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For a list of Rhode Island economic development agencies that can help with the site selection process, visit our Online Site Seekers’ Guide.
Industry Cluster Grants: Competitive grants to start, grow or improve industry sector partnerships, encouraging companies to work together to solve problems, exchange technology and share talent. Competitive startup and technical assistance grants range from $75,000 to $250,000, while competitive program grants start at $100,000 and cap at $500,000 for businesses that enhance cluster growth and effectiveness.
Innovation Network Matching Grants: Matching funds to expand a small business development and assistance program at eligible organizations to help more companies start and grow their firms. Competitive applicants will be non-profit organizations, for-profit organizations, universities and co-working space operators that are helping entrepreneurs and small businesses solve innovation challenges, have a track record of outcomes that demonstrate success in helping entrepreneurs and small businesses solve these problems, and have well-conceived plans for scaling or expanding successful programs or initiatives to reach more entrepreneurs and small businesses. Applicants must be able to provide matching support (cash, in-kind, or a combination of) of at least $50,000. Programs for which grant assistance is sought must be well-defined and applying organizations must have a demonstrated track record of assisting small business development.
Innovation Vouchers: Are you a small business owner in Rhode Island? Do you have fewer than 500 employees within Rhode Island? Are you searching for R&D services to develop an innovative product or process that could help grow your business, create new markets and reach new clients? If you answered “yes” to these questions, then you may be eligible to receive $5,000-$50,000 through the Rhode Island Innovation Voucher program. Rhode Island small businesses may redeem the voucher in partnership with a Rhode Island knowledge providing institution for activities including but not limited to:
- Research and development support towards the commercialization of innovative new products, processes, and/or services;
- Services and activities including access to research or scientific expertise;
- Technological development or technological exploration;
- Product, service, or market development; and
- Improved business practices that implement strategies to grow business and create operational efficiencies.
Vouchers must be redeemed within 12 months of receipt. No more than two vouchers may be awarded within a 12-month period. Knowledge providers are limited to a 25% indirect cost charge. All small businesses must be located and conducting business in the state of Rhode Island, and at least fewer than 500 employees must be located in the state of Rhode Island.
Main Street Rhode Island: Funding to stimulate investment in local business districts by providing grants and loans to attract new investment and jobs in Main Street districts. Uses include infrastructure, signage, building façade, street lighting, sidewalks, etc.
Wavemaker Fellowship: Used to attract and retain talent through funding student loan repayment costs for graduates employed at Rhode Island companies pursuing careers in technology, engineering, design and other key sectors in the state. Four-year reimbursement equal to individual’s student loan obligation not to exceed: $1,000 for an associate’s degree, $4,000 for a bachelor’s degree or $6,000 for a graduate/post-graduate degree. 70% of the fund is dedicated to Rhode Island residents or graduates of Rhode Island academic institutions
Anchor Institution Tax Credit: Compensates existing Rhode Island businesses that attract suppliers, service providers and/or major customers to relocate to Rhode Island. The fiscal year 2016 budget includes $1.75 million to fund this program.
- Eligible relocations must have 10 jobs in 2015-2018 and 25 jobs in 2019-2020
- Sector, location, demonstrated role in relocation decision, impact on state, prevailing brokerage fee and ROI all factors in award
Corporate Income Tax Rate Cut: As of January 1, 2015, the corporate income tax rate under Rhode Island General Laws (RIGL) § 44-11-2 is 7%, down from 9%. For some taxpayers, the actual rate could be lower, depending on certain factors. In addition, effective for tax years beginning on or after January 1, 2015 C Corporations will use a single sales factor to apportion income to Rhode Island (in lieu of the standard three-factor apportionment formula). The annual corporate minimum tax remains at $500.
Innovation Tax Credit: Rhode Island offers a tax credit to encourage investment in high-growth, high-wage innovation industries. The Rhode Island Innovation Tax Credit offers up to a 50% credit on qualified capital investments, with a maximum tax credit of $100,000. To be eligible to apply for the credit, a company must produce traded goods or services, have annual gross revenues of less than $1 million in the prior two calendar years and must be categorized as one of the following innovation industries: biotechnology and life sciences; communication and information technology; financial services; marine and defense manufacturing; professional, technical and educational services; and industrial and consumer product manufacturing and design.
Job Training Tax Credit: Rhode Island law (RIGL 42-64.6) grants a credit against the corporate income tax (or the insurance premium tax) equal to 50% of eligible training expenditures for new or existing employees, in accordance with an approved training plan. Employees must be full-time, and after training, the employee must earn at least 150% of the Rhode Island minimum wage. Training plans must be filed with the Rhode Island Human Resources Investment Council for prior written approval. The credit is capped at $5,000 per employee over a three-year period.
Qualified Jobs Incentive: Provides businesses with a base tax credit for creating a minimum number of new jobs in Rhode Island or growing an in-state workforce by a specific percentage. The base tax credit is up to $2,500/new full-time job, with a bonus up to $7,500/job if certain criteria (targeted industry, hope community, etc.) are met.
- Must create a minimum 20 jobs or grow in-state workforce by 10%; lowered to 10 jobs if certain criteria are met
- Benefit may not exceed 10 years in term or income tax withholdings generated by the jobs created
- Applications must be received by December 21, 2018
- Usable, tradable and redeemable (90% to the state)
Rebuild Rhode Island Tax Credit: Provides capital—up to 20% of eligible project costs, or 30% if certain criteria are met—to qualified real estate projects that demonstrate a “financing gap.” The credit maximum is $15 million per project.
- Usable, tradable and redeemable (90% of value)
- Sales tax exemption on building materials may apply
- Credits payable in five years following completion (certificate of occupancy)
Small Business Assistance Program: Provides businesses with fewer than 200 employees access to capital of up to $750,000 per business. The potential uses include: direct lending, collateral support, credit enhancements, co-investing and technical assistance.
Tax Increment Financing: Provides capital to eligible projects by rebating the new state tax revenue generated.
- Projects must demonstrate need through a “financing gap”
- Reimbursements may not exceed 30% of total project costs (exemption for public infrastructure/utilities) or 75% of incremental revenue generated
Tax Stabilization Incentive: Provides an incentive for Rhode Island municipalities to enter into tax stabilization agreements (TSA) of up to 10% of forgone tax revenue reimbursed to a local municipality for 12 years. Projects must be more than or equal to $10 million and create 50 jobs (50% for Hope Communities).
Adult Education Tax Credit: The Adult Education Tax Credit (RIGL 44-46) allows for a corporate tax credit of 50% of the direct costs for vocational training or basic education, up to a maximum of $300 per employee. The maximum overall credit is $5,000 per employer per calendar year. The employee must remain employed by the business for 13 consecutive weeks and a minimum of 455 hours of paid employment before the credit can be claimed. This credit is available Rhode Island companies filed as a C-corporation. Credits cannot be carried forward. For more information, visit the Department of Labor & Training and read the Rhode Island General Law.
Educational Assistance and Development Credit: A contribution to a Rhode Island institution of higher education is allowed a tax credit of 8% for the amount above $10,000. The contribution, which can include qualified tangible personal property, must be for the establishment or maintenance of a faculty chair, department, work fellowship, or program of scientific research or education. The 8% tax credit is applied against the corporate income tax, the bank excise tax or the insurance companies tax. Unused credits may be carried forward up to five years.
Employer’s Apprenticeship Tax Credit: Employers of registered full-time apprentices in the metal and plastic industries are eligible for an annual corporate tax credit of 50% of the actual wages paid to the qualifying apprentice, or $4,800, whichever is less. The number of apprenticeships for which tax credit is allowed must exceed the average number of apprenticeships begun during the five preceding income years. The following trades are eligible: machinist, toolmaker, model-maker, gage maker, pattern-maker, plastic process technician, tool and machine setter, die- sinker, mold-maker, tool and die maker, and machine tool repair. For more information, visit the Department of Labor & Training and read the Rhode Island General Law.
Job Training Grants: The Governor’s Workforce Board offers a training program for business and industry funded through a job development assessment of 0.21% on the firm’s taxable payroll. (Each employer’s unemployment tax rate is reduced annually by 0.21% to ensure that this program does not result in a tax increase.) This pool of money is available to create customized training programs tailored specifically for a company and free from income and other restrictions imposed by federally funded programs.
For more information on all Incentive programs, visit http://commerceri.com/finance-business/taxes-incentives