HOUSE OF REPRESENTATIVES

H.B. NO.

796

TWENTY-SIXTH LEGISLATURE, 2011

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO TAXATION.

 

 

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

 


SECTION 1. The purpose of this Act is to limit the amount of income tax credits that a taxpayer may claim.

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

"235- Credits against income; claim limitation. (a) Notwithstanding any law to the contrary, and as otherwise provided in this section, any tax credit that may be claimed against a taxpayer's net income tax liability under this chapter, or chapter 239, 241, or 431, for taxable years beginning on or after January 1, 2011, and ending before January 1, 2016, no claim for business credit, including carryover business credit from prior taxable years, shall exceed eighty per cent of a taxpayer's tax liability for the taxable year in which the credit is claimed.

(b) As used in this section, "business credit" means all tax credits allowable under this chapter, chapter 239, 241, or 431, except for the following tax credits:

(1) Section 235-15 (relating to a tax credit for child passenger restraint systems);

(2) Section 235-55 (relating to a tax credit for resident taxpayers);

(3) Section 235-55.6 (relating to a tax credit for household and dependent care services);

(4) Section 235-55.7 (relating to a tax credit for low-income household renters);

(5) Section 235-55.85 (relating to the refundable food/excise tax credit);

(6) Section 239-6.5 (relating to a tax credit for lifeline telephone service subsidy);

(7) Any credit against any tax required by the Constitution or laws of the United States; and

(8) The tax credit under section 235-12.5 for a renewable energy technology system installed in a single-family residential property. For this paragraph, the tax credit for a renewable energy technology system installed in a multi-family residential property or commercial property shall be deemed a "business credit".

(c) Any business credit generated from January 1, 2011, to December 31, 2015, shall be subject to the credit claim limitation provided in subsection (a).

Any such business credit that is unclaimed during that period because of the credit claim limitation of subsection (a) may be used against a taxpayer's tax liability in the taxable years beginning on or after January 1, 2016, until exhausted.

(d) Any business credit generated and applicable to a taxable year beginning before January 1, 2011, that resulted in a credit carryover, shall be subject to the limitation on credit claims provided in subsection (a); provided that, notwithstanding any provision creating a waiver of a tax credit by failing to make a claim within a specified period of time for any business tax credit, any business tax credit carryover generated and applicable to a taxable year beginning before January 1, 2011, may be used against a taxpayer's tax liability in the taxable years beginning on or after January 1, 2016, until exhausted.

(e) In determining the priority for credit claims made pursuant to this section, credits generated during taxable years beginning on or after January 1, 2011, and ending before January 1, 2016, shall be claimed first, and credits generated in taxable years beginning prior to January 1, 2011, shall be claimed thereafter; provided that, with regard to any business tax credit properly claimed for a taxable year beginning before January 1, 2011, the specified period of time established to exhaust that business tax credit shall be tolled until such time that business tax credits accrued for the period beginning January 1, 2011, and ending before January 1, 2016, have been exhausted.

(f) This section shall apply to taxable years beginning on or after January 1, 2011, and shall not apply to taxable years beginning on or after January 1, 2016."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2011.

 

INTRODUCED BY:

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Report Title:

Income Tax; Tax Credit Ceiling

 

Description:

Reduces certain allowable tax credits for taxable years beginning on or after 1/1/11, and ending before 1/1/16. Imposes a temporary tax ceiling for certain tax credits.

 

 

 

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