HOUSE OF REPRESENTATIVES

H.B. NO.

2507

TWENTY-EIGHTH LEGISLATURE, 2016

 

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 two new sections to part I to be appropriately designated and to read as follows:

     "§235-     Photovoltaic storage battery development and manufacturing tax credit.  (a)  There shall be allowed to each taxpayer subject to the tax imposed by this chapter, a photovoltaic storage battery development and manufacturing income tax credit, which 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 credit shall be          per cent of the qualified development and manufacturing costs incurred during the taxable year; provided that the total credit claimed per taxpayer shall not exceed $          .

     In the case of a partnership, S corporation, estate, or trust, the tax credit allowable is for qualified manufacturing costs incurred 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 section 704 of the Internal Revenue Code.

     If a deduction is taken under section 179 (with respect to election to expense certain depreciable business assets) of the Internal Revenue Code, no tax credit shall be allowed for those costs for which the deduction is taken.

     The basis of eligible property for depreciation or accelerated cost recovery system purposes for state income taxes shall be reduced by the amount of credit allowable and claimed.

     (c)  If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of credits over liability shall be refunded to the taxpayer; provided that no refunds or payment on account of the tax credits allowed by this section shall be made for amounts less than $1.  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.

     (d)  The director of taxation:

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

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

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

     (e)  The department of business, economic development, and tourism shall:

     (1)  Maintain records of the total amount of qualified development and manufacturing costs for each taxpayer claiming a credit;

     (2)  Verify the amount of the qualified development and manufacturing costs claimed;

     (3)  Total all qualified development and manufacturing costs claimed; and

     (4)  Certify the total amount of the tax credit for each taxable year.

     Upon each determination, the department of business, economic development, and tourism shall issue a certificate to the taxpayer verifying the qualified development and manufacturing costs and the credit amount certified for each taxable year.

     The taxpayer shall file the certificate with the taxpayer's tax return with the department of taxation.  Notwithstanding the department of business, economic development, and tourism's certification authority under this section, the director of taxation may audit and adjust certification to conform to the facts.

     (f)  The tax credit allowed under this section shall be available for taxable years beginning after December 31, 2015, and shall not be available for taxable years beginning after December 31, 2025.

     (g)  As used in this section:

     "Net income tax liability" means income tax liability reduced by all other credits allowed under this chapter.

     "Photovoltaic storage battery" means a battery used to store electrical energy generated by a solar energy system, as defined in section 235-12.5, for use during times when no solar resources are available to generate power.

     "Qualified development and manufacturing costs" means expenditures for:

     (1)  Costs incurred to purchase equipment to be used in the development and manufacturing of photovoltaic storage batteries in the State;

     (2)  Costs incurred to purchase supplies to be used in the development and manufacturing of photovoltaic storage batteries in the State; and

     (3)  Costs incurred to train employees to manufacture photovoltaic storage batteries in the State;

provided that "qualified development and manufacturing costs" does not include any costs for which another credit is claimed under this chapter.

     §235-     Electric vehicle storage battery development and manufacturing tax credit.  (a)  There shall be allowed to each taxpayer subject to the tax imposed by this chapter, an electric vehicle storage battery development and manufacturing income tax credit, which 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 credit shall be          per cent of the qualified development and manufacturing costs incurred during the taxable year; provided that the total credit claimed per taxpayer shall not exceed $          .

     In the case of a partnership, S corporation, estate, or trust, the tax credit allowable is for qualified manufacturing costs incurred 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 section 704 of the Internal Revenue Code.

     If a deduction is taken under section 179 (with respect to election to expense certain depreciable business assets) of the Internal Revenue Code, no tax credit shall be allowed for those costs for which the deduction is taken.

     The basis of eligible property for depreciation or accelerated cost recovery system purposes for state income taxes shall be reduced by the amount of credit allowable and claimed.

     (c)  If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of credits over liability shall be refunded to the taxpayer; provided that no refunds or payment on account of the tax credits allowed by this section shall be made for amounts less than $1.  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.

     (d)  The director of taxation:

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

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

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

     (e)  The department of business, economic development, and tourism shall:

     (1)  Maintain records of the total amount of qualified development and manufacturing costs for each taxpayer claiming a credit;

     (2)  Verify the amount of the qualified development and manufacturing costs claimed;

     (3)  Total all qualified development and manufacturing costs claimed; and

     (4)  Certify the total amount of the tax credit for each taxable year.

     Upon each determination, the department of business, economic development, and tourism shall issue a certificate to the taxpayer verifying the qualified development and manufacturing costs and the credit amount certified for each taxable year.

     The taxpayer shall file the certificate with the taxpayer's tax return with the department of taxation.  Notwithstanding the department of business, economic development, and tourism's certification authority under this section, the director of taxation may audit and adjust certification to conform to the facts.

     (f)  The tax credit allowed under this section shall be available for taxable years beginning after December 31, 2015, and shall not be available for taxable years beginning after December 31, 2025.

     (g)  As used in this section:

     "Electric vehicle storage battery" means a battery that:

     (1)  Provides propulsion energy to a vehicle with four or more wheels;

     (2)  Has an energy storage capacity of at least four kilowatt hours; and

     (3)  Can be recharged from a source of electricity that is external to the vehicle.

     "Net income tax liability" means income tax liability reduced by all other credits allowed under this chapter.

     "Qualified development and manufacturing costs" means expenditures for:

     (1)  Costs incurred to purchase equipment to be used in the development and manufacturing of electric vehicle storage batteries in the State;

     (2)  Costs incurred to purchase supplies to be used in the development and manufacturing of electric vehicle storage batteries in the State; and

     (3)  Costs incurred to train employees to manufacture electric vehicle storage batteries in the State;

provided that "qualified development and manufacturing costs" does not include any costs for which another credit is claimed under this chapter."

     SECTION 2.  New statutory material is underscored.

     SECTION 3.  This Act, upon its approval, shall apply to taxable years beginning after December 31, 2015, but shall not be available for taxable years beginning after December 31, 2025.

 

INTRODUCED BY:

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Report Title:

Income Tax Credits; Photovoltaic Storage Batteries; Electric Vehicle Storage Batteries

 

Description:

Establishes refundable income tax credits for the development and manufacturing of photovoltaic storage batteries and electric vehicle storage batteries.

 

 

 

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