Bill Text: HI HB2325 | 2022 | Regular Session | Introduced
Bill Title: Relating To Business Development In Central Oahu.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2022-02-09 - The committee(s) on ECD recommend(s) that the measure be deferred. [HB2325 Detail]
Download: Hawaii-2022-HB2325-Introduced.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
2325 |
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THIRTY-FIRST LEGISLATURE, 2022 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to business development IN CENTRAL OAHU.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds the federal Tax Cuts and Jobs Act of 2017, P.L. 115-97, authorized a community economic development program called the opportunity zones program to encourage long-term investments in economically distressed communities nationwide.
The legislature also finds that the program provides for incentives for investors to re-invest unrealized capital gains into "opportunity funds" established by the private sector in exchange for temporary tax deferral and other tax benefits.
Hawaii has nominated, and the United States Department of the Treasury has already designated, twenty-five census tracts as opportunity zones. Two of these are in the Pearl-City/Aiea neighborhood and one in the Waipahu Neighborhood. These include Census Tract 80.01 (Hale Mohalu Hospital), Census Tract 80.03 (manana) and Census Tract 87.02 (St. Joseph School).
The legislature further finds that Pearl-City Aiea and Waipahu are excellent locations for residents living in the area as well as those commute to jobs in Honolulu, Ewa and Central Oahu.
Additionally the legislature finds that by fostering neighborhood improvements and future urban development such as multi-family housing, parking management and boulevard treatment along Farrington Highway our communities not only see infrastructure repairs and upgrades but economic and housing opportunities that were previously unattainable in the Central Oahu area.
The purpose of this Act is to incentivize investments in the area for business development and housing and to incentivize businesses or owner-occupants to invest in electrical and water upgrades at in the Pearl-City/Aiea neighborhood and the Waipahu neighborhood opportunity zones.
SECTION 2. Chapter 235, Hawaii
Revised Statutes, is amended by adding a new section to part VI to be appropriately
designated and to read as follows:
"§235-
Central
Oahu infrastructure upgrade tax credit. (a)
There shall be allowed to each taxpayer
subject to the tax imposed under this chapter, a tax credit that shall be
deductible from the taxpayer's net income tax liability, if any, imposed by
this chapter for the taxable year in which the credit is properly claimed.
In the
case of a partnership, S corporation, estate, or trust, the tax credit
allowable is for qualified expenses incurred by the entity for the taxable
year. The expenses upon which the tax
credit is computed shall be determined at the entity level. Distribution and share of credit shall be
determined by rule.
(b)
The amount of the tax credit shall be equal to the qualified expenses of
the taxpayer, up to a maximum of $150,000.
(c)
Every taxpayer claiming a credit under this section, before March 31 of
each year in which qualified expenses were incurred by the taxpayer in the
previous taxable year, shall submit a written, certified statement to the director
of business, economic development, and tourism identifying:
(1) Qualified expenses incurred in the previous
taxable year; and
(2) The
amount of the tax credit claimed by the taxpayer pursuant to this section, if
any, in the previous taxable year.
(d)
The department of business, economic development, and tourism shall:
(1) Maintain
records of the names and addresses of the taxpayers claiming the credits under
this section and the total amount of the qualified expenses upon which the tax
credits are based;
(2) Verify
the nature and amount of the qualified expenses;
(3) Total
all qualified and cumulative expenses that the department certifies; and
(4) Certify
the amount of the tax credit for each taxpayer for each taxable year and the cumulative
amount of the tax credit.
Upon each determination made under this
subsection, the department of business, economic development, and tourism shall
issue a certificate to the taxpayer verifying information submitted to the
department of business, economic development, and tourism, including amounts of
qualified expenses, the credit amount certified for the taxpayer for each
taxable year, and the cumulative amount of tax credits certified. The director of business, economic development,
and tourism may adopt rules under chapter 91 as necessary to implement the certification
requirements under this section.
The taxpayer shall file the certificate
with the taxpayer's tax return with the department of taxation. Notwithstanding the authority of the department
of business, economic development, and tourism under this section, the director
of taxation may audit and adjust the tax credit amount to conform to the
information filed by the taxpayer.
(e)
The director of taxation:
(1) Shall
prepare any forms that may be necessary to claim a tax credit under this section;
(2) May
require the taxpayer to furnish reasonable information to ascertain the
validity of the claim for the tax credit made under this section; and
(3) May
adopt rules under chapter 91 necessary to effectuate the purposes of this
section.
(f)
If the tax credit under this section exceeds the taxpayer's income tax
liability, the excess of the credit over liability may be used as a credit
against the taxpayer's income tax liability in subsequent years until
exhausted. All claims for the tax credit
under this section, including amended claims, shall be filed on or before the
end of the twelfth month following the close of the taxable year for which the
credit may be claimed. Failure to comply
with the foregoing provision shall constitute a waiver of the right to claim
the credit.
(g)
As used in this section, "qualified expenses" means costs that
are necessary and directly incurred by the taxpayer for upgrading the electrical
and water systems In the Pearl-City – Aiea and Waipahu opportunity zones as designated
in their census tracts."
SECTION 3. Section 237-23, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) This chapter shall not apply to the following persons:
(1) Public service companies as that term is defined in section 239-2, with respect to the gross income, either actual gross income or gross income estimated and adjusted, that is included in the measure of the tax imposed by chapter 239;
(2) Public utilities owned and operated by the State or any county, or other political subdivision thereof;
(3) Fraternal benefit societies, orders, or associations, operating under the lodge system, or for the exclusive benefit of the members of the fraternity itself, operating under the lodge system, and providing for the payment of death, sick, accident, a legal service plan, or other benefits to the members of the societies, orders, or associations, and to their dependents;
(4) Corporations, associations, trusts, or societies organized and operated exclusively for religious, charitable, scientific, or educational purposes, as well as that of operating senior citizens housing facilities qualifying for a loan under the laws of the United States as authorized by section 202 of the Housing Act of 1959, as amended, as well as that of operating a legal service plan, as well as that of operating or managing a homeless facility, or any other program for the homeless authorized under part XVII of chapter 346;
(5) Business leagues, chambers of commerce, boards of trade, civic leagues, agricultural and horticultural organizations, and organizations operated exclusively for the benefit of the community and for the promotion of social welfare that shall include the operation of a legal service plan, and from which no profit inures to the benefit of any private stockholder or individual;
(6) Hospitals, infirmaries, and sanitaria;
(7) Companies that provide potable water to residential communities that lack any access to public utility water services and are tax exempt under section 501(c)(12) of the Internal Revenue Code of 1986, as amended;
(8) Cooperative associations incorporated under chapter 421 or Code section 521 cooperatives which fully meet the requirements of section 421-23, except Code section 521 cooperatives need not be organized in Hawaii; provided that:
(A) The exemption shall apply only to the gross income derived from activities that are pursuant to purposes and powers authorized by chapter 421, except those provisions pertaining to or requiring corporate organization in Hawaii do not apply to Code section 521 cooperatives;
(B) The exemption shall not relieve any person who receives any proceeds of sale from the association of the duty of returning and paying the tax on the total gross proceeds of the sales on account of which the payment was made, in the same amount and at the same rate as would apply thereto had the sales been made directly by the person, and all those persons shall be so taxable; and
(C) As used in this paragraph, "Code section 521 cooperatives" mean associations that qualify as a cooperative under section 521 (with respect to exemption of farmers' cooperatives from tax) of the Internal Revenue Code of 1986, as amended;
(9) Persons affected with Hansen's disease and kokuas, with respect to business within the county of Kalawao;
(10) Corporations,
companies, associations, or trusts organized for the establishment and conduct
of cemeteries no part of the net earnings of which inures to the financial
benefit of any private stockholder or individual; provided that the exemption
shall apply only to the activities of those persons in the conduct of
cemeteries and shall not apply to any activity the primary purpose of which is
to produce income, even though the income is to be used for or in the
furtherance of the exempt activities of those persons; [and]
(11) Nonprofit shippers
associations operating under part 296 of the Civil Aeronautics Board Economic
Regulations[.]; and
SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 5. This Act shall take effect upon its approval;
provided that section 2 shall apply to taxable years beginning after December
31, 2022.
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INTRODUCED BY: |
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Report Title:
General Excise Tax Exemption; Tax Credit; Businesses Development; Pearl-City Aiea Opportunity Zone; Waipahu Opportunity Zone
Description:
Authorizes a GET exemption for businesses investing more than $750,000 over a 10-year period and creating a minimum of 50 job positions for the purpose of business development in the Pearl-City Aiea and Waipahu opportunity zones. Establishes a tax credit for upgrading infrastructure in the Pearl-City Aiea and Waipahu opportunity zones.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
