S.B. NO.














RELATING to income tax.





SECTION 1. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to part III to be appropriately designated and to read as follows:

"235-   Food expenditure income tax credit. (a) Each individual taxpayer who files an individual income tax return for a taxable year and who is not claimed or is not otherwise eligible to be claimed as a dependent by another taxpayer for federal or Hawaii state individual income tax purposes may claim a food expenditure tax credit of $           against the taxpayer's individual income tax liability for the taxable year for which the individual income tax return is being filed.

(b) The amount of the credit shall be based upon the taxpayer's adjusted gross income.

(c) The tax credit claimed by a taxpayer pursuant to this section shall be deductible from the taxpayer's individual income tax liability, if any, for the tax year in which the credit is properly claimed. If the tax credit claimed by a taxpayer exceeds the amount of income tax payment due from the taxpayer, the excess of credit over payments due shall be refunded to the taxpayer; provided that tax credit properly claimed by an individual who has no income tax liability shall be paid to the individual; provided further that no refunds or payment on account of the tax credit allowed by this section shall be made for amounts less than $1.

(d) All claims for a tax credit under this section, including any amended claims, 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.

(e) The director of taxation shall prepare forms as 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.

(f) For the purposes of this section:

"Adjusted gross income" means adjusted gross income as defined by the Internal Revenue Code.

"Alcoholic beverages" means beverages that are suitable for human consumption and contain one-half of one per cent or more alcohol by volume.

"Dietary supplement" means any product, other than tobacco, intended to supplement the diet that:

(1) Contains one or more of the following dietary ingredients:

(A) A vitamin;

(B) A mineral;

(C) An herb or other botanical element;

(D) An amino acid; or

(E) A dietary substance for use by humans to supplement a person's diet by increasing the total dietary intake; or a concentrate, metabolite, constituent, extract, or combination of any ingredient described in this definition;

(2) Is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form, or if not intended for ingestion in such form, is not represented as conventional food and is not represented for use as a sole item of a meal or of a diet; and

(3) Is required to be labeled as a dietary supplement, identifiable by the "supplement facts" box found on the label as required pursuant to title 21 Code of Federal Regulations section 101.36, as amended or renumbered.

"Food" or "food ingredients" means substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value. Food or food ingredients does not include food or food ingredients sold from a vending machine, whether cold or hot, alcoholic beverages, dietary supplements, prepared food, or tobacco.

"Prepared food" means:

(1) Food sold in a heated state or heated by the seller;

(2) Food sold with eating utensils provided by the seller, including plates, bowls, chopsticks, knives, forks, spoons, glasses, cups, napkins, or straws. A plate does not include a container or packaging used exclusively to transport the food; or

(3) Two or more food ingredients mixed or combined by the seller for sale as a single item, except:

(A) Food that is only cut, repackaged, or pasteurized by the seller; or

(B) Raw eggs, fish, meat, poultry, or foods containing these raw animal foods requiring cooking by the consumer as recommended by the federal Food and Drug Administration in chapter 3, part 401.11 of the Food Code, published by the Food and Drug Administration, as amended or renumbered, to prevent foodborne illness.

Prepared food does not include food sold in an unheated state by weight or volume as a single item or bakery items, such as bread, rolls, buns, biscuits, bagels, croissants, pastries, donuts, Danish, cakes, tortes, pies, tarts, muffins, bars, cookies, or tortillas.

"Qualified food expenditure" means costs incurred for the purchase of food or food ingredients.

"Tobacco" includes cigarettes, cigars, chewing or pipe tobacco, or any other item that contains tobacco."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2018.








Report Title:

Food Expenditure Income Tax Credit



Establishes the food expenditure income tax credit.




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