HI SB2829

Establishes a new markets tax credit under Hawaii tax law based on federal Internal Revenue Code Section 45D, allowing taxpayers holding qualified equity investments to claim credits against net income tax liability on credit allowance dates (initial investment date and each of the six anniversary dates).

Credits equal 5% of the investment amount for the first three credit allowance dates and 6% for subsequent dates, with unused credits carried forward to subsequent years until exhausted.

Defines "qualified equity investment" as investments in qualified community development entities that use substantially all cash to make qualified low-income community investments in census tracts with poverty rates of at least 20% or median family income not exceeding 80% of statewide/metropolitan area median income.

Authorizes the Department of Taxation to recapture credits if federal credits are recaptured, if the community development entity redeems the investment early, or if the entity fails to maintain 85% investment in qualified low-income community investments for the required period, with a 90-day cure period before final recapture.

Exempts new markets tax credit allocations from IRC Section 704(b)(2) requirements for partnerships and applies the law to taxable years beginning after December 31, 2009.