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RHODE ISLAND Fast Facts

• Population (2006): 1,067,610
• Largest Cities (2006): Providence, 175,255; Warwick, 85,925; Cranston, 81,479; Pawtucket, 72,998; East Providence, 49,123
• Targeted Industries: Health and life sciences, information technology, progressive manufacturing, marine trades, defense, financial services

• Key Incentives: Innovation Tax Credit, Production Tax Credit, Jobs Development Act, High Performance Manufacturing Investment Tax Credit (10%), Research and Development Expense Credit, Job Training Tax Credit

RHODE ISLAND State Incentives

Investment Tax Credits For Manufacturing allow manufacturers a 4% tax credit against the Rhode Island business corporation tax and the personal income tax on new facilities and machinery and equipment used in the production process. The 4% investment tax credit may not reduce the taxpayer's liability below minimum tax ($250). Unused credits may be carried forward for up to seven years.

Beginning in 2001, the Expanded Investment Tax Credit for "High Performance" allows "high performance" manufacturers a 10% credit against the Rhode Island business corporation tax and the personal income tax on newly purchased or constructed facilities, structural components, and machinery and equipment used in the production process. The 10% investment tax credit may not reduce the taxpayer's liability below 50% of the taxpayers total tax liability before credits for that year. Unused credits may be carried forward for up to seven years. Manufacturers may not take the 10% and the 4% tax credits on the same items.

The Rhode Island Adult Education Tax Credit allows for both a worksite and non-worksite tax credit for vocational training or basic education of 50% of the costs incurred, up to a maximum of $300 per employee and $5,000 per employer per calendar year. The employee must remain in the business for 13 consecutive weeks and a minimum of 455 hours of paid employment. Excess credit cannot be carried forward.

The Research and Development Expense Credit is a 22.5% tax credit for increases in qualified research expenses, the highest such rate in America. If the increase above base period expenditures exceeds $111,111, the credit equals 16.9% of the excess. The credit is available to corporations; sole proprietors; or passed through from partnerships, joint ventures, or subchapter S corporations. Unused credit may be carried forward for up to seven years.

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