Bytemarks

We had the chance to talk several times about Act 221 on Bytemarks Cafe. First with Lisa Gibson and Mike Hamnet and more recently with Sen. Carol Fukunaga and David Watumull. Act 221 went into effect in 2001. It provides for tax credits to State of Hawaii investors who invest in qualified high-tech businesses (QHTB). Based on a recent report by the Dept. of Taxation, $657.5 million in investment credit was claimed by investors. This is viewed by the current administration as potential revenue that could be used for other projects like education and social services. Understandably, in this economic downturn the State is looking for any source of revenue. Act 221 is not excluded from this scrutiny.

Keep in mind Act 221 was put in place to do several things including, to be a capital raising tool for Hawaii QHTBs, to support the creation of higher-paying technology jobs and to create viable high technology companies contributing long-term to Hawaii’s economy. It’s successfully done all of these. The 177 QHTBs who filed in 2007 reported almost 1500 full time jobs in the tech sector. This does not include jobs from large corporations like Hawaiian Electric, Hawaiian Telcom or Oceanic Cable.

The claim that $657.5 million in investment credit is lost revenue to the State misses the point that the money was used to hire employees who then had to pay State income tax. The companies also paid employee taxes, sold products and paid excise taxes. Point being, Act 221 has done more to create jobs and keep the money and dealflow happening in Hawaii, something needed by a fledgling tech economy.

On January 21, during opening day at the State Legislature the Extend221 effort will take to the streets. We are asking all in support of extending (preserving) Act 221 to show up at 7:00am on Jan. 21st near the Father Damien statue, get a free Extend221 t-shirt and show the legislators you support Hawaii tech industry. Let’s keep tech growing in Hawaii to become a viable economic engine for our future generations. See you all there.