Bill Text: HI HB369 | 2011 | Regular Session | Introduced

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Bill Title: Construction Task Force (2010); Tax Credit; Ohana Residential Housing; New Construction

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2011-01-24 - (H) Referred to HSG, FIN, referral sheet 1 [HB369 Detail]

Download: Hawaii-2011-HB369-Introduced.html

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HOUSE OF REPRESENTATIVES	H.B. NO.	369
TWENTY-SIXTH LEGISLATURE, 2011
STATE OF HAWAII

A BILL FOR AN ACT

 

 

relating to economic recovery.

 

 

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

 

     SECTION 1.  Senate Concurrent Resolution No. 132, S.D. 1 (2009), established a task force to determine the economic contributions of the construction industry in Hawaii and to develop a series of proposals for state actions to preserve and create new jobs in the local construction industry.  This Act implements one of the task force's proposals in conjunction with the Abercrombie administration's support for state actions to create new jobs in Hawaii's construction industry.

     In addition, in 2010, the senate committee on economic development and technology and the house committee on economic revitalization, business, and military affairs convened an informal small business discussion group to address the most critical issues facing the small business sectors within Hawaii's economy.  Representatives from the Chamber of Commerce of Hawaii, construction and trades industries, community nonprofits, the agricultural sector, food and restaurant industries, retailing, the science and technology sector, the commercial transportation industry, and interested stakeholders developed a package of bills that address the most pressing problems facing Hawaii's small business community.

     The purpose of this Act is to support the findings of the small business working group and the recommendations proposed by the construction industry task force to establish a refundable state income tax credit that mirrors the federal income tax credit but limits the tax credit to qualified taxpayers that purchase a qualified principal residence on or after April 1, 2011, and before January 1, 2013.

     SECTION 2.  Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§235-    Ohana residential housing income tax credit.  (a)  There shall be allowed to each qualified taxpayer subject to the tax imposed by this chapter an ohana residential housing income tax credit which 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)  For purposes of this section:

     "Newly constructed principal residence" means a dwelling or residential unit that did not previously exist and that will result in a new structure that will be built from the ground up.  A newly constructed principal residence includes a single-family home, duplex, condominium, manufactured home, or townhouse.

     "Principal residence" means an individual's principal residence located in the State where the individual lives for more than two hundred seventy calendar days per calendar year.

     "Purchase price" means all direct and indirect costs associated with building a newly constructed principal residence, excluding land acquisition costs and escrow closing costs.

     "Qualified principal residence" means a principal residence that is a newly constructed principal residence, whether detached or attached, that adheres to all of the following:

     (1)  Received a certificate of completion on or after April 1, 2011;

     (2)  Is used by the taxpayer as the taxpayer's principal residence for the immediately following two years; and

     (3)  Is eligible for the homeowner's exemption.

     "Qualified taxpayer" means an individual that signs a binding contract to purchase a qualified principal residence on or after April 1, 2011, and before January 1, 2013; provided that the individual closes on the purchase of the individual's newly constructed principal residence on or after April 1, 2011, and before March 1, 2013.

     (c)  The amount of the tax credit shall be equal to the lesser of:

     (1)  Two per cent of the purchase price of the qualified principal residence; or

     (2)  $6,000;

provided that the tax credit shall be payable in two equal installments over two consecutive taxable years beginning with the taxable year in which the binding contract to purchase the qualified principal residence is signed; provided further that if more than one qualified taxpayer is claiming the tax credit under this section, then the applicable tax credit shall be divided equally between each qualified taxpayer.  For purposes of this paragraph a married couple is considered to be one qualified taxpayer.

     (d)  If the tax credit under this section exceeds the taxpayer's net income tax liability, the excess of credit over liability shall be refunded to the taxpayer; provided that no refunds or payment on account of the tax credit under this section shall be made for amounts less than $1.  All claims for a 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 tax credit may be claimed.  Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the tax credit.

     (e)  The tax credit under this section is limited to qualified principal residences with a purchase price of $625,000 or less.

     (f)  Each qualified taxpayer that is taking title to the qualified principal residence shall meet the following adjusted gross income limitations in order for any of the taxpayers that are taking title to the qualified principal residence to be eligible to claim the tax credit under this section:

     (1)  An individual with adjusted gross income of $75,000 or less;

     (2)  A married couple with adjusted gross income of $150,000 or less; or

     (3)  A grantor of any trust with adjusted gross income of $75,000 or less.

     (g)  If a qualified taxpayer sells or no longer uses the qualified principal residence as the taxpayer's principal residence within seven hundred thirty days after closing on the qualified principal residence, then the taxpayer shall be subject to recapture on the previously claimed credit under this section on a pro-rata dollar-for-dollar basis.

     (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 the tax credit made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act, upon its approval, shall apply to taxable years beginning after December 31, 2010.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

Construction Task Force (2010); Tax Credit; Ohana Residential Housing; New Construction

 

Description:

Establishes a refundable ohana residential housing income tax credit for qualified taxpayers that purchase a qualified principal residence on or after April 1, 2011, and before January 1, 2013, that is payable to the qualified taxpayer in two equal installments over the immediately following two taxable years.

 

 

 

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