S.B. NO.














relating to taxation.





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- Child care facility contribution tax credit. (a) There shall be allowed to each taxpayer subject to the taxes imposed by this chapter, an income 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.

(b) The amount of the credit shall be fifty per cent of the amount of the monetary contribution the taxpayer makes to a child care facility in the State.

(c) If the tax credit claimed by the taxpayer exceeds the amount of income tax payment due from the taxpayer, the excess of the credit over payments due shall be refunded to the taxpayer; provided that a tax credit under this section properly claimed by an individual who has no income tax liability shall be paid to the taxpayer; and 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 amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the tax credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the tax credit.

(e) No other tax credit or deduction shall be claimed under this chapter for the certain expenses used to claim a tax credit under this section for the taxable year.

(f) A taxpayer shall not be eligible to claim a tax credit under this section if the taxpayer is claiming a credit under section 235-55.6 in the same taxable year.

(g) The director of taxation:

(1) Shall prepare any forms necessary to claim a tax credit under this section;

(2) May require the taxpayer to furnish reasonable information to ascertain the validity of the claim for the tax credit made under this section; and

(3) May adopt rules, pursuant to chapter 91, to effectuate this section.

(h) As used in this section:

"Child care facility" means a licensed child care facility as defined under section 346-151.

"Monetary contribution" means:

(1) Donating money for the establishment or operation of a child care facility;

(2) Donating money to establish a grant or loan program for a parent or parents in the State requiring financial assistance for child care;

(3) Pooling moneys of several businesses and donating the moneys for the establishment of a child care facility in the State; or

(4) Donating money for the training of child care providers in the State."

SECTION 2. New statutory material is underscored.
SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2019.








Report Title:

Taxation; Refundable Tax Credit; Promotion of Child Care Facilities



Establishes a child care facility contribution refundable tax credit that is equal to 50% of the amount of the monetary contribution a taxpayer makes to a child care facility in the State. Prohibits a taxpayer from claiming both the child care contribution tax credit and the credit for employment-related expenses for household and dependent care services under section 235-55.6, HRS. Applies to taxable years beginning after December 31, 2019.




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