Bill Text: HI HB916 | 2025 | Regular Session | Amended
Bill Title: Relating To The Low-income Housing Tax Credit.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2025-02-04 - Passed Second Reading as amended in HD 1 and referred to the committee(s) on TOU/ECD with Representative(s) Garcia voting aye with reservations; none voting no (0) and Representative(s) Cochran, Kong, Ward excused (3). [HB916 Detail]
Download: Hawaii-2025-HB916-Amended.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
916 |
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THIRTY-THIRD LEGISLATURE, 2025 |
H.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO THE LOW-INCOME HOUSING TAX CREDIT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the low-income housing credit is a federal tax credit under Section 42 of the Internal Revenue Code that is intended to increase the construction of low-income housing by awarding tax credits to housing developers who agree to reserve a portion of their housing developments for lower‑income households.
The legislature further finds that Hawaii also has a state low-income housing tax credit, based on the federal low-income housing credit requirements. However, unlike the federal tax credit, section 235-110.8(b), Hawaii Revised Statutes, allows any partner or member of the housing developer to claim any portion of that housing developer's state tax credit, including partners and members who are not eligible for the corresponding federal tax credit. This mechanism expands the potential pool of investors and enhances opportunities for affordable housing developers to raise the equity necessary to finance their projects. However, the state low-income housing tax credit may only be claimed against income tax, the taxes imposed under chapter 235, Hawaii Revised Statutes.
The legislature also finds that the transient accommodations tax is imposed on hotels and similar entities that rent accommodations to transient persons. The state low-income housing tax credit cannot be used to offset transient accommodations taxes.
Accordingly, the purpose of this Act is to:
(1) Facilitate the construction of low-income housing by allowing the state low‑income housing tax credit to be used to offset transient accommodations tax liability, which will increase the pool of investors for low-income housing projects; and
(2) Make permanent Act 129, Session Laws of Hawaii, 2016.
SECTION 2. Chapter 237D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§237D- Application of credits. The low-income housing tax credit may be claimed against any tax liability assessed pursuant to this chapter in the county in which the qualified low-income building is located pursuant to section 235-110.8(i)."
SECTION 3. Section 235-110.8, Hawaii Revised Statutes, is amended by amending subsection (i) to read as follows:
"(i) The credit allowed under this section shall
be claimed against net income or other tax liability for the taxable
year. For the purpose of deducting this
tax credit, [net income tax liability] "net income or other tax
liability" means net income tax liability reduced by all other credits
allowed the taxpayer under this chapter[.] and any tax liability
assessed pursuant to chapter 237D in the county in
which the qualified low-income building is located.
A tax credit under this section that exceeds the taxpayer's income or applicable transient accommodations tax liability may be used as a credit against the taxpayer's income or applicable transient accommodations tax liability in subsequent years until exhausted. All 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 and shall include a copy of Form 8609 issued by the corporation with respect to the building; provided that with respect to the first year that the credit is claimed for a qualified low-income housing project, if the taxpayer has not yet received the Form 8609 prior to the time the taxpayer files its original tax return claiming the credit under this section, the taxpayer may claim the credit based upon the amount of credit set forth in the carryover allocation or 42(m) letter, as applicable, issued to the qualified low-income housing project, and upon receipt of the Form 8609, the taxpayer shall:
(1) Amend its tax return to include the Form 8609; and
(2) If the credit amount in the Form 8609 is different than the amount of credit previously claimed, adjust the credit amount claimed on its amended return.
Failure to properly and timely claim the credit shall constitute a waiver of the right to claim the credit. A taxpayer may claim a credit under this section only if the building or project is a qualified low-income housing building or a qualified low-income housing project under section 42 of the Internal Revenue Code.
Except as provided under subsection (j)(1), section 469 (with respect to passive activity losses and credits limited) of the Internal Revenue Code shall be applied in claiming the credit under this section."
SECTION 4. Act 129, Session Laws of Hawaii 2016, as amended by Act 226, Session Laws of Hawaii 2021, is amended by amending section 4 to read as follows:
"SECTION
4. This Act, upon its approval, shall
take effect on January 1, 2017, and shall apply to qualified low-income
buildings awarded credits after December 31, 2016[; provided that this Act shall
be repealed on December 31, 2027, and section 235-110.8, Hawaii Revised
Statutes, shall be reenacted in the form in which it read on the day prior to
the effective date of this Act]."
SECTION 5. Act 226, Session Laws of Hawaii 2021, is amended by amending section 4 to read as follows:
"SECTION
4. This Act shall take effect on July 1,
2021, and shall apply to taxable years beginning after December 31, 2020[;
provided that the amendments made to section 235-110.8, Hawaii Revised
Statutes, by section 1 of this Act shall not be repealed when that section is
reenacted on December 31, 2027, pursuant to section 4 of Act 129, Session Laws
of Hawaii 2016, and section 2 of this Act]."
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act shall take effect on July 1, 3000; provided that section 3 shall apply to taxable years beginning after December 31, 2025.
Report Title:
Low-Income
Housing Tax Credit; Affordable Housing; Transient Accommodations Tax
Description:
Allows
tax credits claimed under the State Low-Income Housing Tax Credit Program to be
used to offset taxes imposed by the state transient accommodations tax
law. Specifies that tax credit amounts
applied to state transient accommodations taxes be limited to state transient
accommodations taxes imposed in the same county in which the qualified
low-income building is located. Makes
permanent Act 129, SLH 2016. Effective
7/1/3000. (HD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
