HOUSE OF REPRESENTATIVES	H.B. NO.	2126
THIRTY-SECOND LEGISLATURE, 2024
STATE OF HAWAII

A BILL FOR AN ACT

relating to income tax credits.

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-    Small business; bonus; tax credit. (a) There shall be allowed to each qualified taxpayer subject to the tax 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 for the taxable year in which the credit is properly claimed.

(b) The amount of the tax credit shall be equal to $           per qualified employee, up to a maximum of $          .

(c) If the tax credit under this section exceeds the taxpayer's net income tax liability, the excess of credit over liability may be used as a tax credit against the taxpayer's net income tax liability in subsequent years until exhausted. 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 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:

(1) Shall prepare any forms that may be necessary to claim a tax credit under this section;

(2) May require the taxpayer to furnish reasonable information to ascertain the validity of the claim for the tax credit made under this section; and

(3) May adopt rules under chapter 91 necessary to effectuate the purposes of this section.

(e) For the purposes of this section:

"Bonus" means a payment made in addition to the employee's regular earnings. "Bonus" does not include overtime pay.

"Qualified employee" means an employee of a qualified taxpayer who was provided a bonus.

"Qualified taxpayer" means any employer:

(1) That is a small business; and

(2) Who provides bonuses to their employees.

"Small business" means a for-profit corporation, limited liability company, partnership, limited partnership, sole proprietorship, or other legal entity that:

(1) Is domiciled and authorized to do business in Hawaii;

(2) Is independently owned and operated; and

(3) Employs fewer than one hundred full-time or part-time employees in Hawaii."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2023.

INTRODUCED BY:

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Report Title:

Small Business; Bonus; Tax Credit

Description:

Establishes a tax credit for small businesses who provide bonuses for their employees.

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