Hawaii 2024 Regular Session

Hawaii Senate Bill SB2497 Compare Versions

Version 1 (Old)

Version 2 (New)

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1		-	THE SENATE S.B. NO. 2497 THIRTY-SECOND LEGISLATURE, 2024 S.D. 2 STATE OF HAWAII ~~H.D. 1 C.D. 1~~ A BILL FOR AN ACT RELATING TO TAXATION. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
	1	+	THE SENATE S.B. NO. 2497 THIRTY-SECOND LEGISLATURE, 2024 S.D. 2 STATE OF HAWAII A BILL FOR AN ACT RELATING TO TAXATION. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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3	3		THE SENATE S.B. NO. 2497
4	4		THIRTY-SECOND LEGISLATURE, 2024 S.D. 2
5		-	STATE OF HAWAII H.D. 1
6		-	C.D. 1
	5	+	STATE OF HAWAII
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8	7		THE SENATE
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10	9		S.B. NO.
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12	11		2497
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14	13		THIRTY-SECOND LEGISLATURE, 2024
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16	15		S.D. 2
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18	17		STATE OF HAWAII
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20		-	H.D. 1
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24		-	C.D. 1
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32	31		A BILL FOR AN ACT
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38	37		RELATING TO TAXATION.
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44	43		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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48		-	SECTION 1. Section 235-110.91, Hawaii Revised Statutes, is amended as follows: 1. By amending subsection (b) to read: "(b) ~~All references~~ to ~~Internal Revenue Code sections within sections 41~~ and ~~280C(c)~~ of ~~the Internal Revenue Code shall be operative for purposes of this section[; provided that references to the base amount in section 41 of the Internal Revenue Code~~ shall not ~~apply, and credit for all qualified research expenses may be taken without regard to~~ the amount of ~~expenses for previous years]~~." 2. By amending subsections (n) and (o) to read: "(n) This section shall not apply to taxable years beginning after December 31, [2024.] 2029. (o) As used in this section: "Qualified high technology business" [shall have the same meaning as in section 235-7.3(c).] means a ~~small~~ business ~~that~~ conducts more than fifty per cent of its activities in qualified research ~~in the State and is registered to do business in the State~~. "Qualified research" shall have the same meaning as in section 41(d) of the Internal Revenue Code. "Qualified research expenses" shall have the same meaning as in section 41(b) of the Internal Revenue Code; provided that it shall not include research expenses incurred outside of the State~~. "Small business" means a company with no more than five hundred employees~~." SECTION 2. Act 261, Session Laws of Hawaii 2019, is amended by amending section 5 to read as follows: "SECTION 5. This Act shall take effect upon its approval; provided that: (1) Section 2 shall apply to taxable years beginning after December 31, 2019; and (2) Part II shall take effect on [December 31, 2024.] January 1, 2030." SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 4. This Act, ~~upon its approval,~~ shall apply to taxable years beginning after December 31, 2023.
	47	+	SECTION 1. Section 235-110.91, Hawaii Revised Statutes, is amended as follows: 1. By amending subsection (f) to read: "(f) If in any taxable year the annual amount of certified credits reaches [$5,000,000] in the aggregate, the department of business, economic development, and tourism shall immediately discontinue certifying credits and notify the department of taxation. In no instance shall the department of business, economic development, and tourism certify a total amount of credits exceeding [$5,000,000] per taxable year. To comply with this restriction, the department of business, economic development, and tourism shall certify credits on a first come, first served basis. The department of taxation shall not allow the aggregate amount of credits claimed to exceed that amount per taxable year." 2. By amending subsections (n) and (o) to read: "(n) This section shall not apply to taxable years beginning after December 31, [2024.] 2029. (o) As used in this section: "Qualified high technology business" [shall have the same meaning as in section 235-7.3(c).] means a for-profit corporation, limited liability company, partnership, limited partnership, sole proprietorship, or other legal entity that: (1) Is registered to do business in the State; (2) Is independently owned and operated; (3) Employs fewer than five hundred full-time or part-time employees in the State; and (4) Conducts more than fifty per cent of its activities in qualified research. "Qualified research" shall have the same meaning as in section 41(d) of the Internal Revenue Code. "Qualified research expenses" shall have the same meaning as in section 41(b) of the Internal Revenue Code; provided that it shall not include research expenses incurred outside of the State." SECTION 2. Act 261, Session Laws of Hawaii 2019, is amended by amending section 5 to read as follows: "SECTION 5. This Act shall take effect upon its approval; provided that: (1) Section 2 shall apply to taxable years beginning after December 31, 2019; and (2) Part II shall take effect on [December 31, 2024.] January 1, 2030." SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 4. This Act shall take effect on January 1, 2060, and shall apply to taxable years beginning after December 31, 2023; provided that, on December 31, 2029, section 1 of this Act shall be repealed and section 235-110.91, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day prior to the effective date of this Act.
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50	49		SECTION 1. Section 235-110.91, Hawaii Revised Statutes, is amended as follows:
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52		-	1. By amending subsection (b) to read:
	51	+	1. By amending subsection (f) to read:
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54		-	"(b) All references to Internal Revenue Code sections within sections 41 and 280C(c) of the Internal Revenue Code shall be operative for purposes of this section[; provided that references to the base amount in section 41 of the Internal Revenue Code shall not apply, and credit for all qualified research expenses may be taken without regard to the amount of expenses for previous years]."
	53	+	"(f) If in any taxable year the annual amount of certified credits reaches [$5,000,000] in the aggregate, the department of business, economic development, and tourism shall immediately discontinue certifying credits and notify the department of taxation. In no instance shall the department of business, economic development, and tourism certify a total amount of credits exceeding [$5,000,000] per taxable year. To comply with this restriction, the department of business, economic development, and tourism shall certify credits on a first come, first served basis.
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	55	+	The department of taxation shall not allow the aggregate amount of credits claimed to exceed that amount per taxable year."
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56	57		2. By amending subsections (n) and (o) to read:
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58	59		"(n) This section shall not apply to taxable years beginning after December 31, [2024.] 2029.
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60	61		(o) As used in this section:
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62		-	"Qualified high technology business" [shall have the same meaning as in section 235-7.3(c).] means a small business that conducts more than fifty per cent of its activities in qualified research in the State and is registered to do business in the State.
	63	+	"Qualified high technology business" [shall have the same meaning as in section 235-7.3(c).] means a for-profit corporation, limited liability company, partnership, limited partnership, sole proprietorship, or other legal entity that:
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	65	+	(1) Is registered to do business in the State;
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	67	+	(2) Is independently owned and operated;
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	69	+	(3) Employs fewer than five hundred full-time or part-time employees in the State; and
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	71	+	(4) Conducts more than fifty per cent of its activities in qualified research.
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64	73		"Qualified research" shall have the same meaning as in section 41(d) of the Internal Revenue Code.
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66		-	"Qualified research expenses" shall have the same meaning as in section 41(b) of the Internal Revenue Code; provided that it shall not include research expenses incurred outside of the State.
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68		-	"Small business" means a company with no more than five hundred employees."
	75	+	"Qualified research expenses" shall have the same meaning as in section 41(b) of the Internal Revenue Code; provided that it shall not include research expenses incurred outside of the State."
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70	77		SECTION 2. Act 261, Session Laws of Hawaii 2019, is amended by amending section 5 to read as follows:
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72	79		"SECTION 5. This Act shall take effect upon its approval; provided that:
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74	81		(1) Section 2 shall apply to taxable years beginning after December 31, 2019; and
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76	83		(2) Part II shall take effect on [December 31, 2024.] January 1, 2030."
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78	85		SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
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80		-	SECTION 4. This Act, ~~upon its approval,~~ shall apply to taxable years beginning after December 31, 2023.
	87	+	SECTION 4. This Act shall take effect on January 1, 2060, and shall apply to taxable years beginning after December 31, 2023; provided that, on December 31, 2029, section 1 of this Act shall be repealed and section 235-110.91, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day prior to the effective date of this Act.
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82		-	Report Title: Tax Credit; Research Activities Description: Repeals the provision that made references to the base amount in the Internal Revenue Code inapplicable to the research activities tax credit and allowed credits for all qualified research expenses to be taken without regard to previous years' expenses. Narrows the qualifying criteria for research activities tax credits to applicants who are small businesses registered in the State. Extends the sunset date of the research activities tax credit to 12/31/2029. (CD1) The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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	89	+	Report Title: Tax Credit; Research Activities Description: Amends the tax credit for research activities by: (1) increasing the total amount of certified credits to an unspecified amount; (2) extending the sunset date of the credit to 12/31/29; and (3) amending the definition of qualified high technology businesses that are eligible to claim the credit. Effective 1/1/2060. (SD2) The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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90	95		Tax Credit; Research Activities
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96		-	~~Repeals~~ the ~~provision that made references to the base amount in the Internal Revenue Code inapplicable to the research activities~~ tax credit ~~and allowed credits for all qualified research expenses to be taken without regard to previous years' expenses. Narrows the qualifying criteria~~ for research activities ~~tax~~ credits to ~~applicants who are small businesses registered in the State. Extends~~ the sunset date of the ~~research activities tax~~ credit to 12/31/~~2029~~. (~~CD1~~)
	101	+	Amends the tax credit for research activities by: (1) increasing the total amount of certified credits to an unspecified amount; (2) extending the sunset date of the credit to 12/31/29; and (3) amending the definition of qualified high technology businesses that are eligible to claim the credit. Effective 1/1/2060. (SD2)
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104	109		The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.