HOUSE OF REPRESENTATIVES	H.B. NO.	1456
THIRTY-THIRD LEGISLATURE, 2025
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-    Environmental sustainability; projects; tax credit. (a) Each individual or corporate taxpayer that files an individual or corporate net income tax return for a taxable year may claim a tax credit under this section against the Hawaii state individual or corporate net income tax. The tax credit may be claimed for every qualified project that is installed and placed in service in the State by a taxpayer during the taxable year. The tax credit may be claimed for      per cent of the actual cost incurred for each qualified project.

(b) In the case of a partnership, S corporation, estate, or trust, the tax credit allowable is for every eligible project that is installed and placed in service in the State by the entity for the taxable year. The cost upon which the tax credit is computed shall be determined at the entity level. Distribution and share of credit shall be determined by rule.

(c) To qualify for this tax credit, a taxpayer shall:

(1) Comply with all state environmental and building regulations; and

(2) Provide evidence that the project has quantifiable environmental benefits.

(d) The director of taxation shall prepare forms as may be necessary to claim a credit under this section. The director may also require the taxpayer to furnish:

(1) Proof of costs for the project, including itemized receipts;

(2) Project plans, including the projected energy output or environmental impact of the project; and

(3) Any certification of compliance with labor, location, and technical requirements.

(e) If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of the credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted. All claims for the tax credit under this section, including 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 this subsection shall constitute a waiver of the right to claim the credit.

(f) Total tax credits claimed per qualified project shall not exceed $          .

(g) The total amount of tax credits allowed under this section in any particular year shall be $          .

(h) No costs incurred for the installation and placing into service in the State of a qualified project for which a credit is claimed by any taxpayer pursuant to section 235-12.5 shall be eligible for credits under this section.

(i) As used in this section, "project" means a system that supports environmental sustainability, including support for agriculture, agroforestry, aquaculture, circular manufacturing, or renewable energy."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2024.

INTRODUCED BY:

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Report Title:

Environmental Sustainability; Projects; Income Tax Credit

Description:

Establishes a tax credit for individual and corporate taxpayers who install and place in service certain projects that support environmental sustainability.

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