Chapter 568

2006 -- H 8000

Enacted 07/11/06

A N A C T

RELATING TO TAXATION - INCENTIVES FOR INNOVATION AND GROWTH

Introduced By: Representatives Fox, Kilmartin, Sullivan, Church, and Jackson

Date Introduced: April 12, 2006

It is enacted by the General Assembly as follows:

     SECTION 1. Title 44 of the General Laws entitled "TAXATION" is hereby amended by

adding thereto the following chapter:

CHAPTER 63

INCENTIVES FOR INNOVATION AND GROWTH

44-63-1. Definitions. -- For the purpose of this chapter:

(a) "Corporation" means the Rhode Island economic development corporation.

(b) "Executive employee" means any employee designated as such by the taxpayer, but in

no case shall a taxpayer designate more than ten (10) executive employees.

(c) "Qualified innovative company" means any business entity formed or registered to

conduct business under the laws of the state of Rhode Island that has provided satisfactory

evidence to the corporation, as submitted by an independent certified public accountant, that the

entity has in the prior two (2) calendar years had annual gross revenues of less than one million

dollars ($1,000,000).

(d) "Rhode Island Science and Technology Advisory Council" means that body created

by executive order 05-07, or any subsequently established successor entity.

(e) "Traded goods or services" means the services produced or goods manufactured in

those industries or businesses which are capable of exporting or importing across state

boundaries.

44-63-2. Innovation credit. -- (a) An eligible qualified innovative company may apply to

the division of taxation for a tax credit certificate in an amount equal to fifty percent (50%) of any

investment made in the company, but in no case shall the amount of the tax credit certificate

exceed one hundred thousand dollars ($100,000). The tax credit certificate may be issued in the

name of the eligible company, or an executive employee or employees of the company, an

investor in the company, or any combination thereof as requested by the company, and may be

applied against state tax liability arising under chapters 44-11, 44-12, or 44-30 by the holders of

the certificates. If not applied in full at the time of the next following tax filing period, the

certificate(s) or the remaining value thereof may be carried forward for a period not to exceed

three (3) years.

44-63-3. Eligibility for credit. -- Only companies with business primarily in those

industries or trades, identified by the corporation upon advisory resolution of the Rhode Island

Science and Technology Advisory Council as "Innovation Industries" producing traded good or

services, shall be eligible for the Incentives for Innovation and Growth as provided in sections 44-

63-1 and 44-63-2. An eligible company must make application to the corporation prior to

claiming the credit, and the corporation shall be authorized to approve no more than two million

dollars ($2,000,000) in credit applications in any two (2) calendar year period.

44-63-4. Rules and regulations. -- The tax administrator is authorized and empowered to

promulgate rules and regulations that he or she may deem necessary for the proper administration

and enforcement of this chapter, excepting those matters committed to the supervision of the

economic development corporation. The director of the economic development corporation is

authorized and empowered to promulgate rules and regulations pertaining to those matters

committed to the supervision of the economic development corporation.

44-63-5. Sunset. -- The corporation shall not approve any application for tax credit

eligibility after December 31, 2016, and the chapter shall be repealed on said date.

     SECTION 2. This act shall take effect on January 1, 2007, and would be repealed on

December 31, 2016.

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LC02915

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