TITLE 42
State Affairs and Government
CHAPTER 42-64
Rhode Island Commerce Corporation
SECTION 42-64-20
§ 42-64-20 Exemption from taxation.
(a) The exercise of the powers granted by this chapter will be in all respects
for the benefit of the people of this state, the increase of their commerce,
welfare, and prosperity and for the improvement of their health and living
conditions and will constitute the performance of an essential governmental
function and the corporation shall not be required to pay any taxes or
assessments upon or in respect of any project or of any property or moneys of
the Rhode Island COMMERCE CORPORATION, levied by any municipality or political
subdivision of the state; provided, that the corporation shall make payments in
lieu of real property taxes and assessments to municipalities and political
subdivisions with respect to projects of the corporation located in the
municipalities and political subdivisions during those times that the
corporation derives revenue from the lease or operation of the projects.
Payments in lieu of taxes shall be in amounts agreed upon by the corporation
and the affected municipalities and political subdivisions. Failing the
agreement, the amounts of payments in lieu of taxes shall be determined by the
corporation using a formula that shall reasonably ensure that the amounts
approximate the average amount of real property taxes due throughout the state
with respect to facilities of a similar nature and size. Any municipality or
political subdivision is empowered to accept at its option an amount of
payments in lieu of taxes less than that determined by the corporation. If,
pursuant to § 42-64-13(f), the corporation shall have agreed with a
municipality or political subdivision that it shall not provide all of the
specified services, the payments in lieu of taxes shall be reduced by the cost
incurred by the corporation or any other person in providing the services not
provided by the municipality or political subdivision.
(b) The corporation shall not be required to pay state taxes
of any kind, and the corporation, its projects, property, and moneys and,
except for estate, inheritance, and gift taxes, any bonds or notes issued under
the provisions of this chapter and the income (including gain from sale or
exchange) from these shall at all times be free from taxation of every kind by
the state and by the municipalities and all political subdivisions of the
state. The corporation shall not be required to pay any transfer tax of any
kind on account of instruments recorded by it or on its behalf.
(c) For purposes of the exemption from taxes and assessments
upon or in respect of any project under subsections (a) or (b) of this section,
the corporation shall not be required to hold legal title to any real or
personal property, including any fixtures, furnishings or equipment which are
acquired and used in the construction and development of the project, but the
legal title may be held in the name of a lessee (including sublessees) from the
corporation. This property, which shall not include any goods or inventory used
in the project after completion of construction, shall be exempt from taxation
to the same extent as if legal title of the property were in the name of the
corporation; provided that the board of directors of the corporation adopts a
resolution confirming use of the tax exemption for the project by the lessee.
Such resolution shall not take effect until thirty (30) days from passage. The
resolution shall include findings that: (1) the project is a project of the
corporation under § 42-64-3(20), and (2) it is in the interest of the
corporation and of the project that legal title be held by the lessee from the
corporation. In adopting the resolution, the board of directors may consider
any factors it deems relevant to the interests of the corporation or the
project including, for example, but without limitation, reduction in potential
liability or costs to the corporation or designation of the project as a
"Project of Critical Economic Concern" pursuant to Chapter 117 of this title.
(d) For purposes of the exemption from taxes and assessments
for any project of the corporation held by a lessee of the corporation under
subsection (c) of this section, any such project shall be subject to the
following additional requirements:
(1) The total sales tax exemption benefit to the lessee will
be implemented through a reimbursement process as determined by the division of
taxation rather than an up-front purchase exemption;
(2) The sales tax benefits granted pursuant to RIGL
42-64-20(c) shall only apply to project approved prior to July 1, 2011 and
shall: (i) only apply to materials used in the construction, reconstruction or
rehabilitation of the project and to the acquisition of furniture, fixtures and
equipment, except automobiles, trucks or other motor vehicles, or materials
that otherwise are depreciable and have a useful life of one year or more, for
the project for a period not to exceed six (6) months after receipt of a
certificate of occupancy for any given phase of the project for which sales tax
benefits are utilized; and (ii) not exceed an amount equal to the income tax
revenue received by the state from the new full-time jobs with benefits
excluding project construction jobs, generated by the project within a period
of three (3) years from after the receipt of a certificate of occupancy for any
given phase of the project. "Full- time jobs with benefits" means jobs that
require working a minimum of thirty (30) hours per week within the state, with
a median wage that exceeds by five percent (5%) the median annual wage for the
preceding year for full-time jobs in Rhode Island, as certified by the
department of labor and training with a benefit package that is typical of
companies within the lessee's industry. The sales tax benefits granted pursuant
to Rhode Island general laws subsection 42-64-20(c) shall not be effective for
projects approved on or after July 1, 2011.
(3) The corporation shall transmit the analysis required by
RIGL 42-64-10(a)(2) to the house and senate fiscal committee chairs, the
department of labor and training and the division of taxation promptly upon
completion. Annually thereafter, the department of labor and training shall
certify to the house and senate fiscal committee chairs, the house and senate
fiscal advisors, the corporation and the division of taxation the actual number
of new full-time jobs with benefits created by the project, in addition to
construction jobs, and whether such new jobs are on target to meet or exceed
the estimated number of new jobs identified in the analysis above. This
certification shall no longer be required when the total amount of new income
tax revenue received by the state exceeds the amount of the sales tax exemption
benefit granted above.
(4) The department of labor and training shall certify to the
house and senate fiscal committee chairs and the division of taxation that jobs
created by the project are "new jobs" in the state of Rhode Island, meaning
that the employees of the project are in addition to, and without a reduction
of, those employees of the lessee currently employed in Rhode Island, are not
relocated from another facility of the lessee's in Rhode Island or are
employees assumed by the lessee as the result of a merger or acquisition of a
company already located in Rhode Island. Additionally, the corporation, with
the assistance of the lessee, the department of labor and training, the
department of human services and the division of taxation shall provide
annually an analysis of whether any of the employees of the project qualify for
RIte Care or RIte Share benefits and the impact such benefits or assistance may
have on the state budget.
(5) Notwithstanding any other provision of law, the division
of taxation, the department of labor and training and the department of human
services are authorized to present, review and discuss lessee specific tax or
employment information or data with the corporation, the house and senate
fiscal committee chairs, and/or the house and senate fiscal advisors for the
purpose of verification and compliance with this resolution; and
(6) The corporation and the project lessee shall agree that,
if at any time prior to the state recouping the amount of the sales tax
exemption through new income tax collections from the project, not including
construction job income taxes, the lessee will be unable to continue the
project, or otherwise defaults on its obligations to the corporation, the
lessee shall be liable to the state for all the sales tax benefits granted to
the project plus interest, as determined in RIGL 44-1-7, calculated from the
date the lessee received the sales tax benefits.
History of Section.
(P.L. 1974, ch. 100, § 14; P.L. 1976, ch. 277, § 7; P.L. 1995, ch.
400, § 4; P.L. 2006, ch. 246, art. 30, § 17; P.L. 2009, ch. 5, art.
11, § 1; P.L. 2010, ch. 239, § 7; P.L. 2011, ch. 151, art. 19, §
21; P.L. 2013, ch. 243, § 3; P.L. 2013, ch. 490, § 3.)