HOUSE OF REPRESENTATIVES
THIRTY-FIRST LEGISLATURE, 2021
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO THE IMPORTANT AGRICULTURAL LAND QUALIFIED AGRICULTURAL COST TAX CREDIT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The purpose of this Act is to extend the important agricultural land qualified agricultural cost tax credit that will expire at the end of the 2021 tax year. The important agricultural land qualified cost tax credit supports food self-sufficiency by providing tax credits to qualified landowners and farmers to help offset costs related to establishing and sustaining viable agricultural operations. This extension will provide additional time to allow landowners and farmers to claim the tax credit in the event their agricultural lands are identified as potential important agricultural lands and designated as such by the land use commission.
SECTION 2. Section 235-110.93, Hawaii Revised Statutes, is amended as follows:
1. By amending subsection (a) to read:
"(a) There shall be allowed to each taxpayer an important agricultural land qualified agricultural cost tax credit that may be claimed in taxable years beginning after the taxable year during which the tax credit under section 235-110.46 is repealed, exhausted, or expired. The credit 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 tax credit amount shall be determined as follows:
(1) In the first year in which the credit is claimed, the lesser of the following:
(A) Twenty-five per cent of the qualified agricultural costs incurred by the taxpayer after July 1, 2008; or
(2) In the second year in which the credit is claimed, the lesser of the following:
(A) Fifteen per cent of qualified agricultural costs incurred by the taxpayer after July 1, 2008; or
(B) $250,000; and
(3) In the third year in which the credit is claimed, the lesser of the following:
(A) Ten per cent of the qualified agricultural costs incurred by the taxpayer after July 1, 2008; or
The taxpayer may incur qualified agricultural costs
during a taxable year in anticipation of claiming the credit in future taxable
years during which the credit is available. The taxpayer may claim the credit in [
the third taxable year after the taxable year during which the taxpayer
[ incurred the qualified agricultural costs upon which the credit is claimed.]
applied to the department of agriculture for first-year certification of the
credit. The taxpayer [ also]
may subsequently claim the credit in consecutive or inconsecutive
taxable years until exhausted."
2. By amending subsection (l) to read:
"(l) The department of agriculture shall cease
certifying credits pursuant to this section for taxable years beginning after December
2021;] 2031; provided that a taxpayer with accumulated, but
unclaimed, certified credits may continue claiming the credits in subsequent
taxable years until exhausted."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2021.
Important Agricultural Land Qualified Agricultural Costs Tax Credit; Extension
Extends through the 2031 tax year the important agricultural land qualified agricultural cost tax credit. Delays taxpayers from claiming and applying the tax credit for at least three full taxable years after credit is earned, to help address State's current fiscal concerns. Applies to taxable years beginning after December 31, 2021. (HD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.