HOUSE OF REPRESENTATIVES

H.B. NO.

1270

TWENTY-SIXTH LEGISLATURE, 2011

H.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO TAXATION.

 

 

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

 


     SECTION 1.  The legislature finds that, each year approximately $1,000,000,000 is given away in tax dollars in the form of tax exemptions, deductions, and credits to certain segments of the community.  While many, if not all are for good reasons and programs, these tax "giveaways" are perpetual and require little or no legislative oversight.  This is an unfair system, considering core programs such as education, public safety, health care programs, including the medicare and medicaid programs, and others must face legislative scrutiny before receiving continued funding.

     Prior to each of the repeal dates for the various tax credits, exclusions, or exemptions listed in section 3 of this Act, it is the intention of the legislature to revisit the date and analyses of each tax credit individually and to consider whether any of the tax credits scheduled to be repealed should be allowed to continue.

     The purpose of this Act is to provide a review of all tax credits and exemptions to facilitate the authorization or reauthorization of successful programs and to do so at a cost that can be accommodated by the state's annual budget.       SECTION 2.  Chapter 231, Hawaii Revised Statutes, is amended by a new section to be appropriately designated and to read as follows:

     "§231-     Tax credits and exemptions; reporting requirements; confidentiality; penalty.  (a)  Every person claiming a tax credit, exclusion, or exemption under this title, shall attach to the person's claim, statistical information requested by the department on a form provided by the department pursuant to subsection (b).

     (b)  The department shall develop forms requesting the following taxpayer statistical information in addition to any other statistical information necessary to enable evaluation of each tax credit, exclusion, and exemption listed in section 3 of Act    , Session Laws of Hawaii 2011:

     (1)  Reporting period;

     (2)  Amount of tax credit claimed;

     (3)  Number of jobs created based on the tax credit;

     (4)  Public purpose of the tax credit, exclusion, or exemption as it relates to the specific taxpayer;

     (5)  Job quality standards provided by the taxpayer;

     (6)  Amount of tax credit recaptured, if any;

     (7)  Conformance by the taxpayer with the purpose of the tax credit, exclusion, or exemption; and

     (8)  A review of expenditures enabled because of the tax credit, exclusion, or exemption and the extent to which the tax credit, exclusion, or exemption fits within the State's budgeted estimates.

     (c)  No later than September 30, the department shall provide a report to the legislature summarizing for each tax credit, exclusion, or exemption the statistical information received from taxpayers for the previous year as required by subsection (b).  This information shall be made available to the public so that the statistics may be analyzed by any individual or public or government agency interested in establishing an opinion on whether the statistics indicate which credits, exclusions, or exemptions should be continued, amended, or permitted to expire. 

     (d)  No later than thirty days prior to each regular session beginning with the regular session of 2013, any individual or public or government agency that has analyzed any tax credit, exclusion, and exemption data made available by the department may provide the legislature with a report of this analysis including information sufficient to allow the legislature to determine whether the tax credits, exclusions, and exemptions established under title 14 and listed in section 3 of Act    , Session Laws of Hawaii 2011, are achieving their intended objectives, are consistent with public policies, and should be reenacted, amended, or permitted to expire.

     (e)  Notwithstanding section 235-16 and any other law restricting disclosure of tax returns or tax return information to the contrary, all tax information received by the department relating to credits, exclusions, and exemptions shall be made available to the public.

     (f)  Any taxpayer claiming a tax credit under this title shall file the taxpayer's return by the due date or March 30, whichever is earlier, of the year following the year in which the tax credit, exclusion, or exemption is being claimed and include the data required pursuant to subsection (b).  If the taxpayer fails to file by the due date or March 30, whichever is earlier, in the year following the year in which the tax credit, exclusion, or exemption was claimed or fails to include the required data, any tax credit, exclusion, or exemption received shall be recaptured for the year the tax credit, exclusion, or exemption was claimed.  No taxpayer shall be given an extension on this deadline."

     SECTION 3.  Repeal dates for certain tax credits, exclusions, and exemptions.  (a)  All of the following tax credits, exclusions, or exemptions shall be repealed on December 31, 2013:

     (1)  Section 235-9.5, Hawaii Revised Statutes (stock options from qualified high technology businesses excluded from taxation);

     (2)  Section 235-17, Hawaii Revised Statutes (motion picture, digital media, and film production income tax credit);

     (3)  Section 235-110.51, Hawaii Revised Statutes (technology infrastructure renovation tax credit);

     (4)  Section 235-110.6, Hawaii Revised Statutes (fuel tax credit for commercial fishers);

     (5)  Section 235-110.7, Hawaii Revised Statutes (capital goods excise tax credit);

     (6)  Section 237-24.5, Hawaii Revised Statutes (general excise tax; additional exemptions);

     (7)  Section 237-24.75, Hawaii Revised Statutes (general excise tax; additional exemptions);

     (8)  Section 237-24.9, Hawaii Revised Statutes (general excise tax; aircraft service and maintenance facility);

     (9)  Section 237-28.1, Hawaii Revised Statutes (general excise tax; exemption of certain shipbuilding and ship repair business);

     (10) Section 239-12, Hawaii Revised Statutes (public service company tax; call centers; exemption; engaging in business; definitions);

     (11) Section 241-4.5, Hawaii Revised Statutes (banks and other financial corporations tax; capital goods excise tax credit); and

     (12) Section 241-4.8, Hawaii Revised Statutes (banks and other financial corporations tax; high technology business investment tax credit).

     (b)  All of the following exclusions and exemptions shall be repealed on December 31, 2014:

     (1)  Paragraph (14) of section 237-24, Hawaii Revised Statutes (general excise tax; amounts not taxable);

     (2)  Section 237-24.3, Hawaii Revised Statutes (general excise tax; additional amounts not taxable);

     (3)  Section 237-24.7, Hawaii Revised Statutes (general excise tax; additional amounts not taxable);

     (4)  Section 237-25, Hawaii Revised Statutes (general excise tax; exemptions of sales and gross proceeds of sales to federal government, and credit unions);

     (5)  Section 237-26, Hawaii Revised Statutes (general excise tax; exemption of certain scientific contracts with the United States);

     (6)  Section 237-27, Hawaii Revised Statutes (general excise tax; exemption of certain petroleum refiners);

     (7)  Section 237-27.5, Hawaii Revised Statutes (general excise tax; air pollution control facility);

     (8)  Section 237-27.6, Hawaii Revised Statutes (general excise tax; solid waste processing, disposal, and electric generating facility; certain amounts exempt);

     (9)  Section 237-29.5, Hawaii Revised Statutes (general excise tax; exemption for sales of tangible personal property shipped out of the State);

    (10)  Section 237-29.53, Hawaii Revised Statutes (general excise tax; exemption for contracting or services exported out of State);

    (11)  Section 237-29.55, Hawaii Revised Statutes (general excise tax; exemption for sale of tangible personal property for resale at wholesale);

    (12)  Section 237-29.8, Hawaii Revised Statutes (general excise tax; call centers; exemption; engaging in business; definitions); and

    (13)  Section 244D-4.3, Hawaii Revised Statutes (liquor tax; exemption for sales of liquor out of the State).

     (c)  All of the following tax credits shall be repealed on December 31, 2015:

     (1)  Section 235-12.5, Hawaii Revised Statutes (renewable energy technologies; income tax credit);

     (2)  Section 235-110.3, Hawaii Revised Statutes (ethanol facility tax credit);

     (3)  Section 235-110.93, Hawaii Revised Statutes (important agricultural land qualified agricultural cost tax credit); and

     (4)  Section 241-4.6, Hawaii Revised Statutes (banks and other financial corporations tax; renewable energy technologies; income tax credit).

     (d)  All of the following tax credits, exclusions, and exemptions shall be repealed on December 31, 2016:

     (1)  Section 235-15, Hawaii Revised Statutes (tax credits to promote the purchase of child passenger restraint systems);

     (2)  Section 235-55.7, Hawaii Revised Statutes (income tax credit for low-income household renters);

     (3)  Section 235-55.85, Hawaii Revised Statutes (refundable food/excise tax credit);

     (4)  Section 235-110.2, Hawaii Revised Statutes (credit for school repair and maintenance);

     (5)  Section 235-110.8, Hawaii Revised Statutes (low-income housing tax credit);

     (6)  Section 237-29, Hawaii Revised Statutes (general excise tax; exemptions for certified or approved housing projects); and

     (7)  Section 241-4.7, Hawaii Revised Statutes (banks and other financial corporations tax; low-income housing; income tax credit).

     SECTION 4.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect upon its approval.


 


 

Report Title:

Tax Credits; Tax Exemptions; Evaluation

 

Description:

Requires the Department of Taxation to evaluate certain tax credits and tax exemptions and report to the Legislature.  Provides automatic repeal of the tax credits and tax exemptions.  (HB1270 HD1)

 

 

 

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