Start-ups across the country and here on Long Island could benefit from a new bipartisan tax bill co-sponsored by Sen. Charles Schumer (D-N.Y.).
The legislation — called the Start-up Innovation Credit Act of 2012 — would allow fledgling companies to better access research and development tax credits.
"As the R&D Tax Credit program exists now, start-up companies are starting behind the eight ball, without access to the same job-producing programs that already-established companies enjoy," Schumer said in a news release Wednesday.
Currently, businesses can receive a research and development tax credit to offset their income tax. Since new ventures spend their early years focused on hiring employees and developing a product, they typically don't make a profit — so they are not able to take advantage of the benefit.
The new bill would allow start-ups to claim tax credits against payroll taxes instead of income taxes.
To qualify for the Start-up Innovation Credit, a business must be less than five years old and generate less than $5 million in gross receipts.
Venture capitalist Mark Fasciano, a managing partner at Canrock Ventures in Jericho, said the proposed legislation would help "reduce risk for the start-ups because it gives them the ability to have the same tax benefit that bigger companies get to have. Anything that can help reduce some of the risk for the start-up companies, and gives them a chance to grow and blossom, is better for Long Island."
The bill could also boost Accelerate Long Island, the new effort by the Long Island Association to create new companies and jobs from research at local labs and universities.
Schumer is sponsoring the bill along with Sens. Chris Coons (D-Del.), Marco Rubio (R-Fla.) and Mike Enzi (R-Wyo.). The bill is currently seeking more sponsors in the Senate, and will go through the Senate Finance Committee in the fall, Schumer's spokesman Mike Morey said.