Bill
HB 5971
Clarifies documentation timing and defines full-time as 35 hours/week for Rhode Island New Qualified Jobs incentives, with extensions and forfeiture rules.
Status: Referred to House Finance (Executive Office of Commerce). Introduced Feb 28, 2025. Committee action: 04/09/2025 — committee recommended measure be held for further study.
Note: the materials provided included an unrelated Michigan insurance-code draft. This summary covers the Rhode Island measure (LCO No. LC002092 / HB 5971) titled “AN ACT RELATING TO TAXATION — RHODE ISLAND NEW QUALIFIED JOBS INCENTIVE ACT 2015.”
Purpose
- Clarify documentation and timing requirements for businesses claiming tax credits under the Rhode Island New Qualified Jobs Incentive Act (2015) and define “full-time employee” for the program.
Key provisions
- Documentation deadline and certification
- A business must submit documentation showing it met the employment requirements specified in its incentive agreement for certification of its tax credit amount within three (3) years after the commerce corporation approves its application, or must waive tax credits for the first eligible year.
- The commerce corporation may grant up to two (2) six-month extensions for good cause.
- The incentive effective date cannot be set later than four (4) years after approval of the application.
- If documentation for a tax period remains uncertified one year after the closing date of that period, the credit amount for that period is forfeited; credit for remaining years of the eligibility period remains available.
- Special documentation extension (retroactive window)
- Businesses awarded tax credits under the program between Oct 1, 2018 and Dec 31, 2023 are given until Dec 31, 2025 to submit the required documentation, provided submissions include evidence of required withholdings.
- Definition of full-time employment
- Full-time employment for an accounting or privilege period is determined as the average of the monthly full-time employment for that period.
- The explanatory language specifies a full-time employee is one who works an average of 35 hours per week.
- Administrative review and reapplication
- Commerce corporation may require additional information during annual reviews.
- A business previously approved but unable to meet employment commitments and that did not receive any tax credits may submit a new application.
Affected parties
- Businesses participating (or planning to participate) in the Rhode Island New Qualified Jobs Incentive Act — especially those with awards between 10/1/2018 and 12/31/2023 who gain an extended deadline to document compliance.
- The Rhode Island Commerce Corporation (administration, review, and extension authority).
- State tax administration and budget — timing of credit certification and forfeiture rules can affect when credits reduce tax liability and potentially influence near-term state revenue estimates.
- Employees — the bill codifies a 35-hour/week threshold for “full-time” status for program eligibility calculations.
Effective date
- The act takes effect upon passage.
Potential impacts and considerations
- Provides clarity and a definitive full-time threshold (35 hours/week), which may change how businesses count eligible jobs for credit claims compared with a 40-hour benchmark.
- The Dec 31, 2025 deadline relief for certain awardees could allow previously delayed certifications to proceed, potentially accelerating recognition of credits or revealing ineligible claims.
- The forfeiture rule (uncertified credit after one year) creates an administrative incentive for timely certification and could result in revenue retention for the state if businesses fail to certify.
- Administrative workload for the commerce corporation may increase due to extended reviews and documentation submissions.
Sponsors
- Introduced by Representatives Solomon, Hull, Casey, Casimiro, and Shanley (as listed in the bill text).
Compiled from official sources — confirm details with the bill’s official record.
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