Enacts the "empire innovation act"; provides that a participant in the excelsior jobs program shall be eligible to claim a credit equal to the portion of the full cost of the participant's research and development expenses incurred that relates to the participant's research and development expenditures in New York state during the taxable year; provided however, if the participant receives a federal research and development tax credit calculated on the full cost of the participant's research and development expenses that relates to the participant's research and development expenditures in New York state during the taxable year, then said participant shall only be eligible to claim a credit equal to fifty percent of the portion of the participant's federal research and development tax credit that relates to the participant's research and development expenditures in New York state during the taxable year.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10247
SPONSOR: Mikulin TITLE OF BILL:
An act to amend the economic development law, in relation to the excels-
ior research and development tax credit
PURPOSE:
This legislation expands the Excelsior Research and Development Tax
Credit to allow participants in the Excelsior Jobs Program to claim a
credit equal to the portion of the full cost of the participant's
research and development expenses incurred that relates to the partic-
ipant's research and development expenditures in New York State during
the taxable year.
SUMMARY OF PROVISIONS:
Section 1 stipulates that this act shall be entitled the "Empire Inno-
vation. Act."
Section 2 amends subdivision 3 of section 355 of the economic develop-
ment law to enable a participant in the excelsior jobs program to be
eligible to claim a credit equal to the portion of the full cost of the
participant's research and development expenses incurred that relates to
the participant's research and development expenditures in New York
state during the taxable year; provided however, if the participant
receives a federal research and development tax credit calculated on the
full cost of the participant's research and development expenses that
relates to the participant's research and development expenditures in
New York, state during the taxable year, then said participant shall
only be eligible to claim a credit equal to fifty percent of the portion
of the participant's federal research and development tax credit that
relates to the participant's research and development expenditures in
New York state during the taxable year.
Section 3 sets forth the effective date.
JUSTIFICATION:
For nearly seventy years, the United States has encouraged robust
research and development investment through federal policies, partic-
ularly Section 174 of the Internal Revenue Code which allowed for the
deduction of qualified research and development expenses from a corpo-
ration's tax liability in the year the costs were incurred. Following
federal policy changes in 2019, companies will have to amortize such
costs over five years for domestic research and development expenses and
fifteen years for foreign research and development expenses. This change
dramatically increases affected companies' tax liability and removes a
major incentive for United States-based companies to conduct R&D by
restricting liquidity, raising the cost of capital, and threatening
returns on these investments.
Incentivizing innovation must be at the forefront of our collective
commitment to promoting economic and technological empowerment, viabil-
ity, and prosperity. The Empire. Innovation Act will promote investment
in research and development conducted in our State and boldly counter
the adverse economic effects and increased revenue costs associated with
federal, policy changes which no longer allow for the deduction of,
qualified research and development expenses from a corporation's tax
liability in the year the costs were incurred. This legislation would
expand the Excelsior Research and Development Tax Credit to allow
participants in the Excelsior Jobs Program to claim a credit equal to
the portion of the full cost of the participant's research and develop-
ment expenses incurred that relates to the participant's research and
development expenditures in New York State during the taxable year. The
Empire Innovation Act would provide a State-level solution to the
current federal disincentives. This legislation would incentivize
research and development in New York State, discourage crucial resources
and innovation from leaving our State, and lift our beloved, capable,
and forward-thinking Excelsior State to even greater heights.
It is incumbent upon us to reinvigorate domestic innovation, attract and
retain high-skilled talent, and foster an ecosystem that is conducive to
the development of cutting-edge technologies that emerge directly from
our own soil.
LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
To be determined.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
10247
IN ASSEMBLY
February 12, 2026
___________
Introduced by M. of A. MIKULIN -- read once and referred to the Commit-
tee on Economic Development
AN ACT to amend the economic development law, in relation to the excels-
ior research and development tax credit
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. This act shall be known and may be cited as the "empire
2 innovation act".
3 § 2. Subdivision 3 of section 355 of the economic development law, as
4 amended by section 3 of subpart A of part H of chapter 59 of the laws of
5 2025, is amended to read as follows:
6 3. Excelsior research and development tax credit component. A partic-
7 ipant in the excelsior jobs program shall be eligible to claim a credit
8 equal to [fifty percent of] the portion of the [participant's federal
9 research and development tax credit that relates to the participant's
10 research and development expenditures in New York state during the taxa-
11 ble year; provided however,] full cost of the participant's research and
12 development expenses incurred that relates to the participant's research
13 and development expenditures in New York state during the taxable year;
14 provided however, if the participant receives a federal research and
15 development tax credit calculated on the full cost of the participant's
16 research and development expenses that relates to the participant's
17 research and development expenditures in New York state during the taxa-
18 ble year, then said participant shall only be eligible to claim a credit
19 equal to fifty percent of the portion of the participant's federal
20 research and development tax credit that relates to the participant's
21 research and development expenditures in New York state during the taxa-
22 ble year; if not a green project, the excelsior research and development
23 tax credit shall not exceed six percent of the qualified research and
24 development expenditures attributable to activities conducted in New
25 York state, or, if a green project or a Green CHIPS project, the excels-
26 ior research and development tax credit shall not exceed eight percent
27 of the research and development expenditures attributable to activities
28 conducted in New York state, or if a semiconductor supply chain project,
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01204-02-6
A. 10247 2
1 the excelsior research and development tax credit shall not exceed seven
2 percent of the qualified research and development expenditures attribut-
3 able to activities conducted in New York state. If the federal research
4 and development credit has expired, then the research and development
5 expenditures relating to the federal research and development credit
6 shall be calculated as if the federal research and development credit
7 structure and definition in effect in two thousand nine were still in
8 effect. Notwithstanding any other provision of this chapter to the
9 contrary, research and development expenditures in this state, including
10 salary or wage expenses for jobs related to research and development
11 activities in this state, may be used as the basis for the excelsior
12 research and development tax credit component and the qualified emerging
13 technology company facilities, operations and training credit under the
14 tax law.
15 § 3. This act shall take effect immediately.
