PROVIDENCE, RI – Tonight in his State of the State address, Governor Dan McKee will unveil several significant proposals to help Rhode Island small businesses. These myriad actions aim to provide access to capital, help reduce red tape, and improve the state’s business climate.
Specifically, in his FY2023 budget request to the General Assembly, Governor McKee will include a separate small business article. Budget Article 8 will help the state take steps to improve Rhode Island’s small business climate.
“Small businesses make up not only a crucial part of our economy but also our identity – we are truly a small business state,” said Governor McKee. “As a former small business owner, I know firsthand the time and resources it takes, and I am pleased that the targeted initiatives announced today will make it easier and simpler to do business in Rhode Island.”
“The Governor and I have made no secret regarding our support for small businesses and our focus to eliminate the costly red tape mazes they often navigate,” said Lt. Governor Sabina Matos. “This small business budget article will provide our Rhode Island small businesses the breathing room they need by addressing antiquated policies, enacting common sense investments, and expanding access to much needed capital. One of these areas of critical investment is the Minority Business Support Initiative that will help level the playing field for minority business owners who often face additional economic and social barriers as entrepreneurs.”
“Our economy is showing strong signs of recovery out of the COVID crisis, but significant challenges remain,” said Rhode Island Secretary of Commerce Stefan Pryor. “By expanding access to capital, reducing burdensome taxes, and removing unnecessary restrictions, the measures proposed by Governor McKee will make it easier for small businesses to operate – and to thrive – in our state.”
Specifically, Governor McKee’s Small Business Budget Article will:
- Reduce the corporate minimum tax to $375.
- Eliminate the sunset provision for liquor to-go, permanently allowing restaurants and brewpubs to sell alcoholic beverages with take-out food.
- Reform tangible taxes by allowing cities and towns to exempt a portion of business property from the tangible tax without seeking individual exemptions from the General Assembly.
- Reduce the interest rate on delinquent tax payments from 18 percent to 12 percent for non-trust fund taxes, bringing Rhode Island in line with Connecticut.
- Create the position of a Taxpayer Steward within the Rhode Island Division of Taxation. The Taxpayer Steward would guide both small businesses and individuals through the taxation process and assist with getting a resolution to various taxation challenges.
- Provide an exemption from sales tax for the trade-in value of motorcycles. Under current law, an exemption is provided for only private passenger automobiles not used for hire.
- Allow home-based cottage food production for non-farmers. The proposal permits home-based production of baked goods that do not require refrigeration or time/temperature control for safety. Currently, Rhode Island is the only state in the country that restricts cottage food licenses to farmers.
- Expand the entity type of financial institutions that are eligible to apply for the Small Business Development Fund, a tax credit program adopted by the General Assembly in 2019.
Governor McKee’s budget proposal will also include a legislative package to simplify the process of doing business in Rhode Island by reducing outdated and outmoded laws still on the books in the state.
Additionally, during the State of the State Address, Governor McKee will unveil a major investment in Rhode Island’s minority-owned business community. The $10 million Minority Business Support Initiative will bolster our minority business community and will aim to increase minority business ownership in the state.
“For far too long, minority entrepreneurs and minority-owned businesses have faced barriers in starting and growing businesses,” said Governor McKee. “They’ve had more hurdles to jump to get over that finish line. That is why my budget proposal includes the Minority Business Support Initiative, to help reduce those hurdles.”
The Minority Business Support Initiative will involve such initiatives as:
- Increasing access to capital through grants and low-interest loans to minority entrepreneurs and minority-owned businesses to start and expand their businesses.
- Providing technical assistance to minority-owned businesses seeking to improve things ranging from customer-facing marketing strategies to back-end office functions.
- Building capacity and supporting the associations and nonprofits that are key to strengthening our state’s minority-owned business community.
- Building out physical space for these activities to occur.
Small business support and business climate reform have been an integral component of the McKee Administration. In April of 2021, several weeks after taking office, Governor McKee announced a new grant program providing direct relief to small businesses using leftover 2020 CARES Act Funds. The roughly $18 million grant program helped more than 3,700 businesses with grants of $5,000 each.
Additional efforts undertaken by the McKee Administration include the Back to Business RI initiative which worked to address labor shortages, the expansion and codification of outdoor dining and liquor-to-go laws, and the launch of RI Ready, a statewide site readiness program.