HB 634 Summary

• Establishes a 20% income tax credit for taxpayers who incur qualified manufacturing costs in Hawaii, with a minimum annual cost threshold of $50,000 and maximum credit cap of $200,000 per taxpayer.

• Qualified manufacturing costs include equipment or building purchases placed in service within one year and employee training expenses for manufacturing tangible personal property in the State.

• Requires taxpayers to have operated and manufactured in Hawaii for at least one year before claiming the credit, and unused credits can be carried forward to subsequent tax years.

• Implements a recapture provision requiring repayment of 100% of the credit in the first year and 50% in the second year if the manufacturing property is disposed of or converted to non-business use.

• Appropriates $250,000 for fiscal year 2016-2017 to the Department of Business, Economic Development, and Tourism for certification of tax credit claims; credit applies to taxable years after December 31, 2015 and expires January 1, 2024.