STAND. COM. REP. NO.328-02

Honolulu, Hawaii

, 2002

RE: H.B. No. 2570

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Economic Development and Business Concerns, to which was referred H.B. No. 2570 entitled:

"A BILL FOR AN ACT RELATING TO THE CAPITAL GOODS EXCISE TAX CREDIT,"

begs leave to report as follows:

The purpose of this bill is to amend the capital goods excise tax credit by:

(1) Establishing the tax credit as four percent of the cost of eligible depreciable tangible personal property;

(2) Deleting references to the county general excise and use tax surcharge;

(3) Including canned computer software in the definition of "eligible depreciable tangible personal property" for taxable years beginning after December 31, 2001; and

(4) Declaring that recapture provisions are not applicable to computer technology or equipment if:

(A) Contributed to a tax exempt section 501(c)(3) organization primarily for purposes of supporting elementary and secondary education;

(B) Contributed to public schools or the University of Hawaii;

(C) The contribution is made not later than three years after the date the taxpayer acquired the property;

(D) The original use of the property is by the donor or the donee;

(E) Substantially all of the use of the property by the donee is for use within Hawaii for educational purposes that are related to the purpose or function of the donee;

(F) The property is not transferred by the donee in exchange for money, other property, or services, except for shipping, installation, and transfer costs; and

(G) The property will fit into the donee's education plan.

Testimony in support of this measure was submitted by the Department of Taxation. The Tax Foundation of Hawaii offered comments.

Your Committee has amended this measure by excluding the actual invoice price of the tangible personal property from the definition of "cost".

As affirmed by the record of votes of the members of your Committee on Economic Development and Business Concerns that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2570, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2570, H.D. 1, and be referred to the Committee on Finance.

 

Respectfully submitted on behalf of the members of the Committee on Economic Development and Business Concerns,

 

____________________________

LEI AHU ISA, Chair