Report Title:

Prescription Drugs; Refundable Tax Credit

Description:

Establishes a refundable income tax credit of 10% of the cost of prescription drugs for residents whose income is 200% of the federal poverty level or less.

HOUSE OF REPRESENTATIVES

H.B. NO.

2161

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to prescription drug refundable 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- Refundable prescription drug credit. (a) There shall be allowed to each resident 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 and who files an individual income tax return for a taxable year, a refundable prescription drug tax credit, against the resident taxpayer's individual income tax liability for the taxable year for which the individual income tax return is being filed; provided that:

(1) A resident individual who has no income or no income taxable under this chapter and who is not claimed or is not otherwise eligible to be claimed as a dependent by a taxpayer for federal or Hawaii state income tax purposes may claim this credit; and

(2) 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 amount of the tax credit shall be ten per cent of the costs paid by the taxpayer for a "prescription drug" as the term is defined under section 328-1; 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 refundable prescription drug income tax credit, the taxpayer shall be in compliance with all applicable federal, state, and county statutes, rules, and regulations.

(d) The tax credit under this section shall not be available to:

(1) Any person who has been convicted of a felony and who has been committed to prison and has been physically confined for the full taxable year;

(2) Any person who would otherwise be eligible to be claimed as a dependent but who has been committed to a youth correctional facility and has resided at the facility for the full taxable year; or

(3) Any misdemeanant who has been committed to jail and has been physically confined for the full taxable year.

(e) If the tax credit under this section exceeds the taxpayer's individual income tax liability, the excess of prescription drug tax credits over payments due shall be refunded to the resident taxpayer; provided that prescription drug tax credits properly claimed by a resident individual who has no income tax liability shall be paid to the resident individual. All claims for a refundable prescription drug 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 such forms as may be necessary to claim a tax credit under this section, may require proof of the claim for the tax credit, and may adopt rules pursuant to chapter 91 to effectuate the purposes of this section. The director also may require the taxpayer to furnish information to ascertain the validity of the claim for refundable tax credit made under this section."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2003.

INTRODUCED BY:

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