Bill Text: HI SB2094 | 2020 | Regular Session | Amended

---

Bill Title: Relating To Taxation.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2020-03-09 - Referred to AGR/WLH, FIN, referral sheet 36 [SB2094 Detail]

Download: Hawaii-2020-SB2094-Amended.html

---

THE SENATE	S.B. NO.	2094
THIRTIETH LEGISLATURE, 2020		S.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

 

 

RELATING TO TAXATION.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  In 2005, the legislature enacted Act 183, taking an initial step towards implementing the mandate set forth in Article XI, section 3, of the Constitution of the State of Hawaii to identify, conserve, and protect important agricultural lands.  Part of Act 183, codified as section 205‑43, Hawaii Revised Statutes, provided that the tax policy of the State shall promote the long-term viability of agricultural use of important agricultural lands by, among other things, promoting the maintenance of essential agricultural infrastructure systems, including irrigation systems.

     In 2008, in furtherance of this policy, the legislature established the important agricultural land qualified agricultural cost tax credit.  The purpose of the tax credit was to provide this incentive as a critical component in establishing and maintaining the long-term viability of agriculture on important agricultural lands in the State.  However, since 2008, very few agricultural entities have been able to utilize the tax credit due to the enormous costs associated with agricultural operations and the planning, construction, repair, and maintenance of agricultural infrastructure in the State.

     The legislature continues to find that it is in the public's interest to assist agricultural businesses in establishing and sustaining viable agricultural operations on important agricultural lands by providing incentives, such as income tax credits, to promote, among other things, the development of agricultural infrastructure projects.

     Accordingly, the purpose of this Act is to amend the current law to allow for better utilization of the important agricultural land qualified agricultural cost tax credit by amending the cap amount on the tax credit that may be claimed by a taxpayer in the first, second, and third year of a project's existence.  This will allow a greater number of projects to be financially viable, leading to greater investments in agricultural businesses to ensure future sustainability of agriculture in the State.  It is believed that these amendments will allow for greater improvements to the agricultural businesses in the State and the development of significant and long-lived agricultural infrastructure projects.

     SECTION 2.  Section 235-110.93, Hawaii Revised Statutes, is amended as follows:

     1.  By amending subsection (a) to read:

     "(a)  There shall be allowed to each taxpayer an important agricultural land qualified agricultural cost tax credit that may be claimed in taxable years beginning after the taxable year during which the tax credit under section 235-110.46 is repealed, exhausted, or expired.  The credit shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed.  The tax credit amount shall be determined as follows:

     (1)  In the first year in which the credit is claimed, the lesser of the following:

          (A)  [Twenty-five]            per cent of the qualified agricultural costs incurred by the taxpayer after July 1, 2008; or

          (B)  [$625,000;] $          ;

     (2)  In the second year in which the credit is claimed, the lesser of the following:

          (A)  [Fifteen]            per cent of qualified agricultural costs incurred by the taxpayer after July 1, 2008; or

          (B)  [$250,000;] $          ; and

     (3)  In the third year in which the credit is claimed, the lesser of the following:

          (A)  [Ten]            per cent of the qualified agricultural costs incurred by the taxpayer after July 1, 2008; or

          (B)  [$125,000.] $          .

The taxpayer may incur qualified agricultural costs during a taxable year in anticipation of claiming the credit in future taxable years during which the credit is available.  The taxpayer may claim the credit in any taxable year after the taxable year during which the taxpayer incurred the qualified agricultural costs upon which the credit is claimed.  The taxpayer also may claim the credit in consecutive or inconsecutive taxable years until exhausted."

     2.  By amending subsection (l) to read:

     "(l)  The department of agriculture shall cease certifying credits pursuant to this section for taxable years beginning after December 31, [2021;] 2030; provided that a taxpayer with accumulated, but unclaimed, certified credits may continue claiming the credits in subsequent taxable years until exhausted."

     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, 2019.

 

 

Report Title:

HDOA; Income Tax; Important Agricultural Land Qualified Agricultural Cost Tax Credit

 

Description:

Amends the important agricultural land qualified agricultural cost tax credit by changing the cap amounts of the tax credit to unspecified amounts.  Changes to unspecified amounts the percentage of qualified agricultural costs that may be claimed as a credit.  Extends by 9 years the time period that the Department of Agriculture may certify important agricultural lands qualified agricultural costs.  Effective 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.