Report Title:

Income Tax; 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, 2011.  Suspends the use of tax credit carryovers generated from taxable years beginning before January 1, 2009, until January 1, 2011.

 


THE SENATE

S.B. NO.

1322

TWENTY-FIFTH LEGISLATURE, 2009

 

STATE OF HAWAII

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to tax credits.

 

 

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:

"§231‑    Tax credit calculation limitation; temporary reduction.  (a)  Notwithstanding any other law to the contrary, for taxable years beginning on or after January 1, 2009 and ending before January 1, 2011, all allowable 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 by fifty per cent. 

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

     (1)  Section 235-55 (relating to a credit for taxes paid to other jurisdictions);

     (2)  Section 235-55.6 (relating to a credit for care expenses of dependents);

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

     (4)  Section 235-55.85 (relating to a credit for low-income refundable food/excise taxes);

     (5)  Section 239-6.5 (relating to a credit for lifeline telephone services); and

     (6)  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, 2011; provided that, notwithstanding any provision creating a waiver of the right to claim a business tax credit by requiring that a claim be made within a specified period of time, 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, 2011, until exhausted.

     (d)  With regard to any business tax credit properly claimed for a taxable year beginning before January 1, 2009, the specified period of time established to exhaust that business tax credit shall be tolled during the period beginning January 1, 2009, and ending January 1, 2011.

     (e)  Notwithstanding any law to the contrary, for taxable years beginning on or after January 1, 2009, or ending before January 1, 2011, 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.

     (f)  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, 2011."

     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, 2011.

 

INTRODUCED BY:

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