PROVIDENCE – The R.I. Commerce Corp. may relax its requirements for employers to maintain job thresholds this year under the Qualified Jobs Incentive tax credits, because the COVID-19 pandemic has impacted several companies, who have sought relief.
The Investment Committee of R.I. Commerce on Thursday agreed to recommend that the board next week consider an amendment that would affect all companies seeking credits for 2020.
Jeff Miller, executive vice president of investments at R.I. Commerce, explained in a telephone meeting that “a handful” of companies have said that because of COVID-19, they’re worried about meeting their employment numbers for 2020.
Staff recommended, and the investment committee supported, to allow companies that have qualified for the tax credit program to be able to get qualified for this year’s employment even if they only have 50% of the number in their agreement. In 2021, the original hiring commitments would be restored for the program.
Under the state incentive, companies get a tax credit that can be redeemed against corporate income tax, depending on how many jobs they create, what kinds of jobs and how much they pay. The maximum amount per-job for the first 500 positions is $7,500, but each company that qualifies for the incentive negotiates an agreement with R.I. Commerce.
Since the program began 38 companies have qualified for the tax credits, according to the R.I. Commerce website.
It was not clear from the phone meeting which companies had requested relief, or their specific circumstances, including whether they had stopped hiring because of the pandemic, or had had to cut jobs.
“We were looking to see if there was a way we could give relief, just for this calendar year,” Miller said.
The board could extend by six months or 12 months the window under which the company would have to reach its employment numbers, he explained. Or, as recommended by staff, that they be allowed to go below the hiring threshold by 50% for this year only.
Miller did not identify the affected companies, but said companies have cited “hiring weakness” due to the pandemic.
Mike McNally, a R.I. Commerce board member who is chairman of the committee, clarified that the proposal would not expose the state to paying more incentives to companies that had already been approved – but would relax the hiring level needed to qualify this year.
Miller explained that if the companies don’t hit their agreement’s threshold for employment, they would not qualify for any tax credits for this year.
Under the state regulations for the program, which began in 2015, employment levels have to be certified annually. Companies do not receive the tax credits until they have had people working in the positions for at least one year.
Stefan Pryor, the Commerce Secretary, said several states are now considering similar refinements to the incentive programs based on job creation.
“The COVID crisis obviously is affecting all of the states. We are not uniquely grappling with this.”
Mary MacDonald is a staff writer for the PBN. Contact her at macdonald@pbn.com.
