WatchdogRI discovers RI tax loss of more than $3 million, with a continuing annual loss of $500,000 per year

WARWICK, RI – With the Rep. Carnevale controversy in mind, WatchdogRI looked at every Rhode Island
legislator’s real estate disclosures on ethics filings looking for irregularities
with ethics forms, campaign finance filings and Rhode Island real estate records.
One issue that jumped out was corporate ownership of real estate occupied by state
Senator Jabour (D-Providence). Jabour does not own 529 Broadway in Providence,
which he lists as his residence on his ethics filings. Online property records
show that 529 Broadway is owned by a defunct RI corporation named Vijotar, Inc.
The RI Secretary of State’s corporate database lists Vincent Jabour as the president
of the company, which was last an active RI company in 2001. Senator Jabour is listed
as the registered agent for the defunct Vijotar, Inc.
Companies that are no longer active RI corporations do not pay an annual $50
corporations
filing fee to the RI Secretary of State, and they also very likely do not pay Rhode
Island’s $450 annual corporations tax (this tax was just reduced from $500 this
year).
WatchdogRI calculates that Vijotar Inc. has not paid a total of $8,200 in annual
corporate taxes and $50 Secretary of State annual fees since 2001.
Naturally, WatchdogRI wondered how many RI properties were owned by defunct RI
corporations,
and what the financial impact of this might be.
WatchdogRI, using the technical resources of Simpatico Software, Inc., utilized
publicly available online real estate records and the RI Secretary of State’s corporate
database to make the following findings:

* 986 inactive RI corporations own Rhode Island real estate where the corporate
name in the Secretary of State’s database exactly matches the corporate name in
property records. On an annual basis, these 986 corporations are likely not paying
their $450 corporations tax, nor are they paying $50 annually to the Secretary of
State. Total annual tax and fee loss: $493,000.

* When WatchdogRI looked at the total tax liability for the 986 corporations above
going back to the date they became inactive, we calculated that $3,266,650 is owed
collectively by this group.

* Another roughly 300 corporations also are inactive and appear to own RI real estate,
but the name matches are not exact and require a much more time consuming analysis
that was not undertaken.
Theoretically, the corporate taxes not paid by these inactive corporate entities
are supposed to be paid off prior to allowing the sale of any property that they
own.
The net effect of this practice is tax delay, if not outright tax avoidance, and
Rhode Island should take steps to minimize the economic impact of this practice.
Roughly 15,000 corporations own Rhode Island real estate. Most of these corporations
pay their required taxes and fees. Rhode Island should not tolerate that more than
1,000 corporations are not playing by the same rules – especially if one of those
inactive businesses has very close ties to a State Senator.