Landing fees; tax credit
Provides a tax credit for landing fees for airlines that have Honolulu-based fleets.
TWENTY-SECOND LEGISLATURE, 2003
STATE OF HAWAII
A BILL FOR AN ACT
relating to airlines.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Currently, only two, major commercial airlines have Honolulu-based fleets. Because of the high costs of maintaining such an operation in Hawaii, many commercial airlines have been forced to close fleets in Hawaii as a quick money-saving alternative.
The legislature recognizes that airline crews based in Hawaii have provided economic opportunities to our local businesses. The legislature believes that providing a tax credit to commercial airlines will encourage Honolulu-based fleets to stay in Hawaii and encourage other airlines to start-up Honolulu-based fleets. The legislature further believes that this in turn will bolster the state's economy.
The purpose of this Act is to assist commercial airlines by providing a tax credit on landing fees.
SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§235- Airport landing fees tax credit. (a) Each principal operator of a commercial airline that has a Honolulu- based fleet who files an individual or corporate net income tax return for a taxable year may claim an income tax credit under this section against the Hawaii state individual or corporate net income tax.
(b) The tax credit shall be per cent of the landing fees imposed under section 261-7.5 and paid by the principal operator during the taxable year.
(c) The tax credit claimed under this section by the principal operator shall be deductible from the principal operator's individual or corporate income tax liability, if any, for the tax year in which the credit is properly claimed.
(d) If the tax credit claimed by the principal operator under this section exceeds the taxpayer's liability in the tax year the credit is taken, the excess of credit over payments due may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted; provided that the tax credit properly claimed by a principal operator who has no income tax liability shall be paid to the principal operator; and provided further no refunds or payments on account of the tax credit allowed by this section shall be made for amounts less than $1.
(e) 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.
(f) All 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.
(g) Claims for the tax credit under this section, including any amended claims thereof, 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 properly and timely claim the credit shall constitute a waiver of the right to claim the credit.
(h) This section shall apply to taxable years beginning after December 31, 2002, but not to taxable years beginning after December 31, .
(i) As used in this section:
"Principal operator" means any individual or corporate resident taxpayer who derives at least fifty-one per cent of the taxpayer's gross annual income from commercial airlines operations.
SECTION 3. The department of taxation shall submit a yearly report to the legislature no later than twenty days before the beginning of each regular session beginning with the 2004 session and ending with the regular session. The report shall contain:
(1) The name and business address of every taxpayer that claimed the airport landing fees tax credit in the previous year;
(2) The amount of tax credits each taxpayer claimed in the previous year;
(3) The cost to the state of these tax credits for the previous year; and
(4) The sum of each of these for all the years since the tax credit became available.
The report shall also include:
(1) An analysis of the economic impact of this tax credit on the State and the businesses that are eligible for the tax credit; and
(2) Recommendations for amending the availability or caps on the credit if warranted.
The department of taxation shall work with the department of business, economic development, and tourism on this analysis.
SECTION 4. New statutory material is underscored.
SECTION 5. This Act shall take effect upon its approval.