(Editor’s note: This is the fourth in an occasional series focused on questions from Providence Business News readers for R.I. Secretary of Commerce Stefan Pryor. See the others here.)
When meeting with business owners about possibly locating or relocating in R.I., what do they cite as the top barrier?
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
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Some of the top perceived barriers we hear about are actually misconceptions about business taxes, limited availability of real estate and challenges with permitting. The fact is, Rhode Island has a lot to be proud of, and we have significant momentum. Rhode Island can provide terrific opportunities for any company and, especially for those businesses considering a location somewhere in the Northeast, our state can be a very attractive destination. Let’s talk about the three aforementioned misconceptions:
Rhode Island is competitive in our market. Our state has the lowest state corporate income tax rate in New England, a flat rate of 7.0%. Additionally, under the McKee administration, Rhode Island has implemented a number of business-friendly tax actions and cost-saving measures.
Examples include accelerating the phase-out of the of the car tax, which removed annual taxation on business vehicles and fleets. In Rhode Island, over 10% of all active vehicle registrations (owned or leased) can be attributed to businesses. Additionally, the implementation of the tangible tax exemption of up to $50,000 wiped out this tax for approximately 75% of Rhode Island businesses and simplified compliance. Another example is the reduction in unemployment insurance (UI) tax for the second time since 2023. The most recent UI reduction is expected to save Rhode Island businesses an estimated $20-$25 million in payroll taxes this year.
There are great location options for business in the Ocean State. Whether for startup space or a full-scale manufacturing facility, our state has the site and infrastructure to support the growth of existing businesses and attraction of new ones. For startups, examples of potential homes include the CIC Innovation Center and Ocean State Labs, both within the 195 Innovation District, serving entrepreneurs and early-stage businesses. For companies with larger space needs, the Quonset Business Park and well as other sites prepared with help from our Rhode Island Ready program are ready to support location needs throughout the state.
Additionally, these opportunities – and more – will continue to expand with approval of the proposed $100 million Economic Development bond that will be before voters for consideration in November. This funding would enable the development of additional pad-ready industrial sites across key sectors such as defense, ocean tech, life science, and advanced manufacturing along with the creation of a test bed in the water to support Rhode Island’s continued leadership in maritime and national defense.
Commerce – along with our sister state agencies and partners at the 195 Commission, Rhode Island Life Science Hub, Quonset Development Corporation, and others – has the skilled staff as well as incentives and resources to help businesses identify locations which meet their needs.
Permitting has been streamlined through the state’s e-permitting system. Rhode Island’s statewide e-permitting portal brings state and municipal permitting into one centralized online location. Applicants can submit applications, upload documents, communicate with officials, respond to questions, and track approvals in one integrated, digital platform. The system makes the permitting process transparent, faster, easier to navigate and less costly for businesses and residents.
In addition to the above, Commerce supports business growth and investment through its suite of economic-development tools, including access to capital, site selection services, job creation incentives, innovation vouchers and business planning support, to name a few. I encourage any business – whether looking to locate to Rhode Island or already established here – to connect with Commerce and learn more about how we can help meet their business goals.
How is the Commerce secretary going to make businesses prioritize accessibility to allow the 51% of Rhode Islanders who use a mobility aid into their business? Being accessible opens their doors and raises their bottom lines.
Accessibility is important, and it makes good business sense. It opens doors for a broader array of clientele and expands the talent pool available to the employer.
Commerce operates several programs that provide funding which can support accessibility efforts by businesses, developers, and municipalities. For example:
- The Site Readiness Program offers flexible funding to support cities, towns and developers in tackling site-specific challenges and advancing local development goals. Eligible investments include infrastructure and building improvements that make sites more accessible.
- The Main Street RI Streetscape Improvement Fund awards grants on a competitive basis for improvements to the state’s commercial districts which can include ADA compliant sidewalks, signage, and other measures.
- The Small Business Assistance Program and State Small Business Credit Initiative are programs designed to support small businesses and entrepreneurs in Rhode Island by providing capital and/or technical assistance to promote stability, growth, and success, which can include accessibility-related facility renovations and other such improvements.
Commerce also has a staff of business-engagement specialists who can help businesses identify resources for enhancing accessibility and make referrals to advisors and partners who can help employers make their place of business more accessible.
In addition, the Governor’s Workforce Board (on which the Commerce secretary serves as the vice chair), offers Workplace Accessibility Grants which are a resource to businesses. This grant program promotes employment and economic opportunities for individuals with disabilities through investment in accessible workplaces. Funding can be used to attract and/or retain employees or customers with accessibility needs, and businesses can receive 100% reimbursement for eligible costs up to $5,000 per calendar year. Examples of eligible costs include environmental/physical modifications, communication needs, technological tools, inclusive workplace training, and hiring best practices.
What position has the Commerce department taken regarding a “Millionaires Tax?” If they have not taken a position, then why not? If they have, how have they communicated their position to the public?
Drawing upon input from the business community regarding the effect that this tax code change would have upon the Pass-Through Entity Tax (PTET) for businesses, Commerce worked collaboratively with the Governor’s Office and fellow state agencies to draft a technical amendment to the FY27 budget proposal. The amendment was successfully adopted, allowing businesses to continue paying the pre-existing, lower 5.99% PTET rate under the new tax law.
Commerce is grateful to the Office of Management and Budget, the R.I. Division of Taxation, and all of the partners who worked on this revision, responding to the business community’s input and ensuring that the PTET rate remains available to businesses at the lower tax rate.
(Do you have a question for R.I. Commerce Secretary Stefan Pryor? Send it to PBN editor Mike Mello at mello@pbn.com.)
