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Senate Committee on Labor and Technology advances temporary tech-infrastructure tax credit (SB338) with amendments
Summary
The committee voted to pass SB338 with amendments to temporarily reinstate a technology infrastructure tax credit, expand the definition to include data servers and require a DOTAX report to the Legislature; DOTAX will provide fiscal-impact information later.
The Senate Committee on Labor and Technology voted to pass Senate Bill 338 with amendments on Friday, Feb. 7, advancing a temporary reinstatement of a technology infrastructure renovation tax credit.
The measure, which would temporarily reinstate the former Act 221 technology infrastructure renovation tax credit and expand the definition of "technology-enabled infrastructure" to include data servers, was recommended as Senate Draft 1 with technical amendments and a defective effective date. The committee also added language requiring a report from the Department of Taxation to the Legislature (the transcript record: “report from DOTAX to be sent to the legislature prior 20 days prior to the 20 20 ninth session,” as stated during the hearing).
Why it matters: supporters said the credit would help upgrade technology, address replacement needs and help close the digital divide, while DOTAX said it could comply with the bill as drafted and would provide a fiscal-impact estimate on request.
Clint Piper, Department of Taxation, told the committee that the department had "submitted written testimony" and that "this bill has incorporated a number of the changes that were requested in the last session," adding, "there's no changes being requested by DOTAX at this time."
Young Oh, testifying for CERF PAC, said the group supports the temporary tax credit and described it as timely for replacement needs and closing the digital divide, noting the bill creates "a 2 year window" and that the 4% rate is "less than the general excise tax." Tom Yamachika of the Tax Foundation of Hawaii said he would "stand on our written comments" and was available for questions.
The committee recorded its vote recommending passage with amendments. Chair Aquino, Vice Chair Lee and Senator Moriwaki voted aye; Senators Ihara and Fevella were recorded as excused. The committee adopted the recommendation.
The amended measure requires DOTAX reporting and was moved forward as Senate Draft 1; DOTAX indicated it will supply fiscal-impact information to the committee after the hearing.
