Report Title:

Income Tax Credit; Prepaid Health Insurance Premiums

Description:

Allows certain businesses to claim an income tax credit of up to fifteen percent of prepaid health insurance premiums paid for employees and their families.

HOUSE OF REPRESENTATIVES

H.B. NO.

725

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

Relating to income tax.

 

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- Prepaid health insurance tax credit. (a) There shall be allowed to each qualified employer subject to either the individual or corporation income tax imposed by this chapter, a prepaid health insurance tax credit which shall be deducted from the employer's gross income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed.

The amount of the tax credit shall be equal to fifteen per cent of the amount of premiums paid by an employer to a prepaid health care contractor under chapter 393 for a prepaid health care plan, including premiums paid for an employee's family.

To qualify for the tax credit under this section for any taxable year, an employer shall have an average annual number of employees of not more than twenty-five, and a gross annual income of not more than $5,000,000.

(b) If the tax credit claimed by a taxpayer under this section exceeds the amount of the taxpayer's gross income tax liability, the excess of credit over the amount of the taxpayer's gross income tax liability shall be paid to the taxpayer; provided that the tax credit properly claimed by a taxpayer who has no income tax liability shall be paid to the taxpayer; provided further that no refunds or payments on account of the tax credit allowed by this section shall be made for amounts less than $1.

(c) The director of taxation shall prepare such forms as may be necessary to claim a credit under this section, may require proof of the claim for the tax credit, and may adopt rules pursuant to chapter 91 relating to the implementation of this section.

(d) All of the provisions relating to assessments and refunds under this chapter and under section 231-23(c)(1) shall apply to the tax credit under this section.

(e) Claims for the tax credit under this section, including any amended claims, shall be filed on or before the end of the twelfth month following the taxable year for which the credit may be claimed Failure to comply with the foregoing provisions shall constitute a waiver of the right to claim the credit."

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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