Report Title:

Tax Credit; Scholarships

Description:

Provides a tax credit for scholarship donations made to not-for-profit scholarship organizations.

THE SENATE

S.B. NO.

1486

TWENTY-SECOND LEGISLATURE, 2003

 

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-___ Scholarship tax credit. (a) Any taxpayer who files an individual or corporate income tax return for a taxable year may claim a scholarship income tax credit under this section against the Hawaii state individual or corporate net income tax.

(b) The tax credit claimed by an individual taxpayer shall be $1 for every $1 donated to a qualifying not-for-profit scholarship organization; provided that the amount of the tax credit shall not exceed $500. The tax credit claimed by a business owned by an individual or corporate taxpayer shall not exceed ninety per cent of the donation made to a qualifying not-for-profit scholarship organization; provided that the amount of the tax credit shall not exceed $10,000.

(c) The tax credit shall not exceed $15,000,000 in total in any given year.

(d) For the purposes of this section, "qualifying not-for-profit scholarship organization" means an organization that:

(1) Provides scholarships or grants to schools with grades from kindergarten through grade twelve;

(2) Are tax exempt under section 501(c)(3) of the Internal Revenue Code; and

(3) Spends no more than ten per cent of the donations collected for administrative and other expenses.

(e) If the tax credit claimed by the taxpayer under this section exceeds the amount of the income tax payments due from the taxpayer, the excess of credit over payments due shall be refunded 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; and provided further that no refunds or payments on account of the tax credit allowed by this section shall be made for amounts less than $1.00.

(f) 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 to effectuate this section.

(g) 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.

(h) 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."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act shall take effect upon its approval and shall apply to taxable years beginning after December 31, 2002.

INTRODUCED BY:

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