Advocacy in Action

Legislative Break Week

The General Assembly is observing the annual February legislative break this week.  


Next Week At the State House – Finance Committee Hearings

Most hearings for the week of February 25 – 27 will be posted this week.  However, the House Finance Committee has provided extra preparation time for a few hearings by posting them last Friday. The information provided below about these articles comes from the House and Senate Fiscal Staff analyses that provide helpful summaries of the sections.  If you wish to provide comments on any of these issues, email testimony to HouseFinance@rilegislature.gov 


Wednesday, February 26th  4:00 p.m. in Room 35

Taxes and Fees – Article 5, Sections 1, 5, 8, 9, 11, 12 and 14-18

Section 1 extends the Job Development Fund assessment to non-profit organizations with more than 500 employees.  The Governor’s budget office estimates raising $2.3 million in new funding from this initiative. 

Section 5 sunsets the Job Growth Act tax incentive as of January 1, 2026. The incentive allows eligible employees of qualified companies to lower their adjusted gross income for tax purposes by up to 50.0 percent of their income earned from bonuses. According to the Governor’s Office of Revenue Analysis (ORA), the modification is taken by fewer than 10 taxpayers annually. The revenue impact of eliminating this underutilized tax expenditure for FY2026 is $1,489 and is $2,979 in FY2027.

Sections 8 and 9 assume an additional $4.4 million in revenues from a proposal to increase the cigarette tax by 50 cents to $5.00 per 20-pack, effective September 2, 2025 (including a floor tax adjustment for retailers).  This assumption was calculated by assuming $4.7 million more in excise tax offset by a $0.3 million reduction in applicable sales tax to reflect a decline in consumption linked to the higher cost. The estimated FY 2027 value is $3.3 million.

Section 11 sunsets the Specialized Mill Building Investment Tax Credit as of January 1, 2026. The State has provided a credit of 10.0 percent of the rehabilitation and reconstruction costs of a certified rehabilitated mill building. The credit was associated with the Mill Building and Economic Revitalization Act, which sunset in 2009. ORA indicates the credit has not been used since tax year 2019. 

Section 12 has two notable changes.  R&D Credit for Qualified Research Expenses - Carryforward: Extends the period of time that R&D expense tax credits may be carried forward by a taxpayer from seven years to fifteen. The State allows a taxpayer to claim a credit against certain business taxes for certain research expenses. Unused amounts of the credit earned in a taxable year may be carried forward up to seven succeeding tax years. The Governor recommends extending this carryforward period to fifteen, bringing Rhode Island in line with Massachusetts and Connecticut. ORA indicates that there is no fiscal impact.  Section 12 also sunsets the New R&D Facilities Deduction and Property Credit as of January 1, 2026. The State has allowed eligible taxpayers to deduct expenditures related to the development of any new tangible property related to research and development, including construction and acquisition costs. Eligible taxpayers may also claim a 10.0 percent credit against certain business taxes for tangible property primarily used for R&D. Taxpayers must choose either the deduction or the credit. According to the ORA, these tax expenditures are underutilized, as fewer than 30 taxpayers were projected to claim the deduction in 2024.

Section 14 sunsets the Small Business Capital Investment Wage Credit as of January 1, 2026. The State has provided eligible entrepreneurs of qualifying businesses a tax credit for 3.0 percent of employee wages in excess of the $50,000. According to the ORA, this credit is statutorily obsolete. There has been no activity related to this tax expenditure since at least TY2019.

Section 15 sunsets the Small Business Investment Deduction and Modification as of January 1, 2026. Taxpayers may take a deduction or modification to offset their business or income tax liability if they have made a qualifying investment in a certified venture capital partnership. According to the Office of Revenue Analysis (ORA) this is an underutilized tax expenditure. The revenue impact of repealing this tax expenditure is $6,551 in FY2026 and $13,102 in FY2027.

Section 16 authorizes a financial institution data match system for state tax collection purposes. The section specifically requires the Division of Taxation to develop and operate the data match system. It requires all financial institutions doing business in the state to develop a data matching system to facilitate the identification and seizure of non-exempt financial assets of delinquent taxpayers as identified by the Division. It requires financial institutions to report data matching information to the Division at least quarterly, including delinquent taxpayers’ names, addresses, social security numbers, account numbers, and balances. The section also provides the financial institutions with legal protections associated with the disclosure of this information to Taxation. The section prohibits the financial institution and the third party from disclosing information exchanged in the data match system (including to the account holder) unless authorized by the tax administrator. It includes penalties in the event this is violated. The ORA estimates that the data matching program will yield an additional $5.3 million in general revenue in FY2026, and $8.0 million in FY2027, based on an October 15, 2026, program start date.

Section 17 imposes a new tax on a company’s annual gross revenue derived from digital advertising services in Rhode Island. The initiative is estimated to generate $9.5 million in FY2026 based on a January 1, 2026 effective date. This grows to $19.6 million in FY2027 with a full year of the tax. The digital advertising gross revenues tax (DAT) is equal to 10.0 percent of the assessable base for a taxpayer with annual gross revenues exceeding $1.0 billion. The article also prohibits a business that derives income from digital advertising services in Rhode Island from directly passing on the cost of the tax to a customer who purchases the digital advertising by means of as separate fee, surcharge, or line-item. Businesses with annual gross revenues below $1.0 billion are exempt from the tax. Taxpayers must apportion their digital advertising revenue based on the number of devices accessing the advertising in Rhode Island compared to the total number accessing it outside of the state. The Governor’s proposal is based on Maryland’s digital advertising tax, the only state currently to pass this idea.  Businesses are currently challenging the legality of the program in court.

Article 6 – Economic Development 

Article 6 reauthorizes the Executive Office of Commerce’s incentive programs for an additional year by extending the statutory sunset provisions placed on them from December 31, 2025, to December 31, 2026 (Rebuild RI, Wavemaker Fellowship, Innovate RI, Innovation Initiative, Main Streets Revitalization, First Wave Closing Fund, I-195 Redevelopment Fund). It also permanently eliminates the sunset for the Small Business Assistance Program Act, and does not extend the sunset for the P-Tech program, effectively ending the program on December 31 of this year. The article deregulates retail sales operations on legal holidays, other than Christmas and Thanksgiving, by eliminating holiday operations licensing requirements. The repeal of holiday business licensing would negatively impact most municipal revenues, but the magnitude is unknown.  Lastly, Article 6 simplifies how a consumer may be able to opt out of contracts with health clubs and dating services by adding e-mail as an allowed form of contract termination communication. The repeal of holiday business licensing would negatively impact most municipal revenues, but the magnitude is unknown. 


Thursday, February 27th At the Rise (approximately 4:30 p.m.) in Room 35

Article 5, Section 10 amends the real estate conveyance tax (RECT) statute.  The State currently imposes a tax on each deed, instrument, or writing by which interests in real estate are conveyed to a purchaser when the value of the transfer is greater than $100. The tax rate is $2.30 for each additional $500 in value (0.46 percent). For transactions valued $800,000 and above, the RECT rate applied to the value above that amount doubles from $2.30 to $4.60 per each $500 (0.92 percent of the additional value).  Section 10 of Article 5 amends the real estate conveyance tax statute.  For residential real estate transactions valued above $800,000 a new tax is imposed (in addition to two described above) on the amount above the first $800,000. The new tax is applied at a rate of $1.65 per $500, or fractional part of it (0.33 percent for a total of 1.25 percent on the value over $800,000).  As a comparison, Massachusetts has a real estate conveyance tax of $2.28 per $500 (0.456 percent). Connecticut’s tax is 0.75 percent for residential real estate below $800,000, 1.25 percent for property above $800,000 but below $2.5 million. The tax is 2.25 percent on transactions valued above $2.5 million.

The following new bills have been filed:

Senate Bill No. 285  Quezada, Bell, Bissaillon, Ciccone, Mack, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- CONSUMER CREDIT HISTORY EMPLOYMENT PROTECTION ACT -- DECEPTIVE TRADE PRACTICES (Prohibits employers from seeking/using credit reports in making hiring decisions concerning prospective employees, asking questions about the applicant's financial past during interviews or including credit history questions in their job applications.)
https://webserver.rilegislature.gov/BillText/BillText25/SenateText25/S0285.pdf

Senate Bill No. 302   LaMountain, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- RHODE ISLAND NONCOMPETITION AGREEMENT ACT (Prohibits noncompete agreements except for noncompete agreements between a seller and buyer of a business; creates civil action for an employer for the violation of an agreement by employee regarding disclosure or wrongful utilization of trade secrets.)
https://webserver.rilegislature.gov/BillText/BillText25/SenateText25/S0302.pdf

Senate Bill No. 310  Quezada, Ciccone, Urso, Thompson, Mack, Patalano, Valverde, Kallman, Lauria, Bissaillon, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- MINIMUM WAGES (Sets the minimum wage for 2026 at $16 per hour, 2027 at $17 per hour, 2028 at $18 per hour, 2029 at $19 per hour and for 2030 at $20 per hour.)
https://webserver.rilegislature.gov/BillText/BillText25/SenateText25/S0310.pdf 

House Bill No. 5418  Nardone, Santucci, Paplauskas, Quattrocchi, Hull, Cortvriend, Place, AN ACT RELATING TO INSURANCE -- SMALL EMPLOYER HEALTH INSURANCE AVAILABILITY ACT (Amends the definition of "small employer" for purposes of the small employer health insurance availability act to mean a business employing less than one hundred (100) employees rather than fifty (50) employees.)
https://webserver.rilegislature.gov/BillText/BillText25/HouseText25/H5418.pdf

House Bill No. 5424  Boylan, Carson, McGaw, Cortvriend, Spears, Handy, Potter, Speakman, Kislak, Tanzi, AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- RHODE ISLAND CLIMATE SUPERFUND ACT OF 2025 (Establishes the Rhode Island Climate Superfund Act cost recovery program.)
https://webserver.rilegislature.gov/BillText/BillText25/HouseText25/H5424.pdf

House Bill No. 5450  Handy, Cortvriend, Kislak, Stewart, McGaw, Speakman, Boylan, Fogarty, Carson, Ajello, AN ACT RELATING TO PUBLIC PROPERTY AND WORKS -- ALL-ELECTRIC BUILDING ACT (Provides that no city or town may issue a permit for the construction of new buildings, that are not an all-electric building, if the initial application for a permit was submitted after December 31, 2026, unless certain circumstances apply.)
https://webserver.rilegislature.gov/BillText/BillText25/HouseText25/H5450.pdf

House Bill No. 5454  Serpa, Ackerman, Fellela, Read, Chippendale, Edwards, O'Brien, Baginski, J. Brien, Azzinaro, AN ACT RELATING TO GENERAL ASSEMBLY -- COMMITTEES AND STAFF (Requires nonprofit, as a condition for requesting state funds from the general assembly, to submit & post on their website, a list of10 of their highest paid director, officer & employee salaries & any forms of compensation provided to those individuals.)
https://webserver.rilegislature.gov/BillText/BillText25/HouseText25/H5454.pdf

House Bill No. 5456  Santucci, Fascia, Paplauskas, Newberry, Roberts, Hopkins, Chippendale, Place, J. Lombardi, J. Brien, AN ACT RELATING TO STATE AFFAIRS AND GOVERNMENT -- RHODE ISLAND COMMERCE CORPORATION (Requires a seventy-five percent (75%) supermajority vote by the board of directors to establish a quorum and to approve any action taken by the commerce corporation.)
https://webserver.rilegislature.gov/BillText/BillText25/HouseText25/H5456.pdf

House Bill No. 5465  Morales, Potter, Tanzi, Batista, Stewart, Cruz, Handy, J. Lombardi, AN ACT RELATING TO HEALTH AND SAFETY -- THE RHODE ISLAND COMPREHENSIVE HEALTH INSURANCE PROGRAM (Establishes a single-payer health care insurance system, consolidating public and private payments into a more efficient Medicare-for-all style program, funded by progressive taxes, to reduce health care costs.)
https://webserver.rilegislature.gov/BillText/BillText25/HouseText25/H5465.pdf

House Bill No. 5473  Alzate, Casimiro, Batista, Craven, Donovan, Kislak, Potter, Kazarian, Morales, Stewart, AN ACT RELATING TO TAXATION -- PERSONAL INCOME TAX (Creates an additional tax rate of 3% on taxable income over $625,000 in 2025 dollars. Applies to tax years 2026 and thereafter and not retroactively.)
https://webserver.rilegislature.gov/BillText/BillText25/HouseText25/H5473.pdf

House Bill No. 5492  Boylan, McGaw, Bennett, Kislak, Speakman, Carson, Handy, Cortvriend, Spears, Fogarty, AN ACT RELATING TO HEALTH AND SAFETY -- MICROPLASTICS REDUCTION ACT (Creates the Microplastics Reduction Act to prohibit the sale or distribution of products containing synthetic polymer micro particles.)
https://webserver.rilegislature.gov/BillText/BillText25/HouseText25/H5492.pdf

House Bill No. 5493  Kislak, Carson, Spears, Handy, Speakman, McGaw, Boylan, Fogarty, Potter, McEntee, AN ACT RELATING TO HEALTH AND SAFETY -- BUILDING DECARBONIZATION ACT OF 2025 (Establishes a program for the energy and water benchmarking of large buildings in Rhode Island and a standard for their energy performance.)
https://webserver.rilegislature.gov/BillText/BillText25/HouseText25/H5493.pdf

House Bill No. 5506  Craven, O'Brien, Shanley, Dawson, Finkelman, Corvese, Potter, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- EMPLOYEES' FREE SPEECH IN WORKPLACE (Protects employees' rights in the workplace concerning political and religious matters, by creating a civil action that may provide damages and attorneys' fees.)
https://webserver.rilegislature.gov/BillText/BillText25/HouseText25/H5506.pdf

House Bill No. 5507  Felix, Edwards, Kazarian, Batista, Diaz, Sanchez, Stewart, Morales, Potter, Furtado, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- MINIMUM WAGES (Gradually increases the minimum wage for employees receiving gratuities.)
https://webserver.rilegislature.gov/BillText/BillText25/HouseText25/H5507.pdf
House Bill No. 5508  Sanchez, Cruz, Stewart, AN ACT RELATING TO LABOR AND LABOR RELATIONS -- MINIMUM WAGES (Provides that commencing January 1, 2026, the minimum wage shall be twenty-two dollars ($22.00) per hour.)
https://webserver.rilegislature.gov/BillText/BillText25/HouseText25/H5508.pdf

House Bill No. 5531  Stewart, Morales, Potter, AN ACT RELATING TO TAXATION -- RHODE ISLAND NEW QUALIFIED JOBS INCENTIVE ACT 2015 (This act would sunset/discontinue the Jobs Development Act rate reduction as of July 1, 2025.)
https://webserver.rilegislature.gov/BillText/BillText25/HouseText25/H5531.pdf