August 12, 1999


RE: Act 306, Session Laws of Hawaii 1999 (Act 306),
Relating to the Qualified Improvement Tax Credit for Qualified Resort and General Facilities.

The Department of Taxation (Department) issues this announcement to inform taxpayers of the status of Act 306 which became law on July 9, 1999, without the Governor's signature in accordance with section 16, article III of the State Constitution. Act 306 provides for two qualified improvement tax credits: one for the construction or renovation of a "qualified resort facility" and another for the construction and renovation of a "qualified general facility."

The credit amounts were to be based on a percentage of the capitalized costs for equipment of a permanent nature and construction, including the cost of infrastructure. This percentage, however, was left blank. Without this percentage, no credit amount can be calculated. The omission of the percentage is a fatal defect to Act 306 and, therefore, the Department cannot allow any amount of credit under its provisions. Our tax form instructions will provide descriptions of the defective credit provisions along with an explanation of why no credit will be allowed. The tax forms, likewise, will not permit a claim for any of the credits offered by Act 306.

Forms and other tax information may be downloaded from the Department's website at On Oahu, forms may be ordered by calling the Department's Forms Request Line at: 587-7572. Persons who are not calling from Oahu, may call: 1-800-222-7572 to receive forms by mail or 808-678-0522 from a fax machine to receive forms by fax.

Director of Taxation