FIRST ANNUAL TAX CREDIT DISCLOSURE REPORT ISSUED
Legislation enacted by the General Assembly and signed into law by the Governor mandates that the Department of Revenue’s Division of Taxation annually report the names and addresses of the recipients and the amount of the following tax credits received during the previous fiscal year:
- Rhode Island Economic Development Corporation Project Status (RIGL 42-64-10);
- Incentive for Innovation and Growth (RIGL 44-63-3);
- Jobs Development Act (RIGL 42-64.5-5);
- Distressed Areas Economic Revitalization Act – Enterprise Zones (RIGL 42-64.3);
- Mill Building and Economic Revitalization Act (RIGL 42-64.9); and
- Motion Picture Production Tax Credit (RIGL 44-31.2).
In Fiscal Year 2008 a total of $ 54 million in tax credits and incentives were claimed under the six tax credit programs for which public reporting is required. The following table describes the tax credit programs including the number of taxpayers who received a tax credit and the total amount of tax credit awarded. Attached also are the names and addresses of those who received a tax credits and the amount of the credit.
Gary S. Sasse, Director of the Department of Revenue said “The report will enhance analysis of the costs and benefits of tax credits used to encourage business growth within Rhode Island.”
As part of the annual budget request of the Governor, the Department of Revenue is required to submit an annual Unified Economic Development Budget. Also, the Department of Revenue is scheduled to issue a report in October that will include:
- The name of each recipient and the dollar amount of each tax credit or other tax benefit;
- Summaries of the full-time and part-time jobs created or retained for each recipient;
- The employee benefits provided by each recipient;
- The degree to which each recipient has met the job creation and retention and wage and benefit goals and requirements;
- Aggregate dollar amounts for each tax credit or other tax benefit and for each geographical area within the state;
- The dollar amounts of all such tax credits and other tax benefits by each approving authority with the cost to the state and the approving ;
- The degree to which each tax credit or other tax benefit has met the job creation and retention and wage and benefit goals and requirements; and
- The dollar amounts of all such tax credits and other tax benefits by each approving authority with the cost to the state and the approving agency.
| RIGL Cite | Title | Description | Number of Recipients | Total Amount of Credits |
| Chapter 42-64-10 | Rhode Island Economic Development Corporation (EDC) | Provides EDC with the statutory authority to grant project status to certain construction projects. Project status exempts the purchase of materials for the construction and furbishing of new facilities from tax liabilities that would be incurred under RIGL 44-18, Sales and Use Taxes. | 13 | $18.2 M |
| Chapter 44-63-3 | Incentives for Innovation and Growth | Allows EDC, based upon an advisory resolution of the Rhode Island Science and Technology Advisory Council, to grant tax credit certificates of up to $100,000 per company, not to exceed $2,000,000 in total in any two year period, to be used against tax liabilities incurred under RIGL 44-11, Business Corporation Tax, RIGL 44-12, Franchise Tax, or 44-30, Personal Income Tax. | 4 | $0.3 M |
| Chapter 42-64.5-5 | Job Development Act | Allows eligible companies, including subsidiaries, to reduce the rate of tax that is paid under RIGL 44-11-2(a), Business Corporation Tax, RIGL 44-14-3(a), Tax on State Banks, RIGL 44-14-4, Tax on National Banks, RIGL 44-17-1, Taxation of Insurance Companies, and RIGL 44-13-4(4), Public Service Corporation Tax by 0.25 percent for every 50 new employees added to its base employment level up to a maximum total rate reduction of six percent. | 12 | $21 M |
| Chapter 42-64.3 | Distressed Areas Economic Revitalization Act | Allows a qualified business in an enterprise zone to take a credit against the tax imposed under RIGL 44-11, Business Corporation Tax, RIGL 44-13 (except under RIGL 44-13-13), Public Service Corporation Tax, RIGL 44-14, Taxation of Banks, RIGL 44-17, Taxation of Insurance Companies, and RIGL 44-30, Personal Income Tax, where the credits is computed as equal to 50.0 or 75.0 percent of the total amount of wages paid, up to a maximum of $2,500 or $5,000 per employee, to employees that comprise the required five percent new jobs. | 87 | $1.8 M |
| Chapter 42-64.9 | MIll Building and Economic Revitalization Act | Allows a taxpayer who owns and operates an eligible business in a substantially rehabilitated certified building a tax credit of up to $3,000 per qualified employee against the tax imposed by RIGL 44-11, Business Corporation Tax or RIGL 44-30, Personal Income Tax. In addition, a certified building owner may be allowed a specialized investment tax credit of 10.0 percent against the tax liabilities incurred under RIGL 44-11, Business Corporation Tax, RIGL 44-14, Taxation of Banks, RIGL 44-17, Taxation of Insurance Companies, and RIGL 44-30, Personal Income Tax. | 0 | $0 |
| Chapter 44-31.2 | Motion Picture Production Tax Credits | Provides a motion picture production company a tax credit of 25.0 percent of the state certified production costs incurred that are directly attributable to activity within the state provided that the primary locations are within the State of Rhode Island and the total production budget is at least $300,000. The tax credit is transferable from the motion picture production company to other individuals or companies. The tax credit can be used against the tax imposed by RIGL 44-11, Business Corporation Tax, RIGL 44-14, Taxation of Banks, RIGL 44-17, Taxation of Insurance Companies, and RIGL 44-30, Personal Income Tax. | 4 | $12.8 M |
TAX CREDIT AND INCENTIVE REPORT
Senate Bill 2661 Sub A (Tax Incentive Disclosure and Accountability Act) and House Bill 7953 Sub A (The development Subsidy Job Goals Accountability Act) requires the Division of Taxation to annually report the names, address and amount of tax credits received during the previous fiscal year. RIGL also requires all taxpayers receiving any of the credits listed below to report any bonds, grants, loans, loan guarantees, matching funds or tax credits received during the previous state fiscal year from the state governmental entity, state agency or public agency as defined in RIGL 37-2-7.
Section of RIGL 37-2-7 defines a governmental entity as “any department, commission, council, board, bureau, committee, institution, legislative body, agency, or government corporation of the executive, legislative, or judicial branches of state, federal, and/or local governments.”
List of Tax Incentive Credits:
- Rhode Island Economic Development Corporation Project Status (RIGL 42-64-10);
- Incentive for Innovation and Growth (RIGL 44-63-3);
- Jobs Development Ace (RIGL 42-65.5);
- Distressed Areas Economic Revitalization Act – Enterprise Zones (RIGL 42-64.3);
- Mill Building and Economic Revitalization Act (RIGL 42-64.9); and
- Motion Picture Production Tax Credit (RIGL 44.31.2).
- The attached report summarized the amounts of tax credits and bonds, grants, loans, loan guarantees, matching funds or tax credits received by entities during Fiscal Year 2008 (July 1, 2007 through June 30, 2008).
This report merely summarizes the amount of tax credit received along with other incentives received for each project lessee during Fiscal Year 2008. This report is not intended to provide an analysis as to the effectiveness of this or any other tax credit or incentive.
David M. Sullivan Tax Administrator