Report Title:

Tax Credit; Resort Facility; Wireless Internet Access


Provides a tax credit to qualified taxpayers that provide wireless internet access in qualified resort facilities.


S.B. NO.









relating to resort facility tax credit.



SECTION 1. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows

"235- Resort facility wireless tax credit. (a) There shall be allowed to each qualified individual or corporate taxpayer who is not claimed or is not otherwise eligible to be claimed as a dependent by another taxpayer for federal or Hawaii state income tax purposes, who files a net income tax return for a taxable year, a resort facility wireless tax credit, that shall be deductible from the taxpayer's net income tax liability imposed by this chapter for the taxable year in which the tax credit is properly claimed.

(b) The tax credit shall apply to qualified costs incurred at a qualified resort facility. The amount of the tax credit shall be per cent of the qualifying costs expended by a qualified resort facility during a taxable year; 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 tax credit, the taxpayer shall be in compliance with all applicable federal, state, and county statutes, rules, and regulations.

(d) If the tax credit under this section exceeds the taxpayer's net income tax liability under this section, any excess of the tax credit may be used as a credit against the taxpayer's income tax liability in subsequent taxable years until exhausted.

(e) If the taxpayer is a partnership, S corporation, estate, or trust, the tax credit is for qualifying costs incurred by the entity for the taxable year. The costs upon which the tax credit is computed shall be determined at the entity level. Distribution and share of the tax credit shall be determined pursuant to section 235-110.7.

(f) As used in this section:

"Qualified costs" means any capitalized costs for construction and equipment of a permanent nature, that are incurred by a qualified taxpayer who provides wireless internet access for guests in the qualified taxpayer's qualified resort facility.

"Qualified resort facility" means any building that is used primarily for resort or hotel use and is located in the Waikiki special district under chapter 21, Revised Ordinances of Honolulu 1990, as amended.

"Qualified taxpayer" or "taxpayer" means any person or entity that owns a qualified resort facility.

(g) 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.

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

(i) The department of taxation shall report to the legislature annually, no later than twenty days prior to the convening of every regular session, on the number of taxpayers claiming the tax credit and the total cost of the tax credit to the State during the past year."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2003.