Report Title:

Income Tax Credit; Prepaid Health Insurance Premiums

Description:

Allows certain small businesses to claim an income tax credit of up to fifteen per cent of prepaid health insurance premiums paid for employees and their families.

THE SENATE

S.B. NO.

906

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO INCOME TAX.

 

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-   Prepaid health insurance tax credit. (a) There shall be allowed to each qualified employer, whether individual or corporate, subject to the income tax imposed by this chapter a prepaid health insurance tax credit which shall be deductible from the taxpayer's gross income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed.

The amount of the tax credit shall be not more than fifteen per cent of the amount of premium paid for a prepaid health care plan to a prepaid health care plan contractor for premiums paid by the taxpayer under chapter 393, including premiums paid for coverage for the employee's family.

To qualify for the credit under this section the employer shall have an average annual number of employees of not more than twenty-five and a gross annual income of not more than $5,000,000, for the taxable year.

(b) 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 that no refunds or payments on account of the tax credit allowed by this section shall be made for amounts less than $1.

(c) 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.

(d) 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.

(e) 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, upon its approval, shall apply to taxable years beginning after December 31, 2003.

INTRODUCED BY:

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