AI-assisted research summary: Taxpayers licensed under certain chapters may claim a credit for eligible in-kind services used to repair and maintain public schools, if they meet the conditions and file the required certificate on time.
(a) There shall be allowed to each taxpayer licensed under chapter 444, 460J, or 464, who is subject to the tax imposed by this chapter, and does not owe the State delinquent taxes, penalties, or interest, a credit for contributions of in-kind services for the repair and maintenance of public schools provided by the licensed taxpayer in Hawaii. The credit 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. (b) The amount of the credit determined under this section for the taxable year shall be equal to ten per cent of the value of contributions of in-kind services to the Hawaii school repair and maintenance fund for that taxable year; provided that the aggregate value of the contributions of in-kind services claimed by a taxpayer shall not exceed $40,000. (c) For purposes of this section: "Public schools" has the same meaning as defined in section 302A-101. "Value of contributions of in-kind services" means the fair market value of uncompensated services or labor as determined and certified by the department of accounting and general services. (d) The credit allowed under this section shall be claimed against net income tax liability for the taxable year. A tax credit under this section which exceeds the taxpayer's income tax liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted. (e) 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 credits may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit. (f) The department of education shall maintain records of the names of taxpayers eligible for the credit and the total value of in-kind services contributed for the repair and maintenance of public schools for the taxable year. All contributions shall be verified by the department of education. The department of education shall total all contributions that the department of education certifies. Upon each determination, the department of education shall issue a certificate to the taxpayer certifying: (1) The amount of the contribution; (2) That the taxpayer is licensed under chapter 444, 460J, or 464; and (3) That the taxpayer has obtained a current and valid certificate signed by the director of taxation, showing that the taxpayer does not owe the State any delinquent taxes, penalties, or interest. The taxpayer shall file the certificate from the department of education with the taxpayer's tax return with the department of taxation. When the total amount of certified contributions reaches $2,500,000, the department of education shall immediately discontinue certifying contributions and notify the department of taxation. In no instance shall the total amount of certified contributions exceed $2,500,000 for each taxable year. (g) The State shall provide not more than $250,000 in tax credits for contributions of in-kind services in Hawaii for the repair and maintenance of public schools. (h) The director of taxation shall prepare any forms that may be necessary to allow a credit to be claimed under this section. [L 2001, c 309, §2; am L 2004, c 213, §2] Cross References Hawaii 3R's school improvement fund, see §302A-1502.4. School repair and maintenance fund (Helping Hands Hawaii), see §302A-1502.5.