Report Title:
Tax Credit; Historic Preservation
Description:
Provides a tax credit for the rehabilitation or preservation of historic structures in the State.
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
3114 |
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TWENTY-THIRD LEGISLATURE, 2006 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO HISTORIC PRESERVATION TAX CREDIT.
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- Historic preservation tax credit. (a) There shall be allowed to each resident individual and corporate 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, an historic preservation 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:
(1) A resident individual who has no income or no income taxable under this chapter and who is not claimed or is not otherwise eligible to be claimed as a dependent by a taxpayer for federal or Hawaii state individual income tax purposes may claim this tax credit; and
(2) A husband and wife filing separate returns for a taxable year for which a joint return could have been filed by them shall claim only the tax credit to which they would have been entitled had a joint return been filed.
(b) The tax credit shall apply to the qualifying costs expended to rehabilitate or preserve historic structures in the State. The amount of the tax credit shall be per cent of the taxpayer's qualifying costs; provided that no single claim for a tax credit shall exceed $ ; and provided further that the annual total of all tax credits claimed under this section shall not exceed $ .
(c) To qualify for the income tax credit, the taxpayer shall:
(1) Qualify under criteria or rules adopted by the Hawaii historic places review board pursuant to chapter 91, that shall include, but not be limited to:
(A) Criteria for qualifying structures;
(B) A definition of "qualifying costs";
(C) Standards to ensure that the rehabilitation preserves the historic and architectural character of the structure; and
(D) A minimum amount, or threshold, required to be invested in the rehabilitation or preservation.
(2) 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 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.
(e) If the taxpayer is a partnership, S corporation, estate, or trust, the tax credit is for qualifying costs 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) If a deduction is taken under section 179 (with respect to election to expense depreciable business assets) of the Internal Revenue Code of 1986, as amended, no tax credit shall be allowed for qualifying costs for which the deduction is taken.
The basis for eligible property for depreciation of accelerated cost recovery system purposes for state income taxes shall not be reduced by the amount of tax credit allowable and claimed.
(g) If at any time, for whatever reason, the taxpayer no longer qualifies for the tax credit claimed under this section, the tax credits shall be recaptured. The recapture shall be equal to per cent of the total tax credits claimed under this section. The amount of the recaptured tax credits shall be added to the taxpayer's tax liability for the taxable year in which the recapture occurs.
(h) 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.
(i) The director of taxation:
(1) Shall prepare such forms as may be necessary to claim a tax credit under this section;
(2) May require proof of the claim for the tax credit; and
(3) May adopt rules pursuant to chapter 91 to effectuate the tax related purposes of this section.
(j) 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.
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INTRODUCED BY: |
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