Report Title:

Tax Credit; Physicians, Medically Underserved Areas

 

Description:

Allows an income tax credit to physicians practicing in medically underserved areas for a portion of the amount of medical malpractice premiums.

 


HOUSE OF REPRESENTATIVES

H.B. NO.

2413

TWENTY-FOURTH LEGISLATURE, 2008

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

 

RELATING TO INCOME TAXATION.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


SECTION 1. The legislature finds that there is a serious crisis in the provision of medical services to the poor and uninsured in medically underserved areas of the state, particularly in the rural areas. The legislature further finds that financial incentives need to be extended to physicians to treat the poor and medically uninsured in those areas. The legislature further finds that medical malpractice insurance premiums are reaching levels that discourage the practice of medicine, and that an ideal incentive for physicians to treat the poor and uninsured is to provide them with an income tax credit for a portion of the amounts paid for medical malpractice insurance premiums.

The purpose of this Act is to create an income tax credit for physicians who practice in medically underserved areas of the state.

SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"235‑   Tax credits for physicians and surgeons; medical underserved areas. (a) Any taxpayer licensed to practice medicine under chapter 453 who files an individual income tax return or corporate net income tax return for a taxable year may claim an income tax credit under this section against the Hawaii state individual or corporate net income tax. The tax credit, when claimed by a corporation, partnership, limited liability company or other form of medical business or medical professional entity, shall be claimed only once in the taxable year, regardless of the number of partners or corporate officers.

(b) The tax credit shall be in an amount equal to fifty per cent of the amount of medical malpractice insurance premium paid by the taxpayer for the taxable year in which the credit is claimed; provided that:

(1) The taxpayer physician starts or expands a practice in a medically underserved area or relocates a practice to a medically underserved area after December 31, 2007; the areas of the state deemed to be medically underserved shall be determined by the department of human services; and

(2) The taxpayer derives at least fifty per cent of total income from medicaid or QUEST reimbursement.

(c) The tax credit shall be in an amount equal to five per cent of the amount of medical malpractice insurance premium paid by the taxpayer for the taxable year in which the credit is claimed; provided that:

(1) The taxpayer physician has established a practice in a medically underserved area on or before December 31, 2007; the areas of the state deemed to be medically underserved shall be determined by the department of human services; and

(2) The taxpayer derives at least fifty per cent of total income from medicaid or QUEST reimbursement.

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

(e) The director of taxation:

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

(2) May require proof of the claim for the tax credit; and

(3) May adopt rules pursuant to chapter 91.

(f) 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.

(g) 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 3. New statutory material is underscored.

SECTION 4. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2007.

 

INTRODUCED BY:

_____________________________