Bill Text: HI HB1653 | 2011 | Regular Session | Introduced
Bill Title: Taxation; Hotel Construction and Renovations
Spectrum: Partisan Bill (Democrat 6-0)
Status: (Introduced - Dead) 2011-01-31 - (H) The committee(s) recommends that the measure be deferred. [HB1653 Detail]
Download: Hawaii-2011-HB1653-Introduced.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
1653 |
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TWENTY-SIXTH LEGISLATURE, 2011 |
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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. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§235- Hotel and resort property construction and renovation tax credit. (a) There shall be allowed to each taxpayer, subject to the taxes imposed by this chapter and chapter 237D, a tax credit which shall be deductible from the taxpayer's net income tax liability, if any, imposed for the taxable year in which the credit is properly claimed.
The amount of the credit claimed under this section shall be:
(1) Seven per cent of the construction or renovation costs over $1,000,000 to a maximum of $10,000,000 in the aggregate; and
(2) Ten per cent of the construction or renovation costs over $10,000,000 to a maximum of $100,000,000 in the aggregate,
incurred during the taxable year for each qualified hotel facility located in Hawaii; provided that the amount of credit claimed shall not include the construction or renovation costs for which another credit was claimed for the taxable year; and provided further that the construction or renovation costs are incurred before December 31, 2016.
In the case of a partnership, S corporation, estate, trust, or association of a qualified hotel facility, timeshare owners association, or any developer of a timeshare project, the tax credit allowable shall be for construction or renovation 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.
If a deduction is taken under Section 179 (with respect to election to expense depreciable business assets) of the Internal Revenue Code, no tax credit shall be allowed for that portion of the construction costs, renovation costs, or both costs for which the deduction is 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. In the alternative, the taxpayer shall treat the amount of the credit allowable and claimed as a taxable income item for the taxable year in which it is properly recognized under the method of accounting used to compute taxable income.
(b) The credit allowed under this section shall be claimed against the net income tax liability for the taxable year.
(c) If the tax credit under this section exceeds the taxpayer's tax liability, the excess of credit over liability may be used as a credit against the taxpayer's tax liability in subsequent years until exhausted.
(d) 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. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.
(e) 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 credit made under this section and may adopt rules pursuant to chapter 91 necessary to effectuate the purposes of this section.
(f) The tax credit allowed under this section shall be available for taxable years beginning after December 31, 2010, and shall not be available for taxable years beginning after December 31, 2015.
(g) Renovation or construction costs financed, in whole or in part, with funds that represent government grants, government-issued loans, or property assessed clean energy financing, shall not be eligible for the tax credit under this section.
(h) There shall be a total annual cap on tax credits granted under this section of $50,000,000.
(i) As used in this section:
"Construction or renovation cost" means any costs incurred in Hawaii after December 31, 2010, and before January 1, 2016, for the plans, design, construction, and equipment related to new construction, alteration, or modification of a qualified hotel facility.
"Net income tax liability" means income tax liability reduced by all other credits allowed under this chapter.
"Qualified hotel facility" means a:
(1) Hotel, hotel-condominium, or condominium-hotel as defined in section 486K-1;
(2) Time share facility or project; or
(3) Commercial building or facility located within a qualified resort area.
"Qualified resort area" means an area designated for hotel use, resort use, or transient vacation rentals, pursuant to county authority under section 46-4, or where the county, by its legislative process, designates hotel, transient vacation rental, or resort use."
SECTION 2. New statutory material is underscored.
SECTION 3. This Act shall take effect on July 1, 2011, and shall apply to taxable years beginning after December 31, 2010.
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INTRODUCED BY: |
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Report Title:
Taxation; Hotel Construction and Renovations
Description:
Provides a seven to ten per cent tax credit for construction and renovation costs on hotel property through December 31, 2015. Effective July 1, 2011.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
