AI-assisted research summary: This section lets eligible taxpayers claim a capital infrastructure tax credit against net income tax liability, with a filing deadline and recapture rules.
(a) There shall be allowed to each taxpayer subject to the taxes imposed by this chapter a capital infrastructure 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 capital infrastructure costs were paid or incurred. (b) For the purpose of this section: "Base investment" means the amount of money invested by an investor. "Capital infrastructure costs" means capital expenditures, as used in section 263 of the Internal Revenue Code and the regulations promulgated thereunder; provided that the capital expenditures are for real property and fixtures that are paid or incurred in connection with the displaced tenant's move of the tenant's current active trade or business to the tenant's new location; provided further that the capital infrastructure costs shall not include amounts for which another credit is claimed. "Net income tax liability" means income tax liability reduced by all other credits allowed under this chapter. "Qualified infrastructure tenant" means a business: (1) That currently owns capital or property or maintains an office, operations, or facilities at the former Kapalama military reservation site; (2) Whose principal business is maritime, and waterfront dependent, and is included under the State's plan to relocate the business to piers twenty-four through twenty-eight within Honolulu harbor; and (3) Will be displaced and relocated by the State pursuant to the Kapalama container terminal project. (c) The amount of the tax credit shall be equal to fifty per cent of the capital infrastructure costs paid or incurred by the qualified infrastructure tenant during the taxable year up to a maximum of $2,500,000 in capital infrastructure costs in any taxable year, provided that the qualified infrastructure tenant shall notify the taxpayer claiming the credit under subsection (a) of the amount of capital infrastructure costs which may be claimed. (d) In the case of an entity taxed as a partnership, credit shall be determined at the entity level, but distribution and share of the credit may be determined notwithstanding section 704 of the Internal Revenue Code. (e) The credit allowed under this section shall be claimed against the net income tax liability for the taxable year. If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of the tax credit over liability may be used as a credit against the taxpayer's net income tax liability in subsequent years until exhausted. All claims, including amended claims, for a tax credit under this section 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. (f) This section shall not apply to taxable years beginning after December 31, 2019. (g) Any credit claimed under this section shall be recaptured following the close of the taxable year for which the credit is claimed if within three years: (1) The qualified infrastructure tenant fails to continue the line of business it conducted as of July 1, 2014; or (2) The interest in the qualified infrastructure tenant, whether in whole or in part, has been sold, exchanged, withdrawn, or otherwise disposed of by the taxpayer claiming a credit under this section. The recapture shall be equal to one hundred per cent of the amount of the total tax credit claimed under this section in the preceding five taxable years, and shall be added to the taxpayer's tax liability for the taxable year in which the recapture occurs pursuant to this subsection. (h) The director of taxation shall prepare any forms that may be necessary to claim a credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of the claim for credit made under this section. The director of taxation may adopt rules to effectuate the purposes of this section pursuant to chapter 91. [L 2014, c 200, §2] Note Section applies to taxable years beginning after December 31, 2013. L 2014, c 200, §6.