Bill Text: HI SB2696 | 2018 | Regular Session | Amended

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Bill Title: Relating To Taxation.

Spectrum: Partisan Bill (Democrat 8-0)

Status: (Introduced - Dead) 2018-02-02 - Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM. [SB2696 Detail]

Download: Hawaii-2018-SB2696-Amended.html

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THE SENATE	S.B. NO.	2696
TWENTY-NINTH LEGISLATURE, 2018		S.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

 

 

RELATING TO TAXATION.

 

 

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

 

     SECTION 1.  Section 235-55.91, Hawaii Revised Statutes, is amended as follows:

     1.  By amending its title and subsection (a) to read:

     "§235-55.91  Credit for employment of vocational rehabilitation referrals[.] and wages of former inmates hired by a technology business.  (a)  There shall be allowed to each taxpayer subject to the tax imposed by this chapter, a credit for employment of vocational rehabilitation referrals and for certain wages paid to former inmates employed by a technology business owned by the taxpayer, 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."

     2.  By amending subsection (c) to read:

     "(c)  For purposes of this section:

     "Former inmate" means a person formerly placed in the custody of the department of public safety.

     "Hiring date" means the day the vocational rehabilitation referral is hired by the employer.

     "Qualified first-year wages" means, with respect to any vocational rehabilitation referral, qualified wages attributable to service rendered during the one-year period beginning with the day the individual begins work for the employer.

     "Qualified wages" means the wages paid or incurred by the employer during the taxable year to an individual who is a vocational rehabilitation referral and more than one-half of the wages paid or incurred for such an individual is for services performed in a trade or business of the employer.

     "Technology business" means a trade or business that derives the majority of its gross income from the sale or license of products or services resulting from its software development or information technology development, or both, and participates in the Work Opportunity Tax Credit program administered by the United States Department of Labor, Employment and Training Administration.  A "technology business" excludes any trade or business that is considered by standard practice as part of the broadcast industry or any telecommunications carrier, as defined in section 269-1, that holds a franchise or charter enacted or granted by the legislative or executive authority of the State or its predecessor governments.

     "Vocational rehabilitation referral" means any individual who is certified by the department of human services vocational rehabilitation and services for the blind division in consultation with the Hawaii state employment service of the department of labor and industrial relations as:

     (1)  Having a physical or mental disability which, for such individual, constitutes or results in a substantial handicap to employment; and

     (2)  Having been referred to the employer upon completion of (or while receiving) rehabilitative services pursuant to:

          (A)  An individualized written rehabilitation plan under the State's plan for vocational rehabilitation services approved under the Rehabilitation Act of 1973, as amended;

          (B)  A program of vocational rehabilitation carried out under chapter 31 of title 38, United States Code; or

          (C)  An individual work plan developed and implemented by an employment network pursuant to subsection (g) of section 1148 of the Social Security Act, as amended, with respect to which the requirements of such subsection are met.

     "Wages" has the meaning given to such term by section 3306(b) of the Internal Revenue Code (determined without regard to any dollar limitation contained in the Internal Revenue Code section).  "Wages" shall not include:

     (1)  Amounts paid or incurred by an employer for any period to any vocational rehabilitation referral for whom the employer receives state or federally funded payments for on-the-job training of the individual for the period;

     (2)  Amounts paid to an employer (however utilized by the employer) for any vocational rehabilitation referral under a program established under section 414 of the Social Security Act; and

     (3)  If the principal place of employment is at a plant or facility, and there is a strike or lockout involving vocational rehabilitation referrals at the plant or facility, amounts paid or incurred by the employer to the vocational rehabilitation referral for services which are the same as, or substantially similar to, those services performed by employees participating in, or affected by, the strike or lockout during the period of strike or lockout."

     3.  By amending subsection (e) to read:

     "(e)  The following wages paid to vocational rehabilitation referrals and former inmates employed by a technology business owned by the taxpayer are ineligible to be claimed by the employer for this credit:

     (1)  No wages shall be taken into account under this section with respect to a vocational rehabilitation referral who:

          (A)  Bears any of the relationships described in section 152(d)(2)(A) to (G) of the Internal Revenue Code to the taxpayer, or, if the taxpayer is a corporation, to an individual who owns, directly or indirectly, more than fifty per cent in value of the outstanding stock of the corporation (determined with the application of section 267(c) of the Internal Revenue Code);

          (B)  If the taxpayer is an estate or trust, is a grantor, beneficiary, or fiduciary of the estate or trust, or is an individual who bears any of the relationships described in section 152(d)(2)(A) to (G) of the Internal Revenue Code to a grantor, beneficiary, or fiduciary of the estate or trust; or

          (C)  Is a dependent (described in section 152(d)(2)(H) of the Internal Revenue Code) of the taxpayer, or, if the taxpayer is a corporation, of an individual described in subparagraph (A), or, if the taxpayer is an estate or trust, of a grantor, beneficiary, or fiduciary of the estate or trust.

     (2)  No wages shall be taken into account under this section with respect to any vocational rehabilitation referral if, prior to the hiring date of the individual, the individual had been employed by the employer at any time during which the individual was not a vocational rehabilitation referral.

     (3)  No wages shall be taken into account under this section with respect to any vocational rehabilitation referral unless such individual either:

          (A)  Is employed by the employer at least ninety days; or

          (B)  Has completed at least one hundred-twenty hours of services performed for the employer."

     4.  By amending subsection (g) to read:

     "(g)  No credit shall be determined under this section with respect to wages paid by an employer to a vocational rehabilitation referral or former inmate employed by a technology business owned by the taxpayer for services performed by the individual for another person unless the amount reasonably expected to be received by the employer for the services from the other person exceeds the wages paid by the employer to the individual for such services."

     SECTION 2.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 3.  This Act, upon its approval, shall apply to taxable years beginning after December 31, 2017.

 

 

Report Title:

Income Tax Credit; Former Inmate Hires; Technology Businesses

 

Description:

Provides an income tax credit for wages paid by a technology business owner to employees who were formerly in the custody of the department of public safety.  (SD1)

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.