THE SENATE

S.B. NO.

654

TWENTY-SIXTH LEGISLATURE, 2011

 

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

"235-    Residential construction and remodeling tax credit. (a) There shall be allowed to each individual taxpayer who owns residential real property and who is subject to the taxes imposed by this chapter, a residential construction and remodeling 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 residential construction or remodeling costs paid by the taxpayer during the taxable year for which the credit is claimed; provided that the costs shall not exceed $           in the aggregate for each residential unit and that the costs are incurred before July 1,     .

A husband and wife filing separately, or multiple owners of a property filing separately may apportion the tax credit between themselves; provided that the total amount of the claim shall not exceed the amount that would have been claimed if filed jointly; and provided further that the tax credit may be claimed only once for a single residential property.

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

(b) 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.

(c) The director of taxation:

(1) Shall prepare any forms that may be necessary to claim a tax credit;

(2) May require the taxpayer to furnish information to ascertain the validity of the claim for the tax credit; and

(3) May adopt rules pursuant to chapter 91 necessary to effectuate the purposes of this section.

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

(e) As used in this section:

"Construction or remodeling cost" means any costs incurred after December 31, 2010, for the plans, design, construction, or equipment that is permanently affixed to a building or structure related to new construction, alterations, or modifications of a residential apartment unit or house, and shall not include any costs for which another credit is claimed under this chapter.

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

SECTION 2. The department of taxation shall submit a report to the legislature that compares the impact on jobs and on the state budget that is produced by four separate tax credits for:

(1) New construction to residential apartment units and houses;

(2) Renovations to residential apartment units and houses;

(3) New construction to hotels and resorts; and

(4) Renovations to hotels and resorts.

The department of taxation shall submit the report no later than twenty days prior to the convening of the regular session of 2012.

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval and shall apply to taxable years beginning after December 31, 2010, and ending prior to January 1, 2014.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Tax Credit; Residential Construction and Remodeling

 

Description:

Provides a temporary tax credit for residential construction and remodeling projects. Requires a report to the legislature comparing the impact on jobs and the state budget for various tax credit applications. Sunsets 12/31/13.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.