There's plenty of money to be made in Open Source software — something that, despite recent events, Novell, Red Hat, and a laundry-list of other OSS-loving firms can attest to. Where there often isn't much money, however, is in the hands of individual developers who donate their time to hack Open Source apps into enterprise-class offerings. That may be changing, however — at least in New York — where a pair of state assemblymen are sponsoring a bill to provide tax breaks for Open Source developers.

The bill, introduced by Assemblymen Jonathan Bing & Micah Kellner and "multi-sponsored" by members Alec Brook-Krasny, Kevin Cahill, Francine DelMonte, Crystal Peoples, and Mike Spano, provides for the creation of a new state tax credit for developers of Open Source projects to help recoup out-of-pocket costs of their development activities. If enacted, any developer of any software released under a Free or Open Source license — as defined by the Open Source Initiative and/or the Free Software Foundation — would be able to claim the credit for up to 20% of the total out-of-pocket expenses incurred in the course of development — up to a maximum of $200.

Further, the credit cannot exceed the amount of tax owed, meaning no refunds by virtue of excess credit, though any unused amount can be carried over to successive tax years until exhausted. (This differs from certain federal tax credits, such as the Earned Income Credit, where any excess credit is returned to the taxpayer as a refund.) Sadly, though perhaps understandably, the credit may only be applied to a given application once, so those developing ongoing projects — the Linux kernel, for example — will only be entitled to recoup one year's expenses, though they may still claim the credit for a separate project.

The move is certainly a step in the right direction — and one that no doubt will be eagerly supported by Open Source New Yorkers — and we applaud Assemblymen Bing & Kellner, and their "multi-sponsor" colleagues, for their efforts to support Open Source development — and Open Source developers.