NY Tax L § 43 (2021)
2021 New York Laws TAX - Tax Article 1 - Short Title; Definitions; Miscellaneous 43 - Life Sciences Research and Develpoment Tax Credit.

* §  43.  Life  sciences  research  and  development  tax  credit. (a) Allowance of credit. (1) A taxpayer that is a  qualified  life  sciences company,  or  that is a sole proprietor of or a partner in a partnership that is a qualified life sciences company or a shareholder of a New York S corporation that is a qualified life sciences company, and is  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  referred to  in  subdivision (e) of this section, for a period of three years, as provided in subparagraph (ii) of paragraph two of this  subdivision,  to be  computed  as provided in this section, provided that no credit shall be allowed for taxable years beginning on or after  January  first,  two thousand  twenty-eight.  Such  credit may be claimed in the taxable year specified on the certificate of tax credit issued to the qualified  life sciences company.  (2)(i)  For a qualified life sciences company that employs ten or more persons during the taxable year, the amount of the credit shall be equal to fifteen percent of such qualified life  sciences  company's  research and  development  expenditures in this state for the taxable year. For a qualified life sciences company  that  employs  less  than  ten  persons during  the  taxable  year,  the  amount of the credit shall be equal to twenty percent of such qualified life sciences  company's  research  and development expenditures in this state for the taxable year.  (ii)  The  credit  shall  be  allowed  only  with respect to the first taxable year during which the criteria set forth in this subdivision are satisfied, and with respect to  each  of  the  two  taxable  years  next following  (but  only,  with  respect  to  each  of  such years, if such criteria are satisfied). Subsequent certifications of the life  sciences company  by  the  department  of  economic  development pursuant to this section shall not extend the three taxable year time limitation  on  the allowance of the credit set forth in the preceding sentence.  (3)  The total amount of credit allowable to a qualified life sciences company, or, if the  life  sciences  company  is  properly  included  or required  to  be  included  in a combined report, to the combined group, taken in the aggregate, shall not exceed five hundred  thousand  dollars in  any taxable year. If the taxpayer is a partner in a partnership that is a life sciences company or a shareholder of a New York S  corporation that  is  a  life  sciences  company,  then  the  total amount of credit allowable shall be applied at the entity level, so that the total amount of credit allowable to all the partners or  shareholders  of  each  such entity,  taken  in  the aggregate, does not exceed five hundred thousand dollars in any taxable year.  (4) No research and development expenditures made by the life sciences company and used either as the basis for the  allowance  of  the  credit provided  for pursuant to this section or used in the calculation of the credit provided pursuant to this section shall  be  used  to  claim  any other  credit  allowed  pursuant  to  this  chapter  or  be  used in the calculation of any other credit allowed pursuant to this chapter.  (b) Maximum amount of credits. The aggregate  amount  of  tax  credits allowed  under  this  section to taxpayers subject to tax under articles nine-A and twenty-two of this chapter in any taxable year shall  be  ten million  dollars, and shall be allotted from the funds available for tax credits under article seventeen of the economic  development  law.  Such aggregate  amount  of  credits  shall  be allocated by the department of economic development among taxpayers in order of priority based upon the date of filing an application for allocation of life  sciences  research and  development tax credit with such department. If the total amount of allocated credits  applied  for  in  any  particular  year  exceeds  the aggregate  amount  of  tax  credits  allowed  for  such  year under this  section, such excess shall be treated as having been applied for on  the first day of the subsequent year.  (c)  Definitions.  As  used  in this section the following terms shall have the following meanings:  (1) "Certificate of  tax  credit"  means  the  document  issued  to  a qualified   life   sciences   company  by  the  department  of  economic development, after the department of economic development  has  verified that  such life sciences company has met all applicable criteria in this section to be eligible for the life sciences  research  and  development tax  credit  allowed  under  this  section, including but not limited to verifying that  the  life  sciences  company  is  a  new  business.  The certificate  shall be issued annually if such criteria are satisfied and shall specify the  exact  amount  of  the  life  sciences  research  and development  tax  credit  that  may  be  claimed  by such qualified life sciences company, pursuant  to  this  section,  and  shall  specify  the taxable year in which such credit may be claimed.  (2) "New business" means any business that qualifies as a new business under  either  paragraph  (f)  of subdivision one of section two hundred ten-B or paragraph ten of subsection (a) of section six hundred  six  of this chapter.  (3)  "Qualified  life sciences company" means a life sciences company, as defined in subdivision eleven of section three hundred  fifty-two  of the  economic development law, that has been certified by the department of economic development  as  a  life  sciences  company  and  is  a  new business.  Provided however, for purposes of the credit authorized under this  section,  the department of economic development shall not certify as  a  life  sciences  company  any  corporation,  partnership,  limited partnership,  or  other  entity  that  has  been  within the immediately preceding sixty months a related person to an  entity  that  is  a  life sciences company or an entity that is engaged in scientific research and development  as  defined  in  subdivision  twenty-two  of  section three hundred fifty-two of the economic development law.  (4) "Research and development expenditures" means  qualified  research expenses  as  defined  in  subsection  (b) of section 41 of the internal revenue code, provided, however, that such qualified  research  expenses shall  not  include  amounts  under  subparagraph  (B) of paragraph 1 of subsection (b) of section 41 of the internal revenue code and as further described in paragraph 3 of subsection (b) of section 41 of the internal revenue code. If section 41 of the internal revenue  code  has  expired, then the research and development expenses shall be calculated as if the federal  research  and  development  credit  structure and definition in effect in section 41 in federal tax year two thousand nine were still in effect.  (5) "Related person" means a related person as defined in subparagraph (C) of paragraph three of subsection (b) of section 465 of the  internal revenue  code.  For  this  purpose,  a "related person" shall include an entity that would have qualified as a "related person"  if  it  had  not been  dissolved,  liquidated,  merged  with  another entity or otherwise ceased to exist or operate.  (d)(1) For purposes of this section, in order to be eligible  for  the life  sciences  research  and  development tax credit allowed under this section, a life sciences company must be issued  a  certificate  of  tax credit  by  the  department  of  economic development. The department of economic development shall verify that such life  sciences  company  has met all applicable eligibility criteria in this section before issuing a certificate  of  tax credit, including but not limited to verifying that the life sciences company is a new business.  (2) The commissioner of economic development,  after  consulting  with the  commissioner, shall promulgate regulations by October thirty-first, two thousand seventeen to establish procedures for the allocation of tax credits allowed under this section. Such  rules  and  regulations  shall include  provisions  describing  the  application process for the credit allowed under this section, the due dates  for  such  applications,  the eligibility   standards  for  qualified  life  sciences  companies,  the standards  which  shall  be  used  to  evaluate  the  applications,  the documentation  that will be provided to taxpayers to substantiate to the department the amount of tax credits allocated to  such  taxpayers,  and such   other   provisions   as   deemed   necessary   and   appropriate. Notwithstanding any other  provisions  to  the  contrary  in  the  state administrative  procedure act, such rules and regulations may be adopted on an emergency basis if necessary to meet  such  October  thirty-first, two thousand seventeen deadline.  (e)  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 52.  (2) article 22: section 606: subsection (hhh).  (f) Notwithstanding any provision of this chapter, (i)  employees  and officers  of  the  department of economic development and the department shall be allowed and are directed  to  share  and  exchange  information regarding  the credits applied for, allowed, or claimed pursuant to this section and taxpayers who are applying for credits or who  are  claiming credits, including information contained in or derived from credit claim forms  submitted  to  the  department and applications for certification submitted to the  department  of  economic  development,  and  (ii)  the commissioner   and  the  commissioner  of  the  department  of  economic development may release the names and addresses of any taxpayer claiming the credit allowed under this section  and  the  amount  of  the  credit earned  by  the  taxpayer.  Provided, however, if a taxpayer claims such credit because it is a member  of  a  limited  liability  company  or  a partner in a partnership, only the amount of credit earned by the entity and not the amount of credit claimed by the taxpayer may be released.  (g)  For purposes of the credit allowed under this section, the number of persons employed by a qualified  life  sciences  company  during  the taxable  year  shall  be  determined  by ascertaining the number of such individuals  employed  full-time  by  such  company,  excluding  general executive  officers, on the thirty-first day of March, the thirtieth day of June, the thirtieth day of September  and  the  thirty-first  day  of December during each taxable year, by adding together the number of such individuals  ascertained  on  each of such dates and dividing the sum so obtained by the number of such dates occurring within such taxable year. An individual employed full-time means an employee in a  job  consisting of at least thirty-five hours per week, or two or more employees who are in  jobs  that  together  constitute the equivalent of a job of at least thirty-five hours per week (full-time equivalent).   * NB There are 2 § 43's