Bill Text: HI HB389 | 2023 | Regular Session | Introduced
Bill Title: Relating To Taxation.
Spectrum: Partisan Bill (Democrat 11-0)
Status: (Introduced - Dead) 2023-02-17 - Report adopted. referred to the committee(s) on FIN as amended in HD 2 with none voting aye with reservations; none voting no (0) and Representative(s) Marten excused (1). [HB389 Detail]
Download: Hawaii-2023-HB389-Introduced.html
HOUSE OF REPRESENTATIVES |
H.B. NO. |
389 |
THIRTY-SECOND LEGISLATURE, 2023 |
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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 a new section to be appropriately designated and to read as follows:
"§235- Carbon
sequestration tax credit. (a)
There shall be allowed to each taxpayer subject to the taxes imposed by
this chapter, a carbon sequestration 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. The amount of the credit shall be equal to $
per metric ton of qualified carbon oxide that is:
(1) Captured by the taxpayer using carbon capture equipment placed in service at an industrial facility or direct air capture facility in the State; and
(2) Disposed of by
the taxpayer in secure geological storage and not used by the taxpayer as a
tertiary injectant.
(b) In the case of a partnership, S corporation,
estate, or trust, the tax credit allowable is for qualified carbon oxide
captured and stored 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 by rule.
(c) If the tax credit under this section exceeds
the taxpayer's income tax liability in any taxable year that the credit is claimed,
the excess of the tax credit over liability may be used as a credit against the
taxpayer's net income tax liability in subsequent years until exhausted. All claims, including any amended claims, for
tax credits under this section shall be properly 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
any of the foregoing provision shall constitute a waiver of the right to claim
the credit.
(d) The department of health shall adopt rules
pursuant to chapter 91 for the purposes of certifying the metric tons of
qualified carbon oxide captured and disposed of by a taxpayer.
(e) Every taxpayer claiming a tax credit under
this section for a qualified carbon oxide shall, no later than ninety days
following the end of each taxable year in which the qualified carbon oxide was
captured and disposed, submit information deemed necessary under the rules
adopted pursuant to subsection (d) to the department of health.
(f) The department of health shall:
(1) Maintain records of the names of the taxpayers claiming the tax credit under subsection (a) and the respective amount of qualified carbon oxide captured and disposed;
(2) Verify the amount of qualified carbon oxide
captured and disposed, and certify the amount of the tax credit for each
taxpayer for the taxable year; and
(3) Issue a certificate to the taxpayer verifying the amount of the qualified carbon oxide captured and disposed and the tax credit amount certified for the taxable year; provided that the department of health shall issue the certificate to the taxpayer no later than seven months after the submission of the information to the department pursuant to subsection (e).
(g) The taxpayer shall file the certificate
issued under subsection (f) with the taxpayer's tax return with the department
of taxation. The director of taxation
may audit and adjust the certification to conform to the facts.
(h) The director of taxation:
(1) Shall prepare any
forms as may be necessary to claim a credit under this section;
(2) May require the
taxpayer to furnish information to ascertain the validity of the claim for
credit made under this section; and
(3) May adopt rules pursuant to chapter 91 necessary to effectuate the purposes of this section.
(i) For purposes of this section:
"Carbon capture equipment"
has the same meaning as in title 26 Code of Federal Regulations section
1.45Q-2(c).
"Direct air capture
facility" means any facility that uses carbon capture equipment to capture
carbon dioxide directly from the ambient air.
"Direct air capture facility" does not include any facility
that captures carbon dioxide that is deliberately released from naturally
occurring subsurface springs or using photosynthesis.
"Industrial facility"
has the same meaning as in title 26 Code of Federal Regulations section
1.45Q-2(d).
"Net income tax liability" means income tax liability reduced by all other credits allowed under this chapter.
"Qualified carbon oxide" means:
(1) Any carbon dioxide or other carbon oxide that:
(A) Is captured from an industrial source by carbon capture equipment;
(B) Would otherwise be released into the atmosphere as industrial emission of greenhouse gas or lead to such release; and
(C) Is measured at the source of capture and verified at the point of disposal; or
(2) In the case of a direct air capture facility, any carbon dioxide that:
(A) Is captured directly from the ambient air; and
(B) Is
measured at the source of capture and verified at the point of disposal.
"Secure geological
storage" has the same meaning as used in title 26 Code of Federal
Regulations section 1.45Q-3(b)(1)(i).
"Tertiary injectant"
means qualified carbon oxide that is injected into and stored in a qualified
enhanced oil or natural gas recovery project and contributes to the extraction
of crude oil or natural gas. "Tertiary
injectant" includes the same meaning as used in title 26 United States
Code section 193(b)(1)."
SECTION 2. New statutory material is underscored.
SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2023.
INTRODUCED BY: |
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Report Title:
Carbon Sequestration Tax Credit; Income Tax; DOTAX; DOH
Description:
Establishes a carbon sequestration income tax credit. Applicable to taxable years beginning after 12/31/2023.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.