PROVIDENCE, R.I. – The Rhode Island Department of Revenue, Office of Revenue Analysis, this week published its initial review of the New Qualified Jobs Incentive Act, which was enacted in 2015 to promote new jobs and industries to the state.
The Evaluation of New Qualified Jobs Incentive Act 2015 was prepared by the Office of Revenue Analysis in conjunction with the R.I. Division of Taxation and the R.I. Commerce Corporation in accordance with Rhode Island General Law Chapter 44-48.2.
"The report is the latest in a series of analyses intended to gauge the effectiveness of the state's many economic development tax incentive programs," said Paul L. Dion, Ph.D., Chief of the Office of Revenue Analysis. "While still in their early stages we expect the reports, over time, will help guide the state's policymakers as they shape an economy that provides opportunities for Rhode Islanders and the businesses located here to thrive."
Dion noted that the production of the Evaluation of New Qualified Jobs Incentive Act 2015 would not be possible without the cooperation of the Department of Revenue, Division of Taxation and the Executive Office of Commerce and the Rhode Island Commerce Corporation.
"This report is the latest example of the insight and clarity the Office of Revenue Analysis staff brings to bear on the complex relationship between tax incentives, business activity, and economic competitiveness," Dion said.
Madiha Zaffou, Ph.D., Principal Economic and Policy Analyst, assisted by Emily Fazio, Senior Economic and Policy Analyst, of the Office of Revenue Analysis were responsible for executing the analysis included in the report. Tracy Wunder, Data Analyst 3 in the Division of Taxation provided data to support the analysis.
The report covers the use of the New Qualified Jobs Tax Incentive Act tax credits for the tax years 2016-2018. Some of the report's findings are: • Two companies that were awarded New Qualified Jobs Incentive Act tax credits used $136,229 of tax credits in TY 2016 – TY 2018. These tax credits were connected to 74 jobs, 29 in TY 2017 and 45 in TY 2018, at the two companies. • The median wage paid to employees that qualified the companies to receive New Qualified Jobs Incentive Act tax credits ranged from $43,460 to $66,229 depending on the tax year and company. • ORA found that if at least 38% of the jobs that qualified the two companies to receive the New Qualified Jobs Incentive Act tax credits were located in Rhode Island strictly due to the availability of the tax credits, then the New Qualified Jobs Incentive Act generates more in state general revenues than it costs the state in terms of the amount of tax credits. • The New Qualified Jobs Incentive Act tax credit program will ramp up considerably over the TY 2019 – TY 2021 period, the next period to be covered by an incentive evaluation report, with an estimated $4,288,427 in tax credits expected to be claimed.