Rhode Island

Quick Facts

Rhode Island Governor Lincoln Chafee

Rhode Island Governor Lincoln Chafee

 

  • Capital: Providence
  • Population (2012 Est.): 1,050,292
  • Largest Cities (2012): Providence, 178,432; Warwick, 81,873; Cranston, 80,529; Pawtucket, 71,170; East Providence, 47,096
  • Targeted Industries: Agriculture/Aquaculture Industries, Defense, IT, Financial Services, Life Sciences, Manufacturing & Design
  • GDP (All Industry 2012): $50.9 billion*

*Bureau of Economic Analysis, U.S. Department of Commerce

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Incentives

BOND FINANCING

  • Tax-Exempt R.I. Industrial Facilities Corporation (RIIFC) Bonds: RIIFC issues tax-exempt revenue bonds for companies exploring various manufacturing projects with a $20,000,000 maximum limit per project. The bond can cover up to 100% of the cost for a manufacturing project.
  • Taxable RIIFC Bonds: RIIFC offers taxable bonds for businesses that want to branch out into a commercial enterprise, including building tourist-travel facilities. The limit per project is usually established by the bond purchaser or credit enhancer.

Loan and Bond Guarantees

  • Mortgage Insurance: Offered through the Rhode Island Industrial Recreational Building Authority (IRBA). The maximum amount a business can borrow through this program is $5,000,000. The loan covers up to 90% on real estate, 80% of machinery and equipment, and 75% of tourist-travel recreation projects.

Renewable Energy Fund: Provides grants, loans and other financing options to renewable energy projects with the potential to make electricity in a cleaner, more sustainable manner, while stimulating job growth in the green technology and energy sectors of Rhode Island’s economy.

The U.S. Small Business Administration (SBA) offers a variety of loan programs for very specific purposes.

  • Small Business Loan Fund: For smaller businesses looking for a direct, fully secured loan, the Small Business Loan Fund (SBLF) provides up to $250,000 for working capital to existing manufacturing, processing and selected services. Additionally, manufacturers seeking financing to be used for the acquisition of land, buildings, and equipment may qualify for loans in excess of $250,000.
  • General Small Business Loans: The 7(a) Loan Program, the U.S. Small Business Administration’s (SBA) most common loan program, includes financial help for businesses with special requirements.
  • Microloan Program: SBA’s Microloan Program provides small, short-term loans to small business concerns and certain types of not-for-profit child-care centers.
  • Real Estate & Equipment Loans (CDC/504): The CDC/504 Loan Program provides financing for major fixed assets such as equipment or real estate.
  • Disaster Loans: SBA provides low-interest disaster loans to homeowners, renters, businesses of all sizes, and most private nonprofit organizations.

Low-Rate Business Loans in Providence, Rhode Island: The government uses Ocean State Business Development Authority, based in Providence, Rhode Island, to help small companies secure low-rate business loans to grow the regional economy.

Rhode Island Historical and Preservation Heritage Commission Low-Interest Loans: The Historical Preservation Loan Fund is available to preserve properties listed on the State Register of Historic Places by providing low-interest loans to public, non-profit, or private owners. Loan money may be used for needed restoration work or, in some cases, for acquiring and rehabilitating an endangered historic property.

FINANCIAL SERVICE INDUSTRY INCENTIVES

Alien Insurance Companies: Rhode Island allows a non-U.S. insurance company to become licensed in Rhode Island and, as long as it maintains its base of U.S. operations in Rhode Island, and to be treated as a Rhode Island domiciled insurance company for the purposes of obtaining licenses in other states.

Deregulation of Commercial Lines: This law exempts qualified commercial insurance lines from specific state review requirements, including filing policy forms, casualty insurance rating requirements, and certificate of compliance requirements.

Gross Premiums Tax Credits in Enterprise Zones: Rhode Island offers some of the most competitive ongoing tax incentives for job creation in Enterprise Zones. These credits may be taken against the gross premiums tax.

Income Apportionment – Depository Institutions: Income of banks having a regular place of business outside Rhode Island are entitled to a portion net income using a three-factor formula similar to that used for the corporate income tax.

Income Apportionment – Credit Card Banks: Banking institutions engaged only in credit card business may elect to apportion net income derived directly or indirectly from the banking institution to Rhode Island to the extent that customers of the taxpayer are domiciled in Rhode Island.

Income Apportionment – Regulated Investment Companies & Securities Brokerage: Income of Regulated Investment Companies and Securities Brokerage Services may be apportioned to Rhode Island using a one-factor formula based on the ratio of gross sales to Rhode Island residents to gross sales everywhere.

Income Apportionment – Retirement and Pension Plans: Pension fund service firms may use a one-factor formula based on the ratio of total Rhode Island receipts to total receipts everywhere. Taxpayers who provide traditional administrative services to pension or retirement plans may elect to have its net income apportioned on the basis of the domicile of its employee beneficiaries.

Insurance Company Retaliatory Tax Exemption: Foreign insurance companies are exempt from gross premiums retaliatory taxes in Rhode Island when their home jurisdiction does not impose a like tax.

Intangible Personal Property Sales Tax Exemption: Sales or transfers of intangible personal property such as stocks, bonds, accounts receivable, money or insurance policies are exempt from the sales tax.

Interest: Rhode Island has no cap on credit card transactions and authorizes any interest rate agreed upon between lender and debtor.

International Investment Management Fee Income Tax Exemption: Companies with at least 500 employees in Rhode Island will not be taxed on fee income derived from international investment management services rendered to investors not domiciled in the United States.

Interstate Banking: Rhode Island allows out of state banks to operate branch offices in Rhode Island as long as the same opportunities are offered to Rhode Island banks as in their home state.

Mutual Insurance Holding Companies: Rhode Island effectively permits mutual insurance companies to access capital through stock issues without threatening policy holder rights or sacrificing the benefits of the mutual form of ownership.

Protected Cell Companies: The protected cell act facilitates insurance securitization transactions and rent-a-captive formation through its protected cell structure.

TAX INCENTIVES

Summaries of RI Tax Incentives

Jobs Development Act, Corporate Income Tax Reduction for Job Creation: The Jobs Development Act provides an incremental reduction in the corporate income tax rate to as low as 3% for companies that create new employment in Rhode Island over a three-year period.

Motion Picture Production Tax Credit: Rhode Island provides a transferable 25% tax credit against the corporate or personal income tax for all certified costs (including salaries) associated with Rhode Island primary locations of feature-length films, videos, video games, television series or commercials.

Telecommunication Sales Tax Exemption: Regulated investment companies with at least 500 full-time equivalent employees are exempt from the sales and use tax imposed on toll-free terminating telecommunication service.

Manufacturing Investment Tax Credit (4%): A manufacturer is allowed a 4% tax credit against the Rhode Island corporate income tax on buildings and structural components, as well as machinery and equipment, which are owned or leased and are principally used in the production process (including storage).

High Performance Manufacturing Investment Tax Credit (10%): High-performance manufacturers are allowed a 10% investment tax credit against their corporate tax on the cost or qualified lease amounts for tangible personal property or other tangible property, as well as buildings and structural components owned, leased to own, or leased for at least 20 years.

Business Income Apportionment for Manufacturers: Affiliated multi-state corporations may file single, separate Rhode Island corporate tax returns or file a consolidated return.

Apportionment Exclusion for Medical & Pharmaceutical Manufacturers: A Rhode Island manufacturer of Medical Instruments, Supplies or Pharmaceuticals whose facility is registered and certified by the United States Food & Drug Administration may modify the Rhode Island business income apportionment formula for the current tax year.

Apportionment Exclusion for Medical & Pharmaceutical Manufacturers: A Rhode Island manufacturer of Medical Instruments, Supplies or Pharmaceuticals whose facility is registered and certified by the United States Food & Drug Administration may modify the Rhode Island business income apportionment formula for the current tax year.

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 investors up to a 50% credit on eligible investments, with a maximum tax credit of $100,000.

Jobs Growth Act of 2005: Income Tax Reduction on Performance-Based Income: The Jobs Growth Act allows eligible businesses in any industry to offer their employees an exclusion of 50% of performance-based compensation from their Rhode Island gross income.

Bonus Program Private Participation: An employer who participates in the Bonus Program, which provides job training for former public assistance recipients, can qualify for a $250 tax credit per participant.

Child and Adult Daycare Tax Credit: A Rhode Island taxpayer that purchases or provides for adult or child day care services for adult family members or dependent children of the taxpayer’s employees or to employees of its commercial tenants is allowed a tax credit.

Hazardous Waste Facilities Amortization: Rhode Island extends a business corporation tax amortization to include tangible personal property for the recycling, reuse or recovery of materials from the treatment of hazardous waste.

Hiring of Unemployed or Low-Income Residents: A tax credit of 40% of a newly hired employee’s first year wages (up to a maximum of $2,400) is allowed for businesses that employ and retain Rhode Island residents who were previously unemployed or receiving public assistance.

Natural Disaster Rebuilding: Manufacturers who have lost 60% or more of their facilities due to a natural disaster, resulting in the inability of active employees to continue production, may qualify for corporate income tax rate reductions under the Jobs Development Act for jobs retained or added.

Top Personal Income Tax Rate: Rhode Island’s top personal income tax rate is 5.99%.

Reduction of Long-Term Capital Gains Tax: For all capital assets purchased prior to January 1, 2002 and sold on or after January 1, 2007, the Rhode Island capital gains tax rate will be 8.33% of the Federal capital gains rate in effect prior to the enactment of the federal Economic Growth and Tax Relief Reconciliation Act of 2001(EGTRRA). Thereafter, the rate will be 1.67%.

Research & Development Expense Credit: Rhode Island offers a 22.5% tax credit for increases in qualified research expenses.

Research & Development Property Credit: A corporation is allowed a 10% tax credit for expenditures paid or incurred for the construction, reconstruction or acquisition of any property which is principally used or to be used for research and development in the experimental or laboratory sense.

Elective Deduction for Research & Development Facilities: In lieu of depreciation or the investment tax credit, a corporation is allowed a one year write-off for expenditures paid or incurred during the taxable year for the construction, reconstruction or acquisition of all qualifying depreciable tangible property used or to be used for the purpose of research and development in the experimental or laboratory sense.

Research & Development Sales Tax Exemptions: Sales or use of scientific equipment, computers, software and related items to a qualifying firm to be used predominantly for research and development purposes are exempt from Rhode Island Sales and Use Tax.

Manufacturing Fuels & Raw Materials Sales Tax Exemption: Sales of tangible personal property, computer software and public utility services are exempt from sales tax when the property or service becomes a component part of a manufactured product for resale, or when the property or service is used in the process of manufacturing or processing products for resale.

Manufacturing Machinery & Equipment Sales Tax Exemption: Sales, storage, use or other consumption of tools, dies, and molds, and machinery and equipment (including replacement parts), and related items to the extent used in an industrial plant in connection with the actual manufacture, conversion, or processing of tangible personal property are exempt from sales tax.

Scientific Equipment Sales Tax Exemption: Scientific equipment used for research and development by eligible firms is exempt from the state sales tax.

Pollution Control Equipment Sales Tax Exemption: Pollution control property and supplies are exempt from the state sales tax.

Aircraft, Boats and Aircraft Fuel Sales Tax Exemption: Rhode Island exempts the sale, storage, use or other consumption of new or used aircraft and aircraft parts from taxation. Fuel used for propulsion of aircraft is also exempt. Boats are also exempt from the sales tax.

Professional and Occupational Services Sales Tax Exemption: Professional services such as those provided by physicians, attorneys, accountants, engineers, and others are exempt from state sales tax.

Intangible Personal Property Sales Tax Exemption: Sales or transfers of intangible personal property such as stocks, bonds, accounts receivable, money, or insurance policies are exempt.

Small Business Capital Investment Tax Incentives: Small business entities or venture capital partnerships may be eligible for tax deductions or modifications or capital gains exclusion.

State Enterprise Zones: Any business with a certified business facility within a state-designated Enterprise Zone or a Federally-designated Enterprise Community in Rhode Island may qualify for the Enterprise Zone Business Tax Credit. Only qualified c-corporations are eligible.

Foreign Trade Zone # 105: Consists of three different geographic locations in the State of Rhode Island which provide a variety of tax benefits, including: duty exemption on re-exports, duty elimination on manufacture, re-packaging, waste and scrap and relief from inverted tariffs.

General Business Taxes: Business income earned by a sole proprietor, a Limited Liability Corporation (LLC) or S-Corporation is typically passed through to the owner(s) and reported on a personal income tax return. Otherwise, C-corporations operating in Rhode Island are generally subject to four categories of business taxes, some of which can be modified through the tax credits or other incentives.

Historic Homeowner Tax Credit: Owners of Rhode Island historic residences may claim a credit against the Rhode Island personal income tax up to 20% of certified costs for exterior restoration work.

WORKFORCE DEVELOPMENT

Workforce Development Tax Credit: Rhode Island 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.

Adult Education Tax Credit: Rhode Island allows for a tax credit of 50% of the direct costs for worksite and non worksite-based vocational training or basic education, up to a maximum of $300 per employee.

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.

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 must be for the establishment or maintenance of a faculty chair, department, work fellowship, or program of scientific research or education.

Job Training Grants: The Rhode Island Governor’s Workforce Board offers a training program for business and industry funded through a job development assessment of 0.51% on the firm’s taxable payroll.

State Listings

  • Grow Smart Rhode Island

    Scott Wolf
    Executive Director
    235 Promenade Street, Suite 550
    Providence, RI 02908
    P: 401-273-5711, ext. 4
    [email protected]
    www.growsmartri.org
  • Rhode Island Commerce Corporation

    Marcel A. Valois
    Executive Director
    315 Iron Horse Way, Suite 101
    Providence, RI 02908
    P: 401-278-9100
    [email protected]
    www.greaterri.com

Utility Listings

Regional Listings

  • South Kingstown Chamber of Commerce

    Elizabeth Berman
    Director of Mission Development
    230 Old Tower Hill Road
    Wakefield, RI 02879
    P: 401-783-2801
    [email protected]
    www.skchamber.com
  • Team New England

    David C. Driver
    Managing Director – Regional Development
    107 Selden Street
    Berlin, CT 06037
    P: 860-665-6312
    [email protected]
    www.teamnewengland.com

County Listings

  • Newport County Chamber of Commerce

    Jody Sullivan
    Executive Director
    35 Valley Road
    Middletown, RI 02842
    P: 401-847-1600
    [email protected]
    www.newportchamber.com

City Listings

  • City of Woonsocket

    Lisa Baldelli-Hunt
    Economic Development Director
    169 Main Street
    Woonsocket, RI 02895
    P: 401-767-9205
    [email protected]
    www.ci.woonsocket.ri.us
  • Cranston Economic Development

    Lawrence DiBoni
    Director
    City Hall, 869 Park Avenue
    Cranston, RI 02910
    P: 401-780-3166
    [email protected]
    www.cranstonri.com
  • East Providence Economic Development

    Jim Moran
    Economic Planner
    City Hall Building, 145 Taunton Avenue
    East Providence, RI 02914
    P: 401-435-7534, ext. 11153
    [email protected]
    www.eastprovidence.com
  • Greater Providence Chamber of Commerce

    Janet Raymond
    Senior Vice President of Economic Development & Operations
    30 Exchange Terrace
    Providence, RI 02903
    P: 401-521-5000
    [email protected]
    www.providencechamber.com
  • North Kingstown Economic Development

    Paige R. Bronk, AICP
    Economic Development Manager
    Department of Planning and Development, Town Hall Annex, 55 Brown Street
    North Kingstown, RI 02852
    P: 401-268-1572
    [email protected]
    www.northkingstown.org/business/economic-development
  • Pawtucket Office of Planning & Redevelopment

    Barney Heath
    Acting Director
    Benjamin Chester Building, 175 Main Street, 3rd Floor
    Pawtucket, RI 02860
    P: 401-724-5200
    [email protected]
    www.pawtucketri.com
  • Providence Office of Economic Development

    James S. Bennett
    Director
    444 Westminster Street, Suite 3A
    Providence, RI 02903
    P: 401-680-8541
    [email protected]
    www.providenceri.com/economic-development/
  • Town of Burrillville

    Thomas Kravitz
    Director of Economic Development
    144 Harrisville Main Street
    Harrisville, RI 02830
    P: 401-568-4300, ext. 130
    [email protected]
    www.burrillville.org
  • Warren Department of Planning & Community Development

    Caroline Wells
    Director
    514 Main Street
    Warren, RI 02885
    P: 401-245-2469
    [email protected]
    www.townofwarren-ri.gov
  • Warwick Department of Economic Development

    Karen Jedson
    Executive Director
    City Hall Building, 3275 Post Road
    Warwick, RI 02886
    P: 401-738-2000, ext. 6402
    [email protected]
    www.movetowarwickri.com