SB 970: RELATING TO TAXATION.

A BILL FOR AN ACT

RELATING TO TAXATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§235-    Public transportation subsidization tax credit.  (a)  There shall be allowed to each individual or corporate taxpayer who is not claimed, or is not otherwise eligible to be claimed, as a dependent by another taxpayer for federal or state income tax purposes, a public transportation subsidization tax credit that shall be deductible from the taxpayer's net income tax liability imposed by this chapter for the taxable year in which the tax credit is properly claimed.

     (b)  To qualify for the tax credit, the taxpayer shall be an employer having a place of business in any county in the State having a population of seven hundred thousand or more.

     (c)  The amount of the tax credit shall be equal to the amount spent by the taxpayer during the taxable year to purchase fares or passes for the employer's employees to use public transportation.

     (d)  If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of the credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted.

     All claims for the tax credit under this section, including amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the tax credit may be claimed.  Failure to meet the filing requirements of this subsection shall constitute a waiver of the right to claim the tax credit.

     (e)  The director of taxation:

     (1)  Shall prepare any forms that may be necessary to claim a tax credit under this section;

     (2)  May require the taxpayer to furnish reasonable information to ascertain the validity of the claim for the tax credit made under this section; and

     (3)  May adopt rules under chapter 91 necessary to effectuate the purposes of this section.

     (f)  The tax credit authorized under this section shall not be available for taxable years beginning after December 31, 2029.

     (g)  The director of taxation shall submit to the legislature reports regarding the tax credit authorized under this section.  Each report shall be submitted twenty days prior to the convening of the regular sessions of 2027, 2028, 2029, and 2030.  Each report shall include, at minimum:

     (1)  The number and value of the credits granted under this section for the prior calendar year;

     (2)  The total number and value of the credits granted under this section since the enactment of this section;

     (3)  The impact of the tax credit authorized under this section; and

     (4)  A recommendation whether the State should continue to authorize the tax credit under this section.

     (h)  For the purposes of this section, "public transportation" means any mass transportation program that is:

     (1)  Open to the general public;

     (2)  Operated or contracted by the State or a county; and

     (3)  Operated within a county having a population of seven hundred thousand or more.

"Public transportation" includes any bicycle share program or membership that provides access to bicycles."

     SECTION 2.  New statutory material is underscored.

     SECTION 3.  This Act shall take effect on July 1, 2050, and shall apply to taxable years beginning after December 31, 2024.

Report Title:

Tax Credit; Businesses; Employees; Public Transportation; Reports

Description:

Authorizes a tax credit for businesses that pay the public transportation costs of employees.  Applies to counties having populations of 700,000 or more.  Applies for taxable years beginning after 12/31/2024 but not beginning after 12/31/2029.  Requires reports to the Legislature.  Effective 7/1/2050.  (SD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

RELATING TO TAXATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§235-     Public transportation subsidization tax credit.  (a)  There shall be allowed to each individual or corporate taxpayer who is not claimed, or is not otherwise eligible to be claimed, as a dependent by another taxpayer for federal or state income tax purposes, a public transportation subsidization tax credit that shall be deductible from the taxpayer's net income tax liability imposed by this chapter for the taxable year in which the tax credit is properly claimed.

     (b)  To qualify for the tax credit, the taxpayer shall be an employer having a place of business in any county in the State having a population of seven hundred thousand or more.

     (c)  The amount of the tax credit shall be equal to the amount spent by the taxpayer during the taxable year to purchase fares or passes for the employer's employees to use public transportation.

     (d)  If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of the credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted.

     All claims for the tax credit under this section, including amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the tax credit may be claimed.  Failure to meet the filing requirements of this subsection shall constitute a waiver of the right to claim the tax credit.

     (e)  The director of taxation:

     (1)  Shall prepare any forms that may be necessary to claim a tax credit under this section;

     (2)  May require the taxpayer to furnish reasonable information to ascertain the validity of the claim for the tax credit made under this section; and

     (3)  May adopt rules under chapter 91 necessary to effectuate the purposes of this section.

     (f)  The tax credit authorized under this section shall not be available for taxable years beginning after December 31, 2029.

     (g)  The director of taxation shall submit to the legislature reports regarding the tax credit authorized under this section.  Each report shall be submitted twenty days prior to the convening of the 2027, 2028, 2029, and 2030 regular sessions.  Each report shall include, at minimum:

     (1)  The number and value of the credits granted under this section for the prior calendar year;

     (2)  The total number and value of the credits granted under this section since the enactment of this section;

     (3)  The impact of the tax credit authorized under this section; and

     (4)  A recommendation whether the State should continue to authorize the tax credit under this section.

     (h)  For the purposes of this section, "public transportation" means any mass transportation program that is:

     (1)  Open to the general public;

     (2)  Operated or contracted by the State or a county; and

     (3)  Operated within a county having a population of seven hundred thousand or more."

     SECTION 2.  New statutory material is underscored.

     SECTION 3.  This Act, upon its approval, shall apply to taxable years beginning after December 31, 2024.

Report Title:

Tax Credit; Businesses; Employees; Public Transportation; Legislature; Reports

Description:

Authorizes a tax credit for businesses that pay the public transportation costs of employees.  Applies to counties having populations of 700,000 or more.  Applies for taxable years beginning after 12/31/2024 but not beginning after 12/31/2029.  Requires reports to the Legislature.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO. 614

Honolulu, Hawaii

RE:    S.B. No. 970

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committees on Transportation and Culture and the Arts and Energy and Intergovernmental Affairs, to which was referred S.B. No. 970 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

beg leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Authorize a tax credit for businesses that pay the public transportation costs of employees for:

          (A)  Counties having populations of 700,000 or more; and

          (B)  Taxable years beginning after December 31, 2024, but not beginning after December 31, 2029; and

     (2)  Require reports to the Legislature.

     Your Committees received testimony in support of this measure from the Retail Merchants of Hawaii and two individuals.

     Your Committees received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

     Your Committees find that by incentivizing businesses to subsidize public transportation costs, this measure will encourage the use of public transportation, therefore reducing traffic congestion, greenhouse gas emissions, and costs of commuting.

     Your Committees note the comments of the Department of Taxation regarding the percent of expenditures and the potentiality for waste.  Your Committees find that this issue raises concerns that merit further consideration and respectfully requests that subsequent Committees to which this measure is referred examine the issues and concerns raised by the testimony.

Accordingly, your Committees have amended this measure by:

     (1)  Inserting language to ensure that eligible employers for the tax credit includes those who purchase fares or passes for employees for bicycle sharing;

     (2)  Inserting an effective date of July 1, 2050, to encourage further discussion; and

     (3)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the records of votes of the members of your Committees on Transportation and Culture and the Arts and Energy and Intergovernmental Affairs that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 970, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 970, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Transportation and Culture and the Arts and Energy and Intergovernmental Affairs,