HOUSE OF REPRESENTATIVES H.B. NO. 690 THIRTY-THIRD LEGISLATURE, 2025 STATE OF HAWAII A BILL FOR AN ACT Relating to Taxation. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
HOUSE OF REPRESENTATIVES H.B. NO. 690
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII
HOUSE OF REPRESENTATIVES
H.B. NO.
690
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII
A BILL FOR AN ACT
Relating to Taxation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that water is essential to life and flourishing local communities, yet some communities, such as portions of the Kaū region of Hawaii island, lack access to municipal water infrastructure, leaving residents to rely on water catchment systems and water delivery services to meet their basic needs. Notably, areas that lack water resources are often highly impoverished, and a lack of water access can worsen preexisting economic precarity. The legislature additionally finds that water catchment systems can be cost-effective, reliable, and safe and reduce consumer demand for fresh water. Water catchment systems can promote water conservation; mitigate flooding; and conserve energy needed to pump, treat, and transport fresh water for consumer use. The purpose of this Act is to provide one alternative water source income tax credit to taxpayers who either install, place into service, or repair a water catchment system or to taxpayers who purchase water delivery services. SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows: "§235- Alternative water source tax credit. (a) Each taxpayer who files an individual income tax return for a taxable year may claim a refundable income tax credit equal to the lesser of: (1) The costs of installing, placing into service, or repairing a water catchment system on a residential property located in the State that is owned by the taxpayer; (2) The costs of purchasing water delivery services of at least two hundred fifty gallons of water during the taxable year to a residential property located in the State that is owned by the taxpayer; or (3) $500. (b) A taxpayer shall be limited to claiming only one of the credit amounts in subsection (a)(1), (2), or (3). The tax credit claimed by a taxpayer pursuant to this section shall be deductible from the taxpayer's net income tax liability, if any, for the tax year in which the tax credit is properly claimed. If the tax credit claimed by a taxpayer exceeds the amount of income tax payments due from the taxpayer, the excess of credits over payments due shall be refunded to the taxpayer; provided that tax credits properly claimed by an individual who has no income tax liability shall be paid to the individual; provided further that no refunds or payment on account of the tax credits allowed by this section shall be made for amounts less than $1. (c) All claims for a tax credit under this section, including any amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit. (d) The director of taxation shall prepare any forms that may be necessary to claim a tax credit under this section. The director may also require the taxpayer to furnish reasonable information to ascertain the validity of the claim for the credit and adopt rules, pursuant to chapter 91, necessary to implement this section. (e) As used in this section: "Water catchment system" means a system of catching rainwater from a surface and transporting it through a conveyance system to a storage container with a minimum capacity of one thousand gallons on a residential property located in the State that is owned by the taxpayer. "Water delivery service" means a service that delivers fresh water to a residential property located in the State that is owned by the taxpayer." SECTION 3. New statutory material is underscored. SECTION 4. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2025. INTRODUCED BY: _____________________________
SECTION 1. The legislature finds that water is essential to life and flourishing local communities, yet some communities, such as portions of the Kaū region of Hawaii island, lack access to municipal water infrastructure, leaving residents to rely on water catchment systems and water delivery services to meet their basic needs. Notably, areas that lack water resources are often highly impoverished, and a lack of water access can worsen preexisting economic precarity.
The legislature additionally finds that water catchment systems can be cost-effective, reliable, and safe and reduce consumer demand for fresh water. Water catchment systems can promote water conservation; mitigate flooding; and conserve energy needed to pump, treat, and transport fresh water for consumer use.
The purpose of this Act is to provide one alternative water source income tax credit to taxpayers who either install, place into service, or repair a water catchment system or to taxpayers who purchase water delivery services.
SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§235- Alternative water source tax credit. (a) Each taxpayer who files an individual income tax return for a taxable year may claim a refundable income tax credit equal to the lesser of:
(1) The costs of installing, placing into service, or repairing a water catchment system on a residential property located in the State that is owned by the taxpayer;
(2) The costs of purchasing water delivery services of at least two hundred fifty gallons of water during the taxable year to a residential property located in the State that is owned by the taxpayer; or
(3) $500.
(b) A taxpayer shall be limited to claiming only one of the credit amounts in subsection (a)(1), (2), or (3). The tax credit claimed by a taxpayer pursuant to this section shall be deductible from the taxpayer's net income tax liability, if any, for the tax year in which the tax credit is properly claimed. If the tax credit claimed by a taxpayer exceeds the amount of income tax payments due from the taxpayer, the excess of credits over payments due shall be refunded to the taxpayer; provided that tax credits properly claimed by an individual who has no income tax liability shall be paid to the individual; provided further that no refunds or payment on account of the tax credits allowed by this section shall be made for amounts less than $1.
(c) All claims for a tax credit under this section, including any amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.
(d) The director of taxation shall prepare any forms that may be necessary to claim a tax credit under this section. The director may also require the taxpayer to furnish reasonable information to ascertain the validity of the claim for the credit and adopt rules, pursuant to chapter 91, necessary to implement this section.
(e) As used in this section:
"Water catchment system" means a system of catching rainwater from a surface and transporting it through a conveyance system to a storage container with a minimum capacity of one thousand gallons on a residential property located in the State that is owned by the taxpayer.
"Water delivery service" means a service that delivers fresh water to a residential property located in the State that is owned by the taxpayer."
SECTION 3. New statutory material is underscored.
SECTION 4. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2025.
INTRODUCED BY: _____________________________
INTRODUCED BY:
_____________________________
Report Title: Alternative Water Source Income Tax Credit; Water Conservation; Water Catchment; Water Delivery Services Description: Creates an alternative water source income tax credit for taxpayers who install, place in service, or repair a water catchment system or who purchase water delivery services. The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
Report Title:
Alternative Water Source Income Tax Credit; Water Conservation; Water Catchment; Water Delivery Services
Description:
Creates an alternative water source income tax credit for taxpayers who install, place in service, or repair a water catchment system or who purchase water delivery services.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.