2023 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