It is enacted by the General Assembly as follows:
SECTION 1. Title 44 of the General Laws entitled "Taxation" is hereby amended by adding thereto the following chapter:
{ADD CHAPTER 55 ADD}
{ADD TAX INCENTIVES FOR EMPLOYERS ADD}
{ADD 44-55-1. Short title. -- ADD} {ADD This chapter shall be known as "The Tax Incentives For Employers Act". ADD}
{ADD 44-55-2. Tax incentives. -- ADD} {ADD There are hereby established tax incentives, which shall be computed in accordance with section 44-55-4.1, for businesses which employ and retain in the state of Rhode Island employees who have been previously unemployed for a period of at least twenty-six (26) consecutive calendar weeks and who have been domiciled residents of the state of Rhode Island for at least fifty-two (52) consecutive calendar weeks. ADD}
{ADD 44-55-3. Definitions. -- ADD} {ADD The words defined in this section shall have the meanings set forth below whenever they appear in this chapter.
(1) "Business" shall mean any corporation, limited liability company, partnership, individual, sole proprietorship, joint stock company, joint venture, or any other legal entity through which business is legally conducted or any successors or assigns thereof.
(2) "First year wages" shall mean the Rhode Island wages or Rhode Island salary of the newly-hired employee and actually paid by the business for a period of three hundred sixty-five (365) days from the employee's first day of work as evidenced by the W-2(s) provided by the claimant's business for the calendar year(s) into which such time period falls; provided, however, that wages subject to the incentive shall be reduced by any direct state or federal assistance.
(3) "Tax incentives" or "incentive" shall mean a deduction or modification in computed taxes owed by a claimant's business.
(4) "Paid employment" shall mean a period of time during which an employee has been hired by a business and is receiving Rhode Island wages or salaries for his or her service.
(5) "Unemployed" for the purposes of this chapter, shall mean and refer to an individual who attests that he/she is not working and (a) has received unemployment compensation benefits pursuant to chapter 28-44 of the general laws of Rhode Island or any similar laws of another state any time within a one (1) year period preceding the date of hire; or (b) has been a recipient of the state of Rhode Island's aid to families with dependent children program pursuant to chapter 40-6 for a minimum of a one (1) year period preceding the date of hire. ADD}
{ADD 44-55-4. Criteria for tax incentives. -- ADD} {ADD A business whose employees each meet the following criteria as certified by the department of employment and training shall be entitled to an incentive in the amount of forty percent (40%) of the eligible employee's first year wages, up to a maximum of two thousand four hundred dollars ($2,400) per eligible employee.
(1) The hired employee attests and must have been unemployed for a period of at least twenty-six (26) consecutive calendar weeks immediately prior to employment with the claimant business; and
(2) The employee must have been in the employ of the claimant business for a minimum period of fifty-two (52) consecutive calendar weeks, and a minimum of one thousand eight hundred twenty (1,820) hours of paid employment before the employer can become eligible for the incentive;
(3) The incentive shall be applied only once for any given employee. The employee must be a first time hiree of the claimant business and not have worked for any company that subsequently merges with or is acquired by said business. Also, any employees which a business leases do not qualify for this incentive.
(4) In order to avail itself of the incentive, the business must file for the incentive for the employee with the department of employment and training within thirty (30) days from the first day the employee begins work; provided, further, that department of employment and training shall notify the business as soon as practicable after the completion of certification pursuant to the provisions of sections 44-55-4 and 44-55-4.1.
(5) The employee cannot be a relative of any controlling shareholder, director, or officer of the claimant corporation, nor controlling shareholder, officer, or manager of the claimant limited liability company, nor partner or owner of any claimant partnership, joint venture, sole proprietorship or any other type of legal business entity claiming the incentive under this chapter. ADD}
{ADD 44-55-4.1. Incentive provisions. -- ADD} {ADD (a) The deduction or modification is not refundable but may be used by the claimant business for the tax against it pursuant to chapter 11, 13, 14, 15, 17, and 30 of this title, not including any tax imposed under section 44-13-13 or other similar provisions in the following manner:
(i) A deduction for purposes of computing net income in accordance with chapter 11 of this title; or
(ii) A deduction from gross earnings for purposes of computing the public service corporation tax in accordance with chapter 13 of this title; or
(iii) A deduction for the purposes of computing net income in accordance with chapter 14 of this title; or
(iv) A deduction for the purposes of computing deposits in accordance with chapter 15 of this title;
(v) A deduction for the purposes of computing gross premiums in accordance with chapter 17 of this title; or
(vi) A modification reducing federal adjusted gross income in accordance with chapter 30 of this title.
(b) The modification allowed under this chapter for any taxable year shall not reduce the tax due for that year to below the minimum tax imposed under the applicable chapter of this title. Any amount of modification not used in that taxable year may not be carried over to the following year.
(c) In the event that the claimant business is electing a subchapter S corporation, limited liability company, partnership, or a joint venture, the incentive shall be divided as income.
(d) In the event that the taxpayer is liable for taxes imposed under both chapters 14 and 15 of this title, the taxpayer must elect the tax against which it wishes to claim the incentive. This election is made as part of the taxpayer's filings in accordance with sections 44-14-6 and 44-15-5. The taxpayer may not divide the incentive for any year between the two (2) tax liabilities for which it is liable.
(e) In the event that the hiring of the employee will be used to obtain any other tax incentive or tax benefit for the business, then the business will not be eligible for the incentive available in this chapter. ADD}
{ADD 44-55-5. Certification. -- ADD} {ADD After receiving the initial request from the claimant business for the tax incentive, the department of employment and training shall provide to the claimant business certification of unemployment as soon as practicable. The department of employment and training shall determine the eligibility of the employee and issue certification for the same. ADD}
{ADD 44-55-6. Certificates. -- ADD} {ADD A business shall not be allowed an incentive under this chapter for any taxable year unless the business obtains a written certificate from department of employment and training for each employee so claimed. ADD}
{ADD 44-55-7. Administration. -- ADD} {ADD The tax administrator shall make available suitable forms with instructions for claiming the incentive. The claim shall be in such form as the tax administrator may prescribe. The tax administrator may prescribe rules and regulations, not inconsistent with law, to carry into effect the provisions of this chapter. ADD}
SECTION 2. This act shall take effect January 1, 1998.
