HI HB451

Establishes a new markets tax credit under Hawaii state tax law allowing taxpayers who hold qualified equity investments to claim a credit equal to the applicable percentage of the original investment amount paid to a qualified community development entity.

Credit can be deducted from net income tax liability for the taxable year, with any excess amount carrying forward to subsequent years until exhausted; must be claimed within 12 months after the close of the taxable year.

Incorporates federal Internal Revenue Code section 45D provisions for determining credit allowance dates, qualified equity investments, qualified community development entities, qualified low-income community investments, low-income communities, credit recapture, and basis reduction.

Exempts new markets tax credit allocations among partners from the section 704(b)(2) requirements of the Internal Revenue Code, consistent with similar exemptions for other state tax credits.

Applies to taxable years beginning after December 31, 2010.