Fledgling businesses on Long Island would benefit from a new bipartisan tax legislation introduced Tuesday by Sen. Charles Schumer (D-N.Y.) and three other senators.
The bill -- called the Startup Innovation Credit Act of 2012 -- would allow smaller companies to file for research and development tax credits based on payroll taxes instead of income tax.
Start-ups and new businesses typically don't pay federal income taxes in their first few years, so they are unable to take advantage of the tax credit though they focus a majority of their early years on research and development. The new legislation would give start-ups more resources to grow.
The bill would be essential to Accelerate Long Island, the new effort by the Long Island Association to create businesses from research at local labs and universities.
“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.
To qualify for the tax credit, a business would have to be less than five years old and make less than $5 million in gross receipts.
Schumer is sponsoring the bill along with Sens. Chris Coons (D-Del.), Marco Rubio (R-Fla.) and Mike Enzi (R-Wyo.).