Bill Text: HI SB2462 | 2012 | Regular Session | Introduced

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Bill Title: Taxation; Motion Picture, Digital Media, and Film Production Infrastructure Tax Credit

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2012-02-15 - (S) The committee(s) on EDT recommend(s) that the measure be HELD. The votes in EDT were as follows: 4 Aye(s): Senator(s) Fukunaga, Wakai, Baker, Solomon; Aye(s) with reservations: none ; 0 No(es): none; and 1 Excused: Senator(s) Slom. [SB2462 Detail]

Download: Hawaii-2012-SB2462-Introduced.html

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THE SENATE	S.B. NO.	2462
TWENTY-SIXTH LEGISLATURE, 2012
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 purpose of this Act is to promote the motion picture, digital media, and film production industry in Hawaii by:

     (1)  Establishing a motion picture, digital media, and film production infrastructure tax credit of fifty per cent of qualified infrastructure costs;

     (2)  Requiring the expenditure of at least $10,000,000 in qualified infrastructure costs;

     (3)  Providing for an annual payment to the Hawaii film office equal to one per cent of the tax credit received by the taxpayer; and

     (4)  Providing for a 100 per cent recapture of the tax credit if the infrastructure project ceases to meet the requirements of a qualified infrastructure project.

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

     "§235‑    Motion picture, digital media, and film production infrastructure income tax credit.  (a)  Any law to the contrary notwithstanding, there shall be allowed to each taxpayer subject to the taxes imposed by this chapter, an income tax 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.  The amount of the credit shall be fifty per cent of the qualified infrastructure costs incurred by a qualified taxpayer in any county of the State.

     In the case of a partnership, S corporation, estate, or trust, the tax credit allowable is for qualified infrastructure 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 by rule.

     (b)  The credit allowed under this section shall be claimed against the net income tax liability for the taxable year.  For the purposes of this section, "net income tax liability" means net income tax liability reduced by all other credits allowed under this chapter.

     (c)  If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of credits 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, 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.

     (d)  To qualify for this tax credit, a qualified infrastructure project shall:

     (1)  Meet the definition of a qualified infrastructure project specified in subsection (l);

     (2)  Have qualified infrastructure costs totaling at least $10,000,000; and

     (3)  Provide evidence of reasonable efforts to hire Hawaii residents.

     (e)  To receive the tax credit, the taxpayer shall first prequalify the infrastructure project for the credit by registering with the department of business, economic development, and tourism during the development stage.  Failure to comply with this provision may constitute a waiver of the right to claim the credit.

     (f)  If all or a portion of an infrastructure project is a facility that may be used for other purposes unrelated to production or post-production activities, then the project shall be approved only if a determination is made that the multiple-use facility will support and will be necessary to secure production or post-production activity.

     The taxpayer may also request a comfort ruling from the department of taxation regarding the applicability of the tax credit to a specific qualified infrastructure project.

     (g)  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.

     (h)  An annual fee for administration of the tax credit shall be payable to the department of business, economic development, and tourism Hawaii film office and shall be submitted with the application for a qualified infrastructure project tax credit.  The annual fee shall be equal to one per cent of the tax credit received by the taxpayer under this section.  The fee shall become first payable within thirty days of the issuance of the determination letter specified in subsection (k).

     (i)  Every taxpayer claiming a tax credit under this section for a qualified infrastructure project shall, no later than ninety days following the end of each taxable year in which qualified production costs were expended, submit a written, sworn statement to the department of business, economic development, and tourism, identifying:

     (1)  All qualified infrastructure costs, if any, incurred in the previous taxable year;

     (2)  The amount of tax credits claimed pursuant to this section, if any, in the previous taxable year; and

     (3)  The number of total employees hired versus the number of Hawaii residents hired, by job category and by county.

     (j)  The department of business, economic development, and tourism shall:

     (1)  Maintain records of the names of the taxpayers and qualified infrastructure projects thereof claiming the tax credits under subsection (a);

     (2)  Obtain and total the aggregate amounts of all qualified infrastructure costs per qualified infrastructure project per taxable year; and

     (3)  Provide a letter to the director of taxation specifying the amount of the tax credit per qualified infrastructure project for each taxable year that a tax credit is claimed and the cumulative amount of the tax credit for all years claimed.

     (k)  Upon each determination required under this subsection, the department of business, economic development, and tourism shall issue a letter to the taxpayer, regarding the qualified infrastructure project, specifying the qualified infrastructure costs and the tax credit amount qualified for in each taxable year a tax credit is claimed.  The taxpayer for each qualified infrastructure project shall file the letter with the taxpayer's tax return for the qualified infrastructure project to the department of taxation.  Notwithstanding the authority of the department of business, economic development, and tourism under this section, the director of taxation may audit and adjust the tax credit amount to conform to the information filed by the taxpayer.

     (l)  For the purposes of this section:

     "Qualified infrastructure costs" means the total costs incurred by a qualified infrastructure project within the State that are subject to the general excise tax under chapter 237 or income tax under this chapter and that have not been financed by any investments for which a credit was or will be claimed pursuant to section 235-110.9.  Qualified infrastructure costs shall not include the cost of purchasing or leasing real property.

     "Qualified infrastructure project" means a construction project in the State, for the development, construction, or renovation of a film, video, television, or media production or post-production facility and the immovable property and equipment related thereto, or any other facility that supports and is a necessary component of such infrastructure project.

     (m)  If at any time the infrastructure project ceases to be a qualified infrastructure project, the credit claimed under this section shall be recaptured.  The amount of the recaptured tax credit determined under this subsection shall be added to the taxpayer's tax liability, up to one hundred per cent of the tax credit, for the taxable year in which the recapture occurs under this subsection.  The taxpayer shall consent to a tax lien in the amount of the tax credit claimed under this section on the property as a condition to receiving the tax credit under this section."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act, upon its approval, shall apply to taxable years beginning after December 31, 2011.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

Taxation; Motion Picture, Digital Media, and Film Production Infrastructure Tax Credit

 

Description:

Establishes a motion picture, digital media, and film production infrastructure tax credit of fifty per cent of qualified infrastructure costs; requires qualified expenditure of at least $10,000,000; provides for an annual payment to the department of business, economic development, and tourism Hawaii film office equal to one per cent of the tax credit received by the taxpayer; provides for a 100 per cent recapture of the tax credit if the facilities are no longer used for a qualified activity; applies to taxable years beginning after 12/31/2011.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.