HI HB1242

Establishes a 25% income tax credit for individual taxpayers who install automatic fire sprinkler systems in new detached one- or two-family residential dwellings, with a maximum credit of $5,000 per system.

Credit is limited to owner-occupants or purchasers installing systems in new structures, with only one credit allowed per tax map key number.

Reduces the basis of eligible property for depreciation purposes by the credit amount claimed; unused credits may be carried forward to subsequent tax years.

Applies to taxable years beginning after December 31, 2015, with the tax credit provision set to expire on June 30, 2025.

Requires the Director of Taxation to prepare necessary forms and establish rules; taxpayers must file claims for the credit within twelve months following the taxable year.