Report Title:

Grease Interceptor Tax Credit

Description:

Provides a tax credit for grease interceptors required by state or county laws.

THE SENATE

S.B. NO.

909

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to required grease interceptors.

 

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- Grease interceptor installation; income tax credit. (a) There shall be allowed to each taxpayer who is required to install a grease interceptor system by any State or county law, subject to the taxes imposed by this chapter, a grease interceptor tax credit that shall be deductible from the taxpayer's net 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 claimed under this section by the taxpayer in all years for which the credit is available shall be limited to per cent of the cost of the design, construction, installation, and equipment of the grease interceptor, excluding any costs for which another credit was claimed under this chapter, incurred during the taxable year for which the credit is claimed; provided that the costs shall not exceed $         and that the costs are incurred before January 1, 2007.

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

If a deduction is taken under section 179 (with respect to election to expense depreciable business assets) of the Internal Revenue Code, no tax credit shall be allowed for that portion of the design, construction, or installation cost for which the deduction is taken.

The basis of eligible property for depreciation or accelerated cost recovery system purposes for state income taxes shall be reduced by the amount of credit allowable and claimed. In the alternative, the taxpayer shall treat the amount of the credit allowable and claimed as a taxable income item for the taxable year in which it is properly recognized under the method of accounting used to compute taxable income.

(b) The credit allowed under this section shall be claimed against the net income tax liability, if any, imposed by this chapter for the taxable year in which the tax credit is properly claimed.

(c) If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted. All claims, 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. (d) 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 claim for credit made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91.

(e) The tax credit allowed under this section shall be available for taxable years beginning after December 31, 2002, and shall not be available for taxable years beginning after December 31, 2006.

(f) To qualify for the income tax credit, the taxpayer shall be in compliance with all applicable federal, state, and county statutes, rules, and regulations.

(g) As used in this section:

"Grease interceptor" means a device, equipment, or system that is designed to prevent the discharge of any material which is extractable from an acidified sample of a waste by hexane or other designated solvent and as determined by appropriate procedures into any publicly-owned treatment works or private sewer that is connected to a publicly-owned treatment works.

"Net income tax liability" means income tax liability reduced by all other credits allowed under this chapter.

"Publicly-owned treatment works" means a treatment works as defined by section 212 of the Federal Water Pollution Control Act, which is owned by a state or municipality, as defined by section 502(4) of the Federal Water Pollution Control Act. This definition includes any devices and systems used in the storage, treatment, recycling, and reclamation of municipal sewage or industrial wastes of a liquid nature. It also includes sewers, pipes, and other conveyances only if they convey wastewater to a publicly-owned treatment works. The term also means the municipality as defined in section 502(4) of the Federal Water Pollution Control Act, which has jurisdiction over the indirect discharges to and the discharges from such a treatment works."

SECTION 2. New statutory material is underscored.

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

INTRODUCED BY:

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