2016 Administrative Proposals

Dept/No. Description Senate House
BED-23 Makes the State low‐income housing credit more valuable by reducing the payout period from ten to five years, beginning on 1/1/2017. State credit shall not exceed 50% of total federal credits allocated. Sunsets on 12/31/2021. 2833,
CD‐1
ACT 129
 BUF‐16 Appropriates $100 million to the Department of Education to cool the schools. (Prior versions of the bill borrowed the money from the GEMS loan program.) 3126,
CD‐1
ACT 047
 PSD‐05 Uniform Controlled Substances Act. Prior versions of the bill redirected any fines collected to the controlled substance registration revolving fund to support enforcement programs. That part of the bill has been deleted and the fines go to the general fund as before. 2915,
CD‐1
ACT 218
 TAX‐01 Conforms the Hawaii income tax and estate and generation‐skipping transfer taxes to federal changes adopted through December 31, 2015. 2921,
HD‐1
ACT 033
TAX‐02 Extends the reporting date of the 2015‐2017 Tax Review Commission and appropriates $250,000 for fiscal year 2016‐17 for the commission. 2922,
CD‐1
ACT 222
 CCA‐09 Requires electronic filing and payment of insurance premium taxes. Applies to all authorized insurers. 2854,
CD‐1
ACT 141

Legislative Tax Proposals

Tax Bill No. Description Status
MULTIPLE TAX TYPES SB 2547, CD-1 Requires the State Auditor to periodically review the myriad exemptions, deductions, and other tax benefits under chapters 237, 238, and 239, and the insurance premium tax. First review will take place in 2018. ACT 261
HB 1527, CD-1 Requires the State Auditor to periodically review the myriad exemptions, deductions, and other tax benefits under chapters 235 and 241. First review will take place in 2019. ACT 245
HB 2707, CD-1 Provides that medical marijuana dispensary businesses (1) are not eligible for enterprise zone program incentives; (2) may claim deductions for income tax purposes despite IRC section 280E disallowing them; and (3) can’t take the GET exemption for sales of prescription medicine. Effective 7/1/2016. ACT 230
FUEL SB 2131,

CD‐1

Restores the 2¢ per gallon tax on naphtha sold for use in a power‐generating facility, retroactive to 1/1/2016. The state fuel tax rate rollbacks are unchanged; aviation and diesel remain at 1¢ and gasoline remains at 16¢. ACT 076
NET INCOME SB 2652,
CD‐1
Replaces the ethanol facility tax credit with a nonrefundable renewable fuels production tax credit. The annual dollar amount of the credit shall be 20 cents per 76,000 British thermal units (BTU) of renewable fuels using the lower heating value produced for distribution in Hawaii; provided that the production by the facility is not less than 15 billion BTUs of renewable fuels per year. Limits the amount of tax credit that may be claimed by all taxpayers to $3 million per taxable year. Provides that DBEDT will certify eligibility for the credit. Sunsets 12/31/2021. ACT 202
SB 3084,
CD‐1
Clarifies that the maximum credit for cesspool conversion for a residential large‐capacity cesspool is $10,000 times the number of TMKs where more than one residence is connected to it. ACT 182
HB 1689, CD-1 Establishes a nonrefundable organic foods production credit, allowing qualified farmers a credit equal to 100% of qualified expenses up to a maximum of $50,000 per year, with an aggregate cap of $2 million. A claim exceeding the aggregate cap may be claimed in the next taxable year. Claims are to be certified by the department of agriculture. Effective for taxable years beginning after 12/31/2016. Sunsets 12/31/2021. ACT 258
HB 1702, CD-1 Amends the income tax credit for expenses for household and dependent care services necessary for gainful employment by changing the creditable percentage of employment-related expenses from 25% at AGI less than $25K to 15% at AGI over $50K. Thresholds do not depend on filing status. Depends on AGI level. Retroactive to 1/1/2016. ACT 235
HB 2218,
SD‐1
Repeals sections 235‐2, 235‐2.1, 235‐2.2 that apply to years
prior to 1978.
ACT 053
MISC. SB 2552,
HD‐1
Repeals various non‐general funds including special funds, revolving funds, trust funds, and trust accounts, all in accordance with the State Auditor’s Report No. 15‐17, and places any unencumbered balances into the general fund and emergency and budget reserve fund. ACT 043
SB 2553,
HD‐1
Repeals various non‐general funds including special funds, revolving funds, trust funds, and trust accounts, all in accordance with the State Auditor’s Report No. 15‐19, and places any unencumbered balances into the general fund and emergency and budget reserve fund. ACT 042
HB 545,
SD‐2
Raids $300,000 from the Bureau of Conveyances Special Fund to go to the Hawaii Historic Preservation Special Fund for an integrated information management system. ACT 119
HB 2415,
SD‐1
Repeals the Kapolei recreational sports complex special fund and makes conforming amendments as recommended in State Auditor’s Report 14‐01. Reclassifies the prepaid airport use charge fund from a special fund to a trust fund as recommended in Report 14‐05. Abolishes the photo enforcement revolving fund because it is inactive. ACT 061
REAL
PROPERTY
HB 2217,
SD‐1
Repeals HRS chapters 246 and 246A because the State doesn’t administer real property taxes any more. Makes conforming amendments. ACT 052
TAT HB 1850, CD-1 Allows a transient accommodations broker to enter into an agreement with DOTAX to serve as a collection agent for general excise and transient accommodations taxes. The transient vacation rental owners or operators are required to attest to the broker that they are in compliance with land use laws and ordinances. The TAT registration number to appear on advertising may be the broker’s number. Effective 1/1/2017. Sunsets 12/31/2021. VETO
SB 2987,
CD‐1
Extends to fiscal year 2016‐17 an annual $103 million allocation of TAT revenues to the counties. Thereafter the allocation will drop back to $93 million. ACT 223
TOBACCO HB 2466,
SD‐1
Requires Depts. of Health and B&F to conduct a study on the distribution of cigarette tax revenues. ACT 086
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