Rhode Island Launches Tax Credit for Investment in Innovation-based Industries
June 28, 2007 | Print this page | Share This | Email this page
Program put forth by the Rhode Island Science and Technology Advisory Council will offer investors up to $100,000 in tax credit for supporting Rhode Island Innovators.
Rhode Island will now offer a new tax credit to encourage investment in high-growth, high-wage innovation industries and support the state's entrepreneurs. The Rhode Island Innovation Tax Credit, proposed by the Rhode Island Science and Technology Advisory Council (STAC), will offer investors up to a 50 percent credit on eligible investments, with a maximum tax credit of $100,000.
To be eligible to apply for the credit, an investor must invest in a Rhode Island business that produces traded goods or services and has annual gross revenues of less than $1 million in the prior two calendar years. Companies 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; Industrial and Consumer Product Manufacturing and Design.
The program will be managed by the Rhode Island Economic Development Corporation (EDC).
The Innovation Tax Credit was put forth by STAC in its 2006 recommendations. Each year, STAC issues a set of actionable recommendations to the governor and Rhode Island General Assembly that seek to support the state's research and development platform, promote collaboration, encourage entrepreneurship and new company creation, and make innovation central to Rhode Island's leadership agenda. The General Assembly enacted the tax credit by statute and the EDC adopted regulations through the public rulemaking process.
"Supporting entrepreneurs and attracting investment to Rhode Island is central to our efforts to build a 21st century innovation economy that produces higher wage jobs for all Rhode Islanders," says EDC executive director Saul Kaplan, who also serves as a member of STAC. "This credit directs resources toward innovative, small companies that are well positioned to grow in today's global economy. I believe that these companies will play an integral role in creating jobs and in making Rhode Island a more prosperous place. Although we need to continue to do more to attract investment to Rhode Island , we are excited to put this product into the market."
The credit may be carried forward for a period not to exceed three years and may be issued in the name of the eligible company, an executive employee or employees of the company, an investor in the company or a combination thereof not to exceed a maximum of 10 executive employees. The EDC may not approve more than $2 million in credit applications in any two-year calendar year period and the credit sunsets in 10 years.
Investors must apply for the credit prior to making an investment. Once an application is approved, the investor has up to 12 months to make the investment and provide proof of investment back to the EDC board of directors. Upon completion of this process, the EDC will certify the investor's eligibility for the credit with the Rhode Island Division of Taxation.
For more information, contact Melissa Withers, Director, Communications and Market Development for the Rhode Island Economic Development Corporation, at 401-278-9134 or .
