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SB 349 establishes a five-year renewable fuels production tax credit and repeals the ethanol facility tax credit. It allows qualifying taxpayers to claim a refundable income tax credit equal to 20 cents per seventy-six thousand British thermal units of qualifying renewable fuel, capped at $3,000,000 per taxable year. The Governor is concerned that the bill runs afoul of the federal Commerce Clause because the credit is only awarded for renewable fuels produced in Hawaii. Read the veto message here.
Some of the things we helped to accomplish (or kill) in the 2015 legislative session:
- Top tax rates. Hawaii has the second highest individual income tax rate in the nation, 11%, but the top rate is scheduled to sunset at the end of 2015. As bills to give the top rates additional life moved through the session, we reminded lawmakers that their counterparts in 2009 promised the public that the increases would be temporary. At the end, no bill to extend the rates survived, and the top rates of 9%, 10%, and 11% will sunset on schedule.
- Rail tax extension. City officials came to the session wanting the tax to be extended forever and to serve as an operating subsidy as they believed a large portion of the tax is paid by tourists. We testified that the tax historically was intended to pay for capital costs and never was intended for operations. Ultimately, a five-year extension was enacted to help the City finish the job it started. The bill was signed into law on July 15 and became Act 240 of 2015.
- SB 1212. The Foundation drafted a bill to clean up some of the tax laws by getting rid of obsolete provisions. That bill has become Act 22 of 2015.
- Medical marijuana 25% tax. The last committee to hear the bill establishing medical marijuana dispensaries slapped a 25% general excise tax on sales of the drug. We went to the media and Hawaii News Now aired an interview with the President pointing out that prescribed medicines have been exempt from the tax since 1986. Interestingly, the final draft of the bill dropped the taxing provisions. That bill was signed into law on July 15 and became Act 241 of 2015.