Technology in Maui Hawaii

"Best Island in the World" Improves Its Business Climate
Legislative Initiatives Boost High Tech

Maui has become an even better place to do high tech business thanks to the High Technology Omnibus Act 178 signed into law by the Hawaii State Legislature during 1999. This Act includes a number of provisions that are designed to build a strong technology industry via a solid public-private partnership and offers some substantial financial advantages to organizations doing high tech business in Hawaii. An advisory council and special adviser to the Governor will coordinate targeted technology development activities, including international promotion of Hawaii as a premier location for high tech. Special emphasis will be placed on developing a high tech workforce and preparing students for careers in the technology industry.

Tax provisions of Act 178 apply directly to Hawaii’s state income tax and include:

Six-year moratorium from discriminatory taxes on electronic commerce or Internet, effective in tax year 2000.

Tax exemption for income received from stock options by a qualified high technology business, effective in tax year 2000.

Tax exemption for royalties and other income derived from patents and copyrights owned by an individual or qualified high technology business, effective in tax year 2000.

A non-refundable income tax credit for an investment in a qualified high technology business, equal to 10% of the investment up to a maximum credit of $500,000. Credit can be taken against the state income tax, insurance premium tax, and franchise tax (financial institutions) for tax years 1999-2005 for investments made on or after July 1, 1999.

Tax credits for R&D that now conform to federal R&D income tax credit under section 41 of the IRC, with some modifications. The credit is based upon a percentage of certain research expenses and is available for tax years 2000 – 2005.
Other provisions of the Act are intended to create a better climate for high technology business. These include:

Expand awareness of Hawaii’s technology community by including “techno-tourism” into the Hawaii Tourism Authority’s strategic marketing plan

Establish a millennium workforce development program to provide education and training at the post-high school to graduate levels and to encourage partnerships with high tech industries for pre-employment employment and on-the-job training.
“The High Technology Omnibus Act will support Maui County’s on-going efforts to develop a viable technology community,” said Mayor Apana. “It addresses some of the issues we face in trying to attract high technology industry to Maui and provides technology businesses already located in Maui with some solid tax incentives.”

For more information on the High Technology Omnibus Act 178, visit www.state.hi.us/tax/announce/99ann26.htm