SB802

THE SENATE	S.B. NO.	802
THIRTY-SECOND LEGISLATURE, 2023
STATE OF HAWAII

A BILL FOR AN ACT

relating to THE job creation 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- Job creation tax credit. (a) For each taxpayer that qualifies as a business firm and is subject to taxes imposed by this chapter, there shall be allowed a job creation tax credit against the business firm's net income tax liability, if any, for each new qualified permanent full-time employment position created in the State, as computed and certified by the department of taxation.

(b) To be eligible to claim the credit, the business firm shall invest at least $50,000 of capital investment and create at least one net new qualified employment position that pays compensation at least equal to or above the fiscal year's self-sufficiency income standard provided by the department of business, economic development, and tourism.

(1) $3,000 for each full-time employee hired in a qualified employment position in the first year or partial year of employment; provided that employees hired in the last ninety days of the taxable year shall be excluded for that taxable year and shall be considered to be new employees in the following taxable year;

(2) $3,000 for each full-time employee in a qualified employment position for the full taxable year in the second year of continuous employment; and

(3) $3,000 for each full-time employee in a qualified employment position for the full taxable year in the third year of continuous employment.

(d) Claims for tax credits under this section, including amended claims, shall be filed on or before the end of the twelfth month following the taxable year for which the tax credit may be claimed. Failure to file within the twelve-month period shall constitute a waiver of the right to claim the credit.

(e) The director of taxation may prepare any forms and procedures that may be necessary to claim a credit under this section. The director may also require the business firm to furnish information to ascertain the validity of the claims for credit made under this section and may adopt, pursuant to chapter 91, rules necessary to effectuate the purposes of this section.

(f) Notwithstanding any other law to the contrary limiting the disclosure of tax returns or return information, the department of business, economic development, and tourism, and the department of labor and industrial relations shall be entitled to inspect and receive tax returns and return information in the administration of this credit.

(g) As used in this section:

"Business firm" means any corporation, partnership, subchapter S corporation, limited liability company, or sole proprietorship registered to do business in the State of Hawaii with the department of commerce and consumer affairs and the department of taxation, subject to the taxes imposed under this chapter.

"Capital investment" means an expenditure to acquire, lease, or improve property that is used in operating a business, including land, buildings, machinery, fixtures, and equipment.

"Qualified employment position" means employment that meets the following requirements:

(1) The position consists of at least one thousand seven hundred fifty hours per year of full-time permanent employment;

(2) The job duties are performed primarily at the location or locations of the business in the State; and

(3) The employer pays compensation at least equal to or above the fiscal year's self-sufficiency income standard provided by the department of business, economic development, and tourism."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act shall take effect on July 1, 2023; provided that this Act shall apply to taxable years beginning after December 31, 2023.

INTRODUCED BY:	_____________________________