Bill Text: HI HB1068 | 2016 | Regular Session | Introduced
Bill Title: Tax Credit; High Technology
Spectrum: Partisan Bill (Democrat 8-0)
Status: (Introduced - Dead) 2015-12-17 - Carried over to 2016 Regular Session. [HB1068 Detail]
Download: Hawaii-2016-HB1068-Introduced.html
|
HOUSE OF REPRESENTATIVES |
H.B. NO. |
1068 |
|
TWENTY-EIGHTH LEGISLATURE, 2015 |
|
|
|
STATE OF HAWAII |
|
|
|
|
|
|
|
|
||
|
|
||
A BILL FOR AN ACT
RELATING TO HIGH TECHNOLOGY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that fostering science, technology, engineering, and mathematics education, commonly referred to as STEM, in our public education system is important. An education in these subjects and a culture of innovation are essential to help grow and diversify Hawaii's economic sectors with new products, services, and processes. Each year, the legislature appropriates significant moneys to fund initiatives that further science, technology, engineering, and mathematics education at all levels of Hawaii's education system.
However, the legislature further finds that each year, many Hawaii residents leave the State for careers in science, technology, engineering, and mathematics across the United States and internationally. Many do not want to leave Hawaii, but they have no choice because Hawaii has few career opportunities in these subject areas.
The legislature also finds that funding science, technology, engineering, and mathematics educational initiatives alone does not ensure jobs in these fields for Hawaii's residents. Educational efforts must be matched with initiatives that help foster jobs in research and development, which is the core of innovation. Innovative research and development helps spur economic growth and supports diversity in our economy. Additionally, it is the critical first step in the corporate and product development cycle.
Innovation is essential for creating new jobs in the high technology sector, as well as traditional sectors. In recent years, innovation has led to new jobs in sectors as diverse as defense or dual-use, software and information technology, life sciences and biotechnology, and clean energy. At the same time, these innovations ripple through the economy, by creating jobs for workers building advanced infrastructure, installing broadband networks, and utilizing new devices and products in the service industries, such as education, healthcare, and tourism. Innovation is also critical for sustaining the vitality and resilience of Hawaii's economy.
The legislature further finds that, while future challenges are impossible to predict, the State's economy will be able to respond to challenges by diversifying and building upon the current economic base, by adapting innovative processes, practices, and mindsets, and thereby making industries in the State less susceptible to economic shocks.
The income tax credit for research activities provides a way for this innovation in Hawaii. The re-establishment of this refundable tax credit has been useful in providing support for early-stage research and development companies, because the credit is only calculated on the increase of research and development expenditures over those incurred in previous years instead of on all qualified research expenditures. However, small businesses that are not yet profitable have not been able to use the law to commercialize their innovations. Hawaii's many small research and development companies win competitive federal small business research grants and bring millions of dollars and science, technology, engineering, and mathematics jobs to Hawaii. The proposed changes to the law would allow Hawaii's small research and development companies to focus resources on commercialization, which the federal government is emphasizing as a key criteria for winning larger follow-up federal funding, especially small business innovation research funding.
The purpose of this Act is to amend the income tax credit for qualified research activities in the State so that it would:
(1) Help bridge any funding gap between federal early stage research funding and the critical product development and validation stage, by including all qualified research expenses incurred in the taxable year instead of only the increase of expenses over those incurred in the previous years; and
(2) Contribute to the diversification of Hawaii's economy by creating and maintaining science, technology, engineering, and mathematics jobs in the State.
SECTION 2. Section 235-110.91, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) Section 41 (with respect to the credit for increasing research activities) and section 280C(c) (with respect to certain expenses for which the credit for increasing research activities are allowable) of the Internal Revenue Code shall be operative for the purposes of this chapter as provided in this section; provided that references to the base amount shall not apply, and credit for all qualified research expenses may be taken without regard to the amount of expenses for previous years; provided further that the federal tax provisions in section 41 of the Internal Revenue Code, as that section was enacted on December 31, 2011, irrespective of any subsequent changes to section 41 of the Internal Revenue Code, shall remain in effect for purposes of determining the state income tax credit under this section; provided further that the federal tax provisions in section 41 of the Internal Revenue Code, as enacted on December 31, 2011, irrespective of any subsequent amendments to section 41 of the Internal Revenue Code, shall apply only to expenses incurred for qualified research activities after December 31, 2012."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act shall take effect on July 1, 2015, and shall apply to taxable years beginning after December 31, 2015.
|
INTRODUCED BY: |
_____________________________ |
|
|
|
Report Title:
Tax Credit; High Technology
Description:
Allows for a credit for all qualified research expenses without regard to the amount of expenses for previous years.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
