Rhode Island Small Business Tax Laws
Posted by Molly
I was noticing that the state of Rhode Island has done a lot of changes to its tax laws and incentives for small businesses. This is good if you are a small business owner, or if you are thinking of becoming one. The state’s interest in bringing in new business may have a very positive outcome for you, whether you are a sole proprietor, a partner, or you hold interest in a corporation.For example, the state is offering a 50% tax credit to businesses for employees to upgrade their skills. This can cover up to $5,000 per employee over three years. $1,000 of the training expenses can be based on employee’s wages. Training dollars that have been taken as a credit under other state tax programs are not eligible for this tax credit. There is also a vocational training or basic education tax credit of 25% of the costs incurred up to a maximum of $300 per employee and $5,000 per employer. This applies to both worksite or offsite training classes. If you are a machine tools apprentice or you employ one, there is a credit that applies to new machine tool and metal trade apprentices or plastics process technician apprentices. Its annual credit is 50% of actual wages paid to the qualifying apprentice or $4,800, whichever is less.
The reemployment tax credit applies to new hires who have been unemployed or have received AFDC (Aid to Families with Dependent Children) or TANF (Temporary Assistance for Needy Families). This is a one time credit of $2,400.
The last incentive is the Rhode Island Investment tax credit, which is a 10 Percent credit that may be applied toward the Rhode Island business corporation tax and the personal income tax. This credit is available to employers in manufacturing, wholesale trade, finance, insurance, real estate and selected services industries. The employer must be paying above average wages or investing in employee training, and more than half of the revenue of non-manufacturing firms must come from out-of-state sales or sales to the federal government.
If you need further information, the phone number for the Rhode Island Division of Taxation is 222-1111.
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