N.Y. Comp. Codes R. & Regs. tit. 5 § 260.6

Current through Register Vol. 46, No. 45, November 2, 2024

Section 260.6 - Calculation of the tax credit

(a) 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 9-A or 22 of the Tax Law shall be allowed a credit against such tax, pursuant to the provisions referred to in subdivision 52 of section 210-B and subsection (hhh) of section 606 of the Tax Law, for a period of 3 years, as provided in subparagraph (ii) of paragraph 2 of subsection (a) of section 43 of the Tax Law, to be computed as provided in this section, provided that no credit shall be allowed for taxable years beginning on or after January 1, 2028. Such credit may be claimed in the taxable year that corresponds to the allocation year specified on the certificate of tax credit issued to the qualified life sciences company.

(b)

(1) For a qualified life sciences company that employs 10 or more persons during the taxable year, the amount of the credit shall be equal to 15 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 10 persons during the taxable year, the amount of the credit shall be equal to 20 percent of such qualified life sciences company's research and development expenditures in this State for the taxable year.

(2) The credit shall be allowed only with respect to the first taxable year during which the criteria set forth in subdivision (a) of section 43 of the Tax Law 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.

(c) 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 31st day of March, the 30th day of June, the 30th day of September and the 31st 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 35 hours per week, or 2 or more employees who are in jobs that together constitute the equivalent of a job of at least 35 hours per week (full-time equivalent).

(d) 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 $500,000 in any taxable year. If the life sciences company is a partner in a partnership or shareholder of a New York S corporation, 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 $500,000 in any taxable year.

(e) 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 section 43 of the Tax Law or used in the calculation of the credit provided pursuant to section 43 of the Tax Law shall be used to claim any other credit allowed pursuant to the Tax Law or be used in the calculation of any other credit allowed pursuant to the Tax Law.

N.Y. Comp. Codes R. & Regs. Tit. 5 § 260.6