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SB 2833

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

2026 Regular Session Introduced by Jonathon Acosta and 9 co-sponsors

Rhode Island offers a 50% personal or corporate tax credit for investments in small, Rhode Island-based businesses (≤99 employees), capped at $3,000 per taxpayer per year.

05/28/2026 Committee recommended measure be held for further study
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Bill Summary · SB 2833

Summary of Bill SB 2833 (Rhode Island) – Rhode Island Local Investment Tax Credit Act

Date Introduced: March 4, 2026
Jurisdiction: Rhode Island
Session: 2026
Referred to: Senate Finance
Primary Sponsors: Valverde, Ciccone, Lauria, DiPalma, Acosta, Bissaillon, Kallman, Felag, Pearson, Quezada
Status: Introduced; scheduled for hearing/consideration

Purpose and Intent

  • Establish a new state tax credit program called the Rhode Island Local Investment Tax Credit Act.
  • Provide a 50% credit against Rhode Island personal or corporate income taxes for qualified investments in small, local businesses.
  • Target businesses with 99 employees or fewer and located in Rhode Island.
  • Ensure funding to negate revenue loss from the tax credit through annual General Fund appropriations and a dedicated funding source via the Rhode Island Commerce Corporation Strategic Fund.

Key Provisions

Definitions

  • Qualified business: A Rhode Island-based business with 99 or fewer employees, with:
    • Headquarters/domicile and majority of employees in RI,
    • At least 80% of gross revenues earned in RI,
    • At least 80% of assets located in RI,
    • Certified by the Rhode Island Commerce Corporation Strategic Fund as meeting the above criteria.
  • Qualified investment: A cash or cash-equivalent investment certified by the RI Commerce Corporation Strategic Fund in a qualified business, excluding investments where the investor or a family member has a preexisting fiduciary relationship with the business or where a family member of the investor is an employee/owner.
  • Rhode Island Commerce Corporation Strategic Fund: The state fund established under § 42-64-18, which administers the program.

Tax Credit Mechanics (effective for tax years beginning after January 1, 2027)

  • A eligible taxpayer may claim a credit equal to 50% of the qualified investment made in a qualified business during the tax year.
  • Credit limits:
    • No more than $3,000 credit per qualified business per tax year.
    • No more than $3,000 credit total in the tax year across all qualified businesses for a single taxpayer.
  • Certification requirements:
    • Taxpayer must obtain a certification from the RI Commerce Corporation Strategic Fund within 60 days of making the investment.
    • Certification details must be attached to the tax return claiming the credit.
  • Administrative process:
    • The RI Commerce Corporation Strategic Fund must develop an application/approval process and a program outlining criteria for investments to be considered qualified investments.
    • Investments must comply with applicable securities laws and be subject to the Rhode Island Uniform Securities Act and other state/federal securities regulations.
  • Allocation of credits:
    • If the credit exceeds the taxpayer’s tax liability for the year, the excess may be carried forward to future years for up to 10 years, or until used, whichever comes first.
  • Certificates issued by the Fund must specify:
    • Total investment amounts by qualified business,
    • Total credit allowed for the tax year,
    • Carryforward applicability if not fully utilized,
    • Carryforward period details.

Revenue and Funding

  • The Act contemplates annual appropriations from the state General Fund to fully compensate for any revenue loss resulting from enacting the chapter, ensuring the program is revenue-neutral to the state.
  • Funding for the program is drawn from the Rhode Island Commerce Corporation Strategic Fund for administering and certifying investments.

Effective Date

  • The Act takes effect upon passage.

Who is Affected

  • Individual and corporate taxpayers who make qualified investments in small Rhode Island businesses (≤99 employees) that meet the stipulated criteria.
  • Qualified businesses in Rhode Island seeking investment from eligible taxpayers.
  • The Rhode Island Commerce Corporation Strategic Fund, which administers certification, program parameters, and compliance with securities laws.
  • Taxpayers and businesses could experience changes in tax planning related to investment strategies and credit utilization, subject to the annual cap of credits.

Procedural and Timeline Aspects

  • Credit eligibility begins for tax years after January 1, 2027.
  • Certification by the Rhode Island Commerce Corporation Strategic Fund must occur within 60 days of investment.
  • Credits are claimed on the taxpayer’s annual tax return with attached certificate.
  • Excess credits can be carried forward up to 10 tax years.
  • The General Assembly would annually appropriate funds to offset revenue loss from the program.

Potential Impacts and Considerations

  • Encourages local investment in small RI businesses and potential job creation/retention in-state.
  • Creates a targeted incentive for investments in qualified Rhode Island businesses with strict geographic and operation criteria.
  • The program includes safeguards to prevent conflicts of interest (family relationships with invested businesses) and requires securities compliance.
  • The revenue impact is intended to be offset by annual General Fund appropriations, preserving overall state revenue, though the effectiveness depends on appropriation levels and participation.
  • The collaboration with the RI Commerce Corporation Strategic Fund centralizes administration and oversight of the program.

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

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