Qualified Jobs Incentive Tax Credit
General Electric Company is a multinational conglomerate with annual revenues of roughly $120 billion and more than 330,000 employees worldwide. While the Company was formed through a merger of electricity-focused companies in 1892, GE’s scope has grown to support the following business segments: oil and gas, aviation, healthcare, transportation, and capital. By extension of these business segments, GE operates in financial services, medical devices, life sciences, automotive, software development, and engineering industries. In September of 2015, the Company announced the creation of GE Digital to integrate GE’s Software Center, global IT and commercial software teams, and expertise in industrial security into one organization focused on the Industrial Internet.
GE is proposing to locate a GE Digital office in Providence. Since GE does not have an existing presence in Rhode Island, it is costlier to locate an office in Providence than to collocate this GE Digital office with an existing location. GE Digital is expected to employ 100 people in its Providence location in new advanced-industry, full-time jobs in its initial years here, with the aim to expand its presence in the state over the next several years. The Providence office will be staffed by a range of professionals in Rhode Island, from experienced engineers and data scientists to young professionals with backgrounds in data, design and IT. GE Digital plans to have in place its full team by 2018, primarily software developers with an estimated average annual salary in excess of $100,000 (and a median annual salary of $88,000). In total, the Corporation is recommending awarding the Company an incentive package consisting of tax credits under the Qualified Jobs Incentive Tax Credit Program and up to $650,000 in two separate grants from the First Wave Closing Fund.
- The Commerce Corporation is recommending a total incentive package consisting of Qualified Jobs Tax Credits and two potential grant allocations from the First Wave Closing Fund.
- The recommended term of the tax incentive agreement is ten years, and GE has indicated that it will commit to maintaining the new jobs in Rhode Island for at least the twelve years required.
- The total credits are anticipated to be approximately $4.6 million based on the projected hiring schedule of the first 100 employees.
- GE is eligible for credits up to and including 300 full-time employees if certain hiring milestones are met.
- The Company is eligible for a $150,000 grant from the First Wave Closing Fund for tenant improvements and fitout of GE’s new location, payable upon verification of expenditures.
- The Company is eligible for a supplemental $500,000 grant from the First Wave Closing Fund if GE hires and has in place 100 full-time employees by no later than 1/1/2019. This grant can fund additional leasehold improvements related to GE’s expansion in Providence or student loan debt relief to support GE’s attraction of talent to the Providence office.
- Based on a third-party analysis, over the twelve-year period, Rhode Island is projected to realize a net increase of nearly $7.4 million in personal income, sales, and business corporation taxes resulting from 100 new hires, as well as an increase of $18.5 million in Rhode Island’s annual GDP starting in 2019 attributed to GE’s ongoing operations.