HOUSE OF REPRESENTATIVES	H.B. NO.	1038
TWENTY-NINTH LEGISLATURE, 2017
STATE OF HAWAII

A BILL FOR AN ACT

 

 

RELATING TO THE MOTION PICTURE, DIGITAL MEDIA, AND FILM PRODUCTION INCOME TAX CREDIT.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

PART I

     SECTION 1.  The purpose of this part is to extend the sunset date of the motion picture, digital media, and film production income tax credit from January 1, 2019, to January 1, 2026.

     SECTION 2.  Act 88, Session Laws of Hawaii 2006, as amended by section 3 of Act 89, Session Laws of Hawaii 2013, is amended by amending section 4 to read as follows:

     "SECTION 4.  This Act shall take effect on July 1, 2006; provided that:

     (1)  Section 2 of this Act shall apply to qualified production costs incurred on or after July 1, 2006, and before January 1, [2019;] 2026; and

     (2)  This Act shall be repealed on January 1, [2019,] 2026, and section 235-17, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day before the effective date of this Act."

PART II

     SECTION 3.  The purpose of this part is to require taxpayers to submit an independent certification by a certified public accountant of the qualified production costs eligible for the tax credit, as recommended by the Office of the Auditor's Report No. 16-08  "Audit of Hawaii's Motion Picture, Digital Media, and Film Production Income Tax Credit" issued in November 2016.

     SECTION 4.  Section 235-17, Hawaii Revised Statues, is amended by amending subsection (h) to read as follows:

     "(h)  Every taxpayer claiming a tax credit under this section for a qualified production shall, no later than ninety days following the end of each taxable year in which qualified production costs were expended, submit [a written, sworn statement] to the department of business, economic development, and tourism[, identifying]:

     (1)  A written, sworn statement identifying:

    [(1)] (A)  All qualified production costs as provided by subsection (a), if any, incurred in the previous taxable year;

    [(2)] (B)  The amount of tax credits claimed pursuant to this section, if any, in the previous taxable year; and

    [(3)] (C)  The number of total hires versus the number of local hires by category and by county.

[This information may be reported from the department of business, economic development, and tourism to the legislature in redacted form pursuant to subsection (i)(4).]

     (2)  An independent certification of the qualified production costs eligible for the credit in the form of a tax opinion.  To satisfy this paragraph, a tax opinion must reach a conclusion substantially similar to the following:  "It is more likely than not that at least $(insert appropriate amount) expended by the taxpayer during_(insert taxable year) would qualify as qualified production costs within the meaning of section 235-17, Hawaii Revised Statutes."  To qualify as a tax opinion acceptable under this paragraph, such an opinion shall meet the requirements for covered opinions as set forth in Treasury Circular 230, 31 Code of Federal Regulations, subtitle A, part 10, section 10.35(c), which by this reference is incorporated herein, with conforming changes in nomenclature and other wording as authorized by chapter 235.

The information required in paragraph (1) may be reported from the department of business, economic development, and tourism to the legislature in redacted form pursuant to subsection (i)(4).  Failure to comply with this subsection shall constitute a waiver of the right to claim the credit."

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

SECTION 6.  This Act shall take effect upon its approval.

 

INTRODUCED BY:	_____________________________
	BY REQUEST

 

 

Report Title:

Motion Picture, Digital Media, and Film Production Income Tax Credit

 

Description:

Amends Act 88, Session Laws of Hawaii 2006, to extend the sunset date for the amendments made to section 235-17, Hawaii Revised Statutes.  Amends section 235-17(h), Hawaii Revised Statues, to require taxpayers claiming the tax credit to submit an independent certification of the qualified production costs.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.