§235-110.31 Renewable fuels production tax credit. Section repealed December 31, 2021. L 2016, c 202, §6. (a) As used in this section:
"Credit period" means a maximum period of five consecutive years, beginning from the first taxable year in which a taxpayer begins renewable fuels production at a level of at least two billion five-hundred million British thermal units of renewable fuels per calendar year.
"Net income tax liability" means income tax liability reduced by all other credits allowed under this chapter.
"Renewable feedstocks" means:
(1) Biomass crops and other renewable organic material, including but not limited to logs, wood chips, wood pellets, and wood bark;
(2) Agricultural residues;
(3) Oil crops, including but not limited to algae, canola, jatropha, palm, soybean, and sunflower;
(4) Sugar and starch crops, including but not limited to sugar cane and cassava;
(5) Other agricultural crops;
(6) Grease and waste cooking oil;
(7) Food wastes;
(8) Municipal solid wastes and industrial wastes;
(9) Water; and
(10) Animal residues and wastes,
that can be used to generate energy.
"Renewable fuels" means fuels produced from renewable feedstocks, provided that the fuel:
(1) Is sold as a fuel in Hawaii; and
(2) Meets the relevant ASTM International specifications or other industry specifications for the particular fuel, including but not limited to:
(A) Methanol, ethanol, or other alcohols;
(B) Hydrogen;
(C) Biodiesel or renewable diesel;
(D) Biogas;
(E) Other biofuels;
(F) Renewable jet fuel or renewable gasoline; or
(G) Logs, wood chips, wood pellets, or wood bark.
(b) Each year during the credit period, there shall be allowed to each taxpayer subject to the taxes imposed by this chapter, a renewable fuels production tax credit that shall be applied to the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed.
For each taxpayer producing renewable fuels, the annual dollar amount of the renewable fuels production tax credit during the five-year credit period shall be equal to 20 cents per seventy-six thousand British thermal units of renewable fuels using the lower heating value sold for distribution in Hawaii; provided that the taxpayer's production of renewable fuels is not less than two billion five hundred million British thermal units of renewable fuels per calendar year; provided further that the amount of the tax credit claimed under this section by a taxpayer shall not exceed $3,000,000 per taxable year. No other tax credit may be claimed under this chapter for the costs incurred in producing the renewable fuels that are used to properly claim a tax credit under this section for the taxable year.
(c) Not later than thirty days following the close of the calendar year, every taxpayer claiming a credit under this section shall complete and file an independent, third-party certified statement, at the taxpayer's sole expense, with the department of business, economic development, and tourism in the form prescribed by the department of business, economic development, and tourism providing the following information:
(1) The type, quantity, and British thermal unit value, using the lower heating value, of each qualified fuel, broken down by the type of fuel, produced and sold during the previous calendar year;
(2) The feedstock used for each type of qualified fuel;
(3) The proposed total amount of credit to which the taxpayer is entitled for each calendar year and the cumulative amount of the tax credit the taxpayer received during the credit period;
(4) The number of full-time and number of part-time employees of the facility and those employees' states of residency, totaled per state; and
(5) The number and location of all renewable fuel production facilities within and outside of the State.
(d) Within thirty calendar days after the due date of the statement required under subsection (c), the department of business, economic development, and tourism shall:
(1) Acknowledge receipt of the statement in writing; and
(2) Issue a certificate to the taxpayer reporting the amount of renewable fuels produced and sold, the amount of credit that the taxpayer is entitled to claim for the previous calendar year, and the cumulative amount of the tax credit during the credit period.
(e) The taxpayer shall file the certificate issued under subsection (d) with the taxpayer's tax return with the department of taxation. The director of taxation may audit and adjust the certification to conform to the facts.
(f) The total amount of tax credits allowed under this section shall not exceed $3,000,000 for all eligible taxpayers in any calendar year. In the event that the credit claims under this section exceed $3,000,000 for all eligible taxpayers in any given calendar year, the $3,000,000 shall be divided between all eligible taxpayers for that year in proportion to the total amount of renewable fuels produced by all eligible taxpayers. Upon reaching $3,000,000 in the aggregate, the department of business, economic development, and tourism shall immediately discontinue issuing certificates and notify the department of taxation. In no instance shall the total dollar amount of certificates issued exceed $3,000,000 per year.
(g) Notwithstanding any other law to the contrary, the information collected and compiled by the department of business, economic development, and tourism under subsections (c) and (d) for the purposes of the renewable fuels production tax credit, shall be available for public inspection and dissemination subject to chapter 92F.
(h) If the credit under this section exceeds the taxpayer's net income tax liability, the excess of the credit over liability may be used as a credit against the taxpayer's net income tax liability in subsequent years until exhausted. All claims for a credit under this section shall be properly 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 or to provide the certified statement required under subsection (c) shall constitute a waiver of the right to claim the credit.
(i) Prior to production of any renewable fuels for the calendar year, the taxpayer shall provide written notice of the taxpayer's intention to begin production of renewable fuels. The written notice shall be provided to the department of taxation and the department of business, economic development, and tourism, and shall include information on the taxpayer, facility location, facility production capacity, anticipated production start date, and the taxpayer's contact information. Notwithstanding any other law to the contrary, the written notice described in this subsection, including taxpayer and facility information, shall be available for public inspection and dissemination subject to chapter 92F.
(j) The taxpayer shall provide written notice to the director of taxation and the director of business, economic development, and tourism within thirty days following the start of production. The notice shall include the production start date and expected renewable fuels production for the next twelve months. Notwithstanding any other law to the contrary, the written notice described in this subsection shall be available for public inspection and dissemination subject to chapter 92F.
(k) In the case of a partnership, S corporation, estate, or trust, distribution and share of the renewable fuels production tax credit shall be determined pursuant to section 704(b) (with respect to a partner's distributive share) of the Internal Revenue Code of 1986, as amended. For a fiscal year taxpayer, the taxpayer shall report such credit in the taxable year in which the calendar year end is included.
(l) Following each calendar year in which a credit under this section has been claimed, the director of business, economic development, and tourism shall submit a written report to the governor and legislature regarding the production and sale of renewable fuels. The report shall include:
(1) The number and location of renewable fuels production facilities in the State and outside the State that have claimed a credit under this section;
(2) The total number of British thermal units of renewable fuels, broken down by type of fuel produced and sold during the previous calendar year; and
(3) The projected number of British thermal units of renewable fuels production for the succeeding year.
(m) The director of taxation shall prepare forms that may be necessary to claim a credit under this section. The director of taxation may require the taxpayer to furnish information to ascertain the validity of the claim for credit made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91. [L 2016, c 202, §2; am L 2017, c 142, §2; am L 2018, c 143, §2]
Note
The 2017 amendment applies to taxable years beginning after December 31, 2017. L 2017, c 142, §4.
The 2018 amendment applies to taxable years beginning after December 31, 2017. L 2018, c 143, §4.