Bill Text: HI HB2170 | 2014 | Regular Session | Amended
Bill Title: New Hotel Construction; Income Tax Credit
Spectrum: Partisan Bill (Democrat 15-0)
Status: (Enrolled - Dead) 2014-04-25 - Conference committee meeting to reconvene on 04-25-14 5:00PM in conference room 309. [HB2170 Detail]
Download: Hawaii-2014-HB2170-Amended.html
|
HOUSE OF REPRESENTATIVES |
H.B. NO. |
2170 |
|
TWENTY-SEVENTH LEGISLATURE, 2014 |
H.D. 2 |
|
|
STATE OF HAWAII |
S.D. 2 |
|
|
|
|
|
|
|
||
|
|
||
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 tourism is Hawaii's principal industry, with visitor expenditures estimated to be over $15,000,000,000 in 2013, representing approximately twenty per cent of Hawaii's economy. Tourists' stays at hotels and resorts, shopping, recreational activities, and attendance at attractions and sporting events contribute significantly to Hawaii's tax base.
The legislature further finds that Hawaii's travel and tourism industry must continue to refresh its product offering to support and attract new and repeat travelers, compete with other global destinations, and distinguish Hawaii as a unique travel and tourist destination. Hawaii cannot continue to rely on aging hotel and resort infrastructure and hope for the best. Hawaii is at risk of losing its competitive edge in the travel and tourism industry to emerging tourist destinations that are competing for Hawaii's travel and tourism business. Traditional financing has failed to generate new construction work, and jobs are lacking.
The purpose of this Act is to provide an income tax credit for hotel construction for taxable years beginning after December 31, 2014, and ending on or before December 31, 2019.
SECTION 2. 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, 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 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.
(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 determined pursuant to 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) If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of the tax credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted. All claims, including any amended claims, for tax credits under this section 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.
(f) As used in this section:
"Construction costs" means any costs incurred during the taxable year for plans, design, construction, and equipment related to construction of a hotel facility located in the State. "Construction costs" does not include costs incurred for the renovation, alteration, modification, or repair of an existing hotel facility.
"Hotel facility" means an establishment:
(1) Consisting of any building or structure;
(2) 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
(3) 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" or "unit" respectively, 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) The director of taxation shall prepare any forms that 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, pursuant to chapter 91, necessary to effectuate the purposes of this section.
(h) The department of business, economic development, and tourism shall:
(1) Maintain records of the names of the taxpayers and hotel facilities thereof claiming the tax credit under subsection (a);
(2) Obtain and total the aggregate amounts of all construction costs per hotel facility per taxable year; and
(3) Certify the total amount of the tax credit for each taxable year and the cumulative amount of the tax credit for all years claimed.
Upon each determination, the department of business, economic development, and tourism shall issue a certificate to the taxpayer verifying the construction costs, the credit amount certified for each taxable year, and the cumulative amount of the tax credit for all years claimed. The taxpayer shall file the certificate with the taxpayer's tax return with the department of taxation. Notwithstanding the department of business, economic development, and tourism's certification authority under this section, the director of taxation may audit and adjust certification to conform to the facts.
(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 3. New statutory material is underscored. SECTION 4. This Act shall take effect on July 1, 2030, and shall apply to taxable years beginning after December 31, 2014.
Report Title:
New Hotel Construction; Income Tax Credit
Description:
Provides an income tax credit for costs incurred for new hotel construction. Effective 7/1/2030. (SD2)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
