(a)  Fifty percent (50%) of the performance-based compensation realized by an eligible employee in any credit year shall be allowed as a modification decreasing adjusted gross income and alternative minimum income for purposes of the personal income tax.

Terms Used In Rhode Island General Laws 42-64.11-4

  • Compensation: means any income, capital gain or preference items realized by an employee in connection with the employee's service for an eligible company or affiliated entity provided that such compensation would (but for the modification provided by § 42-64. See Rhode Island General Laws 42-64.11-2
  • Credit year: means any calendar year for which an eligible company has been certified under § 42-64. See Rhode Island General Laws 42-64.11-2
  • Eligible employee: means any full-time active employee having compensation at least equal to one hundred twenty-five percent (125%) of the average compensation of all employees in the state first performing services in the state for an eligible company or an affiliate entity after the date the eligible company files its initial application for certification; provided, however, that for any eligible company filing its initial application in 2005, "eligible employee" means any full-time active employee having compensation at least equal to one hundred-twenty five percent (125%) of the average compensation of all employees in the state first performing services in the state after June 1, 2005. See Rhode Island General Laws 42-64.11-2
  • Fully-certified company: means an eligible company that has been certified by the Rhode Island economic development corporation as meeting the criteria set forth in subsection 42-64. See Rhode Island General Laws 42-64.11-2
  • Performance-based compensation: means any compensation paid by a certified company to an eligible employee in consideration of the achievement of individual or company performance-based goals, including, for example, but without limitation, bonuses, and income derived from employer-granted stock options. See Rhode Island General Laws 42-64.11-2

(b)  The modification provided under subsection (a) shall be taken into account in determining withholding under § 44-30-71 to be deducted by a fully-certified company with respect to performance-based compensation paid to eligible employees.

(c)  The amount of income, otherwise qualifying as performance-based compensation, derived from employer granted stock options is subject to the fifty percent (50%) modification provided for in subsection (a) only to the extent that the same amount is subject to tax under § 42-64.11-5.

History of Section.
P.L. 2005, ch. 53, § 1; P.L. 2005, ch. 54, § 1.