H 7505Credits & Incentives

Taxation - Rhode Island New Qualified Jobs Incentive Act 2015

This bill sets a final expiration date of July 1, 2026, for certain legacy corporate tax rate reductions.

Held for study

Population
Affected

Introduced Feb 4, 2026Committee House Finance

Plain-English Summary

This legislation amends the "Rhode Island New Qualified Jobs Incentive Act 2015" and the "Jobs Development Act." It establishes a hard expiration date for corporate tax rate reductions that were previously granted under the Jobs Development Act. Although new rate reductions were discontinued in 2015, companies that had already qualified were allowed to keep their lower rates. This bill mandates that all such remaining rate reductions and tax credits under this specific chapter will officially end no later than July 1, 2026.

For younger readers

A long time ago, the state gave some businesses a special discount on the taxes they pay if they created new jobs. In 2015, the state decided not to give this discount to any new businesses, but they let the businesses that already had it keep using it. This new law says that on July 1, 2026, the discount will stop for everyone, even the businesses that have been using it for a long time. After that date, those businesses will have to pay the regular tax amount like everyone else.

Who & Where It Applies

Impacted groups

Corporations with grandfathered tax incentivesBusiness OwnersEmployees of affected corporationsState Department of RevenueTaxpayers

Impacted communities

All

Constitutional & Fiscal Check

None Likely

Estimated cost

None

Estimated revenue

Amount unknown

Bill Analysis

Both viewpoints

For Progressives

Eliminates long-standing corporate tax breaks, ensuring that established corporations pay their fair share of taxes rather than benefiting from outdated incentives.
Increases state revenue by ending tax expenditures, potentially freeing up funds for public services, education, and social safety nets.
Levels the economic playing field by removing government-granted advantages for older corporations that are not available to newer, smaller businesses.
Could potentially lead to job losses if corporations relying on these rate reductions decide to relocate to states with more favorable tax environments.
Does not explicitly mandate that the revenue saved from ending these tax breaks be redirected toward social programs or community welfare.
Might cause economic instability for workers employed by these specific companies if the sudden change in tax liability forces budget cuts or layoffs.

For Conservatives

Ends a system of government "picking winners and losers" by removing special tax privileges that favor specific companies over others.
Simplifies the tax code by sunsetting a complex incentive program, moving closer to a flatter, more uniform tax structure.
Reduces cronyism by eliminating a grandfathered benefit that allowed certain businesses to operate under different rules than their competitors.
Represents a functional tax increase on businesses, which violates the principle of keeping tax burdens low to encourage economic growth.
Undermines business confidence and stability by revoking a long-standing statutory agreement that companies may have relied upon for long-term planning.
Could harm the state's reputation among investors, making it appear hostile to business interests and unreliable regarding future incentive agreements.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 7 additions

SECTION 1. Section 44-48.3-12 of the General Laws in Chapter 44-48.3 entitled "Rhode Island New Qualified Jobs Incentive Act 2015" is hereby amended to read as follows: 44-48.3-12. Discontinuance of further rate reductions and future beneficiaries under the jobs development act.

(a) The rate reduction(s) provided pursuant to chapter 64.5 of title 42 shall be discontinued effective July 1, 2015, except as provided in subsection (b) of this section; provided, however, that all rate reductions provided pursuant to chapter 64.5 of title 42 will discontinue no later than July 1, 2026.

(b) Any company that has qualified for a rate reduction pursuant to chapter 64.5 of title 42 prior to July 1, 2015, shall be entitled to maintain the rate reduction in effect as of June 30, 2015, and no additional rate reduction shall be permitted. All obligations of the company required under chapter 64.5 of title 42 to retain a rate reduction shall remain in full force and effect.

SECTION 2. Chapter 42-64.5 of the General Laws entitled "Jobs Development Act" is hereby amended by adding thereto the following section: 42-64.5-9. Sunset. No credits shall be authorized to be reserved pursuant to this chapter after June 30, 2026.

SECTION 3. This act shall take effect upon passage.