Bill Text: HI HB1784 | 2024 | Regular Session | Amended
Bill Title: Relating To Taxation.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed) 2024-03-20 - Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM. [HB1784 Detail]
Download: Hawaii-2024-HB1784-Amended.html
HOUSE OF REPRESENTATIVES |
H.B. NO. |
1784 |
THIRTY-SECOND LEGISLATURE, 2024 |
H.D. 1 |
|
STATE OF HAWAII |
S.D. 1 |
|
|
|
|
|
||
|
A BILL FOR AN ACT
RELATING TO TAXATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that upgrading and modernizing equipment necessary for data storage will improve the resilience against physical damage caused by weather-related events and cybersecurity threats and ensure the continued, uninterrupted provision of services to Hawaii businesses, state government and satellite agencies, and residents.
Leveraging modern and up-to-date technology to support critical operation systems is a significant benefit of data center operations, where one of the core missions is to stay at the forefront of technological advancements, enabling reliable data access 99.999 per cent of the time.
In
mid-2023, dozens of Hawaii businesses in the health care, airline, and finance
fields, as well as state agencies, were operationally disrupted due to a local
data outage, frustrating customers and residents.
Over the last decade, Hawaii has adopted various tax incentives
to encourage the development of high-technology businesses in the State. The focus on high technology is commendable
and recognized as a policy direction that will yield greater investment from
within and outside the State.
Accordingly, the purpose of this Act is to temporarily reinstate the technology infrastructure renovation tax credit and expand the definition of "technology-enabled infrastructure" to include data servers.
SECTION 2. Section 235-110.51, Hawaii Revised Statutes, is amended as follows:
1. By amending subsections (b) and (c) to read:
"(b) The amount of the credit shall be four per
cent of the renovation costs incurred during the taxable year [for each
commercial building located] in Hawaii.
(c)
In the case of a partnership, S corporation, estate, trust, or [any
developer of a commercial building,] other entity taxed as a partnership
for federal income tax purposes, the tax credit allowable is for 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. Distribution and share of credit shall be
determined pursuant to section 235‑110.7(a)."
2. By amending subsections (h) and (i) to read:
"(h) The tax credit allowed under this section
shall [not] be available for taxable years beginning after [December
31, 2010.] December 31, 2024, but shall not be available for taxable
years beginning after December 31, 2027.
(i) As used in this section:
"Data server" means a computer system designed and configured for the process, storage, retrieval, and management of electronic data and provide database management and access services to client computers on a computer network.
"Net income tax liability" means income tax liability reduced by all other credits allowed under this chapter.
"Renovation costs" means
costs incurred after December 31, 2000, to plan, design, install, construct, [and]
repair, replace, monitor, test or purchase technology-enabled
infrastructure machinery and equipment [to]; or provide a
commercial building with technology-enabled infrastructure.
"Technology-enabled infrastructure" means:
(1) Either:
[(1)] (A) High speed
telecommunications systems that provide [Internet], in whole or in
part, internet access, direct satellite communications access, and
videoconferencing facilities; or
(B) Data
servers;
(2) Physical security systems that identify and verify valid entry to secure spaces, detect invalid entry or entry attempts, and monitor activity in these spaces;
(3) Environmental systems to include heating, ventilation, air conditioning, fire detection and suppression, and other life safety systems; and
(4) Backup and emergency electric power systems."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act shall take effect on July 1, 2050, and shall apply to taxable years beginning after December 31, 2024.
Report Title:
Technology Infrastructure Renovation Tax Credit; Reinstatement; Technology-Enabled Infrastructure; Data Servers
Description:
For taxable years beginning after 12/31/2024, temporarily reinstates the Technology Infrastructure Renovation Tax Credit and expands the definition of "technology-enabled infrastructure" to include data servers. Sunsets the tax credit for taxable years beginning after 12/31/2027. Takes effect 7/1/2050. (SD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.