TAXATION -- RHODE ISLAND LOCAL INVESTMENT TAX CREDIT ACT, the official text

S2833 2026 -- S 2833 ======== LC005425 ======== STATE OF RHODE ISLAND IN GENERAL ASSEMBLY JANUARY SESSION, A.D. 2026 ____________ A N A C T RELATING TO TAXATION -- RHODE ISLAND LOCAL INVESTMENT TAX CREDIT ACT Introduced By: Senators Valverde, Ciccone, Lauria, DiPalma, Acosta, Bissaillon, Kallman, Felag, Pearson, and Quezada Date Introduced: March 04, 2026 Referred To: Senate Finance It is enacted by the General Assembly as follows: 1 SECTION 1. Title 44 of the General Laws entitled TAXATION is hereby amended by 2 adding thereto the following chapter: 3 CHAPTER 73 4 RHODE ISLAND LOCAL INVESTMENT TAX CREDIT ACT 5 44-73-1. Short title. 6 This chapter shall be known and may be cited as the Rhode Island Local Investment Tax 7 Credit Act”. 8 44-73-2. Legislative intent. 9 It is the intent of the general assembly to annually appropriate sufficient funds from the 10 state general fund to fully compensate for any loss of revenue resulting from the enactment of this 11 chapter. 12 44-73-3. Definitions. 13 As used in this chapter: 14 (1) Family member means an individual who is the spouse, mother, father, brother, sister, 15 child, stepparent, stepchild, stepbrother, stepsister, grandparent, grandchild, legal ward, or a legally 16 appointed guardian with a certified letter of guardianship, of the investor. 17 (2) Qualified business means a business that employs ninety-nine (99) or fewer 18 employees and that the Rhode Island commerce corporation strategic fund certifies as in 19 compliance with all of the following at the time of the investment: 1 (i) The business has its headquarters in this state, is domiciled in this state, and has a 2 majority of its employees working in this state, and its transactions are limited to residents of this 3 state. 4 (ii) The business receives at least eighty percent (80%) of its gross revenues from the 5 operation of its business in this state. 6 (iii) The business has at least eighty percent (80%) of its assets in this state. 7 (3) Qualified investment means a cash or a cash equivalent investment certified by the 8 Rhode Island commerce corporation strategic fund in a qualified business and that is not in a 9 qualified business in which a family member of the investor is an employee or owner of the business 10 or in which the investor or a family member of the investor has a preexisting fiduciary relationship 11 with the business. 12 (4) Rhode Island commerce corporation strategic fund means the Rhode Island 13 commerce corporation strategic fund to be created pursuant to § 42-64-18. 14 44-73-4. Credit against tax. 15 (a) For tax years beginning on and after January 1, 2027, subject to the limitations under 16 this section, a taxpayer that makes a qualified investment in a qualified business may claim a credit 17 against the tax imposed by this title equal to fifty percent (50%) of the qualified investment made 18 during the tax year. A taxpayer shall not claim a credit of more than three thousand dollars ($3,000) 19 based on a qualified investment in any one qualified business and shall not claim a credit of more 20 than three thousand dollars ($3,000) for qualified investments in all qualified businesses in any one 21 tax year. To qualify for the credit under this section, the taxpayer shall request certification from 22 the Rhode Island commerce corporation strategic fund within sixty (60) days of making the 23 investment. 24 (b) The Rhode Island commerce corporation strategic fund shall develop an application 25 and approval process in order to certify investments under this section and adopt a program 26 describing parameters and criteria to be used for approving investments. As part of that program 27 adoption, the Rhode Island commerce corporation strategic fund shall determine and describe the 28 conditions to be met to be considered a qualified investment. Any investment for which a credit is 29 sought under this section is subject to the provisions of chapter 11 of title 7 ( Rhode Island uniform 30 securities act ), and shall be made in compliance with applicable state and federal securities laws, 31 rules, and regulations. 32 (c) A taxpayer shall not claim a credit under this section unless the Rhode Island commerce 33 corporation strategic fund has issued a certificate to the taxpayer. The taxpayer shall attach the 34 certificate to the annual return filed under this title on which a credit under this section is claimed. LC005425 - Page 2 of 4 1 The certificate required under this subsection shall specify all of the following: 2 (1) The total amount of investment made during the tax year by the taxpayer in each 3 qualified business. 4 (2) The total amount of qualified investments made in each qualified business if different 5 from the previous amount. 6 (3) The total amount of the credit under this section that the taxpayer is allowed to claim 7 for the designated tax year. 8 (4) If the amount of the credit allowed under this section exceeds the tax liability of the 9 taxpayer for the tax year, that portion of the credit that exceeds the tax liability of the taxpayer for 10 the tax year shall not be refunded but may be carried forward to offset tax liability under this title 11 in subsequent tax years for a period not to exceed ten (10) tax years or until used up, whichever 12 occurs first. 13 SECTION 2. This act shall take effect upon passage. ======== LC005425 ======== LC005425 - Page 3 of 4 EXPLANATION BY THE LEGISLATIVE COUNCIL OF A N A C T RELATING TO TAXATION -- RHODE ISLAND LOCAL INVESTMENT TAX CREDIT ACT *** 1 This act would provide an investment tax credit to a taxpayer that makes a qualified 2 investment in a local qualified business of ninety-nine (99) employees or less. This act would be 3 funded by a Rhode Island commerce corporation strategic fund pursuant to § 42-64-18. 4 Additionally, the general assembly would annually appropriate sufficient funds from the general 5 fund to fully compensate for any loss of revenue as a result of the provisions of this act. 6 This act would take effect upon passage. ======== LC005425 ======== LC005425 - Page 4 of 4