HOUSE OF REPRESENTATIVES

H.B. NO.

2681

TWENTY-FIFTH LEGISLATURE, 2010

 

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 a new section to be appropriately designated and to read as follows:

     "§235-     Hotel construction and remodeling tax credit.  (a)  There shall be allowed to each taxpayer subject to the taxes imposed by this chapter and chapter 237D, an income tax credit, that 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.

     The amount of the credit shall be four per cent of the construction or renovation costs incurred during the taxable year for each qualified hotel facility located in Hawaii, and shall not include the construction or renovation costs for which another credit was claimed under this chapter for the taxable year; provided that the construction or renovation costs are incurred before December 31, 2011.

     In the case of a partnership, S corporation, estate, trust, association of apartment owners of a qualified hotel facility, time share owners association, or any developer of a time share project, the tax credit allowable is for construction or renovation 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 pursuant to section 235-110.7(a).

     If a deduction is taken under section 179 (with respect to election to expense depreciable business assets) of the Internal Revenue Code, no tax credit shall be allowed for that portion of the construction or renovation cost for which the deduction is taken.

     (b)  The credit allowed under this section shall be claimed against the net income tax liability for the taxable year.

     (c)  If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of credit 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.  All claims for a tax credit under this section, including amended claims, 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 the tax credit;

     (2)  May require the taxpayer to furnish information to ascertain the validity of the claim for the tax credit; and

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

     (e)  The tax credit allowed under this section shall be available for taxable years beginning after December 31, 2009, and shall not be available for taxable years beginning after December 31, 2011.

     (f)  To qualify for the income tax credit, the taxpayer shall be in compliance with all applicable federal, state, and county statutes, rules, and regulations.

     (g)  As used in this section:

     "Construction or renovation cost" means any costs incurred after July 1, 2010, for the plans, design, construction, and equipment related to new construction, alteration, or modification of a qualified hotel facility.

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

     "Qualified hotel facility" means a:

     (1)  Hotel, hotel-condominium, or condominium-hotel as defined in section 486K-1;

     (2)  Time share facility or project; or

     (3)  Commercial building or facility located within a qualified resort area.

     "Qualified resort area" means an area designated for hotel use, resort use, or transient vacation rental, pursuant to county authority under section 46-4, or where the county designates the area for hotel, transient vacation rental, or resort use.

     "Taxpayer" means a taxpayer under this chapter, and includes:

     (1)  An association of apartment owners; or

     (2)  A time share owners association."

     SECTION 2.  New statutory material is underscored.

     SECTION 3.  This Act shall take effect on July 1, 2010 and shall:

     (1)  Be repealed on December 31, 2011; and

     (2)  Apply to taxable years beginning after December 31, 2009 and ending before January 1, 2012.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Taxation; Hotel Construction and Renovations

 

Description:

Provides until 12/31/11, a tax credit for hotel construction and renovations.

 

 

 

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