September 14th, 2016 Help For RI Businesses Are you taking advantage of incentives and tax credits in your own backyard? -by David Gobeille, CPA, MST, Tax Partner The state offers a number of incentives and tax credits to help RI businesses. Commerce RI, the quasi-state agency charged with improving the economic development environment in the state and assisting individual businesses of all sizes, has developed and introduced several new business development incentives and tax credits; through their partnership with the Department of Labor and Training. The following is a summary provided by Commerce RI of the 2016 business development incentives and tax credits available. As we enter into the last quarter of fiscal 2016, you may want to review the list to see if your business could benefit from of any of these available opportunities. Qualified Jobs Incentive Promotes new jobs by attracting business /industries to grow in Rhode Island Base tax credit: up to $2,500/new full-time job; 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 12/31/18 Usable, tradeable and redeemable (90% to the state) Rebuild Rhode Island Tax Credit Provides capital to qualified real estate projects that demonstrate a “financing gap”. Up to 20% of eligible project costs; 30% if certain criteria are met; $15M/project cap Usable, tradeable and redeemable (90% of value) Sales tax exemption on building materials may apply Credits payable in 5 years following completion (certificate of occupancy) Program sunsets 12/31/18 Tax Increment Financing Program Provides capital to eligible projects by rebating 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 Anchor Institution Tax Credit Compensates existing RI businesses that attract suppliers, service providers and/or major customers to relocate to RI. Eligible relocations must have 10 jobs 2015-2018;25 jobs 2019-2020 Sector, location, demonstrated role in relocation decision, impact on state, prevailing brokerage fee and ROI all factors in award Main Street Rhode Island Funding to stimulate investment in local business districts Grants and loans to attract new investment and jobs in Main Street districts Uses include infrastructure, signage, building façade, street lighting, sidewalks, etc. FY’16 budget includes $1.0 million Small Business Assistance Program Provides businesses (under 200) access to capital up to $750,000 per business Potential uses include: direct lending, collateral support, credit enhancements, co-investing and technical assistance Industry Cluster Grants Encourage industry “clusters” to share technology, knowledge, and personnel Competitive startup and technical assistance grants ($75-250K) Competitive program grants ($100-500K) to business that enhance cluster growth, effectiveness, etc. First Wave Closing Fund Gap financing for attraction, expansion or retention of jobs Flexible funds needed to close critical economic development projects Funds can be used to close a demonstrated “gap” or gain competitive advantage over a competing site in another state Tax Stabilization Incentive Provides incentive for RI municipalities to enter into TSAs Up to 10% of forgone tax revenue reimbursed to a local municipality for 12 year TSA Projects must >= $10 million and create 50 jobs (50% for Hope Communities) Innovation and Network Vouchers Provides financial /technical resources to small businesses in innovation sectors Competitive awards ($5,000-$50,000) to purchase R&D technical assistance from state and regional higher-Ed institutions Wavemaker Fellowship Attract and retain talent in RI by funding student loan repayment costs Four year reimbursement equal to individual’s student loan obligation not to exceed: $1,000 Associates degree, $4,000 Bachelors, and $6,000 grad/post-grad 70% of fund dedicated to RI residents attending RI institutions For more information about the programs, please visit Commerce RI. You can also contact a Sansiveri tax professional with your tax questions at 401-331-0500.