2019 -- S 0220 | |
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LC001038 | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2019 | |
____________ | |
A N A C T | |
RELATING TO TAXATION -- PAWTUCKET OPPORTUNITY ZONE INCOME TAX | |
CREDIT ACT | |
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Introduced By: Senators Conley, Nesselbush, Crowley, and Cano | |
Date Introduced: January 31, 2019 | |
Referred To: Senate Housing & Municipal Government | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Title 44 of the General Laws entitled "TAXATION" is hereby amended by |
2 | adding thereto the following chapter: |
3 | CHAPTER 70 |
4 | PAWTUCKET OPPORTUNITY ZONE INCOME TAX CREDIT ACT |
5 | 44-70-1. Short title. |
6 | This chapter shall be known and may be cited as "Pawtucket Opportunity Zone Income |
7 | Tax Credit Act." |
8 | 44-70-2. Definitions. |
9 | The following words and phrases used in this chapter shall have the meanings given to |
10 | them in this chapter unless the context indicates otherwise: |
11 | (1) "Code" means the federal Internal Revenue Code (the "code") 26 U.S.C. 1 et seq. |
12 | (2) " Corporation" means the governmental agency and public instrumentality, formerly |
13 | known as the "Rhode Island port authority and economic development corporation" and/or also |
14 | formerly known as the "Rhode Island economic development corporation," and now known as the |
15 | Rhode Island commerce corporation authorized, created, and established pursuant to § 42-64-4, |
16 | or any subsidiary corporation thereof which is established pursuant to § 42-64-7.1. |
17 | (3) "Director" means the chief executive officer of the Rhode Island commerce |
18 | corporation. |
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1 | (4) "Pawtucket qualified opportunity fund" means a qualified opportunity fund, as |
2 | defined in 26 U.S.C. 1400Z-2(d) of the code, that invests, either directly or through a qualified |
3 | opportunity zone business, not less than two hundred fifty thousand dollars ($250,000) in a |
4 | qualified opportunity zone which is located in the city of Pawtucket. |
5 | (5) "Pawtucket qualified opportunity zone business property" means qualified |
6 | opportunity zone business property as defined in 26 U.S.C. 1400Z-2(d)(2)(D) of the code that is |
7 | located in a qualified opportunity zone which is located in the city of Pawtucket. |
8 | (6) "Placed in service" means the earlier of: |
9 | (i) The date the owner of the Pawtucket qualified opportunity zone business property |
10 | receives, for any portion of the Pawtucket qualified opportunity zone business property, a |
11 | certificate or other authorization for occupancy; |
12 | (ii) The year in which, under the depreciation practice of the owner of the qualified |
13 | opportunity zone property, the period for depreciation with respect to the property begins; or |
14 | (iii) The year in which the qualified opportunity zone business property is placed in a |
15 | condition or state of readiness and availability for its specifically assigned function. |
16 | (7) "Qualified opportunity zone" means a qualified opportunity zone as defined in 26 |
17 | U.S.C. 1400ZO-1(a) of the code. |
18 | (8) "Qualified opportunity zone business" means a qualified opportunity zone business as |
19 | defined in 26 U.S.C. 1400Z-2(d)(3) of the code. |
20 | (9) "Rule or regulation" means any directive promulgated by the Rhode Island commerce |
21 | corporation not inconsistent with the laws of the United States or the state. |
22 | 44-70-3. Pawtucket opportunity zone tax credit. |
23 | (a) A taxpayer shall be allowed a nonrefundable credit, to be computed as provided in |
24 | this chapter, against the tax imposed by chapters 11, 14, 17 and 30 of this title. The credit shall be |
25 | claimed for the taxable year in which the Pawtucket qualified opportunity zone business property |
26 | acquired, constructed, or renovated by a Pawtucket qualified opportunity fund is placed in |
27 | service, and shall equal ten percent (10%) of the amount of the investment in Pawtucket qualified |
28 | opportunity zone business property. |
29 | (b) If the amount of the tax credit exceeds a Pawtucket qualified opportunity fund's total |
30 | tax liability for the year in which the Pawtucket qualified opportunity zone business property is |
31 | placed in service, the amount that exceeds the Pawtucket qualified opportunity fund's tax liability |
32 | may be carried forward for credit against the taxes imposed for the succeeding seven (7) years, or |
33 | until the full credit is used, whichever occurs first. Credits allowed to a Pawtucket qualified |
34 | opportunity fund that is a partnership or a limited liability company taxed as a partnership shall be |
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1 | passed through to the persons designated as partners or members respectively pro rata or pursuant |
2 | to an executed agreement among such persons designated as partners or members documenting |
3 | an alternate distribution method without regard to their sharing of other tax or economic attributes |
4 | of such entity. |
5 | (c)(1) If the Pawtucket qualified opportunity fund or its partners or members have not |
6 | claimed the tax credits in whole or part, the Pawtucket qualified opportunity fund eligible for the |
7 | tax credits may assign, transfer or convey the credits, in whole or in part, by sale or otherwise to |
8 | any individual or entity. The assignee of the tax credits may use acquired credits to offset up to |
9 | one hundred percent (100%) of the tax liabilities otherwise imposed pursuant to chapter 11, 14, |
10 | 17 or 30 of this title. The assignee may apply the tax credit against taxes imposed on the assignee |
11 | until the end of the seventh calendar year after the year in which the Pawtucket qualified |
12 | opportunity zone business property acquired, constructed, or renovated by the Pawtucket |
13 | qualified opportunity fund investment is placed in service or until the full credit assigned is used, |
14 | whichever occurs first. Fiscal year assignees may claim the credit until the expiration of the fiscal |
15 | year that ends within the seventh year after the year in which the Pawtucket qualified opportunity |
16 | zone business property acquired, constructed, or renovated by the Pawtucket qualified |
17 | opportunity fund investment is placed in service. The assignor shall perfect the transfer by |
18 | notifying the state of Rhode Island division of taxation, in writing, within thirty (30) calendar |
19 | days following the effective date of the transfer and shall provide any information as may be |
20 | required by the division of taxation to administer and carry out the provisions of this section. |
21 | (2) For purposes of this chapter, any assignment or sales proceeds received by a taxpayer |
22 | for the assignment or sale of the tax credits allowed pursuant to this section shall be exempt from |
23 | this title. If a tax credit is subsequently revoked or adjusted, the seller's tax calculation for the |
24 | year of revocation or adjustment shall be increased by the total amount of the sales proceeds, |
25 | without proration, as a modification under chapter 30 of this title. In the event that the seller is not |
26 | a natural person, the seller's tax calculation under chapters 11, 14, 17, or 30 of this title, as |
27 | applicable, for the year of revocation or adjustment, shall be increased by including the total |
28 | amount of the sales proceeds without proration. |
29 | 44-70-4. Tax administrator. |
30 | The tax administrator and his or her agents, for the purpose of ascertaining the |
31 | correctness of any credit claimed under the provisions of this chapter, may examine any books, |
32 | papers, records, or memoranda bearing upon the matters required to be included in the return, |
33 | report, or other statement, and may require the attendance of the person executing the return, |
34 | report, or other statement, or of any officer or employee of any taxpayer, or the attendance of any |
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1 | other person, and may examine the person under oath respecting any matter which the tax |
2 | administrator or his or her agent deems pertinent or material in determining the eligibility for |
3 | credits claimed. A taxpayer may request information regarding the credit authorized by this |
4 | chapter from the tax administrator, and the tax administrator shall provide the information in all |
5 | cases, to the extent not otherwise prohibited by law. |
6 | 44-70-5. Sales and use tax exemption. |
7 | The sales and use taxes imposed by chapters 18 and 19 of title 44 shall not apply to gross |
8 | receipts from the sale: |
9 | (1) To contractors of tangible personal property incorporated into the construction of an |
10 | improvement on or to real property that is a Pawtucket qualified opportunity zone business |
11 | property, or |
12 | (2) To a Pawtucket qualified opportunity fund of tangible personal property that is placed |
13 | in service as a Pawtucket qualified opportunity zone business property. |
14 | 44-70-6. Rules and regulations -- Enforcement. |
15 | The Rhode Island commerce corporation shall have all the powers conferred by chapter |
16 | 64 of title 42 to enforce the rules and regulations promulgated pursuant to this chapter. |
17 | SECTION 2. This act shall take effect upon passage. |
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LC001038 | |
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EXPLANATION | |
BY THE LEGISLATIVE COUNCIL | |
OF | |
A N A C T | |
RELATING TO TAXATION -- PAWTUCKET OPPORTUNITY ZONE INCOME TAX | |
CREDIT ACT | |
*** | |
1 | This act would provide a tax credit for qualified investments in "opportunity zones" as |
2 | defined by federal law and located in Pawtucket. The act would be implemented by rules |
3 | promulgated by the commerce corporation. |
4 | This act would take effect upon passage. |
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LC001038 | |
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