Report Title:

Long-Term Care; Tax Credits; Contributions

 

Description:

Creates income tax credit for charitable contributions to qualifying providers of long-term care services under the Kupuna Care program.

 

THE SENATE

S.B. NO.

1549

TWENTY-FIRST LEGISLATURE, 2001

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

rELating to income tax law.

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

SECTION 1. The legislature finds that the State's rapidly aging population is in dire need of long-term care services. The State's population continues to age at a significantly more rapid rate compared with younger segments of the population. The demand for long-term care services will rise in proportion to the growth of the elderly population.

The bulk of home and community long-term care services are provided by private charitable organizations that qualify for income tax exemption under the Internal Revenue Code. The legislature further finds that these charities, though tax exempt, could be helped financially by an income tax credit for contributions. These organizations would be required to spend at least half of their budgets on providing long-term care services. A tax credit would create a new source of funding for the provision of long-term care services in this State.

The purpose of this Act is to create an income tax credit for individual contributions to qualifying charitable organizations that provide long-term care services.

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

"§235- Credit for contribution to charitable organization providing long-term care services. (a) Each individual or corporate resident taxpayer who 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 for a contribution to long-term care service provider.

(b) The tax credit under this section shall not exceed the amount of $200 in any taxable year, including for joint returns. A husband and wife who file separate returns for the taxable year in which they could have filed a joint return may each claim only one-half of the tax credit that would be allowed for a joint return.

(c) If the allowable tax credit exceeds the taxes due under this chapter on the taxpayer's income, or if there are no taxes due under this chapter, the taxpayer may carry forward the amount of the claimed credit not used to offset the income taxes under this chapter for not more than five consecutive taxable years' income tax liability.

(d) The credit allowed under this section shall be in lieu of a deduction under section 170 of the Internal Revenue Code as taken for purposes of this chapter; provided that the credit under this section shall be allowed only to the extent that the contribution exceeds the total amount deducted under section 170 of the Internal Revenue Code in the taxpayer's baseline year. The taxpayer's baseline year shall be:

(1) The 2000 taxable year if the taxpayer deducted charitable contributions under section 170 of the Internal Revenue Code in the 2000 taxable year; or

(2) If the taxpayer did not deduct charitable contributions under section 170 of the Internal Revenue Code in the 2000 taxable year, the taxpayer's baseline year shall be the first taxable year after 2000 that the taxpayer deducted charitable contributions to section 170 of the Internal Revenue Code.

(e) A taxpayer taking a credit under this section shall provide the name of the qualifying charitable organization and the amount of the contribution to the department of taxation on forms provided by the department.

(f) A qualifying charitable organization shall provide the department of taxation with a written certification that it meets all criteria to be considered a qualifying organization. The organization shall notify the department of taxation in writing of any changes that may affect the qualifications for purposes of this section. The department of taxation shall compile and make available to the public a list of the qualifying organizations.

(g) As used in this section:

"Long-term care service provider" means a provider of long-term care services that is a qualifying charitable organization and that receives funds through the Kupuna Care program or receives community services block grants, or both.

"Long-term care services" means therapeutic, rehabilitative, maintenance, social, or personal care services provided in the home or in the community, or both, for the frail, impaired elderly, or other disabled adults who do not need institutionalized care.

"Qualifying charitable organization" means a charitable organization that is exempt from federal income taxation under section 501(c)(3) of the Internal Revenue Code or is a designated community action agency that receives community services block grant moneys pursuant to title 42 United States Code section 9901. The organization must spend not less than fifty per cent of its budgets on services to provide long-term care services.

(h) A taxpayer making a donation through an umbrella qualifying charitable organization that collects funds for distribution to member organizations that would each qualify as a charitable organization under this section shall designate on the contribution that the donation be received by a member organization."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act upon its approval, shall apply to taxable year beginning after December 31, 2000.

INTRODUCED BY:

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