Hawaii Tax Department says Act 221 generated $1B in spending, 5,000 jobs

Hawaii high-technology companies spent $1 billion and created more than 5,000 jobs over four years, according to a report released Monday by the Hawaii Tax Department.

The findings are part of a 44-page report aimed to measure the effectiveness of the state's Act 221/215 high-tech tax incentives, which were first established in 2002.

The report was the first effort by the Tax Department to quantify what Hawaii gets out of the incentives, which have been criticized by some for being too generous and for being too difficult to track.

While the state paid out $195.6 million in Act 221/215 investment credits over the past four years, the report shows that local tech companies spent a much higher amount on expenses that make their way back to the state.

The report says 287 local tech companies applied for the tax credits for the 2002 through 2006 tax years.

These companies spent a total of $1 billion on such expenses as salaries and infrastructure, while creating 5,383 tech jobs.

Other findings in the Tax Department report:

• •$822 million were invested in Hawaii technology companies over the past four years.
• •The 287 tech companies spent $507 million in salaries.
• •Among the tech companies benefiting from Act 221, the average worker is paid $67,000 a year.

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