CVS reviewing Chafee push to cut tax credit worth $15 millionJanuary 17th, 2013 at 4:30 pm by Ted Nesi under Nesi's Notes, On the Main Site
The governor on Wednesday proposed reducing Rhode Island’s corporate tax rate from 9% to 7% over three years, and paying for it partly by cutting in half the value of Jobs Development Act tax credits – the vast majority of which benefit Woonsocket-based CVS, to the tune of more than $15 million in fiscal 2011-12 alone.
“We will be reviewing all of the elements of the governor’s budget proposal and look forward to continue making significant contributions to Rhode Island’s economy,” CVS spokesman Mike DeAngelis told WPRI.com on Thursday.
“CVS Caremark shares Governor Chafee’s commitment to improving and growing Rhode Island’s economy and we applaud his focus on job creation and a competitive corporate tax rate,” he said.
DeAngelis declined to say whether the change could lead CVS to add jobs in other states, but he cited a study commissioned by the company that found CVS added more than $1.2 billion to Rhode Island’s economy and paid $116 million in state and local taxes during 2010. The federal government charges CVS one of the highest corporate tax rates paid by any large American business.
“As a national employer with operations in multiple states, we view Rhode Island’s Jobs Development Act as an important tool for bringing more business to Rhode Island and making it an attractive place for us to continue hiring in the future,” he said. According to CVS, the company has added more than 2,100 jobs in Rhode Island since the Jobs Development Act passed in 1994.
CVS was one of seven Rhode Island employers that shared $16.4 million in Jobs Development Act credits in 2011-12. CVS got $15.5 million; the others were Electric Boat ($602,160), RBS Citizens Financial Group ($120,402), United Natural Foods ($108,979), AAA of Southern New England ($108,112) and RITE Solutions ($8,403). In 2011 lawmakers rejected Chafee’s proposal to phase out the credits over three years.
In October, Chafee and the R.I. Economic Development Corporation board agreed to give Jobs Development Act credits to Alexion Pharmaceuticals. a Connecticut-based company that uses the old Alpha-Beta factory in Smithfield. A spokesman for Alexion didn’t respond to a request for comment on the budget proposal.