HB2576 HSCR224-02

 

STAND. COM. REP. NO.224-02

Honolulu, Hawaii

, 2002

RE: H.B. No. 2576

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Economic Development and Business Concerns, to which was referred H.B. No. 2576 entitled:

"A BILL FOR AN ACT RELATING TO HIGH TECHNOLOGY TAX INCENTIVES,"

begs leave to report as follows:

The purpose of this bill is to:

(1) Amend provisions relating to income tax exemptions for amounts received by an individual or a qualified high technology business as royalties and other income derived from any patents, copyrights, and trade secrets by:

(A) Amending the definition of "performing arts products" to require that at least fifty per cent of postproduction work be performed in Hawaii to qualify for income tax exemptions;

(B) Defining "postproduction work";

(C) Expanding the types of software research that qualify under the definition of "qualified research";

(2) Amend provisions of the high technology business investment tax credit by:

(A) Clarifying that the recapture provisions of this credit apply where a business or an interest in the business has been transferred;

(B) Clarifying that a "qualified high technology business" must be in business at the close of its taxable year for investors to claim the credit for that year;

(C) Declaring that if the high technology business investment credit is claimed in any taxable year, the motion picture credit and the ethanol production credit cannot be claimed for that taxable year.

Testimony in support of this measure was submitted by the Department of Taxation and the Hawaii Technology Trade Association. Worldwide Energy Group and the Tax Foundation of Hawaii offered comments.

As affirmed by the record of votes of the members of your Committee on Economic Development and Business Concerns that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2576 and recommends that it pass Second Reading and be referred to the Committee on Finance.

 

Respectfully submitted on behalf of the members of the Committee on Economic Development and Business Concerns,

 

		____________________________ LEI AHU ISA, Chair