ASSEMBLY 1999 TAX PLAN

The Assembly has worked to enact tax reductions that are linked to job creation in the past and will continue to look for new ways to create jobs. In 1998, the Legislature enacted the "New York State Emerging Industry Jobs Act", which provided several tax actions to promote growth and job development in high technology industries.

The following tax reductions are aimed at fostering continued growth and job development in New York State's high technology industry. In addition, these proposals will provide economic assistance to small businesses, which are the engine of job growth in the State.

Employment Incentive Credits

$2 Million

· Extends the time period that new "emerging technology" companies can obtain a refund of the employment incentive tax credit from the first 4 years to the first 8 years.

High Technology Credit Expansion

$20 Million

· Extends the employment tax credit and capital investment credit, enacted in 1998, to businesses who file under the Personal Income Tax.

· Increases the current wage credit of $1,000 per employee to $1,500 per employee.

· Increases the capital investment credit from 10 percent to 20 percent for investments held for 4 years, and from 25 percent to 50 percent for investments held for 9 years.

High Technology Credit for Emerging Technology Transfer Companies

$5 Million

· Doubles the high tech credits for emerging technology "start-up technology companies".

· These are companies which move from a not-for-profit research institution to the private sector.

· These credits would be refundable for companies in existence for 8 years or less.

University Research Credit

$5 Million

· Provides a credit to taxpayers who contribute to not-for-profit research organizations.

· The credit would be equal to 20 percent of the incremental amount of payments made to the institution above the previous year.

Computer Hardware

None

· Current law allows a sales tax exemption for computer hardware used to produce computer software.

· Clarifies that the design of websites will be treated as developing software for purposes of the exemption.

High Technology Park

$3 Million

· Provides a State funded property tax abatement for property owners who lease space to high technology transfer technology companies.

· The abatement would be passed along in the form of lower rents to the tenants.

Airline Taxation

$5 Million

· Provides $5 million in tax relief to the airline industry to promote economic development and enhance airline activity.

Remanufacturing Credit

$1 Million

· Provides a tax credit for small companies that produce re-manufactured goods.

CAPCO Extender

$15 Million

· Extends the CAPCO program for 2 more years.

· Allocates an additional $150 million in tax credits over the additional 2 year period.

Zone Equivalent Area

$1 Million

· Extends the wage tax credits available to businesses that locate in a Zone Equivalent Area for another 5 years.

· The current tax credits are set to expire in June 1999.

Telecommunications Equipment

$15 Million

· Expands the current sales tax exemption for central office equipment, enacted in 1998, to include equipment located outside of the central office or station.

Alternative Fuels Credit

$2.5 Million

· Expands the current alternative fuels tax credit to allow the credit to be claimed by a taxpayer selling or leasing a car to the United States or any State and its subdivisions.

ASSEMBLY TAX PLAN - 1

Increases the earned income tax credit from 20 percent of the Federal credit to 30 percent of the Federal credit beginning in tax year 1999, as proposed in A.6969. When fully effective, this credit enhancement is estimated to reduce revenues by $160,000,000.