S 8171: Establishes the contract New York program to provide tax credits to corporations contracting with emerging microbusinesses; directs the department of economic development and the empire state development corporation to create and maintain a registry of emerging microbusinesses and to biannually implement best practices for engaging corporations to utilize such registry; establishes the contract New York tax credit for New York corporations with eligible contracts with emerging microbusinesses.

  
  STATE OF NEW YORK ________________________________________________________________________ 8171 2025-2026 Regular Sessions  IN SENATE May 16, 2025 ___________ Introduced by Sen. BASKIN -- read twice and ordered printed, and when printed to be committed to the Committee on Commerce, Economic Devel- opment and Small Business AN ACT to amend the economic development law, in relation to establish- ing the contract New York program; and to amend the tax law, in relation to establishing the contract New York tax credit The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The economic development law is amended by adding a new 2 article 29 to read as follows: 3 ARTICLE 29 4 CONTRACT NEW YORK PROGRAM 5 Section 508. Definitions. 6 509. Contract New York program. 7 510. Contract New York registry. 8 511. Contract New York tax credit. 9 § 508. Definitions. For the purposes of this article, the following 10 terms shall have the following meanings: 11 1. "Emerging microbusiness" shall mean a business which employs fewer 12 than five persons, is authorized to do business in this state, is inde- 13 pendently owned and operated, is not dominant in its field, is owned by 14 United States citizens or permanent resident noncitizens, has at least 15 fifty-one percent ownership by socially and economically disadvantaged 16 individuals and is subject to a physical site inspection to verify such 17 fifty-one percent socially and economically disadvantaged ownership 18 requirement, and the disadvantaged ownership interest of which is real, 19 substantial and continuing and has and exercises the authority to 20 control independently the day-to-day business decisions of such micro- 21 business. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD13088-01-5 
 S. 8171 2 1 2. "Eligible contract" shall mean a contract between a corporation and 2 an emerging microbusiness valued between twenty-five and one hundred 3 thousand dollars. 4 § 509. Contract New York program. There is hereby established within 5 the department a contract New York program to provide tax credits to 6 corporations contracting with emerging microbusinesses. 7 § 510. Contract New York registry. 1. The department and the empire 8 state development corporation shall create and maintain a registry of 9 emerging microbusinesses, which shall be publicly accessible and shall 10 contain information about such emerging microbusinesses including, but 11 not limited to, an emerging microbusiness's: 12 (i) operational region; 13 (ii) North American Industry Classification System (NAICS) code; and 14 (iii) range of contract size capacity. 15 2. The department and the empire state development corporation shall 16 biannually implement best practices for engaging corporations to utilize 17 the contract New York registry. Such best practices may include, but 18 shall not be limited to, recruitment, surveys, and corporation and 19 microbusiness mixers. 20 § 511. Contract New York tax credit. 1. A New York corporation with an 21 eligible contract with an emerging microbusiness on the contract New 22 York registry established pursuant to section five hundred ten of this 23 article may be eligible to claim a credit equal to the amount of such 24 corporation's payroll tax withholdings as required pursuant to section 25 six hundred seventy-one of the tax law. 26 2. The tax credit established in this section shall be allowed as 27 prescribed in section fifty, section one hundred eighty-five, subdivi- 28 sion sixty-three of section two hundred ten-B and subsection (uuu) of 29 section six hundred six of the tax law. 30 § 2. The tax law is amended by adding a new section 50 to read as 31 follows: 32 § 50. Contract New York tax credit. (a) Definitions. As used in this 33 section, the following terms shall have the following meanings: 34 (1) "Emerging microbusiness" shall mean a business which employs fewer 35 than five persons, is authorized to do business in this state, is inde- 36 pendently owned and operated, is not dominant in its field, is owned by 37 United States citizens or permanent resident noncitizens, has at least 38 fifty-one percent ownership by socially and economically disadvantaged 39 individuals and is subject to a physical site inspection to verify such 40 fifty-one percent socially and economically disadvantaged ownership 41 requirement, and the disadvantaged ownership interest of which is real, 42 substantial and continuing and has and exercises the authority to 43 control independently the day-to-day business decisions of such micro- 44 business. 45 (2) "Eligible contract" shall mean a contract between a corporation 46 and an emerging microbusiness valued between twenty-five and one hundred 47 thousand dollars. 48 (b) Allowance of credit. A taxpayer subject to tax under article 49 nine-A or twenty-two of this chapter shall be allowed a credit against 50 such tax. The amount of the credit is equal to the amount determined 51 pursuant to section five hundred eleven of the economic development law. 52 (c) Eligibility. To be eligible for the contract New York tax credit, 53 the taxpayer shall be a corporation with an eligible contract with an 54 emerging microbusiness on the contract New York registry established 55 pursuant to section five hundred ten of the economic development law. 
 S. 8171 3 1 § 3. The tax law is amended by adding a new section 185 to read as 2 follows: 3 § 185. Contract New York tax credit. 1. Definitions. (a) The term 4 "emerging microbusiness" means a business which employs fewer than five 5 persons, is authorized to do business in this state, is independently 6 owned and operated, is not dominant in its field, is owned by United 7 States citizens or permanent resident noncitizens, has at least fifty- 8 one percent ownership by socially and economically disadvantaged indi- 9 viduals and is subject to a physical site inspection to verify such 10 fifty-one percent socially and economically disadvantaged ownership 11 requirement, and the disadvantaged ownership interest of which is real, 12 substantial and continuing and has and exercises the authority to 13 control independently the day-to-day business decisions of such micro- 14 business. 15 (b) "Eligible contract" shall mean a contract between a corporation 16 and an emerging microbusiness valued between twenty-five and one hundred 17 thousand dollars. 18 2. Allowance of credit. A taxpayer that is a corporation with an 19 eligible contract with an emerging microbusiness on the contract New 20 York registry established pursuant to section five hundred ten of the 21 economic development law shall be allowed a credit, to be computed as 22 provided in section fifty of this chapter, against the tax imposed by 23 this article. Such credit shall be allowed for the duration of the 24 eligible contract. 25 3. Application of credit. In no event shall the credit under this 26 section be allowed in an amount which will reduce the tax payable to 27 less than the applicable minimum tax fixed by section one hundred eight- 28 y-three of this article. If, however, the amount of credit allowable 29 under this section for any taxable year reduces the tax to such amount, 30 any amount of credit not deductible in such taxable year shall be treat- 31 ed as an overpayment of tax to be refunded in accordance with the 32 provisions of section one thousand eighty-six of this chapter. Provided, 33 however, the provisions of subsection (c) of section one thousand eight- 34 y-eight of this chapter notwithstanding, no interest shall be paid ther- 35 eon. 36 § 4. Section 210-B of the tax law is amended by adding a new subdivi- 37 sion 63 to read as follows: 38 63. Contract New York tax credit. (a) Definitions. For purposes of 39 this subdivision, the following definitions shall apply: 40 (i) "Emerging microbusiness" shall mean a business which employs fewer 41 than five persons, is authorized to do business in this state, is inde- 42 pendently owned and operated, is not dominant in its field, is owned by 43 United States citizens or permanent resident noncitizens, has at least 44 fifty-one percent ownership by socially and economically disadvantaged 45 individuals and is subject to a physical site inspection to verify such 46 fifty-one percent socially and economically disadvantaged ownership 47 requirement, and the disadvantaged ownership interest of which is real, 48 substantial and continuing and has and exercises the authority to 49 control independently the day-to-day business decisions of such micro- 50 business. 51 (ii) "Eligible contract" shall mean a contract between a corporation 52 and an emerging microbusiness valued between twenty-five and one hundred 53 thousand dollars. 54 (b) Allowance of credit. A taxpayer that is a corporation with an 55 eligible contract with an emerging microbusiness on the contract New 56 York registry established pursuant to section five hundred two of the 
 S. 8171 4 1 economic development law shall be allowed a credit, to be computed as 2 provided in section fifty of this chapter, against the tax imposed by 3 this article. Such credit shall be allowed for the duration of the 4 eligible contract. 5 (c) Application of credit. The credit allowed under this subdivision 6 for any taxable year shall not reduce the tax due for such year to less 7 than the fixed dollar minimum amount prescribed in paragraph (d) of 8 subdivision one of section two hundred ten of this article. However, if 9 the amount of credits allowed under this subdivision for any taxable 10 year reduces the tax to such amount or if the taxpayer otherwise pays 11 tax based on the fixed dollar minimum amount, any amount of credit thus 12 not deductible in such taxable year shall be treated as an overpayment 13 of tax to be credited or refunded in accordance with the provisions of 14 section one thousand eighty-six of this chapter. Provided, however, the 15 provisions of subsection (c) of section one thousand eighty-eight of 16 this chapter notwithstanding, no interest shall be paid thereon. 17 § 5. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 18 of the tax law is amended by adding a new clause (lii) to read as 19 follows: 20 (lii) Contract New York tax Amount of credit under subdivision 21 credit under subsection (uuu) sixty-three of section two hundred 22 ten-B 23 § 6. Section 606 of the tax law is amended by adding a new subsection 24 (uuu) to read as follows: 25 (uuu) Contract New York tax credit. (1) Definitions. For the purposes 26 of this subsection, the following definitions shall apply: 27 (A) "Emerging microbusiness" shall mean a business which employs fewer 28 than five persons, is authorized to do business in this state, is inde- 29 pendently owned and operated, is not dominant in its field, is owned by 30 United States citizens or permanent resident noncitizens, has at least 31 fifty-one percent ownership by socially and economically disadvantaged 32 individuals and is subject to a physical site inspection to verify such 33 fifty-one percent socially and economically disadvantaged ownership 34 requirement, and the disadvantaged ownership interest of which is real, 35 substantial and continuing and has and exercises the authority to 36 control independently the day-to-day business decisions of such micro- 37 business. 38 (B) "Eligible contract" shall mean a contract between a corporation 39 and an emerging microbusiness valued between twenty-five and one hundred 40 thousand dollars. 41 (2) Allowance of credit. A taxpayer that is a corporation with an 42 eligible contract with an emerging microbusiness on the contract New 43 York registry established pursuant to section five hundred ten of the 44 economic development law shall be allowed a credit, to be computed as 45 provided in section fifty of this chapter, against the tax imposed by 46 this article. Such credit shall be allowed for the duration of the 47 eligible contract. 48 (3) Application of credit. If the amount of the credit allowed under 49 this subsection for the taxable year exceeds the taxpayer's tax for such 50 year, the excess shall be treated as an overpayment of tax to be credit- 51 ed or refunded in accordance with the provisions of section six hundred 52 eighty-six of this article, provided, however, that no interest will be 53 paid thereon. 54 § 7. This act shall take effect immediately and shall apply to taxable 55 years beginning on and after the first of January next succeeding the 56 date on which it shall have become a law.