Film Production Facility Tax Credit; Turtle Bay Resort
Establishes a tax credit for the construction and development of a movie production and hotel facility at the Turtle Bay Resort.
TWENTY-SECOND LEGISLATURE, 2003
STATE OF HAWAII
A BILL FOR AN ACT
relating to taxation.
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- Movie production and hotel facility tax credit; Turtle Bay Resort. (a) There shall be allowed to each qualified taxpayer subject to the taxes imposed by this chapter a tax credit for qualified costs in the development of a movie production and hotel facility at the Turtle Bay Resort. The tax credit shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter and at the election of the taxpayer from the tax liability imposed by chapter 237, 237D, 238, 239, 241, and 431.
(b) The tax credit earned shall be equal to the qualified costs incurred in the previous taxable year for any one or more years in the seven consecutive taxable years from January 1, 2004, through December 31, 2010, up to a maximum of $50,000,000 of credits in the aggregate for all qualified taxpayers for all seven years; provided that notwithstanding the amount of tax credit earned in any year, a maximum of $7,150,000 of tax credit in the aggregate for all qualified taxpayers may be utilized in any one year. The credits over $7,150,000 shall be used as provided in subsection (d).
(c) To qualify for the tax credit, a taxpayer shall:
(1) Have expended qualified costs on and be developing a movie production and hotel facility at the Turtle Bay Resort; and
(2) Dedicate one-half of the taxable income, as defined in chapter 235, of the movie production and hotel facility to the State, beginning on the seventh year following the year in which the movie production and hotel facility tax credit was first taken.
(d) If the tax credit under this section exceeds $7,150,000 in the aggregate for all qualified taxpayers for any taxable year or exceeds the taxpayer's income tax liability and the tax liability under chapter 237, 237D, 238, 239, 241, and 431 for any year for which the credit is taken, the excess of the tax credit may be used as a credit against the taxpayer's tax liability for the taxes set forth in this section in subsequent years until exhausted.
(e) Every claim, including amended claims, for a 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) If at any time during the seven-year period in which tax credits are earned under this section, the costs incurred no longer meet the definition of qualified costs, the credit claimed under this section shall be recaptured. The recapture shall be equal to one hundred per cent of the total tax credit claimed under this section for the preceding taxable year; provided the amount of the credit recaptured shall apply only to those costs that no longer meet the definition of qualified costs. The amount of the recaptured tax credit determined under this subsection shall be added to the taxpayer's tax liability for the taxable year in which the recapture occurs under this subsection.
(g) This section shall apply to qualified costs incurred after December 31, 2003, and shall not apply to qualified costs incurred after December 31, 2010; provided that a taxpayer may continue to claim the credits provided in this section if the qualified cost is incurred before January 1, 2011.
(h) No taxpayer that claims a credit under this section shall claim any other credit for the same qualified costs under any chapter identified in this section.
(i) The director of taxation shall prepare any forms that may be necessary to claim a credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of the claims for credit made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91.
The qualified taxpayer, no later than March 31 of each year in which qualified costs were expended in the previous taxable year, shall submit a written, certified statement to the director of taxation, in the form specified by the director of taxation identifying:
(1) The qualified costs, if any, expended in the previous taxable year;
(2) The amount of tax credit claimed pursuant to this section, if any, in the previous taxable year; and
(3) The tax liability under this chapter and chapter 237, 237D, 238, 239, 241, and 431 against which the tax credit is claimed.
(j) As used in this section:
"Hotel facility" means a hotel/hotel-condo as defined in section 486K-1, and includes a time share facility or project.
"Movie production and hotel facility" means a hotel facility comprised of buildings and improvements that accommodate the production of film, television, and digital media products and that also provides capacity for high speed digital transmission of the products.
"Qualified costs" means any costs for plans, design, and construction, and costs for equipment that is permanently affixed to a building or structure, up to a total of $50,000,000 in the aggregate, incurred after December 31, 2003, at the Turtle Bay Resort for the development of a movie production and hotel facility.
"Qualified taxpayer" means a person who fulfills the requirements of subsection (c).
"Turtle Bay Resort" means the resort area located at 57-091 Kamehameha Highway, Kahuku, Oahu, comprised of eight-hundred acres containing one hotel with four-hundred twenty rooms, forty-two luxury cottages, two golf courses, three restaurants, one equestrian center, a spa, and five miles of beach front property."
SECTION 2. Section 235-2.45, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:
"(e) Section 704 of the Internal Revenue Code (with respect to a partner's distributive share) shall be operative for purposes of this chapter; except that section 704(b)(2) shall not apply to:
(1) Allocations of the high technology business investment tax credit allowed by section 235-110.9; [
(2) Allocations of net operating loss pursuant to section
(3) Allocations of the movie production and hotel facility tax credit allowed by section 235- ."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act, upon approval, shall apply to qualified costs, as defined in section 2 of this Act, incurred after December 31, 2003.