H.B. 634 - Manufacturing Tax Credit 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 of $200,000 per taxpayer.

• Eligible costs include equipment or building purchases for manufacturing tangible personal property in the State and employee training costs for manufacturing, but exclude vehicles, land, electricity production, and costs claimed under other credits.

• Requires taxpayers to have operated and manufactured in Hawaii for at least one year before claiming the credit, with excess credits carried forward to subsequent years until exhausted.

• The Department of Business, Economic Development, and Tourism must certify qualified manufacturing costs and credit amounts, while the Director of Taxation retains audit authority.

• Appropriates $250,000 for fiscal year 2016-2017 to DBEDT for certification administration; applies to taxable years beginning after December 31, 2015 and repeals January 1, 2024.