Allows resident individual taxpayers to claim an income tax deduction from gross income of up to $250 per taxable year for eligible school-related expenditures paid by qualifying educators. Applies to expenses incurred after December 31, 2006. (SD1)

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-   Deduction for school-related expenses paid by educator. (a) A resident taxpayer who files an individual income tax return for the taxable year and qualifies as an eligible educator shall be allowed a deduction from gross income not exceeding $250 in the aggregate for the taxable year for qualified school-related expenditures paid during the taxable year. The deductions allowed under this section consist of expenses not in excess of $250, paid or incurred by an eligible educator in connection with books, supplies other than nonathletic supplies for courses of instruction in health or physical education, supplemental materials, and computer equipment including related software and services used by the eligible educator in the classroom.

(b) If the taxpayer is married at the close of the taxable year and both spouses claim the deductions, the deduction allowed under subsection (a) shall not exceed $400 on a joint return filed for the taxable year; provided that a husband and wife filing separate tax returns for a taxable year for which a joint return could have been filed by them shall claim only the deduction that they would have been entitled to had a joint return been filed.

(c) For purposes of this section, the term "eligible educator" means, with respect to any taxable year, an individual who is a school teacher, instructor, counselor, principal, or aide in a school for at least nine-hundred hours during a school year.

(d) For purposes of this section, the term "school" means any school which provides elementary education or secondary education in grades kindergarten through grade twelve, as determined under state law.

(e) The director of taxation shall prepare such forms as may be necessary to claim the deduction under this section and shall require proof of the claim for the deduction."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act shall take effect upon its approval

and shall apply to school-related expenses paid after December 31, 2005.