Category: Rhode Island

Rhode Island Credits and Incentives

As we’ve mentioned before, our Georgia clients frequently ask us to investigate potential credits and incentives in other states where they have operations, potential acquisitions or strong relationships with customers or vendors. In addition, private equity groups ask us about potential $$ for their portfolio companies.
We were recently asked about credits and incentives in Rhode Island, and their state economic development professionals gave us some details (CommerceRI site click here).
Rhode Island offers a meager collection of credits and incentives for new and existing businesses.  CNBC ranked Rhode Island #48 in their 2015 America’s Top States for Business survey (Georgia was #5 in the same survey).    
Incentives and Credits include:
Qualified Jobs Incentive Tax Credit — Companies expanding their workforce in Rhode Island or relocating jobs from out of state can receive annual, redeemable tax credits for up to 10 years with the Qualified Jobs Incentive program. Credits can equal up to $7,500 per job per year, depending on the wage level and other criteria. The minimum number of new jobs needed to qualify varies by industry and company size, but can be as few as 20, or even 10, jobs. The first 500 jobs approved under the program will receive the maximum credit available.  Pre-approval required, of course, and caps apply.

Rebuild Rhode Island Tax Credit — Covers project financing gaps with redeemable tax credits covering up to 20-30% of project costs. Commercial office, industrial, residential, mixed use development, ground-up construction and historic rehab can qualify. A minimum project cost of $5 million and certain square footage/project size minimums may apply. Approved projects can also be exempted from sales tax on construction materials, furnishings and equipment.

Industry Cluster Grants — Encourages companies in an industry sector to work together to solve problems, exchange ideas and develop talent. Grants of $75,000 to $250,000 are available to fund planning and organization building for the cluster; grants of $100,000 to $500,000 are available to implement programs that strengthen the cluster in areas like R&D, tech transfer, workforce development, or marketing.  Sounds like another government cluster program!

Others: Anchor Institution Tax Credit, a referral program; I-195 Redevelopment Fund, a fix-up Providence fund; Innovation Vouchers, a local medical R&D fund; other assorted grant programs.

Compared to Georgia, Rhode Island has:
  • Higher corporate and comparable personal income tax rates.
  • Higher combined state and local tax burden
  • A far narrower range of incentives.
  • Pre-approval required for all incentives
To summarize, Rhode Island is below average for business tax incentives,but at least not many people would notice!