Ruggiero wants tax breaks for startups
Rep. Deb Ruggiero has proposed legislation that would give startup businesses a break by suspending the minimum corporate tax for its first three years.
“We know that it’s very common for businesses, even the ones that later become very successful, to struggle in their first few years,” she said. “Some of the corporations that are building the new technology of tomorrow may take years to develop their products, and in the meantime, they’re not making any money. That $500 isn’t an enormous loss for the state, but it means a lot to the businesses this bill would affect.”
Ruggiero represents District 74 of Middletown and her hometown of Jamestown in the state House of Representatives.
Rhode Island taxes businesses 9 percent, and a provision in the law imposes a $500 floor. If 9 percent of a company’s net income equals less than $500, the business is charged $500. There are several proposals this year, however, including one in the budget bill, to reduce the rate.
Ruggiero’s legislation would add an exception to the minimum corporate tax for the first three years of a company’s existence. It would not affect businesses that are less than three years old but profitable enough to pay more than the minimum tax.
“With a relatively small investment on the state’s part, this is a way we can encourage entrepreneurs to develop their business in Rhode Island. The future of our economy depends on today’s young talent, so we should support them,” she said.
The bill has been forwarded to the House Finance Committee.