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§42-64.20-5  Tax Credits. –


Published: 2015

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TITLE 42

State Affairs and Government

CHAPTER 42-64.20

Rebuild Rhode Island Tax Credit

SECTION 42-64.20-5



   § 42-64.20-5  Tax credits. –

(a) An applicant meeting the requirements of this chapter may be allowed a

credit as set forth hereinafter against taxes imposed upon such person under

applicable provisions of title 44 of the general laws for a qualified

development project.



   (b) To be eligible as a qualified development project

entitled to tax credits, an applicant's chief executive officer or equivalent

officer shall demonstrate to the commerce corporation, at the time of

application, that:



   (1) The applicant has committed capital investment or owner

equity of not less than twenty percent (20%) of the total project cost;



   (2) There is a project financing gap in which after taking

into account all available private and public funding sources, the project is

not likely to be accomplished by private enterprise without the tax credits

described in this chapter; and



   (3) The project fulfills the state's policy and planning

objectives and priorities in that:



   (i) The applicant will, at the discretion of the commerce

corporation, obtain a tax stabilization agreement from the municipality in

which the real estate project is located on such terms as the commerce

corporation deems acceptable;



   (ii) It (A) is a commercial development consisting of at

least 25,000 square feet occupied by at least one business employing at least

25 full-time employees after construction or such additional full-time

employees as the commerce corporation may determine; (B) is a multi-family

residential development in a new, adaptive reuse, certified historic structure,

or recognized historical structure consisting of at least 20,000 square feet

and having at least 20 residential units in a hope community; or (C) is a mixed

use development in a new, adaptive reuse, certified historic structure, or

recognized historical structure consisting of at least 25,000 square feet

occupied by at least one business, subject to further definition through rules

and regulations promulgated by the commerce corporation; and



   (iii) Involves a total project cost of not less than

$5,000,000, except for a qualified development project located in a hope

community or redevelopment area designated under § 45-32-4 of the general

laws in which event the commerce corporation shall have the discretion to

modify the minimum project cost requirement.



   (c) Applicants qualifying for a tax credit pursuant to

chapter 44-33.6 of the General Laws shall be exempt from the requirements of

subsections (b)(3)(ii) and (b)(3)(iii) of this section. The following procedure

shall apply to such applicants:



   (1) The division of taxation shall remain responsible for

determining the eligibility of an applicant for tax credits awarded under

chapter 44-33.6 of the General Laws;



   (2) The commerce corporation shall retain sole authority for

determining the eligibility of an applicant for tax credits awarded under this

chapter; and



   (3) The commerce corporation shall not award in excess of

fifteen percent (15%) of the annual amount appropriated in any fiscal year to

applicants seeking tax credits pursuant to this subsection (c).



   (d) Maximum project credit.



   (i) For qualified development projects, the maximum tax

credit allowed under this chapter shall be the lesser of (1) thirty percent

(30%) of the total project cost; or (2) the amount needed to close a project

financing gap (after taking into account all other private and public funding

sources available to the project), as determined by the commerce corporation.



   (ii) The credit allowed pursuant to this chapter shall not

exceed fifteen million dollars ($15,000,000) for any qualified development

project under this chapter. No building or qualified development project to be

completed in phases or in multiple projects shall exceed the maximum project

credit of fifteen million dollars ($15,000,000) for all phases or projects

involved in the rehabilitation of such building.



   (e) Credits available under this chapter shall not exceed

twenty percent (20%) of the project cost, provided, however, that the applicant

shall be eligible for additional tax credits of not more than ten percent (10%)

of the project cost, if the qualified development project meets any of the

following criteria or other additional criteria determined by the commerce

corporation from time to time in response to evolving economic or market

conditions:



   (1) The project includes adaptive reuse or development of a

recognized historical structure;



   (2) The project is undertaken by or for a targeted industry;



   (3) The project is located in a transit oriented development

area;



   (4) The project includes residential development of which at

least twenty percent (20%) of the residential units are designated as

affordable housing or workforce housing;



   (5) The project includes the adaptive reuse of property

subject to the requirements of the industrial property remediation and reuse

act, sections 23-19.14-1, et seq. of the general laws; or



   (6) The project includes commercial facilities constructed in

accordance with the minimum environmental and sustainability standards, as

certified by the commerce corporation pursuant to Leadership in Energy and

Environmental Design or other equivalent standards.



   (f) Tax credits shall not be allowed under this chapter prior

to the taxable year in which the project is placed in service.



   (g) The amount of a tax credit allowed under this chapter

shall be allowable to the taxpayer in up to five annual increments; no more

than thirty percent (30%) and no less than fifteen percent (15%) of the total

credits allowed to a taxpayer under this chapter may be allowable for any

taxable year.



   (h) If the portion of the tax credit allowed under this

chapter exceeds the taxpayer's total tax liability for the year in which the

relevant portion of the credit is allowed, the amount that exceeds the

taxpayer's tax liability may be carried forward for credit against the taxes

imposed for the succeeding four (4) years, or until the full credit is used,

whichever occurs first. Credits allowed to a partnership, a limited liability

company taxed as a partnership, or multiple owners of property shall be passed

through to the persons designated as partners, members or owners respectively

pro rata or pursuant to an executed agreement among such persons designated as

partners, members or owners documenting an alternate distribution method

without regard to their sharing of other tax or economic attributes of such

entity.



   (i) The commerce corporation in consultation with the

division of taxation shall establish, by regulation, the process for the

assignment, transfer or conveyance of tax credits.



   (j) For purposes of this chapter, any assignment or sales

proceeds received by the taxpayer for its assignment or sale of the tax credits

allowed pursuant to this section shall be exempt from taxation under title 44

of the general laws. If a tax credit is subsequently revoked or adjusted, the

seller's tax calculation for the year of revocation or adjustment shall be

increased by the total amount of the sales proceeds, without proration, as a

modification under chapter 30 of title 44 of the general laws. In the event

that the seller is not a natural person, the seller's tax calculation under

chapters 11, 13, 14, or 17 of title 44 of the general laws, as applicable, for

the year of revocation, or adjustment, shall be increased by including the

total amount of the sales proceeds without proration.



   (k) The tax credit allowed under this chapter may be used as

a credit against corporate income taxes imposed under chapters 11, 13, 14, or

17, of title 44, or may be used as a credit against personal income taxes

imposed under chapter 30 of title 44 for owners of pass-through entities such

as a partnership, a limited liability company taxed as a partnership, or

multiple owners of property.



   (l) In the case of a corporation, this credit is only allowed

against the tax of a corporation included in a consolidated return that

qualifies for the credit and not against the tax of other corporations that may

join in the filing of a consolidated tax return.



   (m) Upon request of a taxpayer and subject to annual

appropriation, the state shall redeem such credit in whole or in part for

ninety percent (90%) of the value of the tax credit. The division of taxation,

in consultation with the commerce corporation, shall establish by regulation a

redemption process for tax credits.



   (n) Projects eligible to receive a tax credit under this

chapter may, at the discretion of the commerce corporation, be exempt from

sales and use taxes imposed on the purchase of the following classes of

personal property only to the extent utilized directly and exclusively in such

project: (1) furniture, fixtures and equipment, except automobiles, trucks or

other motor vehicles; or (2) such other materials, including construction

materials and supplies, that are depreciable and have a useful life of one year

or more and are essential to the project.



   (o) The commerce corporation shall promulgate rules and

regulations for the administration and certification of additional tax credit

under subsection (e) of this section, including criteria for the eligibility,

evaluation, prioritization, and approval of projects that qualify for such

additional tax credit.



   (p) The commerce corporation shall not have any obligation to

make any award or grant any benefits under this chapter.



History of Section.

(P.L. 2015, ch. 141, art. 19, § 3.)