PROVIDENCE – Alexion Pharmaceuticals in Smithfield has applied for a corporate tax rate cut under the state’s Jobs Development Act, according to the R.I. Economic Development Corporation.
If approved, the rate cut would reduce Alexion’s corporate tax rate from 9 percent to 6.7 percent, according to the application, which was included in agenda materials for the EDC’s Oct. 22 meeting.
Alexion grew from 13 employees to 113 employees between 2006 and 2009 as it ramped up production capacity at its Smithfield plant, which makes the drug Soliris and other pharmaceutical compounds.
The Jobs Development Act provides a .25 percent corporate tax rate cut for every 10 new jobs created that pay at least 250 percent of the state’s minimum wage, plus benefits.
The median pay of Alexion employees in 2009 was $75,000 per year, according to the application. Of the 100 new hires between 2006 and 2009, 92 of them qualify for the program, which would result in a 2.3 percent rate cut.
Alexion’s application said the company paid the corporate minimum tax between 2007 and 2009 and, as a result, does not calculate how much revenue will be lost in future years if the company becomes more profitable.
The EDC board of directors is slated to vote on the application Oct. 22.
The Jobs Development Act is the most expensive business tax incentive in Rhode Island, resulting in $16.4 million in lost revenue in fiscal 2012 to eight companies. Of that total CVS Caremark received $15.4 million.
Estate and Corporate Income Taxes are changing next year, and business owners and executives should know the details. The PBN Summit on November 6th will provide those details and more - including how much Obamacare's Employer Mandate could cost.
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.