Report Title:

Renter's Tax Credit; Real Property Tax

 

Description:

Authorizes a tax credit for residential renters within the boundaries of a county if the county agrees to pay the State for the tax loss and administrative cost.

 


HOUSE OF REPRESENTATIVES

H.B. NO.

1908

TWENTY-FOURTH LEGISLATURE, 2007

 

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, at present, a county has difficulty in providing direct real property tax relief to a renter in a practical and efficient manner.  If a county reduces the residential or apartment real property tax rate, the county would not be assured that the landlord will pass the savings on to the renter.

     This Act is intended to allow a county to provide direct relief to a renter in order to offset a portion of the renter's real property tax burden.

The purpose of this Act is to provide a renter's tax credit to persons who have rented and occupied residential units within the boundaries of a county if the county agrees to pay for the tax loss and administrative costs.

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

     "§235-    Renter's tax credit.  (a)  If the State and a county agree in writing, there shall be allowed a tax credit for each resident individual taxpayer who qualifies under subsection (b).  The agreement shall require the State to provide the tax credit to a qualified taxpayer during a taxable year if the county agrees to pay or reimburse the State for the tax loss resulting from the credit and cost to the State to administer the credit.  The agreement shall be executed by the State and county at least one hundred eighty days before the taxable year in which the credit is to apply.  The agreement shall also require the county to agree to allow the State to withhold an appropriate amount from the county's share of the transient accommodations tax or general excise and use tax surcharge if the county fails to pay or reimburse the State for the tax loss from the credit and administrative cost.

     If an agreement is not executed in compliance with this section for the application of the tax credit in a taxable year, then the tax credit shall not be available to renters within the boundary of the county during that taxable year.

     If the tax credit is made available to residential individual taxpayers within the boundaries of a county, the tax credit shall be additional to the tax credit for low-income household renters under section 235-55.7.

     (b)  A resident individual taxpayer shall qualify for the tax credit made available during a taxable year if:

     (1)  The taxpayer has rented and occupied a residential unit within the boundaries of the county at any time during the taxable year;

     (2)  The taxpayer does not own other residential property nor receive a real property tax homeowner's exemption; and

     (3)  Is not eligible to be claimed as a dependent for federal or state income taxes by another.

     (c)  The amount of the tax credit available during a taxable year shall be the amount agreed to by the county and the State.  The amount may be a flat amount or vary according to the income of the taxpayer, rent paid by the taxpayer, or other factors.

     (d)  The tax credit shall be deductible from the qualified taxpayer's net income tax liability, if any, for the taxable year in which the credit is made available and properly claimed; provided that spouses filing separate returns for a taxable year for which a joint return could have been made by them shall claim only the tax credit to which they would have been entitled had a joint return been filed.

     (e)  If a rental unit is occupied by two or more individuals, and more than one individual qualifies for the tax credit, the claim for the credit shall be based on the actual share of the rent paid.

     (f)  If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted.

     (g)  A claim for the tax credit under this section, including any amended claim, shall be filed on or before the end of the twelfth month following 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.

     (h)  The director of taxation:

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

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

     (3)  May adopt rules in accordance with chapter 91 to implement this section.

     (i)  All of the provisions relating to assessment and refunds under section 231-23(c)(1) shall apply to the tax credits hereunder."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect upon its approval.

 

INTRODUCED BY:

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