PROVIDENCE – Rhode Island nonprofits will have another 60 days to reapply for state tax exemptions, Gov. Daniel J. McKee announced on Tuesday.
The extension announced at McKee’s weekly briefing for reporters comes after The Providence Journal reported that many nonprofits were caught by surprise by the renewal requirement, which was set to end June 30. This is the first time the state has required them to renew their tax-exempt status, under 2017 legislation that called for reapplications every four years.
McKee on Tuesday acknowledged that the notification process for a first-time requirement had been “slow of the gates” and committed to supporting the nonprofit community just as his administration has emphasized its help for small businesses.
State tax exemptions let eligible charitable organizations bypass sales and use taxes on certain purchases. This is separate from the federal tax-exempt status through the Internal Revenue Service, which applies to federal income and unemployment taxes.
Also at his briefing, McKee said he wants to spend a portion of the state’s federal stimulus aid this summer before time runs out. Exactly how the $113 million he hopes to dole out would be spent has not been decided, but he named infrastructure, housing and family issues as priority areas. He pledged to work with lawmakers on deciding how to spend this first tranche of American Rescue Plan Act funds, though the legislature is days away from ending its session.
In response to questions from a reporter, McKee defended the decision to renew the state’s contract with the same provider for the embattled Unified Health Infrastructure Project.
The $99.4 million contract signed with Deloitte Consulting LLP on Monday gives the company another three years to run and manage the state’s social services computer system. McKee on Tuesday said re-upping the contract was in the state’s best interests, noting that the company had sought to sign a five-year agreement which he reduced to three years, with the option for several extensions.
McKee acknowledged the troubled history of the UHIP system – now called RI Bridges – under Deloitte’s management, with technical issues and cost overruns that prompted a federal investigation and ultimately forced the company to pay a $50 million penalty. However, McKee said recent history has not been marred by these problems.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
