Newspaper article Providence Journal (Providence, RI)

Taxes | R.I. Spends $356 Million on Incentives

Newspaper article Providence Journal (Providence, RI)

Taxes | R.I. Spends $356 Million on Incentives

Article excerpt

PROVIDENCE - Rhode Island spends at least $356 million a year on tax credits and incentives for businesses, according to an analysis the New York Times released this week.

The amount, which represents roughly $338 in per capita spending on tax exemptions, deductions and credits for corporations, places Rhode Island fourth among New England states, after Vermont ($650 per capita), Maine ($379) and Massachusetts ($345), according to the Times.

But a state official Monday said the analysis, titled "The United States of Subsidies," wrongly includes Rhode Island's sales tax exemption on groceries.

Paul L. Dion, head of the state Office of Revenue Analysis, said $156 million cited in 2008 as coming from a "Food and Food Ingredients Exemption" closely matches what the state reported as lost revenue from not subjecting groceries to the state's 7-percent sales tax.

"That's not really a [business] incentive, in my mind," Dion said. "To say that is an incentive for the food industry is not accurate. That's benefitting consumers."

According to the Times, the top three tax-subsidized Rhode Island industries are "food" ($156 million), "manufacturing" ($61.6 million) and "trucking" ($18.4 million).

Dion added that a significant portion of the Times data would be familiar to Rhode Islanders, as it appears to come from the state's publicly released annual reports on tax expenditures and tax credit programs.

38 Studios, Curt Schilling's now-bankrupt video game company, topped the list of Rhode Island companies receiving the most tax incentives.

The company received a $75-million state-backed loan guarantee in 2010 before filing for federal bankruptcy earlier this year. …

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