Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 1 - GENERAL PROVISIONS › Section 18-235-17-04 - Claim for credit; aggregate cap; tentative allocation and certification of credit

Current through June, 2024
(a) The aggregate
				cap applies to taxable years beginning after December 31, 2018. If the total
				amount of credits applied for in any particular year exceeds the aggregate cap,
				the excess shall be treated as applied for in the subsequent year and shall be
				claimed in such year; provided that no credit shall be claimed after December
				31, 2025.
(b) For purposes of
				applying the aggregate cap, tentatively allocating the credit under subsection
				(c), and certifying the credit under subsection (d), the Hawaii film office
				shall consider the year's claims for credits to be the total amount of credits
				applied for based on production costs incurred during the preceding calendar
				year. Credits applied for in production reports that cover tax years beginning
				before January 1, 2019 shall not be counted against the aggregate cap for any
				year.
(c) The Hawaii film office
				shall tentatively allocate credits based on the production costs reported in
				the estimated budget provided by taxpayers as part of the preproduction
				registration submitted to the Hawaii film office. Tentative allocation of
				credits is subject to the following rules:
(1) Credits shall be tentatively allocated in
				the order of the date and, if necessary, the time that the preproduction
				registration required under section 18-235-17-03(a) and section
				235-17(f),
				HRS, is received by the Hawaii film office;
(2) The principal photography start date
				shall be within ninety days of the date of the letter sent by the Hawaii film
				office approving the preproduction registration and tentatively allocating the
				credit. Each production shall provide written notice of the actual principal
				photography start date to the Hawaii film office within thirty days of starting
				principal photography. If the principal photography start date is after the
				ninety-day period described in this paragraph, the tentative allocation of
				credit shall be void; provided that a new preproduction registration may be
				submitted to the Hawaii film office in order to receive a new tentative
				allocation of credit;
(3) Credits
				that cannot be tentatively allocated pursuant to paragraph (5) or (6) or
				because the aggregate cap is exceeded in any year, shall be allocated in the
				subsequent year in the manner described in paragraph (1);
(4) Credits of $500,000 or less described in
				subsection (e) shall have priority in tentative allocation before initial claim
				year claims and after any credits that were allocated under paragraph
				(3);
(5) If the amount of credit
				applied for by a qualified production is $2,500,000 or more, these credits
				shall be tentatively allocated over a two-year period; provided that no more
				than one-half of the credits applied for shall be allocated to the initial
				claim year, except as allowed under subsection (t); provided further that this
				paragraph shall not apply if the initial claim year is the last year that the
				credit is available under section
				235-17,
				HRS;
(6) For split-year
				productions, credits shall be tentatively allocated to the initial claim year
				and the subsequent year upon the approval of the preproduction registration for
				the initial claim year; provided that the requirements of this subsection are
				met for the initial claim year as if the production was not a split-year
				production; provided further that this paragraph shall not apply to qualified
				productions that are subject to paragraph (5); and
(7) If the amount of credit applied for in a
				production report exceeds the amount of credit that was tentatively allocated
				under this subsection, the difference shall be tentatively allocated in the
				subsequent year in the manner described in paragraph (1).
Tentative allocation required under this subsection shall not
				  be interpreted to guarantee the amount of credit that is certified or may be
				  claimed.