Innovation Tax Credit

Rhode Island now offers a new tax credit to encourage investment in high-growth, high-wage innovation industries and support the state's entrepreneurs. The Rhode Island Innovation Tax Credit offers investors up to a 50% credit on eligible investments, with a maximum tax credit of $100,000. To be eligible to apply for the credit, an investor must invest in a Rhode Island business that produces traded goods or services and has annual gross revenues of less than $1 million in the prior two calendar years. Companies must be categorized as one of the following innovation industries: Biotechnology and Life Sciences; Communication and Information Technology; Financial Services; Marine and Defense Manufacturing; Professional, Technical and Educational Services; Industrial and Consumer Product Manufacturing and Design.

The credit may be carried forward for a period not to exceed three years and may be issued in the name of the eligible company, an executive employee or employees of the company, an investor in the company or a combination thereof not to exceed a maximum of 10 executive employees. Investors must apply for the credit prior to making an investment. Once an application is approved, the investor has up to 12 months to make the investment and provide proof of investment back to the EDC board of directors. Upon completion of this process, EDC will certify the investor's eligibility for the credit with the Rhode Island Division of Taxation.

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