Report Title:

Income Tax Credit Reduction; Suspension of Tax Credit

 

Description:

Reduces tax credits allowable under chapters 235, 239, 241, and 431, HRS, by a certain amount for taxable years beginning on or after January 1, 2009, and ending before January 1, 2012. Suspends the use of tax credit carryovers generated from taxable years beginning before January 1, 2009, until January 1, 2012.

 


HOUSE OF REPRESENTATIVES

H.B. NO.

1583

TWENTY-FIFTH LEGISLATURE, 2009

 

STATE OF HAWAII

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to taxation.

 

 

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

 


SECTION 1. Chapter 231, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"231-   Temporary tax credit reduction. (a) Notwithstanding any law to the contrary, all allowable business tax credits that may be claimed against a taxpayer's net income tax liability under chapters 235, 239, 241, and 431, except for those tax credits provided in subsection (b), shall be reduced as follows:

(1) For the taxable year beginning on or after January 1, 2009, and ending before January 1, 2010, the allowable business tax credit that may be claimed shall be reduced by seventy-five per cent;

(2) For the taxable year beginning on or after January 1, 2010, and ending before January 1, 2011, the allowable business tax credit that may be claimed shall be reduced by fifty per cent; and

(3) For the taxable year beginning on or after January 1, 2011, and ending before January 1, 2012, the allowable business tax credit that may be claimed shall be reduced by twenty-five per cent.

(b) For purposes of this section, "business tax credit" means all tax credits allowable under chapters 235, 239, 241, and 431, except for the following tax credits:

(1) Section 235-55 (relating to a tax credit for resident taxpayers);

(2) Section 235-55.6 (relating to expenses for household and dependent care services necessary for gainful employment);

(3) Section 235-55.7 (relating to an income tax credit for low-income household renters);

(4) Section 235-55.85 (relating to the refundable food/excise tax credit);

(5) Section 235-110.7 (relating to the capital goods excise tax credit);

(6) Section 239-6.5 (relating to the tax credit for a lifeline telephone service subsidy); and

(7) Any credit against any tax required by the Constitution or the laws of the United States.

(c) Any business tax credit generated and applicable to a taxable year beginning before January 1, 2009, that resulted in a carryover, shall be suspended and not applied to any tax liability for taxable years beginning on or after January 1, 2009, or ending before January 1, 2012; provided that, notwithstanding any waiver of the right to claim a tax credit within a specified period of time provision contained in any tax credit temporarily reduced by this Act, any business tax credit carryover generated and applicable to a taxable year beginning before January 1, 2009, may be used against a tax liability in taxable years beginning on or after January 1, 2012, until exhausted.

(d) Notwithstanding any law to the contrary, for taxable years beginning on or after January 1, 2009, or ending before January 1, 2012, no allowable business tax credits that may be claimed against a taxpayer's net income tax liability under chapters 235, 239, 241, and 431, except those tax credits provided in subsection (b), shall be carried over to another taxable year.

(e) This section shall apply to taxable years beginning on or after January 1, 2009, and shall not apply to taxable years beginning on or after January 1, 2012."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act shall take effect upon its approval and shall apply to taxable years beginning on or after January 1, 2009; provided that this Act shall be repealed on January 1, 2012.

 

INTRODUCED BY:

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