AN ACT RELATING TO TAXATION -- EMPLOYEE OWNERSHIP TAX CREDIT

This bill creates a tax credit for businesses in Rhode Island that transition to employee ownership models, such as employee stock ownership plans, worker cooperatives, or employee ownership trusts. The credit covers up to 50% of conversion costs, with a maximum of $100,000 for full employee ownership transitions or $25,000 for partial equity structures, and allows an additional $25,000 credit for expanding existing employee ownership programs. To qualify, businesses must grant at least 20% ownership rights to eligible workers and provide them with decision-making rights comparable to current shareholders. The tax credit applies to income tax years between January 1, 2026, and January 1, 2029, and requires businesses to apply through the state Department of Revenue for certification.