Bill Text: HI HB2530 | 2016 | Regular Session | Introduced
Bill Title: Commercial Dairies; Income Tax Credits
Spectrum: Partisan Bill (Democrat 5-0)
Status: (Introduced - Dead) 2016-02-01 - Referred to AGR, WAL, FIN, referral sheet 5 [HB2530 Detail]
Download: Hawaii-2016-HB2530-Introduced.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
2530 |
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TWENTY-EIGHTH LEGISLATURE, 2016 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to taxation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 235, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:
"§235- Commercial dairy renovation tax credit. (a) There shall be allowed to each taxpayer subject to the taxes imposed by this chapter, an income 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.
(b) The amount of the credit shall be per cent of the renovation costs incurred during the taxable year for each commercial dairy located in Hawaii.
(c) In the case of a partnership, S corporation, estate, trust, or any developer of a commercial building, the tax credit allowable is for renovation costs incurred by the entity for the taxable year. The cost upon which the tax credit is computed shall be determined at the entity level. Distribution and share of credit shall be determined pursuant to section 235-110.7(a).
(d) If a deduction is taken under section 179 (with respect to election to expense certain depreciable business assets) of the Internal Revenue Code, no tax credit shall be allowed for that portion of the renovation cost for which the deduction is taken.
(e) The basis of eligible property for depreciation or accelerated cost recovery system purposes for state income taxes shall be reduced by the amount of credit allowable and claimed. In the alternative, the taxpayer shall treat the amount of the credit allowable and claimed as a taxable income item for the taxable year in which it is properly recognized under the method of accounting used to compute taxable income.
(f) The credit allowed under this section shall be claimed against the net income tax liability for the taxable year.
(g) If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of credits over payments due shall be refunded to the taxpayer; provided that tax credits properly claimed by an individual who has no income tax liability shall be paid to the individual; and provided further that no refunds or payment on account of the tax credits allowed by this section shall be made for amounts less than $1.
(h) The director of taxation shall prepare any forms that may be necessary to claim a credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of the claim for credit made under this section. The director of taxation may adopt rules to effectuate the purposes of this section pursuant to chapter 91.
(i) As used in this section:
"Net income tax liability" means income tax liability reduced by all other credits allowed under this chapter.
"Renovation costs" means costs incurred after December 31, 2015, to plan, design, install, construct, and purchase equipment to renovate a commercial dairy.
(j) No taxpayer that claims a credit under this section shall claim any other credit under this chapter.
§235- Commercial dairy investment tax credit. (a) There shall be allowed to each taxpayer subject to the taxes imposed by this chapter a commercial dairy investment 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 investment was made and the following four years provided the credit is properly claimed. The tax credit shall be as follows:
(1) In the year the investment was made, thirty-five per cent;
(2) In the first year following the year in which the investment was made, twenty-five per cent;
(3) In the second year following the year in which the investment was made, twenty per cent;
(4) In the third year following the year in which the investment was made, ten per cent; and
(5) In the fourth year following the year in which the investment was made, ten per cent,
of the investment made by the taxpayer in each commercial dairy, up to a maximum allowed credit in the year the investment was made, $ ; in the first year following the year in which the investment was made, $ ; in the second year following the year in which the investment was made, $ ; in the third year following the year in which the investment was made, $ ; and in the fourth year following the year in which the investment was made, $ .
(b) The credit allowed under this section shall be claimed against the net income tax liability for the taxable year. For the purpose of this section, "net income tax liability" means income tax liability reduced by all other credits allowed under this chapter.
(c) If the tax credit under this section exceeds the taxpayer's income tax liability for any of the five years that the credit is taken, the excess of credits over payments due shall be refunded to the taxpayer; provided that tax credits properly claimed by an individual who has no income tax liability shall be paid to the individual; and provided further that no refunds or payment on account of the tax credits allowed by this section shall be made for amounts less than $1.
Every claim, including amended claims, for a tax credit under this section 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.
(d) If at the close of any taxable year in the five-year period in subsection (a):
(1) The business that the taxpayer invested in under subsection (a) no longer operates a commercial dairy;
(2) The business or an interest in the business has been sold by the taxpayer investing in the commercial dairy; or
(3) The taxpayer has withdrawn the taxpayer's investment wholly or partially from the commercial dairy;
the credit claimed under this section shall be recaptured. The recapture shall be equal to ten per cent of the amount of the total tax credit claimed under this section in the preceding two taxable years. The amount of the credit recaptured shall apply only to the investment in the particular commercial dairy that meets the requirements of paragraph (1), (2), or (3). The recapture provisions of this subsection shall not apply to a tax credit claimed for a commercial dairy that does not fall within the provisions of paragraph (1), (2), or (3). The amount of the recaptured tax credit determined under this subsection shall be added to the taxpayer's tax liability for the taxable year in which the recapture occurs under this subsection.
(e) Every taxpayer, before March 31 of each year in which an investment in a commercial dairy was made in the previous taxable year, shall submit a written, certified statement to the director of taxation identifying:
(1) Investments, if any, expended in the previous taxable year; and
(2) The amount of tax credits claimed pursuant to this section, if any, in the previous taxable year.
(f) The department of taxation shall:
(1) Maintain records of the names and addresses of the taxpayers claiming the credits under this section and the total amount of the investment costs upon which the tax credit is based;
(2) Verify the nature and amount of the investments;
(3) Total all investments that the department certifies for each taxable year and on a cumulative basis; and
(4) Certify the amount of the tax credit for each taxable year and cumulative amount of the tax credit.
Upon each determination made under this subsection, the department shall issue a certificate to the taxpayer verifying information submitted to the department, including investment amounts, the credit amount certified for each taxable year, and the cumulative amount of the tax credit during the credit period. The taxpayer shall file the certificate with the taxpayer's tax return with the department.
The director of taxation may assess and collect a fee to offset the costs of certifying tax credits claims under this section. All fees collected under this section shall be deposited into the tax administration special fund established under section 235-20.5.
(g) The director of taxation shall prepare any forms that may be necessary to claim a credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of the claim for credit made under this section. The director of taxation may adopt rules to effectuate the purposes of this section pursuant to chapter 91."
SECTION 2. New statutory material is underscored.
SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2015.
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INTRODUCED BY: |
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Report Title:
Commercial Dairies; Income Tax Credits
Description:
Establishes income tax credits to incentivize the renovation or investment in commercial dairies in the State.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
