Provides a tax credit to high technology businesses that train high school students in a cooperative education program. (HB2127 HD1)

A BILL FOR AN ACT

SECTION 1. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows

"§235- High technology cooperative education tax credit. (a) There shall be allowed to each eligible taxpayer 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, who files an individual or corporate net income tax return for a taxable year, a high technology cooperative education tax credit, which shall be deductible from the taxpayer's net income tax liability imposed by this chapter for the taxable year in which the tax credit is properly claimed.

(b) The amount of the tax credit shall be equal to the expenses claimed by an eligible taxpayer for costs related to the establishment, training, supervision, and other related costs incurred in operating a cooperative education program for high school students in the taxpayer's qualified high technology business.

(c) For the purpose of this section, "eligible taxpayer" means a person or business entity that owns or operates a "qualified high technology business", as that term is defined under section 235-110.9, establishes and operates a high technology cooperative education program pursuant to rules adopted by the department of education, and is in compliance with all applicable federal, state, and county statutes, rules, and regulations.

(d) If the tax credit under this section exceeds the taxpayer's net income tax liability under this chapter, any excess of the tax credit may be used as a credit against the taxpayer's income tax liability in subsequent taxable years until exhausted; provided that no claim for a refund shall exceed $1.

(e) If the taxpayer is a partnership, S corporation, estate, or trust, the tax credit is for the expenses incurred by the entity for the taxable year. The costs upon which the tax credit is computed shall be determined at the entity level. Distribution and share of the tax credit shall be determined pursuant to section 235-110.7.

(f) Every claim, including amended claims, for the tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the tax credit may be claimed. Failure to meet the filing requirements of this subsection shall constitute a waiver of the right to claim the tax credit.

(g) The director of taxation:

(h) The department of education shall adopt rules pursuant to chapter 91 to effectuate this section.

(i) The department of taxation shall report to the legislature annually, no later than twenty days prior to the convening of every regular session, on the number of taxpayers claiming the tax credit and the total cost of the tax credit to the State during the past year."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2005.