Report Title:

Income Taxes; Residential Automatic Fire Sprinkler System

Description:

Provides an income tax deduction for qualifying costs of automatic fire sprinkler systems installed and placed into service after December 31, 2006.

HOUSE OF REPRESENTATIVES

H.B. NO.

3023

TWENTY-THIRD LEGISLATURE, 2006

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to income tax deductionS.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The purpose of this Act is to establish an income tax deduction for owner-occupants of residential housing units for the qualifying costs of automatic fire sprinkler systems installed and placed into service after December 31, 2006.

SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235-   Automatic fire sprinkler system; income tax deduction. (a) There shall be allowed as a deduction from gross income the amount paid, during the taxable year by an individual taxpayer or married couple filing jointly or separately, for the qualifying costs to install an automatic fire sprinkler system in a single-family residence, provided that:

(1) The taxpayer is the owner-occupant of the single-family residence; and

(2) The automatic fire sprinkler system is placed into service by the taxpayer after December 31, 2006.

(b) There shall be allowed as a deduction from gross income the amount paid, during the taxable year by an individual taxpayer or a married couple filing jointly or separately residing in a residential or mixed use condominium or a cooperative housing corporation, for that portion of the maintenance fees allocable to the qualifying costs to install an automatic fire sprinkler system in a residential unit and building provided that:

(1) The taxpayer is the owner-occupant of the residential unit in a condominium or cooperative housing project;

(2) The deduction shall be equal to the qualifying costs of the automatic fire sprinkler system or a maximum of $7,000 per residential unit, whichever is less; and

(3) The automatic fire sprinkler system is placed into service by the taxpayer after December 31, 2006.

(c) For purposes of this section:

"Automatic fire sprinkler system" means an integrated system of underground and overhead piping designed in accordance with fire protection engineering standards. The portion of the sprinkler system above ground is a network of specially sized or hydraulically designed piping installed in a building, a structure, or area, generally overhead and to which sprinklers are connected in a systematic pattern. The valve controlling each system riser is located in the system riser or its supply piping. Each sprinkler system riser includes a device for activating an alarm when the system is in operation. The device is normally activated by heat from a fire and discharges water over the fire area.

"Qualifying costs" means costs incurred in purchasing or otherwise acquiring and installing an automatic fired sprinkler system, including but not limited to accessories and installation, professional fees for design and construction, and government permit and access fees.

(d) The director of taxation shall:

(1) Require the taxpayer to furnish reasonable information to ascertain the validity of the claim for deduction made under this section; and

(2) Adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2006.

INTRODUCED BY:

_____________________________