In June 2013, Governor Andrew Cuomo unveiled his START-UP NY program which aims to foster entrepreneurialism and job creation through the introduction of tax-free zones throughout the state. These zones are created through partnerships with New York colleges and universities and upstate NY is specifically targeted by Governor Cuomo's plan.
By creating these zones, Governor Cuomo
will be expanding the connections to industry that are already
strong within some of the colleges, universities, and
surrounding towns of this state. R&D focused companies
locating to these tax-free zones may also be eligible for
Federal research and development tax credits.
Enacted in 1981, the Federal Research and Development (R&D) Tax Credit allows a credit of up to 13% of eligible spending for new and improved products and processes. Qualified research must meet the following four criteria:
Eligible costs include employee wages, cost
of supplies, cost of testing, contract research expenses, and
costs associated with developing a patent. On January 2, 2013,
President Obama signed the bill extending the R&D Tax
Credit for 2012 and 2013 tax years.
In order to take advantage of START-UP NY, businesses need to correlate with the academic mission of the sponsoring colleges and universities as well as maintain new jobs. For New York City, Nassau, Suffolk, and Westchester counties, businesses participating in START-UP NY must be high-tech in nature or new start-ups.
The START-UP NY program paves the way for
the already robust university research and development field
to expand and materialize in industries such as
nanotechnology, software and information technology, solar
energy, and lighting technologies.
The tax-free zones proposed by Governor Cuomo include land and building space within college/university campuses as well as surrounding business areas with strong affiliations to the campus.
SUNY Albany's College of Nanoscale Science and Engineering, set to split from UAlbany in 2014-2015, has recently had a number of large firms partner with the college. In July of 2013, Nikon announced a $350 million investment and partnership with the college to develop next generation lithography technology. An estimated 100 new high-tech jobs will be created.
Nikon is just the latest of industry
partnerships that include firms such as IBM, AMD,
GLOBALFOUNDRIES, SEMATECH, Toshiba, and many others. The
College of Nanoscale Science and Engineering and its $5
billion, 800,000 square-foot complex, is the place to be for
nanotechnology and its various disciplines. Nanotechnology is
making big strides the fields of energy, information
technology, medicine, homeland security, and environmental
Similar to nanotechnology in that it works on an extremely small dimension, the field of microelectronics could lead to a transformation of consumer electronics. SUNY Binghamton's Center for Advanced Microelectronics Manufacturing (CAMM) is part of the school's NYS Center of Excellence in Small Scale Systems Integration Packaging. Binghamton University partnered with Endicott Interconnect Technologies, Cornell University, and Flex Tech Alliance to create the first R&D facility for flexible microelectronics.
Once START-UP NY is fully implemented,
nanotech and microelectronic firms will be able to take full
advantage of the program and further expand their activities
in the Albany and Binghamton areas.
Rensselaer Polytechnic Institute (RPI) has one of the leading university-based lighting research organizations in its Lighting Research Center. RPI's LED research is currently relevant as long-life, low-wattage LED's become more widely used for their energy efficiency. Some of the Lighting Research Center's research aims to make LED's more economically feasible for installation in facilities.
The Lighting Research Center has partnered
with corporations such as Philips, creator of the famed
L-Prize 60w LED replacement, GE Lighting, Sylvania, among many
others. By participating in the START-UP NY program and
receive tax-free zoning, RPI's could see further partnerships
with companies in the lighting industry for research and
Stony Brook University, one of the SUNY
network's four University Centers, has a three building, 246
acre, LEED Research and Development Park on its campus. Inside
the R&D park is the Center for Excellence in Wireless and
Information Technology (CEWIT) and Stony Brook's Advanced
Energy and Technology Center (AERTC). Both centers feature
incubator space and services. Industry partners of CEWIT
include IBM and Cisco Systems, and partners of AERTC include
CA Technologies, LIPA, and GE Energy.
SUNY Farmingdale plans to focus heavily on
solar energy through its Solar Energy Center. SUNY Farmingdale
is the site of the first utility scale photovoltaic
demonstration project in the northeast. The school is planning
to research solar energy internally as well as with
institutions such as Brookhaven National Laboratory through
strategic partnerships. On a practical front, the college
plans to provide training in the installation and maintenance
of PV panels. Through the START-UP NY program, SUNY
Farmingdale can take advantage of tax-free zones by teaming up
with leaders in the solar field, such as First Solar, to
develop both new technology and the college's solar research
SUNY Buffalo has operated its UB Technology Incubator program since 1988. The program offers office as well as lab space in a 40,000 square foot, FDA compliant facility at Baird Research Park. UB also has a 4,000 square foot incubator space in downtown Buffalo. These facilities are focusing on alternative energy technologies, biotechnology, and nanotechnology devices, among other subjects, and are prime territory for START-UP NY tax-free zones.
University research and development continues to make great strides in industries such as nanotechnology, software and information technology, solar energy, and ceramics. The START-UP NY program offers a tax-free opportunity for U.S. companies to locate to related college communities. In addition to the benefits of START-UP NY, companies engaging in related research and development activities can also qualify for Federal R&D tax incentives.
Charles R Goulding Attorney/CPA, is the President of R&D Tax Savers.
Andrea Albanese is a Manager with R&D Tax Savers.
Jonathan Saltzman is a Tax Analyst with R&D Tax Savers.
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