Bill Text: HI SB801 | 2024 | Regular Session | Amended
Bill Title: Relating To Qualified Internships Tax Credit.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed) 2023-12-11 - Carried over to 2024 Regular Session. [SB801 Detail]
Download: Hawaii-2024-SB801-Amended.html
|
THE SENATE |
S.B. NO. |
801 |
|
THIRTY-SECOND LEGISLATURE, 2023 |
S.D. 2 |
|
|
STATE OF HAWAII |
|
|
|
|
|
|
|
|
||
|
|
||
A BILL FOR AN ACT
RELATING TO QUALIFIED INTERNSHIPS TAX CREDIT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that local students will have a better chance at surviving and thriving in Hawaii if they have an opportunity to participate in a high-quality work-based learning experience before they graduate from high school. While partnerships between schools and employers have expanded in the past decade, the legislature also finds that equitable access to a diverse range of industries will require significantly greater employer participation in these programs.
The legislature further finds that, to drastically increase work-based learning experience opportunities for students, offering additional financial resources for employers will both incentivize companies to offer work-based learning opportunities and increase capacity to host student interns. Without crucial assistance to support work-based learning experiences, many employers, especially small to medium-sized companies, may encounter difficulties in the hiring and retention of student interns.
Accordingly, the purpose of this Act is to establish a qualified internship tax credit.
PART
II
SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to part I to be appropriately designated and to read as follows:
"§235- Qualified internship tax credit. (a) There shall be allowed to each
taxpayer subject to the tax imposed under this chapter, a qualified internship
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 tax credit
shall be equal to the value of fifty hours of salaries, wages, or other
renumeration services paid to each qualified intern employed by the taxpayer,
up to a maximum of
$ per taxpayer in
any taxable year; provided that the qualified intern was not employed by the
taxpayer within the six months immediately preceding the commencement of the
internship; provided further that the qualified internship tax credit, combined
with other credits allowed pursuant to this chapter during the taxable year,
shall not exceed fifty per cent of the taxpayer's tax liability and shall not
reduce the taxpayer's minimum income tax liability.
(c)
The total amount of tax credits allowed under this section shall not
exceed $ for all taxpayers in
any taxable year; provided that any taxpayer who is not eligible to claim the
credit in a taxable year due to the $
cap having been exceeded for that taxable year shall be eligible to
claim the credit in the subsequent taxable year.
(d) To receive the tax credit, a
taxpayer shall first submit an application to and in a form prescribed by the
department of labor and industrial relations.
The application shall include:
(1) A description of the daily tasks to
be completed by the qualified intern;
(2) Expected student learning outcomes
by the completion of the internship period; and
(3) Other information deemed necessary
by the department of labor and industrial relations to determine whether the
internship fulfills the requirements of a department of education or University
of Hawaii-approved work-based learning program.
Failure
of the taxpayer to fulfill the requirements set forth by the department of
education or University of Hawaii to qualify as a work-based learning program
shall result in denial of the application.
(e) The taxpayer shall certify to the department
of labor and industrial relations in its application under subsection (d) that
the taxpayer:
(1) Would not have employed the qualified intern but substantially for the tax credit allowed under this section; and
(2) Expects that the number of hours worked by the qualified intern will increase in the taxable year for which the application is submitted, compared to the immediately preceding taxable year.
(f) Every taxpayer claiming a tax credit under
this section, no later than ninety days following the end of each taxable year
in which a qualified intern was employed, shall submit a written, sworn
statement to the department of labor and industrial relations, that:
(1) Certifies that each qualified intern was employed and supervised in the State in a position that provides training and experience to the qualified intern in their chosen field of study;
(2) Identifies the total wages paid to
each qualified intern and each qualified intern's hourly wage rate; and
(3) Identifies the number of hours worked by each qualified intern.
(g)
The department of labor and industrial relations shall:
(1) Maintain records of the names and addresses of the taxpayers claiming the credit under this section;
(2) Verify the number of qualified interns employed by the taxpayer and the wage rate of each qualified intern;
(3) Total all hours worked and wages paid to qualified interns by the taxpayer; and
(4) Certify the amount of the tax credit for each taxable year and cumulative amount of the tax credit; provided that if, in any year, the annual amount of certified credits reaches $ in the aggregate, the department of labor and industrial relations shall immediately discontinue certifying credits and notify the department of taxation.
Upon each determination made under this
subsection, the department of labor and industrial relations shall issue a
certificate to the taxpayer verifying information submitted to the department of
labor and industrial relations, including the number of qualified interns,
wages paid to qualified interns, 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 authority of the
department of labor and industrial relations under this section, the director
of taxation may audit and adjust the tax credit amount to conform to the facts.
(h) The director of taxation:
(1) Shall prepare any forms that may be
necessary to claim a tax credit under this section;
(2) May
require the taxpayer to furnish reasonable information to ascertain the
validity of the claim for the tax credit made under this section; and
(3) May adopt rules under chapter 91
necessary to effectuate the purposes of this section.
(i) If the tax credit under this section exceeds
the taxpayer's income tax liability, the excess of the credit over liability
may be used as a credit against the taxpayer's income tax liability in
subsequent years until exhausted.
All claims for tax credits under this
section, including any 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.
(j) As used in this section, "qualified
intern" means an individual who is:
(1) Enrolled in a department of
education school or public charter school;
(2) Employed and supervised in a
position located in the State that provides training and experience to the
individual in their chosen field of study; and
(3) Paid a wage of not less than $12.00
per hour for a term of employment that includes at least one hundred fifty
hours; provided that the qualified intern works not more than fifteen hours per
week during the academic year and not more than forty hours per week during the
winter, spring, and summer holiday periods."
PART
III
SECTION
3. (a)
The department of labor and industrial relations shall submit a report
on the qualified internship tax credit to the legislature no later than January
1, 2025.
(b) The report shall include:
(1) The total number of qualified interns for which a credit was issued for each taxable year;
(2) Information on the department's process in administering the application and certification process of the qualified internship tax credit, including but not limited to a description of departmental personnel tasked with processing and certifying the qualified internship tax credit applications;
(3) An analysis and summary on the data points found within the qualified internship tax credit applications submitted under subsection 235- (d), Hawaii Revised Statutes, and certificates of claim under subsection 235- (f), Hawaii Revised Statutes; and
(4) An analysis of the effectiveness of the qualified internship tax credit as an incentive to encourage employment of qualified interns.
SECTION
4. (a)
The department of taxation shall submit a report on the qualified
internship tax credit to the legislature no later than January 1, 2026.
(b) The report shall include:
(1) The total value of qualified internship tax credits authorized for each taxable year;
(2) The total number of taxpayers for which a credit was issued for each taxable year; and
(3) Information on the department's process in administering the qualified internship tax credit, including but not limited to a description of departmental personnel tasked with verifying and issuing the qualified internship tax credit.
PART IV
SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2023-2024 and the same sum or so much thereof as may be necessary for fiscal year 2024-2025 for the establishment and implementation of the qualified internship tax credit.
The sums appropriated shall be expended by the department of taxation for the purposes of this Act.
PART
V
SECTION 6. New statutory material is underscored.
SECTION 7. This Act shall take effect on January 1, 2050; provided that:
(1) Part I shall apply to taxable years beginning after December 31, 2023; and
(2) Part IV shall take effect on July 1, 2023.
Report Title:
Qualified Internship Tax Credit; Work-Based Learning; DOTAX; DLIR
Description:
Establishes a qualified internship income tax credit for employers of qualified interns. Requires qualified internships to fulfill requirements of the Department of Education and University of Hawaii work-based learning programs. Provides an application and certification process for claims of credits to be administered by the Department of Labor and Industrial Relations. Requires reports to the Legislature from the Department of Taxation and Department of Labor and Industrial Relations. Appropriates funds. Effective 1/1/2050. (SD2)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
