The law, enacted in June 2016, is intended to encourage insurance companies to create jobs in Rhode Island by linking Rhode Island’s insurance premium tax rate to the number of jobs created by the
industry in Rhode Island. Adding new jobs in the state could trigger a reduction in the tax rate insurance companies will pay.
The tax rate reduction is designed to be revenue-neutral by requiring that any reduction in insurance company tax rates is fully offset by the income tax generated from the newly created jobs.
The new regulation sets the standards by which the number of jobs at qualifying insurers is calculated.
The new regulation also identifies whether the statutory criteria was met during calendar year 2016 to reduce the insurance premium tax rate.
- According to the regulation, there has not been a sufficient net increase in "qualifying jobs" in the preceding calendar year to offset a material reduction in the premium tax. Thus, there will be no change in the current premium tax rate during calendar year 2018.
