RELATING TO INCOME TAX CREDITS.

HB81

HOUSE OF REPRESENTATIVES

H.B. NO.

81

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to income tax credits
.

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

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SECTION 1.
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The legislature finds that there are
significant benefits to the State, employers, and employees when employers
allow their employees to telework.
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Encouraging employers to allow employees to telework will benefit
Hawaii's job market, improve the expansion of internet and broadband access in
rural communities, reduce traffic congestion and carbon emissions, and provide
benefits to employees by significantly improving job satisfaction.

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The legislature also finds that
there are more than 135,000 small businesses in Hawaii.
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A small business is defined as a business
having less than five hundred employees.
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Small businesses equate to more than 99.3% of businesses in Hawaii.
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In 2020, small businesses employing twenty to
ninety-nine employees created the most job gains.

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Accordingly, the purpose of this Act
is to establish a telework tax credit to encourage small business employers to
allow their employees to telework.

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SECTION 2.
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Chapter 235, Hawaii Revised Statutes, is
amended by adding a new section to be appropriately designated and to read as
follows:

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"
�235-
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Telework
tax credit.
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(a)
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There shall be allowed to each qualified taxpayer subject to the tax
imposed by this chapter a telework tax credit that shall be deductible from the
taxpayer's net income tax liability, if any, imposed by this chapter for the
taxable year in which the credit is properly claimed.

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(b)
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The amount of the tax credit shall be equal
to $ per qualifying
employee, up to a maximum of
$ .

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(c)
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If the tax credit under this
section exceeds the taxpayer's net income tax liability, the excess of credit
over liability may be used as a tax credit against the taxpayer's net income
tax liability in subsequent years until exhausted.
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All claims for tax credits 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.
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Failure to comply with
the foregoing provision shall constitute a waiver of the right to claim the
credit.

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(d)
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The
director of taxation:

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

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

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

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(e)
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For the purposes of this section:

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"Qualified taxpayer" means any
employer:

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(1)
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Upon whom an
income tax is imposed by this chapter;

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(2)
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That is a small
business; and

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(3)
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That allows at
least thirty per cent of the employer's workforce to telework.

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"Qualifying employee" means an
employee of a qualified taxpayer who is allowed to telework at least two-thirds
of the time that the employee is expected to work.

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"Small business" means a for-profit
corporation, limited liability company, partnership, limited partnership, sole
proprietorship, or other legal entity that:

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(1)
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Is domiciled
and authorized to do business in Hawaii;

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(2)
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Is
independently owned and operated; and

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(3)
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Employs fewer
than one hundred full-time or part-time employees in Hawaii.

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"Telework" means an alternative
work arrangement whereby employees perform the normal duties and
responsibilities of their positions through the use of telecommunication
devices, either at their residence or another location apart from the
employees' usual place of work.
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SECTION 3.
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New statutory material is underscored.

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SECTION 4.
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This Act, upon its approval, shall apply to
taxable years beginning after December 31, 2024.

INTRODUCED BY:

_____________________________

Report Title:

Telework;
Tax Credits; Small Business; Employers; Employees

Description:

Establishes
a telework tax credit for small business employers who allow telework for at
least 30% of their employees.
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Applies to
taxable years beginning after 12/31/24.

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