NEW: Rep. Phillips Pitches Tax Incentive for New Businesses
Friday, March 16, 2012
In an initiative to spur economic development in his community and throughout the state, Rep. Robert D. Phillips (D-Dist. 51, Woonsocket) is proposing a tax incentive for newly created Rhode Island businesses that hire and retain two or more employees.
The legislation (2012-H 7644), titled the Job Creation Incentive Act, would provide a 50 percent tax deduction for a business in its first three years after the opening date, followed by a 25 percent tax deduction for the next three years.
“This bill is going to help businesses of all sizes recoup startup costs,” Representative Phillips said. “We’re sending the message to the world that yes, Rhode Island is open for business. But we can’t do that if people aren’t taking chances and moving forward with their business plans. People are afraid of the economy right now. What many don’t realize is that the fear to innovate and create is one of the things holding us back achieving a more stable economic climate.”
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTIn order to receive the incentive, the business applicant must file with the tax administrator within 30 days after the business hires its second employee. Under the conditions of the tax incentive plan, new employees cannot be relatives of a controlling shareholder, officer or manager of the corporation, limited liability, partnership or any other type of legal business entity claiming the incentive.
Businesses using the hiring of employees as a means of obtaining another tax incentive outside the Jobs Creation Incentive Act would not be eligible for the deduction.
“There’s no double-dipping allowed here,” the representative said. “This is simply a way to give business owners the push they need. There is a dire need for economic development in this state, and we can’t just concentrate on large corporations. We have to keep an eye out for the little guys, too.”
Co-sponsoring the bill are Representatives Jared R. Nunes (D-Dist. 25, Coventry, West Warwick), John G. Edwards (D-Dist. 70, Tiverton, Portsmouth), Brian C. Newberry (R-Dist. 48, North Smithfield, Burrillville) and Daniel P. Reilly (R-Dist. 72, Portsmouth, Middletown, Newport).
This bill has been referred to the House Finance Committee.