Rhode Island offers a competitive, predictable business environment. Thanks to our governor and legislature’s leadership on pension and Medicaid reform, we have reined in structural costs and flattened their trajectories – garnering national attention. As a result, we can ensure businesses a stable tax structure. Learn more about our full suite of incentives and learn how you can benefit.
A strong signal of the state’s commitment to economic growth, Rhode Island’s legislature passed, nearly unanimously and in record time, a powerful suite of new programs aimed at growing businesses and creating jobs. These incentives benefit businesses of every size and are some of the most significant and comprehensive in the Northeast, if not the nation.
The corporate income tax rate has been cut from 9% to 7% and is the lowest in the Northeast. In addition, C-Corporations use a single sales factor to apportion income to Rhode Island (in lieu of the standard three-factor apportionment formula). Rhode Island’s personal income tax structure has been modified to lower the top bracket from 9.99% to 5.99%
GENERAL BUSINESS INCENTIVES
Tax Increment Financing provides capital for eligible projects by rebating the new state tax revenue generated by the project. In addition, the I-195 Redevelopment Fund finances projects that have the potential catalyze development in the I-195 Redevelopment District. Target industries include:
• Biomedical innovation
• Cyber-physical systems
• Data analytics
• Defense shipbuilding and maritime
• Advanced business services
• Design, food and custom manufacturing
• Transportation, distribution, logistics
• Hospitality and tourism
Anchor Institution Tax Credit compensates existing Rhode Island businesses that attract suppliers, service providers and/or major customers to relocate to Rhode Island.
Industry Cluster Grants encourage companies in an industry sector to work together to solve problems, exchange ideas and develop talent.
Small Business Assistance Program provides entrepreneurs and businesses with fewer than 200 employees access to capital. Potential uses include: direct lending, collateral support, credit enhancements, co-investing and technical assistance
First Wave Closing Fund provides financing to close a demonstrated “gap” or gain competitive advantage over a competing site in another state
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.
The Rhode Island Innovation Tax Credit offers up to a 50% rebate on qualified capital investments.
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.
Investment Tax Credit allows firms in certain non-manufacturing industries to take the 10% investment tax credit on owned or leased tangible personal property and other tangible property.
Manufacturing Investment Tax Credit allows 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 allows a 10% investment tax credit against their corporate tax on the cost of qualified lease amounts for tangible personal property or other tangible property, as well as buildings and structural components.
Innovation Vouchers provide competitive awards ($5,000-$50,000) to purchase R&D technical assistance from state and regional higher-ed institutions.
Innovation Network Matching Grants provides funding to intermediary organizations for projects that offer technical assistance, space on flexible terms, and/or access to capital to Rhode Island small businesses in key industries (e.g. life sciences, health care, food and agriculture, clean technology, energy efficiency, cyber security, and others as designated).
Innovate Rhode Island Small Business Fund provides grants to defray the cost of applying for SBIR/STTR awards, match SBIR/STTR Phase I and Phase II awards and hire interns.
Research & Development Expense Credit offers companies filed as a C-corporation a 22.5% tax credit for increases in qualified research expenses – the highest rate in America.
Research & Development Property Credit allows a 10% tax rebate for expenditures paid or incurred for the construction, reconstruction or acquisition of any property that is principally used or to be used for research and development in the experimental or laboratory sense.
Elective Deduction for Research & Development allows 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.
Research & Development Sales Tax Exemptions make scientific equipment, computers, software and related items to a qualifying firm to be used predominantly for research and development purposes exempt from Rhode Island Sales and Use Tax.
Wavemaker Fellowships are used to attract and retain talent through funding student loan repayment costs to graduates pursuing careers in technology, engineering, design and other key sectors in Rhode Island.
Job Training Tax Incentives grant 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 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.
Employer’s Apprenticeship Tax Credit Employers provides incentives for registered full-time apprentices in the metal and plastic industries.
Rebuild Rhode Island Tax Credits provide capital to major qualified real estate projects that demonstrate a “financing gap”.
The Tax Stabilization Incentive provides for Rhode Island cities and towns to enter into tax stabilization agreements by reimbursing municipalities up to 10% of tax revenue foregone due to the completion of a TSA that spans at least 12 years. Qualifying projects must be at least $10 million and create 50 jobs (or at least $5 million and 25 jobs in Hope Communities).
Main Street Rhode Island Funding provides grants and loans to attract new investment and jobs in Main Street districts. Uses include infrastructure, signage, building façade, street lighting and sidewalks.
Statewide Arts District designation makes the sale of original and creative works created by – and sold by – writers, composers, and artists residing in and conducting a business within the state of Rhode Island exempt from the state’s 7% percent sales and use tax.
Scientific equipment used for research and development by eligible firms is exempt from the state sales tax.
Pollution control property and supplies are exempt from the state sales tax.
What We've Achieved
- GE Digital is building a design center for its IoT operations.
- Wexford Science and Technology is investing $270 million in an innovation campus.
- The Cambridge Innovation Center is starting a new co-working space.
- Deepwater Wind is launching the nation's first off-shore wind farm.
- Virgin Pulse is relocating its corporate headquarters to be close to be closer to global giants in predictive analytics.
- Johnson & Johnson is creating a health care research platform to plumb the next generation of scientific discoveries.
- South Street Landing will be home to the world's most sophisticated nursing education facilities.