HOUSE OF REPRESENTATIVES

H.B. NO.

2171

TWENTY-SEVENTH LEGISLATURE, 2014

 

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 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.

(b) The amount of the credit shall be       per cent of the construction costs incurred during the taxable year for each new hotel facility constructed and located in the State and shall not include the construction costs for which another credit was claimed under this chapter for the taxable year.

The total maximum allowed credits available to all taxpayers for construction costs incurred shall not exceed $           in any taxable year. The credits over the aggregate annual limit of $            may be claimed as provided in subsection (g).

(c) In the case of a partnership, S corporation, estate, or trust, the tax credit shall be determined at the entity level. Distribution and share of credit shall be the same amount as the capital goods excise tax credit under section 235-110.7(a).

(d) 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 that portion of the construction cost 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. In the alternative, the taxpayer shall treat the amount of the credit allowable and claimed as a taxable income item for the taxable year in which it is properly recognized under the method of accounting used to compute taxable income.

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

(f) As used in this section:

"Construction cost" means any costs incurred after December 31, 2014, for plans, design, construction, and equipment related to construction of a new hotel facility located in the State.

"Hotel facility" means an establishment consisting of any building or structure used primarily for the business of providing, for consideration, transient hotel accommodation lodging facilities that furnish, as part of its routine operations, one or more customary lodging services, other than living accommodations and furniture and fixtures, including but not limited to, restaurant facilities, room attendant or bell services, telephone switchboard operations, laundry services, or concierge services, and is subject to the transient accommodations tax under chapter 237D. "Hotel facility" does not include any building or structure that is used, or contains any room that is used, as a "condominium" as defined under section 514B-3 or "time share unit" as defined under section 514E-1.

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

"Taxpayer" means an owner of a hotel facility located in the State.

(g) If the tax credit under this section exceeds $           for all qualified taxpayers for any taxable year or exceeds the taxpayer's income tax liability, the excess of the credit over liability may be claimed against the taxpayer's income tax liability in subsequent years until exhausted. All claims for the 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 this subsection shall constitute a waiver of the right to claim the credit.

(h) The director of taxation shall prepare forms as may be necessary to claim a credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of the claim for credit made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91.

(i) The tax credit allowed under this section shall be available for taxable years beginning after December 31, 2014, and shall not be available for taxable years beginning after December 31, 2019."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2014, and ending before January 1, 2020.

 

INTRODUCED BY:

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Report Title:

New Hotel Construction; Income Tax Credit

 

Description:

Provides an income tax credit for costs incurred in new hotel construction.

 

 

 

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