SB641

Report Title:

Motor Vehicle Ins; Tax Credit

Description:

Grants tax credits to taxpayers who maintain motor vehicle insurance policies. Establishes pay-at-the-pump motor vehicle insurance taxes.

THE SENATE	S.B. NO.	641
TWENTY-FIRST LEGISLATURE, 2001
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO mOTOR VEHICLE INSURANCE.

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- Motor vehicle insurance tax credit. (a) There shall be allowed to each taxpayer subject to a tax imposed by this chapter, a credit for maintaining a motor vehicle insurance policy throughout the taxable year.

(b) The amount of credit determined under this section for the taxable year shall be equal to the number of vehicles covered under the policies maintained by the taxpayer multiplied by $100.

(c) The credit allowed under this section shall be claimed against net income tax liability for the taxable year. A tax credit under this section which exceeds the taxpayer's income tax liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted.

(d) Claims for a tax credit under this section, including any amended claims, must 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.

(e) The director of taxation shall prepare and prescribe the appropriate form or forms to be used, establish the modes of proof of the claim for tax credits, and adopt rules pursuant to chapter 91."

SECTION 2. Section 243-4, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:

"(a) Every distributor shall, in addition to any other taxes provided by law, pay a license tax to the department of taxation for each gallon of liquid fuel refined, manufactured, produced, or compounded by the distributor and sold or used by the distributor in the State or imported by the distributor, or acquired by the distributor from persons not licensed distributors, and sold or used by the distributor in the State. Any person who sells or uses any liquid fuel knowing that the distributor from whom it was originally purchased has not paid and is not paying the tax thereon shall pay such tax as would have applied to such sale or use by the distributor. The rates of tax hereby imposed are as follows:

(1) For each gallon of diesel oil, 1 cent.

(2) For each gallon of gasoline or other aviation fuel sold for use in or used for airplanes, 1 cent.

(3) For each gallon of liquid fuel other than fuel mentioned in paragraphs (1) and (2), sold or used in the city and county of Honolulu, or sold in any county for ultimate use in the city and county of Honolulu, 16 cents state tax[,] and a 5 cents motor vehicle insurance tax, and in addition thereto such amount, to be known as the "city and county of Honolulu fuel tax", as shall be levied pursuant to section 243-5.

(4) For each gallon of liquid fuel other than fuel mentioned in paragraphs (1) and (2), sold or used in the county of Hawaii, or sold in any county for ultimate use in the county of Hawaii, 16 cents state tax[,] and a 5 cents motor vehicle insurance tax, and in addition thereto such amount, to be known as the "county of Hawaii fuel tax", as shall be levied pursuant to section 243-5.

(5) For each gallon of liquid fuel other than fuel mentioned in paragraphs (1) and (2), sold or used in the county of Maui, or sold in any county for ultimate use in the county of Maui, 16 cents state tax[,] and a 5 cents motor vehicle insurance tax, and in addition thereto such amount, to be known as the "county of Maui fuel tax", as shall be levied pursuant to section 243-5.

(6) For each gallon of liquid fuel other than fuel mentioned in paragraphs (1) and (2), sold or used in the county of Kauai, or sold in any county for ultimate use in the county of Kauai, 16 cents state tax[,] and a 5 cents motor vehicle insurance tax, and in addition thereto such amount, to be known as the "county of Kauai fuel tax", as shall be levied pursuant to section 243-5.

If it is shown to the satisfaction of the department, based upon proper records and from such other evidence as the department may require, that liquid fuel other than fuel mentioned in paragraphs (1) and (2) is used for agricultural equipment that does not operate upon the public highways of the State, the user thereof may obtain a refund of all taxes thereon imposed by this section in excess of 1 cent per gallon. The department shall prescribe rules to administer such refunds.

(b) Every distributor of diesel oil shall, in addition to the tax required by subsection (a), pay a license tax to the department for each gallon of such diesel oil sold or used by the distributor for operating a motor vehicle or motor vehicles upon public highways of the State. The rates of the additional tax hereby imposed are as follows:

(1) For each gallon of diesel oil sold or used in the city and county of Honolulu, or sold in any other county for ultimate use in the city and county of Honolulu, 15 cents state tax[,] and a 5 cents motor vehicle insurance tax, and in addition thereto such amount, to be known as the "city and county of Honolulu fuel tax", as shall be levied pursuant to section 243-5.

(2) For each gallon of diesel oil sold or used in the county of Hawaii, or sold in any other county for ultimate use in the county of Hawaii, 15 cents state tax[,] and a 5 cents motor vehicle insurance tax, and in addition thereto such amount, to be known as the "county of Hawaii fuel tax", as shall be levied pursuant to section 243-5.

(3) For each gallon of diesel oil sold or used in the county of Maui, or sold in any other county for ultimate use in the county of Maui, 15 cents state tax[,] and a 5 cents motor vehicle insurance tax, and in addition thereto such amount, to be known as the "county of Maui fuel tax", as shall be levied pursuant to section 243-5.

(4) For each gallon of diesel oil sold or used in the county of Kauai, or sold in any other county for ultimate use in the county of Kauai, 15 cents state tax[,] and a 5 cents motor vehicle insurance tax, and in addition thereto such amount, to be known as the "county of Kauai fuel tax", as shall be levied pursuant to section 243-5.

If any user of diesel oil furnishes a certificate, in such form as the department shall prescribe, to the distributor, or the distributor who uses diesel oil signs such certificate, certifying that the diesel oil is for use in operating a motor vehicle or motor vehicles in areas other than upon the public highways of the State, the tax as provided in paragraphs (1) to (4) shall not be applicable. In the event a certificate is not or cannot be furnished and the diesel oil is in fact for use for operating a motor vehicle or motor vehicles in areas other than upon public highways of the State, the user thereof may obtain a refund of all taxes thereon imposed by the foregoing paragraphs. The department shall prescribe rules to administer the refunding of such taxes."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________