Bill Text: HI SB2248 | 2010 | Regular Session | Introduced
Bill Title: Tax Credit; Continuing Education; Employer Contributions
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2010-02-09 - (S) The committee on LBR deferred the measure. [SB2248 Detail]
Download: Hawaii-2010-SB2248-Introduced.html
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THE SENATE |
S.B. NO. |
2248 |
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TWENTY-FIFTH LEGISLATURE, 2010 |
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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. Over the years, the legislature and the private sector have created programs to stimulate the economy through the use of tax incentives, usually in the form of tax credits. However, many of the tax credits proposed over the years have failed to be enacted into law and some of the tax credits that have been enacted have not operated in the exact manner, or had the fiscal impact, that was originally intended by the legislature. Furthermore, the challenge of getting tax credits passed and approved by the legislature and executive office is a task made more difficult during times of economic recession.
To help speed the recovery of the economy in this State, the legislature finds that there is a need for legislation that would help the State gain its financial strength through providing employers with financial incentives that would help to build their employee infrastructure through improved skills, training, and knowledge and also to temporarily limit their financial obligations from employment security laws.
An agenda that could potentially achieve that financial strength during an economic recession would include the following objectives:
(1) Providing employers with a tax credit for amounts they expend on the development and training to improve the current skills and abilities of their existing long‑term employees; and
(2) Limiting the amount of employment security law obligations that employers are required to pay for calendar years 2010 and 2011 to those amounts levied in calendar year 2009.
The purpose of this Act is to provide financial mechanisms to employers that encourage the development of their current employees and to hire more employees.
SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§235‑ Employer continuing education tax credit. (a) There shall be allowed to each qualified taxpayer subject to the tax imposed by this chapter an employer continuing education tax credit, which shall be deductible from the taxpayer's net income tax liability, if any, that is imposed by this chapter in the qualified taxpayer's taxable year following the taxable year in which the credit under this section is earned.
(b) For purposes of this section:
"Continuing education" means costs associated with improving the skills, training, and knowledge that are directly associated with an employee's job title or position and that are directly associated with the employee's current field or occupation.
"Qualified costs" means expenditures by a qualified taxpayer that improves the existing skills or knowledge of an employee that would be sufficient to enable the employee to obtain a higher paying position with the employer or increase the employee's level of productivity. Qualified costs include, but are not limited to, college courses, vocational programs, and certification programs.
"Qualified taxpayer" means an employer that has at least full-time employees and expends moneys on the continuing education of a full-time employee that has been employed by the employer for at least twelve consecutive months.
(c) The amount of the tax credit shall be equal to per cent of the qualified costs incurred by the qualified taxpayer during the taxable year up to a maximum of $ in qualified costs in any taxable year; provided that the qualified taxpayer shall not be eligible to claim the qualified costs toward the tax credit under this section until the taxable year following the taxable year in which the qualified costs were incurred.
(d) If the tax credit under this section exceeds the taxpayer's net income tax liability, the excess of credit over liability may be used as a tax credit against the taxpayer's net income tax liability in subsequent years until exhausted. 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) No other tax credit may be claimed under this chapter for the qualified costs used to properly claim a tax credit under this section.
(f) In the case of a partnership, S corporation, estate, or trust, the tax credit allowable is for the qualified 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 the tax credit shall be determined pursuant to section 704(b) (with respect to partner's distributive share) of the Internal Revenue Code.
(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 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. Chapter 383, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§383‑ Limit on employer contributions. (a) Not withstanding any law to the contrary outside of this chapter, every employer's contribution rate for the 2010 and 2011 calendar years shall not exceed their contribution rate for the 2009 calendar year and the contributions levied, assessed, and collected from every employer for the 2010 and 2011 calendar years shall not exceed the contributions levied upon each employer for the 2009 calendar year.
(b) The limitations of this section shall apply to every employer in this State even if the employer's number of employees in calendar years 2010 and 2011 exceeds the employer's number of employees in calendar year 2009; provided that if an employer's number of employees in calendar year 2010 or 2011 exceeds the employer's number of employees in calendar year 2009 by per cent or more, then the limitations in this section shall not apply in calendar year 2010 or 2011, as applicable.
(c) The requirements of this section shall not impair or limit the rights, powers, or authority granted to the department, or the director of labor and industrial relations, under this chapter to levy, assess, or collect any delinquent contributions, penalties, interest, costs, fines, or expenses, or to commence the placement of a lien or foreclosure proceedings against an employer or an employer's property."
SECTION 4. New statutory material is underscored.
SECTION 5. This Act shall take effect upon approval; provided that section 2 of this Act shall apply to taxable years beginning after December 31, 2009; provided further that section 3 of this Act shall take effect on July 1, 2010.
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INTRODUCED BY: |
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Report Title:
Tax Credit; Continuing Education; Employer Contributions
Description:
Creates a tax credit for employers who fund continuing education for certain employees to improve their existing skills; limits the amount of employer contributions paid under the employment security laws for the 2010 and 2011 calendar years even if the employer hires a certain number of additional employees.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
