global Tax Rhode Island Updates Tax Credits August 29, 2022 Attention Rhode Islanders…Governor Dan McKee recently signed legislation modifying the Rebuild Rhode Island Tax Credit, RI Qualified Job Incentive Act of 2015 and more. Here’s what you should know. What’s new in Rhode Island? You will want to read up on some important modifications and extensions to certain tax credits We have the details here. What has changed? Certain sunset dates have been extended The Rebuild Rhode Island Tax Credit and tax credits related to the Rhode Island Qualified Jobs Incentive Act of 2015 program now have a sunset date of December 31, 2023 (formerly December 31, 2022). Rebuild RI helps companies with real estate projects for which they are having difficulty raising sufficient funding. The program provides financing through redeemable tax credits which can cover up to 30% of project costs. Jobs Incentive credits provide redeemable credits for up to 10 years. The popular Historic Preservation Tax Credits 2013 program targeting historic structures has been extended from June 30, 2022 to sunset on June 30, 2023, or whenever maximum aggregate credits are met, whichever comes first.Limits to motion picture production company tax credit raisedFor the 2022 tax year, a maximum of $30 million in total tax credits can be issued for motion picture tax credits and/or musical and theatrical production tax credits to encourage development within the motion picture industry in Rhode Island. Under the new law, exclusively for tax years 2023 and 2024, the total amount of production tax credits has been raised to a maximum of $40 million. The credit program is scheduled to sunset in July 2027. New definitions under Healthcare for the Stay Invested in RI Wavemaker Fellowship FundThe Wavemaker fellowship program is used to strengthen the workforce in STEM (Science, Technology, Engineering and Mathematics) fields. It offers student loan reimbursement for graduates working in STEM and certain design fields. It has now been expanded to include health and mental health professionals, while other definitions under this initiative have been updated and revised. A “healthcare applicant” refers to any applicant who meets the eligibility criteria and works full- as a high-demand healthcare practitioner or mental health professional.The fund will be used to redeem tax credits applied against the tax liability of any healthcare applicant who received an award on or after July 1, 2022. Additionally, the sunset date for all incentives and credits authorized by the Wavemaker Fellowship is extended to December 31, 2023 (from December 31, 2022). Child Tax Rebates- Check out our blog, https://kahnlitwin.com/blogs/tax-blog/rhode-island-announces-new-child-tax-rebate . Essentially, The Rhode Island Child Tax Rebate is part of the fiscal year 2023 budget signed by the governor in June. Under the new program, RI residents making up to $100,000 (individual) and $200,000 (joint-filers) are eligible for child tax rebates of $250 per child, for up to three children (maximum $750 in rebates). Nearly 115,000 families are expected to benefit.Cannabis tax- RI has legalized adult recreational use of cannabis in the state. The legislation calls for a 20% tax rate, split as follows: 10% state excise tax7% sales tax3% tax by the municipality where the cannabis is sold The state taxes do not apply to the sale of cannabis products by a medical marijuana treatment center to entities with compassion center permits (like cardholders and caregivers).Retirement income exemption increase-Eligible taxpayers can exclude up to $20,000 of their federally taxable income from pensions, 401(k)s and annuities from income tax. This applies to qualified taxpayers who have reached full retirement age as defined by the Social Security Administration. Find your full retirement age here: https://www.ssa.gov/benefits/retirement/planner/agereduction.html.Reduced interest rate for delinquent tax payments-Starting January 1, 2023, the minimum interest rate will drop to 12% (from 18%) for delinquent tax payments (applies to all tax types not held in trust for the state).Property tax relief- The maximum income level for taxpayers to qualify for the $600 property tax credit has increased to $35,000 (from $30,000).Sales tax exemptions- A few exemptions to sales and use tax were added: Funeral items (expanded to include burial containers, urn liners, urn vaults, grave liners, grave vaults, burial tent setups and prayer cards)Breast pumps and storage suppliesTrade in value of motorcycles Electronic filing and payment mandate for large business taxpayers- Large business registrant taxpayers are now required to electronically file returns and remit taxes. This applies to any person who operates as a business and has over $5,000 in combined annual liability for all taxes administered by the DOT and whose annual gross income exceeds $100,000 for the entity. There are penalties for noncompliance! Questions on the changes? Contact us.