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2017 Administrative Proposals

Dept/No. Description Senate House
BED-13 Replaces the DBEDT requirements related to the certification, administration and verification of the renewable fuels production tax credit with a process that requires the taxpayer to file a statement with the Department certified by a third party. Adopts an aggregate cap of $3M per calendar year. Effective for taxable years after 12/31/2017. 1044, CD-1

ACT 142

TAX‐01 Conforms the Hawaii income tax and estate and generation-skipping transfer taxes to federal changes adopted through December 31, 2016. 1002, HD-1

ACT 95

TAX‐05 For estate and generation-skipping tax purposes, specifies that a donor’s or decedent’s property includes property owned by the donor’s or decedent’s single member LLC (if it is disregarded for income tax purposes). Effective after 12/31/2016. 1006, CD-1

ACT 156

TAX‐06 Reduces the frequency of withholding returns to quarterly, but does not change the frequency of payment for those taxpayers obliged to pay biweekly. Effective 1/1/2018. 1007, SD-1

ACT 7

2017 Legislative Tax Proposals

Tax Bill No. Description Status
ADMIN-ISTRATION HB 1414, CD-1 Requires OETS (Office of Enterprise Tech. Svcs.) to investigate and report on the problems of the tax system modernization project of the department of taxation. Appropriates $150K. VETO
SB 100, CD-1 Delays the reviews by the Auditor of tax exemptions, exclusions, credits, and deductions. Provides the Auditor with access to DOTAX records for the reviews. Adds the organic foods production income tax credit to the schedule of review. Amends a review criterion to provide more discretion to the Auditor. ACT 177
NET INCOME HB 147,  HD‐1 Repeals various sections of Hawaii net income tax laws to delete obsolete and unnecessary provisions. ACT 3
HB 209, CD‐1 Expands the low income-household renters’ income tax credit based on adjusted gross income and filing status. Establishes a nonrefundable state earned income tax credit equal to 20% of federal EITC, to sunset after 2027. For taxable years beginning after 12/31/17, restores the income tax rates for high income brackets that were repealed on 12/31/15. Removes the sunset for the refundable food/excise tax credit. ACT 107
HB 375, CD-1 Appropriates $1M for the Hawaii tourism authority, working with the Hawaii lodging and tourism association, for projects to address homelessness in tourist and resort areas. [Relating to Taxation?] ACT 214
HB 423, 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 143
HB 552,  CD‐1 Establishes the Affordable Health Insurance Working Group to plan for and mitigate adverse effects of the potential repeal of the federal Affordable Care Act by Congress. ACT 43 
HB 591, CD‐1 Includes structures, machinery, equipment, and capital assets in the definition of capital infrastructure costs for the Capital Infrastructure Tax Credit. Sets $2.5M cap on credit per taxable year per qualified infrastructure tenant. Specifies that excess qualified expenses may be carried forward. Recaptures credit if qualified infrastructure tenant fails to relocate within a certain period after executing a lease with the Department of Transportation. Specifies taxpayer reporting requirements, and provides a penalty for noncompliance.  ACT 213
HB 1244, CD‐1 Requires upgrade, conversion, or connection to the sewer system of all cesspools in the State before 2050 unless exempted by the director of health. Establishes a grant program to mitigate costs. Eases requirements to qualify for the cesspool upgrade, conversion, or connection income tax credit. ACT 125
SB 1244, CD‐1 Authorizes qualified nonprofit housing trusts to repurchase affordable units developed with government assistance when a government entity waives its first right of refusal. Authorizes counties to waive a first right of refusal to repurchase a privately-developed affordable housing unit built pursuant to a unilateral agreement or similar instrument. No change to the State Low-Income Housing Tax Credit.  ACT 159
GENERAL
EXCISE
HB 1179, CD‐1 Expands the types of rental housing projects that can be exempted from general excise taxes. Allows the terms of collective bargaining agreements to be deemed compliance with Hawaii’s Little Davis-Bacon Act. Sunsets 6/30/2022.  ACT 54
MISC. HB 471, CD‐1 Prohibits the legislature from appropriating from the Emergency and Budget Reserve Fund: (1) more than 50% of the balance of the fund in a single fiscal year; (2) to expend for discretionary costs in a fiscal year, an amount that exceeds 10% of the total discretionary funds appropriated by the Legislature for the same fiscal year; and (3) for a succeeding fiscal year, unless the current fiscal year’s tax collection is less than the collection for the previous fiscal year.  ACT 207
HB 735, CD-1 Expands the list of government fees and taxes that a motor vehicle lessor may pass on to a lessee on a prorated basis. Amends the prorated amount of vehicle license recovery fees that rental car companies may pass on to lessees. Requires rental car companies to submit an annual audit conducted by a third party certified public accountant to the Office of Consumer Protection of the Department of Commerce and Consumer Affairs beginning on 3/1/2019. ACT 137
SB 103,  SD‐2 Implements the state constitutional amendment in 2016 that authorizes excess general fund revenues to pre-pay general obligation bond debt service or pension or other post-employment benefit liabilities. Takes effect 6/30/2017. ACT 6
SB 713, CD‐1 Requires the six-year program and financial plan and budget to include information on tax expenditures. Effective 7/1/18. VETO
MULTIPLE TAX TYPES SB 1183, CD‐2 Senate CD2: Authorizes counties that have established a surcharge on state tax prior to 7/1/2015 to extend the surcharge to 12/31/2037. Authorizes counties that have not established a surcharge to establish a surcharge on state tax prior to 1/1/2018. Decreases from 10% to 1% the gross proceeds retained by the State. Requires a county’s share of the county surcharge on state tax to be paid to the county monthly. House CD2: Authorizes a county that has adopted a surcharge on state tax to extend the surcharge to 12/31/2028. Authorizes a county to adopt a surcharge on state tax before 1/1/2018, provided that certain conditions are met. Increases the transient accommodations tax by 1.0 per cent from 1/1/2018 to 12/31/2028 and provides that $25M of the annual revenue shall be allocated to a new education special fund. Decreases from 10% to 1% the gross proceeds retained by the State. ACT 1

Special

Session