Bill Text: HI SB3048 | 2012 | Regular Session | Amended
Bill Title: Income Tax Credit; Hotel and Resort Construction and Renovation; Transient Accommodations Tax
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2012-04-17 - (H) Received notice of Senate conferees (Sen. Com. No. 757). [SB3048 Detail]
Download: Hawaii-2012-SB3048-Amended.html
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THE SENATE |
S.B. NO. |
3048 |
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TWENTY-SIXTH LEGISLATURE, 2012 |
S.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO TRAVEL AND TOURISM STIMULUS INITIATIVES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that tourism is Hawaii's principal industry, with visitor expenditures contributing $11,100,000,000 to Hawaii's economy in 2010, and that amount is estimated to be $12,600,000,000 for 2011. Tourists' stays at hotels and resorts, shopping, and attendance at attractions and sports and recreational activities, contribute significantly to Hawaii's tax base.
The legislature finds that Hawaii's travel and tourism industry must continue to refresh its product offering to support and attract new and repeat travelers, compete with other global destinations, and continue to distinguish Hawaii as a unique travel and tourist destination. Hawaii cannot continue to rely on aging hotel and resort infrastructure and hope for the best. Hawaii is at risk of losing its competitive edge in the travel and tourism industry to emerging tourist destinations that are competing for Hawaii's travel and tourism business. Traditional financing has failed to generate new construction and renovation work, and jobs are lacking.
The legislature finds that additional stimulus in the form of tax relief is necessary to provide an impetus to finance new construction and renovation of hotels and resorts, and allow new or newly renovated hotels and resorts to stabilize during operations, thereby generating jobs.
The purpose of this Act is to provide a stimulus, through tax relief, for:
(1) Employer hiring for certain individuals at new or renovated hotel and resort facilities for seven years after substantial completion of construction and renovation; and
(2) Large hotel and resort construction and renovation projects for seven years after substantial completion of construction and renovation.
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 tax credit for hiring certain individuals at new or renovated hotel or resort facilities. (a) Each qualified employer shall be allowed a tax credit for wages paid to each qualified employee. The amount of the tax credit shall be 4.5 per cent of the wages paid by the qualified employer to the qualified employee during the taxable year.
(b) All claims for a tax credit under this section shall be filed with the department of taxation 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 claim the credit in compliance with this section shall constitute a waiver of the right to claim the credit.
(c) If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of the credit over liability shall be refunded to the taxpayer; provided that no refunds or payment on account of the tax credits allowed by this section shall be made for amounts less than $1.
(d) The tax credit allowed under this section shall be available for the seven taxable years following the end of the taxable year in which the certified facility was substantially completed as defined under section 237- (f).
(e) As used in this section:
"Certified facility" means hotel facility or resort facility that was the subject of a pre-certification issued by the department under section 237- (c).
"Department" means the department of business, economic development, and tourism.
"Qualified employee" means an individual, with respect to the taxable year for which the tax credit under this section is claimed, who:
(1) Was employed at any time during the taxable year by a qualified employer at a certified facility;
(2) Certified by signed affidavit or declaration that the individual was not employed for more than forty hours by the qualified employer at the certified facility during the ninety-day period ending on the date the individual began employment at the certified facility; and
(3) Was not employed by the qualified employer to replace another employee of the employer at the certified facility unless the other employee separated from employment voluntarily or for cause.
"Qualified employer" means an employer, with respect to the taxable year for which the tax credit under this section is claimed, that owned or operated a certified facility.
"Wages" means the hourly wage or salary of the qualified employee."
SECTION 3. Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§237- Hotel and resort construction and renovation tax exemption. (a) Each taxpayer shall be exempt from the taxes imposed by this chapter on the gross income earned from the construction or renovation of the hotel facility or resort facility.
(b) The taxpayer shall claim and report the exemption on the annual or periodic tax returns required under this chapter for the taxable year or period in which the taxpayer earned the gross income claimed exempt from tax under this section.
(c) The exemption under subsection (a) shall be conditioned on the department pre-certifying the construction or renovation of a hotel facility or resort facility as satisfying the conditions of this section based upon an application or amended application that:
(1) Is submitted by the owner, developer, or general contractor of the hotel facility or resort facility at any time before or during construction or renovation of the hotel facility or resort facility;
(2) Describes, in sufficient detail, the construction or renovation of the hotel facility or resort facility;
(3) Estimates the costs of construction or renovation and tax exemptions and credits to be claimed under this section and section 235- ; and
(4) Includes all other information prescribed by the department.
(d) The department shall maintain records of the names of taxpayers claiming the exemption under this section, the amount of the exemption claimed, and the construction or renovation of a hotel facility or resort facility. The department shall prepare an annual report of the records that shall be made public.
(e) The department shall adopt procedures, rules, and forms for the pre-certification of the construction or renovation of a hotel facility or resort facility under subsection (c) similar to those adopted pursuant to sections 201H-36 and 237-29, to the extent applicable. The department may establish, charge, and collect a reasonable service fee, as necessary, in connection with the pre-certification under subsection (c).
(f) As used in this section:
"Construction or renovation of a hotel facility or a resort facility" means the planning, design, construction, furniture and fixtures above routine maintenance, materials, and equipment related to new construction, alterations, remediation, or modifications of a hotel facility or resort facility in the State that is substantially completed by June 30, 2017; provided that:
(1) The construction or renovation costs exceed $50,000,000 by June 30, 2017; and
(2) The general contractor and any subcontractors of the construction or renovation are signatory parties to collective bargaining agreements with the appropriate construction trade unions covering construction work in the State of Hawaii.
Construction or renovation costs shall not include costs incurred as the result of planned or routine maintenance or refurbishments that would ordinarily take place throughout the normal course of business.
"Department" means the department of business, economic development, and tourism.
"Hotel facility" means a hotel or hotel-condominium as defined in section 486K-1 and includes a time share facility or project.
"Resort facility" means a full-service lodging facility that provides access to or offers a range of amenities and recreation facilities to emphasize a leisure experience and includes commercial, retail, and attraction facilities located within the areas surrounding or related to the lodging facility within the same county of the State.
"Substantially completed" means the state of condition at which the hotel facility or resort facility or a portion thereof is sufficiently complete, in accordance with the contract documents, so that the hotel facility or the resort facility or a portion thereof can be occupied or used for its intended purpose, without regard to the completion of furnishings, fixtures, and interior finishes."
SECTION 4. Section 238-3, Hawaii Revised Statutes, is amended by amending subsection (j) to read as follows:
"(j) The tax imposed by this chapter
shall not apply to any use of property, services, or contracting exempted by
section 237-26 [or section], 237-29[.], or
237- ."
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect on July 1, 2012; provided that:
(1) Section 2 shall apply to taxable years beginning after December 31, 2011; and
(2) Sections 3 and 4 shall apply to taxable periods beginning after June 30, 2012.
Report Title:
Employer Tax Credit for Hiring of Individuals; Tax Exemption for Hotel and Resort Construction and Renovation
Description:
Provides an employer tax credit of 4.5 per cent of the wages paid by a qualified employer to certain employees for seven years after completion of hotel and resort construction and renovation; provides a general excise tax exemption for hotel and resort construction and renovation and for the operation of these hotels and resorts for seven years after substantial completion of construction and renovation; requires construction and renovation of a hotel facility or resort facility to be completed by 6/30/2017 to be eligible for the exemption; employer tax credit applies to taxable years beginning after 12/31/2011; hotel and resort construction and renovation general excise tax exemption applies to taxable periods beginning after 6/30/2012. (SD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
