HOUSE OF REPRESENTATIVES

H.B. NO.

510

THIRTY-FIRST LEGISLATURE, 2021

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to taxation.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


SECTION 1. The legislature finds that taxes and fees associated with vehicles--such as gasoline and vehicular weight taxes--tend to be imposed in a regressive manner in Hawaii, resulting in low- and middle-income residents paying a larger share of their incomes to those taxes and fees than high-income residents. Specifically, gasoline taxes burden low- and middle-income persons disproportionately since they typically have older vehicles that are not as fuel-efficient as newer vehicles. Similarly, vehicular weight taxes burden low- and middle-income persons disproportionately as newer models can be lighter; although this is highly susceptible to a consumer's choice in a vehicle. This burden is compounded for low- and middle-income persons in rural areas who must travel farther distances for basic goods and services, work, and leisure.

The purpose of this Act is to provide some relief to low-income persons by providing a refundable tax credit for a portion of the annual state vehicle registration fee for persons who are eligible to receive a food/excise tax credit greater than $0.

SECTION 2. Section 23-96, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) This section shall apply to the following:

(1) Section 235-15--Credit for purchase of child passenger restraint system;

(2) Section 235-55.6--Credit for employment-related expenses for household and dependent care services;

(3) Section 235-55.7--Credit for a low-income household renter; and

(4) Section 235-55.85--Credit for food and excise tax[.] and vehicle registration."

SECTION 3. Section 235-55.85, Hawaii Revised Statutes, is amended to read as follows:

"235-55.85 Refundable food/excise tax credit[.]; vehicle registration 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 refundable food/excise tax credit against the taxpayer's individual income tax liability for the taxable year for which the individual income tax return is being filed; provided that an individual who has no income or no income taxable under this chapter and who is not claimed or is not otherwise eligible to be claimed as a dependent by a taxpayer for federal or Hawaii state individual income tax purposes may claim [this] the credit.

(b) Each individual taxpayer may claim a refundable food/excise tax credit multiplied by the number of qualified exemptions to which the taxpayer is entitled in accordance with the table below; provided that a husband and wife filing separate tax returns for a taxable year for which a joint return could have been filed by them shall claim only the tax credit to which they would have been entitled had a joint return been filed.

 

Adjusted gross income Credit per exemption

for taxpayers filing

a single return

Under $5,000 $110

$5,000 under $10,000 $100

$10,000 under $15,000 $ 85

$15,000 under $20,000 $ 70

$20,000 under $30,000 $ 55

$30,000 and over $ 0.

 

Adjusted gross income Credit per exemption

for heads of household,

married individuals filing

separate returns, and

married couples filing

joint returns

Under $5,000 $110

$5,000 under $10,000 $100

$10,000 under $15,000 $ 85

$15,000 under $20,000 $ 70

$20,000 under $30,000 $ 55

$30,000 under $40,000 $ 45

$40,000 under $50,000 $ 35

$50,000 and over $ 0.

(c) For the purposes of this section, a qualified exemption is defined to include those exemptions permitted under this chapter; provided that no additional exemption may be claimed by a taxpayer who is sixty-five years of age or older; provided that a person for whom exemption is claimed has been physically present in the State for more than nine months during the taxable year; and provided further that multiple exemptions shall not be granted because of deficiencies in vision or hearing, or other disability. For purposes of claiming [this] the food/excise tax credit only, a minor child receiving support from the department of human services of the State, social security survivor's benefits, and the like, may be considered a dependent and a qualified exemption of the parent or guardian.

(d) Individual taxpayers who may claim a refundable food/excise tax credit under subsection (b) greater than $0 may also claim a refundable vehicle registration fee tax credit of $25; provided that the taxpayer paid the annual state vehicle registration fee required under section 249-31 during the taxable year for at least one vehicle. Married taxpayers filing joint returns may claim a credit of $50; provided that the taxpayers paid the annual state vehicle registration fee for at least two vehicles during the taxable year.

[(d)] (e) The tax [credit] credits under this section shall not be available to:

(1) Any person who has been convicted of a felony and who has been committed to prison and has been physically confined for the full taxable year;

(2) Any person who would otherwise be eligible to be claimed as a dependent but who has been committed to a youth correctional facility and has resided at the facility for the full taxable year; or

(3) Any misdemeanant who has been committed to jail and has been physically confined for the full taxable year.

[(e)] (f) The tax credits 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 they are properly claimed. If the tax credits claimed by a taxpayer exceed the amount of income tax payment due from the taxpayer, the excess of credits over payments due shall be refunded to the taxpayer; provided that tax credits properly claimed by [[]an[]] individual who has no income tax liability shall be paid to the individual; and provided further that no refunds or payment on account of the tax credits allowed by this section shall be made for amounts less than $1.

[(f)] (g) All claims for tax credits 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 credits may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

[(g)] (h) For the purposes of this section, "adjusted gross income" means adjusted gross income as defined by the Internal Revenue Code."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2020.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Refundable Food/Excise Tax Credit; Vehicle Registration Tax Credit

 

Description:

Establishes a vehicle registration fee tax credit for persons who are eligible for a refundable food/excise tax credit greater than $0.

 

 

 

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