Report Title:

Tax Credit; Agricultural Use; Property Tax

Description:

Establishes an agricultural land use tax credit equal to the amount of county property tax paid by taxpayers use their land for commercial purposes; reduces each county's portion of the transient accommodations tax revenue by the amount of credits claimed against each county's property tax assessments.

HOUSE OF REPRESENTATIVES

H.B. NO.

1698

TWENTY-THIRD LEGISLATURE, 2005

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to agricultural 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- Agricultural land use tax credit. (a) There shall be allowed to each eligible taxpayer subject to the taxes imposed by this chapter an agricultural land use tax credit that shall be deductible from the eligible 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 the amount of county property taxes paid by the eligible taxpayer for the taxable year in which the tax credit is claimed.

(c) In the case of an eligible taxpayer that is a partnership, limited liability company, S corporation, estate, or trust, the tax credit allowable is for the amount of county property tax paid by the entity. The costs upon which the tax credit is computed shall be determined at the entity level. Distribution and share of credit shall be determined by rule.

(d) If the tax credit under this section exceeds the eligible taxpayer's net income tax liability for any year, the excess of the tax credit may be used as a credit against the eligible taxpayer's net income tax liability in subsequent years until exhausted.

(e) 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.

(f) The director of taxation shall prepare any forms that may be necessary to claim a credit under this section. The director may also require the eligible taxpayer to furnish information to determine the validity of the claims for credits made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91.

(g) As used in this section:

"Agricultural land use" means the active use of land for the production of agricultural products for human food consumption, including floricultural, horticultural, viticultural, aquacultural, forestry, nut, coffee, bee, dairy, livestock, poultry, animals raised by grazing and pasturing, and any other farm, agronomic, or plantation products.

"Eligible taxpayer" means a taxpayer who uses the taxpayer's land for commercial agricultural purposes and incurs county property tax liability on that land."

SECTION 2. Section 237D-6.5, Hawaii Revised Statutes, is amended by amending subsections (b) and (c) to read as follows:

"(b) Revenues collected under this chapter shall be distributed as follows:

(1) 17.3 per cent of the revenues collected under this chapter shall be deposited into the convention center enterprise special fund established under section 201B-8; provided that beginning January 1, 2002, if the amount of the revenue collected under this paragraph exceeds $31,000,000 in any calendar year, revenues collected in excess of $31,000,000 shall be deposited into the general fund;

(2) 32.6 per cent of the revenues collected under this chapter shall be deposited into the tourism special fund established under section 201B-11 for tourism promotion and visitor industry research; provided that beginning on July 1, 2002:

(A) If the amount of revenues deposited into the tourism special fund exceeds $62,292,000 in any fiscal year, of the first $1,000,000 in revenues deposited in excess of $62,292,000:

(i) Ninety per cent shall be deposited into the state parks special fund established in section 184-3.4; and

(ii) Ten per cent shall be deposited into the special land and development fund established in section 171-19 for the Hawaii statewide trail and access program;

provided that the total amount deposited into the state parks special fund and to the special land and development fund for the Hawaii statewide trail and access program shall not exceed $1,000,000 in any fiscal year;

(3) 44.8 per cent of the revenues collected under this chapter shall be transferred as follows: Kauai county shall receive 14.5 per cent, Hawaii county shall receive 18.6 per cent, city and county of Honolulu shall receive 44.1 per cent, and Maui county shall receive 22.8 per cent; provided that this amount shall be reduced as provided in subsection (c); and

(4) 5.3 per cent of the revenues collected under this chapter shall be deposited into the transient accommodations tax trust fund established under section 237D-5.5.

All transient accommodations taxes shall be paid into the state treasury each month within ten days after collection, and shall be kept by the state director of finance in special accounts for distribution as provided in this subsection.

(c) On or before January or July 1 of each year or after the disposition of any tax appeal with respect to an assessment for periods after June 30, 1990, the state director of finance shall compute and pay the amount due as provided in subsection (b) to the director of finance of each county to become a general realization of the county expendable as such, except as otherwise provided by law[.]; provided that the amount paid to each county shall be reduced by the aggregate amount of tax credits claimed, pursuant to chapter 235- , against each county's property tax assessments."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval and shall apply to taxable years beginning after December 31, 2005.

INTRODUCED BY:

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