HOUSE OF REPRESENTATIVES	H.B. NO.	180
TWENTY-SIXTH LEGISLATURE, 2011
STATE OF HAWAII

A BILL FOR AN ACT

relating to senior citizens.

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‑    Medical services excise tax credit; elders. (a)  Each resident taxpayer sixty-five years of age or older who files an individual income tax return for a taxable year and 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 may claim a medical services excise tax credit against the resident taxpayer's individual income tax liability for the taxable year for which the individual income tax return is being filed; provided that:

(1) 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; and

(2) 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 tax credits as set forth in this section.

(b)  The medical services excise tax credit for elders shall be four per cent of qualified medical expenses paid by the resident individual during the taxable year.  For the purposes of this section, the term "qualified medical expenses" includes those medical expenses allowable as deductions for income tax purposes under section 213 (with respect to medical, dental, etc., expenses) of the Internal Revenue Code; provided that the medical expense was subject to the imposition and payment of the general excise tax under chapter 237.

"Qualified medical expenses" shall not include the following:

(1) Capital improvements; or

(2) Prescription drugs or prosthetic devices exempt under section 237-24.3(7).

The amount of medical expenses paid during the taxable year shall not be reduced by any insurance reimbursement.

(c)  The tax credits claimed by a resident taxpayer pursuant to this section shall be deductible from the resident taxpayer's individual income tax liability, if any, for the tax year in which they are properly claimed.  If the tax credits claimed by a resident taxpayer exceed the amount of income tax payment due from the resident taxpayer, the excess of credits over payments due shall be refunded to the resident taxpayer; provided that:

(1) Tax credits properly claimed by a resident individual who has no income tax liability shall be paid to the resident individual; and

(2) No refunds or payment on account of the tax credits allowed by this section shall be made for amounts less than $1.

(d)  The director of taxation shall prepare the forms that may be necessary to claim a credit under this section.  The director may also require the taxpayer to furnish reasonable information in order that the director may ascertain the validity of the claim for credit made under this section.  The director may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91.

(e)  All claims for tax credits under this section, including any amended claims, must be filed on or before the end of the twelfth month following the close of the taxable year for which the credits may be claimed.  Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit."

     SECTION 2.  Section 235-55.85, Hawaii Revised Statutes, is amended to read as follows:

     "§235-55.85  Refundable food/excise tax credit.  (a)  Each resident individual taxpayer[,] under the age of sixty-five and each resident individual taxpayer sixty-five years of age or older who files an individual income tax return for a taxable year, 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, may claim a refundable food/excise tax credit against the resident taxpayer's individual income tax liability for the taxable year for which the individual income tax return is being filed; provided that 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 credit.

     (b)  Each resident individual taxpayer under the age of sixty-five may claim a refundable food/excise tax credit multiplied by the number of qualified exemptions to which the taxpayer is entitled; 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 tax credit to which they would have been entitled had a joint return been filed.

(c)  Each resident individual taxpayer under the age of sixty-five may claim a credit in accordance with the table below:

     Adjusted gross income       Credit per exemption

     Under $5,000                         $85

     $5,000 under $10,000                  75

     $10,000 under $15,000                 65

     $15,000 under $20,000                 55

     $20,000 under $30,000                 45

     $30,000 under $40,000                 35

     $40,000 under $50,000                 25

     $50,000 and over                       0

(d)  Each resident individual taxpayer sixty-five years of age or older may claim a credit in an amount equal to four per cent of all qualified food expenses paid by the taxpayer during the taxable year.

     [(c)] (e)  For the purposes of this section, a qualified exemption is defined to include those exemptions permitted under this chapter; [provided that no additional exemption may be claimed by a taxpayer who is sixty-five years of age or older;] provided that a person for whom exemption is claimed has physically resided in the State for more than nine months during the taxable year; and provided further that multiple exemptions shall not be granted because of deficiencies in vision or hearing, or other disability.  For purposes of claiming this credit only, a minor child receiving support from the department of human services of the State, social security survivor's benefits, and the like, may be considered a dependent and a qualified exemption of the parent or guardian.

     [(d)] (f)  The tax credit under this section shall not be available to:

     (1)  Any person who has been convicted of a felony and who has been committed to prison and has been physically confined for the full taxable year;

     (2)  Any person who would otherwise be eligible to be claimed as a dependent but who has been committed to a youth correctional facility and has resided at the facility for the full taxable year; or

     (3)  Any misdemeanant who has been committed to jail and has been physically confined for the full taxable year.

     [(e)] (g)  The tax credits claimed by a resident taxpayer pursuant to this section shall be deductible from the resident taxpayer's individual income tax liability, if any, for the tax year in which they are properly claimed.  If the tax credits claimed by a resident taxpayer exceed the amount of income tax payment due from the resident taxpayer, the excess of credits over payments due shall be refunded to the resident taxpayer; provided that tax credits properly claimed by a resident individual who has no income tax liability shall be paid to the resident individual; and provided further that no refunds or payment on account of the tax credits allowed by this section shall be made for amounts less than $1.

     [(f)] (h)  All claims for tax credits under this section, including any amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credits may be claimed.  Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

     [(g)] (i) For the purposes of this section[, "adjusted]:

"Adjusted gross income" means adjusted gross income as defined by the Internal Revenue Code.

"Food" means those items that can be purchased for home consumption under the federal supplemental nutrition assistance program."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act, upon its approval, shall apply to taxable years beginning after December 31, 2010.

INTRODUCED BY:

_____________________________

Report Title:

Food and Medical Services Excise Tax Credit; Elders

Description:

Clarifies that the existing graduated food excise tax credit applies to taxpayers under age 65.  Adds food excise tax credit of 4% of qualified food expenses for elders age 65 and older.  Creates medical services excise tax credit of 4% of qualified medical expenses for elders age 65 and older.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.