Category Archives: Net Income (HRS 235)

SB 301,, HD-1

SUBJECT:  INCOME, Disallow REIT Deduction for Dividends Paid

BILL NUMBER:  SB 301, SD-1, HD-1

INTRODUCED BY:  House Committee on Economic Development & Business

EXECUTIVE SUMMARY:  This bill would disallow the dividends paid deduction that real estate investment trusts, or REITs, now enjoy.  The numerous REITs who now own and manage Hawaii real estate would be taxed like any other corporation doing business in Hawaii.

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SB 1310, HD-1

SUBJECT:  INCOME, Individual Housing Accounts

BILL NUMBER:  SB 1310, HD-1

INTRODUCED BY:  House Committee on Housing

EXECUTIVE SUMMARY:  Increases the cap amounts of the tax deduction for individual housing accounts. Authorizes certain funds from an individual housing account to be used to obtain rental housing. Authorizes the accounts to be placed in a community development financial institution.  The concept of reviving the IHA does appear to merit discussion given the curtailment of the mortgage interest deduction at the federal level.  The current draft is technically flawed and should be clarified.

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SB 394, SD-1

SUBJECT:  INCOME, Adopt Single Sales Factor Apportionment

BILL NUMBER:  SB 394, SD-1

INTRODUCED BY:  Senate Committee on Ways & Means

SYNOPSIS:  Amends section 235-29, HRS, to provide that all business income shall be apportioned to the state by multiplying the income by the sales factor.  Also changes the way the sales factor is calculated for purposes of multistate tax apportionment.  The change makes the sales factor more consistent with the sourcing rules for general excise tax, but it makes application of the law less uniform among the states.

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SB 1360, SD-1

SUBJECT:  INCOME, Withholding Requirement for Partnerships, Estates, and Trusts

BILL NUMBER:  SB 1360, SD-1

INTRODUCED BY:  Senate Committee on Ways & Means

EXECUTIVE SUMMARY:  Requires partnerships, estates, and trusts to withhold taxes on the income of nonresident partners and beneficiaries.  There may be constitutional concerns, as the Attorney General has stated in testimony on SB 675 (2019).

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SB 495, SD-2

SUBJECT:  INCOME, Nexus Presumptions

BILL NUMBER:  SB 495, SD-2

INTRODUCED BY:  Senate Committee on Ways & Means

EXECUTIVE SUMMARY:  States that a seller with more than $100,000 in in-state sales or 200 transactions into the state shall be deemed to be doing business in the state for purposes of the income tax law.  Creates a nexus presumption for income tax like the presumption for general excise tax adopted last year.  Clarification is needed on the $100,000 test because it might not be interpreted as intended, and serious consideration should be given to placing this standard in chapter 231 to make it applicable to more tax types.

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SB 965, SD-1

SUBJECT:  INCOME, Increase Tax Credit for Research Activities

BILL NUMBER:  SB 965, SD-1

INTRODUCED BY:  Senate Committee on Ways & Means

SYNOPSIS:  Amends HRS section 235-110.91 to provide that for tax years beginning after December 31, 2018, the tax credit for research activities is increased to _____ times any credit calculated under section 41 of the Internal Revenue Code as it existed on December 31, 2011.

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