Provides a tax credit to taxpayers that renovate their residence to accommodate a handicapped or aging person.

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- Aging in place tax credit; handicapped accessibility. (a) There shall be allowed to each resident individual 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 net income tax return for a taxable year, an aging in place 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; provided that:

(b) The tax credit shall apply to fifty per cent of the qualified costs incurred by a taxpayer to renovate a residence to provide handicapped accessibility or aging in place up to a maximum of $        .

(c) To qualify for the income tax credit, the taxpayer shall be 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, 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.

(e) As used in this section:

"Aging in place" means renovations made to a residence to accommodate an elderly person.

"Handicapped accessibility" means renovations made to a residence to accommodate a person with disabilities.

"Qualified costs" means direct costs incurred by a taxpayer to renovate a residence to provide handicapped accessibility or aging in place.

"Taxpayer" means a person who claims the aging in place tax credit under this section.

(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 shall prepare such forms as may be necessary to claim a tax credit under this section, may require proof of the claim for the tax credit, and may adopt rules pursuant to chapter 91 to effectuate the purposes of this section, including eligibility requirements for the taxpayer, the handicapped person, and the aging person referred to under this section.

(h) 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 shall take effect upon its approval and shall apply to taxable years beginning after December 31, 2005.