REPORT TITLE:
Income Tax; Tuition Credit


DESCRIPTION:
Establishes an income tax credit for taxpayers who pay private
school tuition.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           12
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO INCOME TAX.



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

 1      "§235-     Tuition credit.  (a)  Each resident individual
 
 2 taxpayer, who files an individual income tax return for a taxable
 
 3 year, and who is not claimed or is not otherwise eligible to be
 
 4 claimed as a dependent by another taxpayer for Hawaii state
 
 5 individual income tax purposes, may claim a tuition credit
 
 6 against the resident taxpayer's individual income tax liability
 
 7 for the taxable year for which the individual income tax return
 
 8 is being filed.
 
 9      (b)  The amount of the credit shall be equal to a percentage
 
10 of the amount paid by the taxpayer for tuition to a private
 
11 elementary or secondary school for any dependent claimed by the
 
12 taxpayer as follows.  For taxable incomes:
 
13      (1)  Less than or equal to $       , the credit shall be
 
14           equal to          per cent of the tuition during the
 
15           taxable year;
 
16      (2)  Between $        and $        the credit shall be equal
 
17           to          per cent of the tuition paid during the
 
18           taxable year;
 
19      (3)  Greater than or equal to $       , the credit shall be
 

 
Page 2                                                     
                                     S.B. NO.           12
                                                        
                                                        

 
 1           equal to         per cent of the tuition paid during
 
 2           the taxable year.
 
 3 A taxpayer may take the credit for each dependent that it pays
 
 4 elementary or secondary private school tuition during a taxable
 
 5 year for which the individual income tax return is being filed
 
 6 but the total shall not be more than $        in any one taxable
 
 7 year.
 
 8      (c)  The tax credit claimed by a resident taxpayer pursuant
 
 9 to this section shall be deductible from the resident taxpayer's
 
10 individual income tax liability, if any, for the tax year in
 
11 which the credit is properly claimed.  If the tax credit claimed
 
12 by a resident taxpayer exceeds the amount of income tax payment
 
13 due from the resident taxpayer, the excess of credit over payment
 
14 due shall be refunded to the resident taxpayer; provided that the
 
15 tax credit properly claimed by a resident individual who has no
 
16 income tax liability shall be paid to the resident individual;
 
17 and provided further that no refunds or payment on account of the
 
18 tax credit allowed by this section shall be made for amounts less
 
19 than $1.
 
20      (d)  For the purposes of this section, "tuition" means the
 
21 amount paid by the taxpayer during the taxable year for which the
 
22 tax return is being filed, to a private elementary or secondary
 
23 educational institution certified as such by the department of
 

 
Page 3                                                     
                                     S.B. NO.           12
                                                        
                                                        

 
 1 education.
 
 2      (e)  The director of taxation shall prepare forms as may be
 
 3 necessary to claim a credit under this section.  The director may
 
 4 also require the taxpayer to furnish reasonable information in
 
 5 order that the director may ascertain the validity of the claim
 
 6 for credit made under this section.  The director may adopt rules
 
 7 necessary to effectuate the purposes of this section pursuant to
 
 8 chapter 91.
 
 9      (f)  All claims for tax credits under this section,
 
10 including any amended claims, shall be filed on or before the end
 
11 of the twelfth month following the close of the taxable year for
 
12 which the credits may be claimed.  Failure to comply with the
 
13 foregoing provision shall constitute a waiver of the right to
 
14 claim the credit."
 
15      SECTION 2.  New statutory material is underscored.
 
16      SECTION 3.  This Act, upon its approval, shall apply to
 
17 taxable years beginning after December 31, 1998.
 
18 
 
19                           INTRODUCED BY:  _______________________