Rhode Island Investment Tax Credit

Rhode Island Law, Section 44-31-1 provides for a 10 Percent Investment Tax Credit, which may be applied toward the Rhode Island business corporation tax and the personal income tax. This credit is available to employers classified in manufacturing, wholesale trade, finance, insurance, real estate and selected services industries. In order to be eligible for the credit, the employer must be paying above average wages or investing significantly in employee training. In addition, more than half of the revenue of non-manufacturing firms must come from out-of-state sales or sales to the federal government.

According to our understanding of the law, employers may qualify for the 10% Investment Tax Credit by meeting one of the following three criteria:

The employer’s median annual wage paid to its full-time equivalent employees must be greater than the average annual wage paid by all employers in the state in the same two-digit SIC, or
The employer’s median annual wage paid to its full-time equivalent employees is greater than or equal to 125 percent of the average annual wage paid by all employers in the state (125 percent of the average annual wage paid to all covered workers in 2004 was equal to $46,351), or
For manufacturing employers only - the average annual wage paid to the employer’s full-time equivalent employees classified as production workers (as defined by the Department of Labor and Training) is greater than the average annual wage paid to all production workers in the state in the same two-digit SIC Code.
The firm invests at least 2 percent of total payroll costs in worker training.

The most recently computed wage tables by two-digit SIC, definition of terms for the Investment Tax Credit, and a Certification Form are available through the links above.

The employer is responsible for calculating its median annual wage paid to its full-time equivalent employees (or the average wage paid to its production workers for criteria #3) and providing it to us. Our Department does not have the necessary information to perform these calculations.

If you believe you meet criteria #1, 2, or 3 to qualify for the tax credit, please complete the certification form and fax it to the Labor Market Information (LMI) unit at (401) 462-8766. Call (401) 462-8740 if you have any questions.

If you believe you meet criteria #4 to qualify for the tax credit, submit a letter specifying total wages, total amount spent on training, and the computation of the percent spent on training to:

                             Governor's Workforce Board-RI
                                                    1511 Pontiac Avenue
                                                    Cranston, RI 02920
                                                    Phone (401) 462-8860
                                                    Fax (401) 462-8865
                                                    Email