HB1597.DOC

HOUSE OF REPRESENTATIVES	H.B. NO.	1597
TWENTY-SIXTH LEGISLATURE, 2011
STATE OF HAWAII

A BILL FOR AN ACT

relating to taxation.

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-A Historic businesses; tax credit. (a) There shall be allowed to each taxpayer subject to the taxes imposed by this chapter a tax credit that shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter. The tax credit shall be equivalent to an amount up to four per cent of gross receipts, or $10,000, whichever is less.

(b) The credit allowed under this section shall be claimed against the net income tax liability for the taxable year, and shall be subject to the following conditions:

(1) The taxpayer or entity claiming the credit shall be a domestic corporation, domestic professional corporation, domestic limited liability company, domestic nonprofit corporation, domestic business trust, estate, domestic partnership, domestic limited liability partnerships, or Hawaii domiciled trust;

(2) The taxpayer or entity claiming the credit shall be subject to taxation under chapter 237 of the Hawaii Revised Statutes;

(3) The taxpayer or entity shall be in current compliance with all applicable laws and regulations of the Department of Commerce and Consumer Affairs;

(4) The taxpayer and entity shall have no outstanding tax liability to the State or its political subdivisions;

(5) The taxpayer or entity claiming the credit shall incur at least fifty per cent of its operating costs, including, but not limited to, rent, labor, and machinery, from sources whose domicile is the state of Hawai`i; and

(6) The taxpayer or entity claiming the credit shall be a historic business.

(c) If the tax credit under this section exceeds the taxpayer's income tax liability for a year in which the credit is taken, the excess of the tax credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted. Every claim, including amended claims, for a 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 credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

(d) The director of taxation may adopt any rules under chapter 91 and forms necessary to carry out this section.

(e) As used in this section:

"Historic business" means a business entity that has operated for at least twenty-five years in the state, and has significance to the history of the state.

"Net income tax liability" means net income tax liability reduced by all other credits allowed under this chapter.

(f) This section shall be applicable to taxable years beginning after December 31, 2011, but not to taxable years beginning after December 31, 2016."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2011.

INTRODUCED BY:

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