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Rhode Island Tax Code: What Manufacturers Don’t Know but Should

Posted January 23, 2014 4:07 PM by jsavage

In July of last year, the Rhode Island legislature enacted a change to the Rhode Island tax code regarding the state's version of the federal Section 179 deduction. We'd hoped this change would increase the limit of the deduction, from $25,000 to the federal limit, at the time of $500,000.[i] However, the federal tax code reverted to its original Section 179 deduction limit of $25,000 at the beginning of 2014; essentially making the change to the Rhode Island tax code moot.[ii]

While it's unfortunate that Rhode Island manufacturers won't have the opportunity to take advantage of the increased deduction limit, there are still a variety of other incentives we'd like to point out. These include tax credits, tax exemptions, or corporate accounting benefits; qualifications for these incentives include property and equipment investment, waste/pollution control, and hiring workers. We've included a list below that we thought would be of most interest to our clients and other Rhode Island manufacturers.

A manufacturer is allowed a 4% tax credit against the Rhode Island corporate income tax on buildings and structural components, as well as machinery and equipment, which are owned or leased and are principally used in the production process (including storage).

High-performance manufacturers are allowed a 10% investment tax credit against their corporate tax on the cost or qualified lease amounts for tangible personal property or other tangible property, as well as buildings and structural components owned, leased to own, or leased for at least 20 years.

Both the property value and the wage value portions in the numerators can be reduced by the portion they each or both increase from current taxable year compared to past year.

Affiliated multi-state corporations may file separate or consolidated tax returns, whichever is more favorable, using the average of a three factor formula.

The business corporation tax amortization provisions may include tangible personal property for the recycling, reuse, or recovery of materials from the treatment of hazardous waste.

Pollution control property and supplies are exempt from the state sales tax.

If you are a manufacturer in Rhode Island, or are looking to expand operations into Rhode Island, these incentives may be worth a closer look. SPEC has worked with several companies who received government funding or assistance and understands, first hand, the real value this type of incentive can provide manufacturers.


[i] http://www.tax.ri.gov/notice/Summary%20of%20Legislative%20Changes%202013.pdf

[ii] http://www.section179.org/

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#1

Re: Rhode Island Tax Code: What Manufacturers Don’t Know but Should

01/24/2014 11:19 AM

If you are a manufacturer in Rhode Island, or are looking to expand operations into Rhode Island, these incentives may be worth a closer look.

That and a number of other states are pushing for manufacturers to move to their state, with incentives....... Florida, Texas,.........

For businesses thinking about moving, All have to be look into, there are things not said.

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Re: Rhode Island Tax Code: What Manufacturers Don’t Know but Should

01/26/2014 7:54 AM

I haven't heard a peep about manufacturers packing up and running to blue states.

If RI doesn't have things in place that directly compete with what other states are offering, they will be hearing the sound of crickets.

Under Scott Walker's leadership, Wisconsin now has close to a $1 billion surplus, and is quickly becoming a business friendly state. This is despite the sheer hatred that was piled on him, a recall election, along with the left wing protests and defacing of the state's capital by union members.

Sometimes you just have to drag the horse to water, and force him to drink.

The result of what this evil man has done, will be a decrease in income and property taxes for everyone.

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Re: Rhode Island Tax Code: What Manufacturers Don’t Know but Should

01/26/2014 8:58 AM

That's not quite true, I'm a Wisconsinite, there is $700 million in unstructured debt. But, it looks like that debt is manageable.only if our (Wisconsin) economy keeps improving.

But, a 700 million in unstructured debt, we are still over 200 million ahead.

But it beats the 3 billion dollar deficeit he inherited. After he created Act 10, also known as the budget repair bill. Which addressed the unfair public sector unions benefits that was basically approved by the unions and union supported politicians, brought Wisconsin's fiscal problem back under control. But taking a portion of these surplus for varies ROI improvements for Wisconsin.

Oh by the way, I beleive Wisconsin is considered a blue state, it's just that, we woke up, seeing what was happening to Michigan and Illinois liberal policies.

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Re: Rhode Island Tax Code: What Manufacturers Don’t Know but Should

01/26/2014 11:36 AM

Yeah, I know it's blue...and proof that fiscal conservatism isn't a dirty phrase.

I wonder why I was hearing that it was a $900+ million surplus? Probably right wing spin.

Didn't Michigan just become a right to work state?

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Re: Rhode Island Tax Code: What Manufacturers Don’t Know but Should

01/26/2014 11:43 AM

It was a surplus, some do to the emproved economy from walkers fiscal responsibility, and some from an accounting error...:/

But the unstructured debt, I beleive are loans.

Either way, it's manageable.

And a surplus.

He's giving back about 500 million back to the taxpayers, and the rest to ajust the debt..... And if the trend that is going on since walker took office with a focus on fiscal responsibility...... The improve economy should address the remainder debt.

I feel it's under control.

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