Relating To The Important Agricultural Land Qualified Agricultural Cost Tax Credit.
If enacted, HB2190 will change the way the important agricultural land qualified agricultural cost tax credit is claimed. Importantly, it allows taxpayers to claim the credit in the third taxable year following application for first-year certification, rather than in the taxable year directly after costs are incurred. Furthermore, the bill extends the department of agriculture's certification authority for these tax credits from December 31, 2021, to December 31, 2031, which should alleviate some concerns regarding the timely availability of this benefit to agricultural operators in Hawaii.
House Bill 2190 proposes key amendments to the Important Agricultural Land Qualified Agricultural Cost Tax Credit, primarily aimed at extending the timeline for claiming this tax credit. This bill recognizes the significance of agricultural land in Hawaii and aims to support food self-sufficiency by enabling qualified landowners and farmers to offset costs associated with establishing and maintaining viable agricultural operations. It has been noted that the existing ability to claim this tax credit effectively expired with the ending of the Department of Agriculture's certification authority on December 31, 2021, which prompted the need for this legislation.
Some points of contention could arise regarding how extensively the bill aids landowners versus its fiscal implications on state revenue. Stakeholders may debate whether extending the credits sufficiently incentivizes farming or simply delays financial responsibilities for landowners. In addition, there may be discussions about whether the adjustment to the claiming schedule truly simplifies the process or merely adds complexity in the long run. The financial impact on the state budget as it relates to reducing tax liability for agricultural operators could also spark varying opinions among legislators.