[LUAU] QHTB

[Clifton Royston]

On Mon, Nov 20, 2006 at 05:04:40PM -1000, Hawaii Linux Institute wrote:
> Has anyone ever heard of any F/OSS-based Act 215 QHTB?  Is there any 
> even a slimmest possibility?  Thanks.

  As Julian just noted, Tiki Technologies got approved as a QHTB.  

  Four key points from that experience:

  * You have to be doing original "R & D", developing some kind of new
software which will be sold in some form.  In our case, that was the
new software components linking together various open source pieces. 
Just doing enhancements to existing F/OSS projects would not count. 
General consulting work would not count.

  * To get any tax benefits, you have to have a corporate entity whose
shares are owned by some other Hawaii taxpayer; the tax credits flow to
the shareholders.  Often this involves setting up a partnership to hold
the shares of the QHTB, with the actual shareholders holding shares in
the partnership; this allows the partners to reallocate tax benefits
among the shareholders by an agreement.

  * For safety in taking the tax credits, you must apply to the Hawaii
Dept. of Taxation for approval of your status ("safe harbor letter")
and wait a long time for them to get back to you.

  * You have to do some weasel-wording about the software technologies
you use, because the act has some ca. mid-1980s software buzzwords
embedded in it to show how "High-tech" it is.  Honestly, who talks
about "4th generation languages" any more, or considers SQL databases
an advanced technology?  We hand-waved around that by talking about
Perl, object oriented design, Makefiles, etc.  (Technically, "gmake"
meets most 4th-GL definitions.)

  In theory I could be doing this with my personal S-corp, but I am
mostly doing consulting rather than doing original software development
right now.

  HTH,
  -- Clifton

-- 
    Clifton Royston  --  cliftonr at iandicomputing.com / cliftonr at lava.net
       President  - I and I Computing * http://www.iandicomputing.com/
 Custom programming, network design, systems and network consulting services