Bill Text: HI SB975 | 2014 | Regular Session | Introduced

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Bill Title: Agriculture; Livestock Feed; Livestock Feed Development; Tax Credit; Appropriation ($)

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2013-12-18 - Carried over to 2014 Regular Session. [SB975 Detail]

Download: Hawaii-2014-SB975-Introduced.html

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THE SENATE	S.B. NO.	975
TWENTY-SEVENTH LEGISLATURE, 2013
STATE OF HAWAII

A BILL FOR AN ACT

 

 

relating to agriculture.

 

 

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-     Livestock feed tax credit.  (a)  There shall be allowed to each qualified producer subject to the tax imposed by this chapter a livestock feed tax credit that shall be applied to the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year for which the credit is properly claimed.

     For each taxable year, a qualified producer may claim a tax credit in the amount of the lesser of:

     (1)  Fifteen per cent of livestock feed costs incurred by the qualified producer; or

     (2)  $200,000.

     (b)  No other credit may be claimed under this chapter for livestock feed costs for which a credit is claimed under this section for the taxable year.

     (c)  The cost upon which the tax credit is computed shall be determined at the entity level.  In the case of a partnership, S corporation, estate, trust, or other pass through entity, distribution and share of the credit shall be determined by rule.

     If a deduction is taken under section 179 (with respect to election to expense certain depreciable business assets) of the Internal Revenue Code, no tax credit shall be allowed for that portion of the livestock feed costs for which a deduction was taken.

     The basis of eligible property for depreciation or accelerated cost recovery system purposes for state income taxes shall be reduced by the amount of credit allowable and claimed.  No deduction shall be allowed for that portion of otherwise deductible livestock feed costs on which a credit is claimed under this section.

     (d)  If the credit under this section exceeds the taxpayer's net income tax liability for the taxable year, the excess of the credit over liability shall be refunded to the taxpayer; provided that no refunds or payments on account of the credits allowed by this section shall be made for amounts less than $1.

     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 credit is claimed.  Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

     (e)  The director of taxation:

     (1)  Shall prepare any forms that 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 to effectuate this section.

     (f)  The department of agriculture shall:

     (1)  Maintain records of the total amount of livestock feed costs for each taxpayer claiming a credit;

     (2)  Verify the amount of the livestock feed costs claimed by each taxpayer claiming the tax credit for each taxable year;

     (3)  Calculate the total livestock feed costs claimed by all taxpayers claiming the tax credit in each taxable year; and

     (4)  Certify the total amount of the tax credit claimed for each taxpayer and for all taxpayers claiming the credit in each taxable year.

     Upon each determination, the department of agriculture shall issue a certificate to the taxpayer verifying the taxpayer's qualified producer status, the amount of livestock feed costs claimed by the taxpayer, and the credit amount certified for the taxpayer for each taxable year.

     Notwithstanding any other law to the contrary, the information required by this subsection shall be available for public inspection and dissemination under chapter 92F.

     (g)  The taxpayer shall file the certificate with the taxpayer's tax return with the department of taxation.  Notwithstanding the department of agriculture's certification authority under this section, the director of taxation may audit and adjust the certification to conform to the facts.

     (h)  The department of agriculture shall certify no more than $1,500,000 in credits in the aggregate for all taxpayers in the taxable year beginning after December 31, 2012, and ending before January 1, 2014.  In no instance shall the department of taxation allow the aggregate amount of tax credits claimed to exceed $1,500,000 in the taxable year.  To comply with this restriction, the department of agriculture shall certify credits on a first come, first served basis.

     (i)  As used in this section:

     "Livestock feed costs" means the purchase amount of all edible materials consumed by a qualified producer's cows, goats, sheep, poultry, sows, beef cattle, fish, or crustaceans, which contribute energy or nutrients to the animal's diet, and which are distributed or imported.

     "Poultry products" means chicken eggs that are uncooked in shell, egg-laying chicks, meat bird chicks, pullets, broilers, fryers, and laying chicken hens.

     "Qualified producer" means any person that, at the time of application for and receipt of the tax credit under this section, is in the business of producing:

     (1)  Milk from a herd, located in the State, of not fewer than three hundred fifty cows or one hundred lactating milking goats;

     (2)  Poultry products from a flock, raised and located in the State, of not fewer than fifty birds;

     (3)  Pork from a herd, raised and located in the State, of not fewer than fifty sows;

     (4)  Beef that is raised in the State; provided that producers who finish at least one hundred head of beef cattle annually shall be eligible for this tax credit;

     (5)  Sheep that are raised in the State; provided that producers with current annual sales of at least thirty sheep or lambs shall be eligible for this tax credit; or

     (6)  Fish and crustaceans, raised in the State; provided that producers with current annual sales of at least two thousand pounds of fish, or crustaceans, or both shall be eligible for this tax credit."

     SECTION 2.  Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§235-     Livestock feed development tax credit.  (a)  There shall be allowed to each qualified producer subject to the tax imposed by this chapter a livestock feed development tax credit that shall be applied to the taxpayer's net income tax liability, if any, imposed by this chapter.

     For livestock feed development costs, a qualified producer may claim a tax credit as follows:

     (1)  During the taxable year beginning after December 31, 2013, and ending before January 1, 2015:

         (A)  Ten per cent of livestock feed development costs incurred by the qualified producer; or

         (B)  $225,000;

          whichever is less.

     (2)  During the taxable year beginning after December 31, 2014, and ending before January 1, 2016:

         (A)  Five per cent of livestock feed development costs; or

         (B)  $225,000;

          whichever is less.

     (b)  No other credit may be claimed under this chapter for livestock feed development costs for which a credit is claimed by the taxpayer under this section for the taxable year.

     (c)  The cost upon which the tax credit is computed shall be determined at the entity level.  In the case of a partnership, S corporation, estate, trust, or other pass through entity, distribution and share of the credit shall be determined by rule.

     If a deduction is taken under section 179 (with respect to election to expense certain depreciable business assets) of the Internal Revenue Code, no tax credit shall be allowed for that portion of the livestock feed development costs for which a deduction was taken.

     The basis of eligible property for depreciation or accelerated cost recovery system purposes for state income taxes shall be reduced by the amount of credit allowable and claimed.  No deduction shall be allowed for that portion of otherwise deductible livestock feed development costs on which a credit is claimed under this section.

     (d)  If the credit under this section exceeds the taxpayer's net income tax liability for the taxable year, the excess of the credit over liability shall be refunded to the taxpayer; provided that no refunds or payments on account of the credits allowed by this section shall be made for amounts less than $1.

     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 credit is claimed.  Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

     (e)  The director of taxation:

     (1)  Shall prepare any forms that 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 to effectuate this section.

     (f)  The department of agriculture shall:

     (1)  Maintain records of the total amount of livestock feed development costs for each taxpayer claiming a credit;

     (2)  Verify the amount of the livestock feed development costs claimed by each taxpayer claiming the tax credit for each taxable year;

     (3)  Calculate the total livestock feed development costs claimed by all taxpayers claiming the tax credit for each taxable year; and

     (4)  Certify the total amount of the tax credit claimed for each taxpayer and for all taxpayers claiming the credit in each taxable year.

     Upon each determination, the department of agriculture shall issue a certificate to the taxpayer verifying the taxpayer's qualified producer status, the amount of livestock feed development costs claimed by the taxpayer, and the credit amount certified for the taxpayer for each taxable year.  Notwithstanding any other law to the contrary, this information shall be available for public inspection and dissemination under chapter 92F.

     (g)  The taxpayer shall file the certificate with the taxpayer's tax return with the department of taxation.  Notwithstanding the department of agriculture's certification authority under this section, the director of taxation may audit and adjust certification to conform to the facts.

     (h)  The department of agriculture shall certify no more than $500,000 in credits in the aggregate for all taypers for each taxable year.

     In no instance shall the department of taxation allow the aggregate amount of tax credits claimed to exceed $500,000 in any taxable year.

     (i)  As used in this section:

     "Livestock feed development costs" means the purchase amount of materials or equipment needed to produce edible materials consumed by the qualified producer's cows, goats, poultry, sows, beef cattle, sheep, fish, or crustaceans which contribute energy or nutrients to the animal's diet, including seeds, fertilizer, insecticides, and fungicides used for the purposes of producing feed.

     "Poultry products" means chicken eggs that are uncooked in shell, egg-laying chicks, meat bird chicks, pullets, broilers, fryers, and laying chicken hens.

     "Qualified producer" means any person that, at the time of application for and receipt of the tax credit under this section, is in the business of producing:

     (1)  Milk from a herd, located in the State, of not fewer than three hundred fifty cows or one hundred lactating milking goats;

     (2)  Poultry products from a flock, raised and located in the State, of not fewer than fifty birds;

     (3)  Pork from a herd, raised and located in the State, of not fewer than fifty sows;

     (4)  Beef that is raised in the State; provided that producers who finish at least one hundred head of beef cattle annually shall be eligible for this tax credit;

     (5)  Sheep that are raised in the State; provided that producers with current annual sales of at least thirty sheep or lambs shall be eligible for this tax credit; or

     (6)  Fish and crustaceans, raised in the State; provided that producers with current annual sales of at least two thousand pounds of fish, or crustaceans, or both shall be eligible for this tax credit."

     SECTION 3.  Section 235-110.93, Hawaii Revised Statutes, is amended by amending subsection (h) to read as follows:

     "(h)  [If in any taxable year the] The aggregate annual amount of certified important agricultural land qualified agricultural cost tax credits [reaches $7,500,000 in the aggregate,] in any taxable year shall not exceed the following:

     (1)  $6,000,000 for the taxable year beginning after December 31, 2012, and ending before January 1, 2014;

     (2)  $7,000,000 per taxable year for the taxable years beginning after December 31, 2013, and ending before January 1, 2016; and

     (3)  $7,500,000 per taxable year for all other successive taxable years.

     If in any taxable year the annual amount of certified credits reaches the limit provided by this subsection, the department of agriculture shall immediately discontinue certifying credits and notify the department of taxation.  In no instance shall the department of agriculture certify a total amount of credits exceeding [$7,500,000 per taxable year.] the annual aggregate amount limit of certified credits per taxable year provided by this subsection.  To comply with this restriction, the department of agriculture shall certify credits on a first come, first served basis.

     The department of taxation shall not allow the aggregate amount of credits claimed to exceed that amount per taxable year."

     SECTION 4.  There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2013-2014 for staffing or other expenses necessary to implement the tax credits established or amended by this Act.

     The sum appropriated shall be expended by the department of agriculture for the purposes of this Act.

     SECTION 5.  There is appropriated out of the general revenues of the State of Hawaii the sum of $          or so much thereof as may be necessary for fiscal year 2013-2014 for staffing and consultant expenses necessary to implement the tax credits established or amended by this Act.

     The sum appropriated shall be expended by the department of taxation for the purposes 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, 2013; provided that:

     (1)  Section 1 shall take effect on January 1, 2013, and shall apply to the taxable year beginning after December 31, 2012, and ending before January 1, 2014; and

     (2)  Section 2 shall take effect on January 1, 2014, and shall apply to the taxable years beginning after December 31, 2013, and ending before January 1, 2016.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

Agriculture; Livestock Feed; Livestock Feed Development; Tax Credit; Appropriation

 

Description:

Amends the important agricultural land qualified agricultural cost tax credit by changing the tax credit cap to $6,000,000 per year for the 2013 tax year and $7,000,000 per year for the 2014 and 2015 tax years, and $7,500,000 per year thereafter.  Creates a livestock feed tax credit from 1/1/2013 to 12/31/2013.  Creates livestock feed development tax credit from 1/1/2014 to 12/31/2015.  Appropriates funds for staffing and consulting expenses.

 

 

 

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