Report Title:

Taxes; Employee Assistance Programs

Description:

Provides a tax credit for companies that implement employee assistance programs. (HB1732 HD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

1732

TWENTY-SECOND LEGISLATURE, 2004

H.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

rELATING TO Taxes.

 

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

SECTION 1. The legislature finds that there is a substantial number of individuals in the workplace with substance abuse problems. Typically, individuals with these types of problems do not seek treatment until it is too late. A disastrous result of this delay is that these individuals often lose their jobs and their health care coverage.

It has long been realized that prevention, along with treatment and rehabilitation, have a tremendous effect on stemming the tide of substance abuse. Employee Assistance Programs (EAP) provide the opportunity for individuals to seek, anonymously, treatment and counseling services for substance abuse problems, thus reducing the stigma that may prevent an individual from seeking assistance. This is a program that benefits everyone involved and one that employers should consider providing.

The legislature also finds that one way to encourage employers to provide programs that assist their employees with their substance abuse problems is to offer tax credits for this expense.

The purpose of this Act is to provide employers with an incentive to implement employee assistance programs through a tax credit.

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

"§235- Employee assistance program tax credit. (a) There shall be allowed to each taxpayer subject to the taxes imposed by this chapter, an employee assistance program tax credit which 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.

(b) The amount of the credit shall be     per cent of the program costs incurred during the taxable year, and shall be limited to $    per employee per year. The taxpayer shall be allowed a maximum total credit of $   .

(c) In the case of a partnership, S corporation, estate, or trust, the tax credit allowable is for program 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 of 1986, as amended, no tax credit shall be allowed for those costs for which the deduction is taken.

The basis for eligible property for depreciation of accelerated cost recovery system purposes for state income taxes shall be reduced by the amount of credit allowable and claimed.

(d) If the tax credit under this section exceeds the taxpayer's income tax liability, the excess credit over liability shall not be refunded to the taxpayer and shall not be used as a credit against the taxpayer's income tax liability in subsequent years.

(e) 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.

(f) The director of taxation shall prepare forms as 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 procedures necessary to effectuate the purposes of this section.

(g) As used in this section:

"Employee assistance program" means:

(1) A program offered by an employer to its employees consisting of counseling, assessment, and referral services designed to help employees and their dependents resolve personal problems that may affect their health and job performance; and

(2) A program which provides services through certified employee assistance program counselors who have a masters or doctorate degree in a counseling-related field with specialized training as an employee assistance professional.

"Net income tax liability" means income tax liability reduced by all other credits allowed under this chapter.

"Program costs" means costs incurred after December 31, 2003, to implement, coordinate, equip, operate, maintain, and support an employee assistance program."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2004; provided that section 2 shall apply to taxable years beginning after December 31, 2003.