Bill Text: HI HB475 | 2011 | Regular Session | Amended
Bill Title: Taxation
Spectrum: Slight Partisan Bill (Republican 6-2)
Status: (Introduced - Dead) 2011-02-18 - (H) Passed Second Reading as amended in HD 1 and referred to the committee(s) on FIN with none voting no (0) and Carroll, Herkes, McKelvey excused (3). [HB475 Detail]
Download: Hawaii-2011-HB475-Amended.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
475 |
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TWENTY-SIXTH LEGISLATURE, 2011 |
H.D. 1 |
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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. The legislature finds that most economists predict a slow economic recovery from the global recession of 2008 for Hawai‘i. The potential lack of federal funds, potential increase in medicare payments, need to address our infrastructure repair and shortfall, collective bargaining, and other needs continue to place pressure on state revenues and the state budget. However, the move towards a clean energy economy through the Hawai‘i Clean Energy Initiative, increasing tourist arrival numbers and spending numbers, new projects like Aulani, the new Disney resort at Ko Olina, an influx of federal funds, and accelerated capital improvement projects over the past year, appeared to have Hawai‘i positioned to weather the storm and resume economic growth and employment.
However, countries in Europe are experiencing economic difficulties, and the effects of those difficulties are being felt in the United States and Hawai‘i, and threaten to squelch all progress made so far. The legislature further finds that while there is no one "silver bullet" to solve the economic woes of the State, the solution must include a balanced combination of measures to spur employment, keeping the cost of doing business relatively low for employers so that they can employ workers, reducing the amount of money flowing out of the State, and increasing the amount of money flowing into the State.
Therefore, the purpose of this Act is to assist in reducing the cost of doing business in this State for a set period of time, and to incentivize sectors of the economy that will help bring more money into the state economy. By stimulating the economy in this manner, employers should create more jobs in the export sectors of our economy.
SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§235- Manufacture and export tax credit. (a) There shall be allowed to each taxpayer subject to the tax imposed under this chapter a manufacture and export tax credit that shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter. The tax credit shall be equivalent to an amount up to fifteen per cent of the domestic production gross receipts attributable to the export and sale of a qualifying product to jurisdictions outside of the State.
(b) The credit allowed under this section shall be claimed against the net income tax liability for the taxable year, and shall be subject to the following conditions:
(1) The taxpayer or entity claiming the credit shall be subject to taxation under chapter 237;
(2) The taxpayer or entity shall be in current compliance with all applicable laws and regulations of the department of commerce and consumer affairs;
(3) The taxpayer or entity shall have no outstanding tax liability to the State or its political subdivisions;
(4) The taxpayer or entity claiming the credit shall incur at least fifty per cent of its operating and manufacturing costs, including, but not limited to, rent, labor, and machinery, from sources in the State; and
(5) The taxpayer or entity claiming the credit, before the effective date of Act , Session Laws of Hawaii 2011, shall not be generating income through the export and sale of a qualifying product to jurisdictions outside of the State.
(c) If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of the tax credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted. All claims, including amended 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.
(d) The director of taxation may adopt any rules under chapter 91 and forms necessary to carry out this section.
(e) As used in this section:
"Domestic production gross receipts" means the gross receipts of the taxpayer that are derived from the sale of a qualifying product that was manufactured or produced by the taxpayer in whole or in significant part within the State.
"Export" means transporting to any jurisdiction outside of the State.
"Manufacture" means the process of making products by hand or machinery, especially when carried on systematically with division of labor.
"Net income tax liability" means net income tax liability reduced by all other credits allowed under this chapter.
"Qualifying product" means tangible personal property, including agricultural products, or any computer software.
"Significant part" means at least fifty per cent.
(f) This section shall be applicable to taxable years beginning after December 31, 2011, but not to taxable years beginning after December 31, 2016."
SECTION 3. The revisor of statutes shall insert the number of this Act in subsection (b)(5) of the new section established under section 2 of this Act.
SECTION 4. New statutory material is underscored.
SECTION 5. This Act shall take effect on July 1, 2112.
Report Title:
Taxation
Description:
Establishes temporary tax credit for manufacturing and export industries. Effective 7/1/2112. (HD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
