Global Tax Insights
RI Division of Taxation: 3 New Tax Credit ProgramsSeptember 15, 2015
Attention Rhode Islanders- Rhode Island has three new tax credits—take note of these important qualification requirements.
On August 26th The Rhode Island Division of Taxation proposed rules and regulations regarding three new tax credit and incentive programs- the Anchor Institution Tax Credit, the Rebuild Rhode Island Tax Credit Program, and the Rhode Island Qualified Jobs Incentive Act of 2015. Take note of these important qualification requirements.
The Anchor Institution Tax Credit
This tax credit is available to an existing Rhode Island business (anchor institution) that plays a key role in getting a material supplier, service provider, or customer to relocate to RI. Some requirements:
- If a business relocates before December 31, 2018, it must create at minimum 10 new jobs.
- If a business relocates after December 31, 2018- 25 new jobs must be created.
The Rebuild Rhode Island Tax Credit Program
This program will provide up to $15 million in tax credits (allocated over five years) to a real estate development project, along with a ruling that allows the Board of the RI Commerce Corporation to approve a sales tax exemption for personal property used directly in a project that qualifies for a tax credit.
In order to qualify for this exemption, a project must be:
- At least $5 million in overall size and the developer has to have 20% equity in the actual project.
- (for a commercial project) At least 25,000 square feet with 25 full time jobs at the finish date.
- (for a residential project) At least 20,000 square feet with 20 units
The Rhode Island Qualified Jobs Incentive Act of 2015
This tax credit is available to qualifying businesses creating new full-time jobs in RI. To be eligible for this exemption:
- A business in a targeted industry has to create 10 new jobs at least, and if it employs more than 100 within the state, it has to create jobs equal to 10% of their workforce in state (or 100 employees).
- A business in a non-targeted industry has to create 20 jobs at minimum, and if it employs more than 200 employees in the state, it needs to create jobs equal to 10% of the workforce (or 100 new jobs).
- The jobs are required to pay (at minimum) the median hourly wage for the state (some exceptions for economically unstable industries).
More information on each new credit can be found here:
Questions? Contact any member of our Tax Services Team.