S 2624Credits & Incentives

Taxation - Rhode Island New Qualified Jobs Incentive Act 2015

This bill sets a final end date of July 1, 2026, for all tax breaks under the Jobs Development Act.

Held for study

Population
Affected

Introduced Feb 13, 2026Committee Senate Labor & Gaming

Plain-English Summary

This legislation establishes a final expiration date for specific business tax incentives under the "Jobs Development Act." Previously, companies that qualified for these tax rate reductions before July 1, 2015, were allowed to maintain those benefits indefinitely. This bill mandates that all such rate reductions and tax credits will officially end on July 1, 2026. After this date, no further credits can be reserved or utilized under this specific chapter of the law, effectively closing the program to all participants.

For younger readers

A while ago, the state gave some businesses a special discount on the taxes they pay to help them grow. The state stopped giving this discount to new businesses years ago, but they let the older businesses keep using it. This new rule says that on July 1, 2026, that discount will stop for everyone, even the businesses that have used it for a long time. After that date, those businesses will have to pay the regular tax amount just like everybody else.

Who & Where It Applies

Impacted groups

Corporations holding pre-2015 tax creditsBusiness ownersEmployees of affected corporationsRhode Island Division of TaxationState Budget Office

Impacted communities

All

Constitutional & Fiscal Check

None Likely

Estimated cost

None

Estimated revenue

Amount unknown

Bill Analysis

Both viewpoints

For Progressives

Eliminates a source of corporate welfare by ending indefinite tax breaks for established corporations, ensuring they pay their fair share of taxes.
Increases potential state revenue that can be redirected toward funding public services, social safety nets, and community programs.
Levels the economic playing field by removing special privileges that were available only to older companies, which disadvantaged newer, potentially more progressive or local businesses.
Could lead to job losses if the affected corporations decide to cut costs or relocate operations to states with more favorable tax incentives, potentially hurting workers.
Does not guarantee that the revenue saved from ending these tax breaks will be legally earmarked for social programs or aid for the poor.
Might destabilize the local economy in specific towns if a major employer relies heavily on these credits to remain profitable.

For Conservatives

Eliminates government market interference by removing special tax carve-outs that favored specific companies over others based on when they applied.
Simplifies the state tax code by removing "zombie" statutes and complex grandfather clauses, promoting a more streamlined regulatory environment.
Promotes fair competition by ensuring that long-standing incumbent businesses do not have a state-sponsored advantage over new market entrants.
Represents a tax increase on businesses, which reduces their available capital for investment and growth.
Undermines business confidence in the state government by revoking a long-standing tax arrangement that companies may have relied upon for financial planning.
Could drive businesses out of the state to jurisdictions with lower tax burdens, ultimately harming the state's economic competitiveness.

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.