Report Title:

Employers Subsidizing Employee Transportation Expenses

 

Description:

Provides a tax credit to employers for subsidizing employee transportation expenses.

 

THE SENATE

S.B. NO.

1494

TWENTY-FIRST LEGISLATURE, 2001

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to employers who subsidize transportation expenses.

 

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

SECTION 1. The legislature finds that it is difficult for individuals who live on islands with fewer employment opportunities to find and maintain gainful and stable employment on other islands due to high transportation costs. Currently, the only viable method of transportation for these individuals is by airplane. The daily air transportation expenses can easily total over $1,000 per month. There are currently several efforts to establish an inter-island ferry system. However, these daily expenses would still impose an extra burden on individuals who can only find employment on an island where they do not reside.

The purpose of this Act is to encourage employers on one island to employ an individual living on another island by allowing them tax credits for subsidizing the individual's transportation expenses.

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

"§235- Employee transportation expenses subsidy credit. (a) There shall be allowed to each corporate or individual taxpayer who is subject to the tax imposed by this chapter, an employee transportation expenses subsidy 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 employee transportation expenses subsidy credit shall be ten per cent of the portion of the cost of each qualified employee trip paid by the taxpayer for the taxable year in which the credit is claimed but not to exceed $           in any taxable year. "Qualified employee trip" means transportation by air or ferry primarily for the purpose of transporting the employee from the employee's island of residence to the employee's place of employment located on a different island.

(c) If the tax credit claimed by the taxpayer under this section exceeds the amount of the income tax payments due from the taxpayer, the excess of credit over payments due shall be refunded to the taxpayer; provided that the tax credit properly claimed by a taxpayer who has no income tax liability shall be paid to the taxpayer; and provided that no refunds or payments on account of the tax credit allowed by this section shall be made for amounts less than $1.

(d) The director of taxation shall prepare any forms that may be necessary to claim a credit under this section, may require proof of the claim for the tax credit, and may adopt rules pursuant to chapter 91.

(e) All of the provisions relating to assessments and refunds under this chapter and under section 231-23(c)(1) shall apply to the tax credit under this section.

(f) Claims for the tax credit under this section, including any amended claims, shall be filed on or before the end of the twelfth month following the taxable year for which the credit may be claimed."

SECTION 3. New statutory material is underscored.

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

INTRODUCED BY:

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