on the full cost of qualifying research and development expenses incurred in New York, subject to the bill’s limits and a special rule when the taxpayer already receives a federal R&D credit calculated on the full cost of those expenses.
The bill preserves different maximum credit rates depending on the type of project: up to 6% for non-green projects, up to 8% for green projects and Green CHIPS projects, and up to 7% for semiconductor supply chain projects. It also clarifies that if the federal R&D credit has expired, the relevant expenditures are to be calculated as though the 2009 federal credit structure and definition were still in effect. In addition, the bill states that New York research and development expenditures, including salary and wage expenses for R&D jobs in the state, may be used as the basis for both the Excelsior R&D credit and the qualified emerging technology company facilities, operations, and training credit under the Tax Law.
Impact
The bill would amend section 355 of the Economic Development Law, changing the state tax credit framework for Excelsior Jobs Program participants engaged in research and development. It broadens the base of eligible expenditures by allowing the credit to be calculated from full R&D costs attributable to New York activities, and it expressly allows salary and wage expenses for R&D-related jobs to count toward the credit base. The measure also affects the interaction between the state credit and the federal R&D credit by creating a fallback calculation if the federal credit expires and by limiting the state credit to 50% of the federal credit in certain cases.
Sentiment
The available record shows no committee transcript and no recorded votes, so there is no documented floor or committee debate to gauge broad sentiment. Based on the bill text and caption, the measure appears to be framed as a pro-innovation, pro-business incentive bill intended to strengthen New York’s competitiveness in research, development, and advanced manufacturing sectors. Its immediate referral to the Assembly Committee on Economic Development suggests it was still in the early review stage.
Contention
The main policy issue is how generous the state should be in subsidizing R&D activity and how closely the state credit should track federal tax law. The bill expands the credit base to full R&D costs and includes wages, which may raise concerns about fiscal cost or program generosity, while supporters would likely view it as a stronger incentive for keeping research jobs and investment in New York. Another possible point of contention is the special treatment for green projects, Green CHIPS projects, and semiconductor supply chain projects, which creates different credit caps for different categories of investment.
Increases the excelsior research and development tax credit maximum from six to twenty percent for qualified research and development expenditures attributable to activities conducted in New York state.
Prohibits mobile sports wagering operators, including parent companies or subsidiaries thereof, from being eligible to receive the excelsior jobs program credit.