Provides a tax refund to each resident individual taxpayer with a federal adjusted gross income below a certain threshold.

A BILL FOR AN ACT

SECTION 1. The legislature finds that the residents of Hawaii continue to be burdened by the high cost of living in the State of Hawaii. This cost of living effects a family's ability to find affordable housing, obtain reliable transportation, pay for necessary health care, ensure an adequate diet for their family, and cover the basic necessities of life.

In particular, the legislature finds it is of paramount importance that those individuals and families with the lowest income levels be granted proportionately higher relief from the burdens of supporting state services through payment of state income taxes. Additionally, the legislature believes this relief should be granted at a time when the state fiscal picture allows a balanced and meaningful refund targeted at those whose daily work and efforts have served as the backbone for the economic recovery the State has enjoyed.

This Act shall be known as the Tax Burden Easement Act of 2006. The purpose of this Act is to provide for an income tax refund to each resident individual taxpayer reporting a federal adjusted gross income of $50,000 or less for persons with a filing status of single or married filing separately, $75,000 or less for persons with a filing status as head of household, and $100,000 or less for persons with a filing status of married filing jointly.

SECTION 2. (a) There shall be paid, as early as December 1, 2006, or as soon thereafter as practical, to each resident individual taxpayer who filed an individual income tax return for the taxable year 2004 reporting an adjusted gross income, as defined by the Internal Revenue Code, of $50,000 or less for persons with a filing status of single or married filing separately, $75,000 or less for persons with a filing status as head of household, and $100,000 or less for persons with a filing status of married filing jointly, and 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, a general income tax refund in the amount provided in subsection (b); provided that a resident individual who has no income or no income taxable under chapter 235, Hawaii Revised Statutes, 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 receive this refund.

(b) Each resident individual taxpayer described in subsection (a) shall be paid $150 multiplied by the number of qualified exemptions which the taxpayer claimed on the taxpayer's 2004 net income tax return. Multiple exemptions shall not be granted for this general income tax credit because of age or deficiencies in vision, hearing, or other disability.

(c) Each person to whom the general income tax refund is paid shall have been a resident of the State, as defined in section 235-1, Hawaii Revised Statutes, for at least nine months regardless of whether the qualified resident was physically in the State for nine months.

(d) The general income tax refund shall not be paid to:

(e) The tax refund paid to a resident taxpayer pursuant to this section shall not be included in the resident taxpayer's gross income.

SECTION 2. This Act shall take effect upon its approval.