Report Title:

Education; Tax Credit; Extracurricular Activity

 

Description:

Provides a tax credit to taxpayers that donate money to a public school to support extracurricular activities and character education programs.

 

HOUSE OF REPRESENTATIVES

H.B. NO.

2046

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO TAX CREDITS.

 

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

SECTION 1. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows

"§235- School assistance tax credit. (a) There shall be allowed to each individual taxpayer who is not claimed or is not otherwise eligible to be claimed as a dependent by another taxpayer for federal or Hawaii state individual income tax purposes who files a net income tax return for a taxable year, a school assistance tax credit, which shall be deductible from the taxpayer's net income tax liability imposed by this chapter for the taxable year in which the tax credit is properly claimed; provided that a husband and wife filing separate returns for a taxable year for which a joint return could have been filed by them shall claim only the tax credit to which they would have been entitled had a joint return been filed.

(b) The tax credit shall apply to contributions to a public school made by a taxpayer to support the school's extracurricular activities or character education program. The amount of the tax credit shall be equal to $200 for a single individual or a head of household and $250 for a married couple filing jointly; provided that no refund or payment on account of the tax credit allowed by this section shall be made for amounts less than $1.

(c) To qualify for the income tax credit, the taxpayer shall be in compliance with all applicable federal, state, and county statutes, rules, and regulations.

(d) If the tax credit under this section exceeds the taxpayer's net income tax liability under this chapter, any excess of the tax credit may be used as a credit against the taxpayer's income tax liability for no more than five consecutive taxable years until exhausted.

(e) 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.

(f) Every claim, including amended claims, for the 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 tax credit may be claimed. Failure to meet the filing requirements of this subsection shall constitute a waiver of the right to claim the tax credit.

(g) The principal at each public school receiving contributions pursuant to this section shall determine the specific use of the contribution (with respect to extracurricular activities and character education programs), unless otherwise directed by the donor taxpayer. The taxpayer shall also indicate, on forms provided by the department of taxation, the public school that is to receive the contribution. If no indication is made, the department of education shall make that determination.

(h) The principal of the public school receiving a contribution shall report annually to the department of education on the following:

(1) The total number of fee and cash contributions received during the previous calendar year;

(2) The total dollar amount of fees and contributions received during the previous calendar year;

(3) The total dollar amount of fees and contributions spent by the school during the previous calendar year, categorized by specific extracurricular activity or character education program; and

(4) The total number of children who participated in each extracurricular activity or character education program funded by the fees or contributions during the previous calendar year, categorized by specific extracurricular activity or character education program.

(i) As used in this section:

"Character education program" means a program that teaches and supports at least five of the following attributes: attentiveness, caring citizenship, compassion, diligence, discernment, forgiveness, generosity, gratefulness, initiative, orderliness, respect, responsibility, sincerity, trustworthiness, virtue, or wisdom.

"Extracurricular activity" means a school-sponsored activity that requires enrolled students to pay a fee in order to participate in the activity and includes fees for: uniforms for band or athletic activities, equipment, scientific laboratory materials, or in- or out-of-state trips that are solely for competitive events. Extracurricular activity does not include any senior trips or events that are purely recreational, amusement, or tourist activities.

(j) The director of taxation or the department of education, as the case may be, shall prepare such forms as may be necessary to claim a tax credit under this section, and may adopt rules pursuant to chapter 91 to effectuate the purposes of this section.

(k) The department of taxation shall report to the legislature annually, no later than twenty days prior to the convening of each regular session, on the number of taxpayers claiming the tax credit and the total cost of the tax credit to the State during the past year."

SECTION 2. Chapter 302A, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§302A- Extracurricular activity and character education trust account. There is established within the state treasury the extracurricular activity and character education trust account, into which shall be deposited all moneys collected pursuant to section 235- . The trust account shall be administered by the department and the funds used pursuant to section 235- ."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2003.

INTRODUCED BY:

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