Report Title:
Income tax credit; agriculture
Description:
Establishes a tax credit against income tax liability for farmer or rancher taxpayers who install agricultural water storage facilities.
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THE SENATE |
S.B. NO. |
624 |
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TWENTY-FIRST LEGISLATURE, 2001 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO AGRICULTURE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§235- Agricultural water storage tax credit. (a) Each taxpayer who:
(1) Is a farmer or rancher;
(2) Files a Hawaii state schedule F income tax return for a taxable year; and
(3) Is not claimed or is not otherwise eligible to be claimed as a dependent by another taxpayer for Hawaii state income tax purposes;
may claim an agricultural water storage tax credit against the taxpayer's income tax liability for the taxable year for which the income tax return is being filed. The credit may be claimed only in the taxable year following the year in which an agricultural water storage facility was placed in service; provided that the taxpayer has financially contributed to the qualified water storage investment.
(b) The amount of the allowable credit shall be ten per cent of the investment paid by the taxpayer; provided that the tax credit shall not exceed $10,000 per year. The tax credit may be carried forward up to a maximum of ten years; provided that the water storage facility remains in service and continues to be used by the taxpayer. The amount of the tax credit that may be used in any tax year shall not exceed fifty per cent of the taxpayer's income tax liability as determined without regard to any other tax credit.
(c) The tax credit granted under this section shall be subject to the following conditions and limitations:
(1) To qualify as a basis for the tax credit, the new or expanded water storage facility shall not be placed in service before January 1, 2001;
(2) In the initial year in which the taxpayer claims the tax credit granted in this section, the taxpayer shall include a description of the project and information that demonstrates that the facility constructed with the qualified water storage investment had a minimum capacity of forty thousand gallons; and
(3) Claiming the tax credit granted in this section shall have no effect on the taxpayer's ability to claim depreciation for tax purposes on assets acquired by the taxpayer, nor shall the tax credit have any effect on the taxpayer's basis in those assets for the purpose of depreciation.
(d) The director of taxation shall prepare forms as may be necessary to claim a tax credit under this section. The director may also require the taxpayer to furnish reasonable information so that the director may ascertain the validity of the claim for the tax credit made under this section. The director may adopt procedures necessary to effectuate the purposes of this section.
(e) 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 tax credits may be claimed. Failure to comply shall constitute a waiver of the right to claim the tax credit.
(f) For purposes of this section:
"Qualified water storage investment" means all spending by a farmer or rancher taxpayer for use in this State for the construction of a new water storage facility, or for the expansion of an existing water storage facility that has been approved by the department of agriculture as necessary for drought mitigation purposes.
"Water storage facility" means any facility used for water storage, such as water tanks and water reservoirs, necessary to claim a credit under this section."
SECTION 2. New statutory material is underscored.
SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2000.
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INTRODUCED BY: |
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