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HB 8195

AN ACT RELATING TO TAXATION -- RHODE ISLAND LOCAL INVESTMENT TAX CREDIT ACT

2026 Regular Session Introduced by Stephen Casey and 1 co-sponsor

Creates state tax credit for Rhode Island residents investing in local businesses to stimulate in-state capital formation and economic development.

04/03/2026 Scheduled for hearing and/or consideration (04/08/2026)
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Bill Summary · HB 8195

Legislative bill overview

HB 8195 establishes the Rhode Island Local Investment Tax Credit Act, which would create a tax credit mechanism to incentivize residents to invest in local businesses or community development projects. The bill allows taxpayers to claim credits against their state income tax liability based on qualifying investments made within Rhode Island. This represents a state-level attempt to redirect capital toward in-state economic development.

Why is this important

Local investment tax credits can potentially accelerate capital formation for small businesses and startups that struggle to access traditional financing, while also keeping investment wealth circulating within Rhode Island's economy rather than flowing to out-of-state markets. However, the effectiveness depends heavily on the credit's structure—specifically the percentage of credit allowed, investment caps, and whether it actually mobilizes new capital or simply subsidizes investments that would occur anyway.

Potential points of contention

  • Revenue impact and fiscal cost: Tax credits directly reduce state revenue; the fiscal note will determine whether this is affordable given Rhode Island's budget constraints
  • Who benefits: Credits may disproportionately advantage wealthy individuals who have capital to invest, raising equity concerns about who receives the tax benefit
  • Investment definition and oversight: Defining what qualifies as "local investment" and preventing fraud or gaming the system requires robust administration and monitoring mechanisms
  • Economic efficacy: Unclear whether the credit will genuinely stimulate new business investment or merely subsidize investments that would happen regardless

Compiled from official sources — confirm details with the bill’s official record.

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