Report Title:

Tax Credit; Not-For-Profit Organizations

Description:

Provides a one-time tax credit for contributions made to qualified not-for-profit organizations.

THE SENATE

S.B. NO.

2635

TWENTY-SECOND LEGISLATURE, 2004

 

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. Not-for-profit organization tax credit. (a) There shall be allowed to each 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 who files a net income tax return for a taxable year, a not-for-profit tax credit, that shall be deductible from the taxpayer's net income tax liability imposed by this chapter for the taxable year beginning after December 31, 2003, and ending before January 1, 2005; provided that 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 tax credit shall apply to contributions made to qualified not-for-profit organization. The amount of the tax credit shall be      per cent of the contribution; 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 income tax credit, the taxpayer shall be in compliance with all applicable federal, state, and county statutes, rules, and regulations.

(d) If a deduction is taken under section 179 (with respect to election to expense depreciable business assets) of the Internal Revenue Code of 1986, as amended, no tax credit shall be allowed for those costs for which the deduction is taken.

(e) As used in this section:

"Eligible not-for-profit organization" means a not-for-profit organization that:

(1) Is not necessarily tax exempt for federal or state income tax purposes;

(2) Provides services in the areas of health, education, or human services;

(3) Has received at least one state purchase of service contract from the state department of education, health, or human services within the period of July 1, 1998 to June 30, 2003; and

(4) Is not currently under any purchase of service contract with the department of education, health, or human services.

(f) Every claim, including amended claims, for the 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 tax credit may be claimed. Failure to meet the filing requirements of this subsection shall constitute a waiver of the right to claim the tax credit.

(g) The director of taxation:

(1) Shall prepare such forms as may be necessary to claim a tax credit under this section;

(2) May require proof to verify a claim regarding eligible not-for-profit organizations; and

(3) May adopt rules pursuant to chapter 91 to effectuate the purposes of this Act.

(h) The department of taxation shall report to the legislature, no later than twenty days prior to the convening of the 2006 regular session, on the number of taxpayers claiming the tax credit and the total cost of the tax credit to the State.

SECTION 2. This Act, upon its approval, shall apply to contributions made during the taxable year beginning after December 31, 2003, and ending before January 1, 2005.

INTRODUCED BY:

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