Bill Text: HI SB255 | 2010 | Regular Session | Introduced
Bill Title: Telecommute; Telework; Income Tax Credit
Spectrum: Partisan Bill (Democrat 6-0)
Status: (Introduced - Dead) 2009-05-11 - Carried over to 2010 Regular Session. [SB255 Detail]
Download: Hawaii-2010-SB255-Introduced.html
Report Title:
Telecommute; Telework; Income Tax Credit
Description:
Provides an income tax credit for employers when their employees telecommute for work.
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THE SENATE |
S.B. NO. |
255 |
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TWENTY-FIFTH LEGISLATURE, 2009 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
Relating to income tax credits.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Traffic-related congestion on Hawaii's roadways continues to increase every year. The morning and evening commutes are marked by long delays and increased time spent on the road as thousands of cars traverse Hawaii's highways and streets. With longer commute times, the working people of Hawaii are spending more time in their cars as opposed to using that time productively, either at work or with their families.
Furthermore, with the increase in cars that are on Hawaii's roadways, the people of Hawaii are more dependent on foreign fossil fuel sources. Currently, Hawaii has one of the highest prices for gas in the nation. Thus, in comparison to their mainland peers, the workers of Hawaii are using a larger percentage of their disposable income to pay for transportation to work. Moreover, massive commutes to work by car will continue to force Hawaii to rely on foreign fossil fuel sources and also continue to allow carbon emissions to deteriorate Hawaii's fragile environment.
The legislature finds that the concept of telecommuting to work has emerged as a viable workplace alternative. According to a federal Office of Personnel Management survey in 2004, more than twenty-three million workers in the United States telecommuted to work. In 2002, a private research firm reported that thirty-five per cent of all employees in the United States used a home computer for work-related purposes. As of 2005, roughly five per cent of the federal workforce telecommuted to work and nine states have enacted state telecommuting policies. In 2007, the State of Georgia was the first to enact an income tax credit for employers who have their employees telecommute to work. Today, the numbers reported in each of the various studies above have likely increased, or are on the verge of increasing, because of the advancements in technology, escalating traffic congestion, rising transportation costs, health concerns, or environmental reasons.
Furthermore, the legislature finds that numerous studies across the nation have demonstrated that telecommuting provides an opportunity for employers to increase employee productivity, decrease employee sick leave, increase the labor pool, and even improve employee retention. The growth of telecommuting is partly attributable to the greater availability of broadband technology, employees placing a greater emphasis on work-life balance, rising office rents, and improvements in internet security.
The purpose of this Act is to implement a statewide telecommuting income tax credit to help alleviate Hawaii's high costs for transportation-related expenses to work, to reduce Hawaii's dependence on fossil fuel, to reduce traffic congestion on Hawaii's roadways, and to provide the workers of Hawaii with an opportunity to spend more time either working from home or with their families, rather than in traffic.
SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§235‑ Telecommuting income tax credit. (a) The income 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. Any income tax credit allowed under this section shall be claimed against the taxpayer's net income tax liability, if any, for the taxable year. A properly claimed income tax credit under this section shall allow an employer a state income tax credit for a percentage of eligible telecommute expenses incurred in the calendar years 2010 and 2011. The amount of the credit shall be calculated as follows:
(1) For employers in nonattainment areas, the credit shall be equal to one hundred per cent of the eligible telecommute expenses incurred pursuant to a telecommute agreement requiring the participating employee to telecommute at least twelve days per month if the employer's principal place of business is located in an area designated by the United States Environmental Protection Agency as a nonattainment area under the federal Clean Air Act, title 42 United States Code section 7401 et seq.;
(2) For employers in attainment areas, the credit shall be equal to seventy-five per cent of the eligible telecommute expenses incurred pursuant to a telecommute agreement requiring the participating employee to telecommute at least twelve days per month; or
(3) For employers who have employees telecommute at least five days, but less than twelve days, per month, the credit shall be equal to twenty-five per cent of the eligible telecommute expenses incurred pursuant to a telecommute agreement requiring the participating employee to telecommute at least five days per month.
(b) For purposes of the income tax credit under this section, the determination of the employer's taxable year and the employer's eligible telecommute assessment expenses require that:
(1) In addition to the tax credit provided by subsection (a), an employer conducting a telecommute assessment on or after July 1, 2009, shall be allowed a tax credit in the calendar year of implementation of the employer's formal telecommute program against the employer's net income tax liability, if any, for one hundred per cent of the cost, up to a maximum credit of $20,000 per employer, of preparing the assessment. The costs shall not be eligible for the tax credit if they are otherwise the subject of a deduction from income claimed by the employer in any tax year. Costs incurred on or after July 1, 2009, and before January l, 2010, shall be treated as being incurred on January 1, 2010, for purposes of this section. The tax credit provided by this subsection is intended to include program planning expenses, including direct program development and training costs, raw labor costs, and professional consulting fees; the credit shall not include expenses for which a credit is claimed under any other provision of this chapter. This credit shall be allowed only once per employer; and
(2) All telecommute assessments shall meet any standards for eligibility that are adopted by the director of taxation.
(c) In no event shall the total amount of any tax credit under this section for a taxable year exceed the employer's net income tax liability. No unused tax credit shall be allowed to be carried forward to apply to the employer's succeeding years' tax liability. No unused tax credit shall be allowed by the employer against prior years' tax liability.
(d) The certification of telecommute expenses by the employer, application for tentative approval by the director of taxation, and the annual limits to the income tax credit under this section shall be imposed as follows:
(1) An employer seeking to claim a tax credit provided for under subsections (a) and (b) of this section shall submit an application to the director of taxation for tentative approval of the tax credit provided for in subsections (a) and (b) between September 1 and October 31 of the year preceding the calendar year for which the tax credit is to be claimed. The director of taxation shall adopt the rules and forms on which the application is to be submitted. Amounts specified on the application shall not be amended by the employer after the application is approved by the director of taxation. The application shall certify that the employer would not have incurred the eligible telecommute expenses stated therein but for the availability of the tax credit. The director of taxation shall review the application and shall tentatively approve the application upon determining that it meets the requirements of this section;
(2) The director of taxation shall provide tentative approval of the applications by the date provided in paragraph (3). In no event shall the aggregate amount of tax credits approved by the director of taxation for all qualified employers under this section in a calendar year exceed:
(A) $2,000,000 for credits earned in calendar year 2009; and
(B) $2,000,000 for credits earned in calendar year 2010; and
(3) The department of taxation shall notify each employer of the tax credits tentatively approved and allocated to the employer by December 31st of the year in which the application was submitted. If the tax credit amounts on the tax credit applications filed with the director of taxation exceed the maximum aggregate limit of tax credits under this subsection, then the tax credits shall be allocated among the employers who filed a timely application on a pro rata basis based upon the amounts otherwise allowed by this section. Once the tax credit application has been approved and the amount approved has been communicated to the applicant, the employer may make purchases approved for the tax credit at any time during the calendar year following the approval of the application. The employer may then apply the amount of the approved tax credit to its tax liability for the tax year or years for which the approved application applies. If the employer has a tax year other than a calendar year and the calendar year expenses are incurred in more than one taxable year, the credit shall be applied to each taxable year based upon when the expenses were incurred.
(e) An employer may claim up to a limit of $1,200 for each participating employee in a given calendar year to enable a participating employee to begin to telecommute, which expenses are not otherwise the subject of a deduction from income claimed by the employer in any tax year. Eligible telecommute expenses shall include, but not be limited to, expenses paid or incurred to purchase computers, computer-related hardware and software, modems, data processing equipment, telecommunications equipment, high‑speed internet connectivity equipment, computer security software and devices, and all related delivery, installation, and maintenance fees. Eligible telecommute expenses shall not include replacement costs for computers, computer-related hardware and software, modems, data processing equipment, telecommunications equipment, or computer security software and devices at the principal place of business when that equipment is relocated to the telecommute site. These expenses shall not include expenses for which a credit is claimed under any other provision of this chapter. Telecommute expenses may be incurred only once per employee. These expenses may be incurred directly by the employer on behalf of the participating employee or directly by the participating employee and subsequently reimbursed by the employer.
(f) The director of taxation shall adopt rules in accordance with chapter 91 that are necessary to implement and administer this section.
(g) For purposes of this section, the following terms shall have the following meanings:
"Employer" means any employer upon whom an income tax is imposed by this chapter.
"Participating employee" means an employee who has entered into a telecommute agreement with the employee's employer on or after July 1, 2009. This term shall not include an individual who is self-employed or an individual who ordinarily spends a majority of the workday at a location other than the employer's principal place of business.
"Telecommute" means an alternative work arrangement whereby employees perform the normal duties and responsibilities of their positions through the use of telecommunication devices, either at home or another place apart from the employees' usual place of work.
"Telecommute agreement" means an agreement signed by the employer and the participating employee, on or after July 1, 2009, that defines the terms of a telecommute arrangement, including the number of days per year the participating employee will telecommute, as provided in subsection (a), in order to qualify for the credit, and any restrictions on the place from which the participating employee will telecommute.
"Telecommute assessment" means an optional assessment leading to the development of policies and procedures necessary to implement a formal telecommute program that would qualify the employer for the credit provided in subsection (a), including but not limited to a workforce profile, a telecommute program business case and plan, a detailed accounting of the purpose, goals, and operating procedures of the telecommute program, methodologies for measuring telecommute program activities and success, and a deployment schedule for increasing telecommute activity."
SECTION 3. New statutory material is underscored.
SECTION 4. This Act shall take effect upon its approval; provided that:
(1) The telecommuting income tax credit established in section 2 of this Act, chapter 235‑ (a), Hawaii Revised Statutes, shall apply to taxable years beginning after December 31, 2009; and
(2) The tax credit allowed for employers conducting a telecommute assessment in section 2 of this Act, chapter 235‑ (b), Hawaii Revised Statutes, shall take effect on July 1, 2009.
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INTRODUCED BY: |
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