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.)