REPORT TITLE: 
Income tax rates
DESCRIPTION:Reduces the number of state income tax brackets to
conform to federal income tax brackets.  Increases the standard
deduction and personal exemption.

 
HB HMIA 99-250
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
HOUSE OF REPRESENTATIVES                H.B. NO.1260       
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                     A BILL FOR AN ACT

RELATING TO INCOME TAXES.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:


 1      SECTION 1.  Section 235-2.4, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "�235-2.4  Operation of certain Internal Revenue Code
 
 4 provisions.(a)  Section 63 (with respect to taxable income
 
 5 defined) of the Internal Revenue Code shall be operative for the
 
 6 purposes of this chapter, except that the standard deduction
 
 7 amount in section 63(c) of the Internal Revenue Code shall
 
 8 instead mean:
 
 9      (1)  $[1,900] 2,600 in the case of:
 
10           (A)  A joint return as provided by section 235-93, or
 
11           (B)  A surviving spouse (as defined in section 2(a) of
 
12                the Internal Revenue Code),
 
13      (2)  $[1,650] 2,300 in the case of a head of household (as
 
14           defined in section 2(b) of the Internal Revenue Code),
 
15      (3)  $[1,500] 1,560 in the case of an individual who is not
 
16           married and who is not a surviving spouse or head of
 
17           household, or
 
18      (4)  $[950] 1,310 in the case of a married individual filing
 
19           a separate return."
 

 
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 1 
 
 2      SECTION 2.  Section 235-51, Hawaii Revised Statutes, is
 
 3 amended by amending subsections (a), (b), (c), and (d) to read as
 
 4 follows:
 
 5      "(a)  There is hereby imposed on the taxable income of (1)
 
 6 every taxpayer who files a joint return under section 235-93; and
 
 7 (2) every surviving spouse a tax determined in accordance with
 
 8 the following table:
 
 9      In the case of any taxable year beginning after December 31,
 
10 [1988:] 1998:
 
11 If the taxable income is:                       The tax shall be:
 
12 [Not over $3,000    2% of taxable income
 
13 Over $3,000 but     $60.00 plus 4% of
 
14      not over $5,000                          excess over  $3,000
 
15 Over $5,000 but     $140.00 plus 6% of
 
16      not over $7,000                          excess over  $5,000
 
17 Over $7,000 but     $260.00 plus 7.25% of
 
18      not over $11,000                         excess over  $7,000
 
19 Over $11,000 but    $550.00 plus 8% of
 
20      not over $21,000                         excess over $11,000
 
21 Over $21,000 but    $1,350.00 plus 8.75% of
 
22      not over $31,000                         excess over $21,000
 
23 Over $31,000 but    $2,225.00 plus 9.5% of
 

 
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 1      not over $41,000                         excess over $31,000
 
 2 Over $41,000   $3,175.00 plus 10% of
 
 3                excess over $41,000]
 
 4 Not Over $39,000       % of the taxable income
 
 5 Over $39,000   $    plus    % of
 
 6      but not over $94,250                                        
 
 7      the excess over $39,000
 
 8 Over $94,250   $    plus    % of
 
 9      but not over $143,600                                       
 
10      the excess over $94,250
 
11 Over $143,600  $    plus    % of
 
12      but not over $256,500                                       
 
13      the excess over $143,600
 
14 Over $256,500  $    plus    % of
 
15                the excess over $256,500
 
16      (b)  There is hereby imposed on the taxable income of every
 
17 head of a household a tax determined in accordance with the
 
18 following table:
 
19      In the case of any taxable year beginning after December 31,
 
20 [1988:] 1998:
 
21 If the taxable income is:                       The tax shall be:
 
22 [Not over $1,500    2% of taxable income
 
23 Over $1,500 but     $30.00 plus 3% of
 

 
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 1      not over $2,500                          excess over  $1,500
 
 2 Over $2,500 but     $60.00 plus 4.5% of
 
 3      not over $3,500                          excess over  $2,500
 
 4 Over $3,500 but     $105.00 plus 5.9% of
 
 5      not over $5,500                          excess over  $3,500
 
 6 Over $5,500 but     $223.00 plus 7.25% of
 
 7      not over $11,000                         excess over  $5,500
 
 8 Over $11,000 but    $621.75 plus 8.6% of
 
 9      not over $21,000                         excess over $11,000
 
10 Over $21,000 but    $1,481.75 plus 9.6% of
 
11      not over $41,000                         excess over $21,000
 
12 Over $41,000   $3,401.75 plus 10% of
 
13                excess over $41,000]
 
14 Not Over $31,250       % of the taxable income
 
15 Over $31,250   $    plus    % of
 
16      but not over $80,750                                        
 
17      the excess over $31,250
 
18 Over $80,750   $    plus    % of
 
19      but not over $130,800                                       
 
20      the excess over $80,750
 
21 Over $130,800  $    plus    % of
 
22      but not over $256,500                                       
 
23      the excess over $130,800
 

 
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 1 Over $256,500  $    plus    % of
 
 2                the excess over $256,500
 
 3      (c)  There is hereby imposed on the taxable income of (1)
 
 4 every unmarried individual (other than a surviving spouse, or the
 
 5 head of a household) [and (2) on the taxable income of every
 
 6 married individual who does not make a single return jointly with
 
 7 the individual's spouse under section 235-93] a tax determined in
 
 8 accordance with the following table:
 
 9      In the case of any taxable year beginning after December 31,
 
10 [1988:] 1998:
 
11 If the taxable income is:                       The tax shall be:
 
12 [Not over $1,500    2% of taxable income
 
13 Over $1,500 but     $30.00 plus 4% of
 
14      not over $2,500                          excess over  $1,500
 
15 Over $2,500 but     $70.00 plus 6% of
 
16      not over $3,500                          excess over  $2,500
 
17 Over $3,500 but     $130.00 plus 7.25% of
 
18      not over $5,500                          excess over  $3,500
 
19 Over $5,500 but     $275.00 plus 8% of
 
20      not over $10,500                         excess over  $5,500
 
21 Over $10,500 but    $675.00 plus 8.75% of
 
22      not over $15,500                         excess over $10,500
 
23 Over $15,500 but    $1,112.50 plus 9.5% of
 

 
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 1      not over $20,500                         excess over $15,500
 
 2 Over $20,500   $1,587.50 plus 10% of
 
 3                excess over $20,500]
 
 4 Not Over $23,350       % of the taxable income
 
 5 Over $23,350   $    plus    % of
 
 6      but not over $56,550                                        
 
 7      the excess over $23,350
 
 8 Over $56,550   $    plus    % of
 
 9      but not over $117,950                                       
 
10      the excess over $56,550
 
11 Over $117,950  $    plus    % of
 
12      but not over $256,500                                       
 
13      the excess over $117,950
 
14 Over $256,500  $    plus    % of
 
15                the excess over $256,500
 
16      (d)  There is hereby imposed on the taxable income of every
 
17 married individual who does not make a single return jointly with
 
18 the individual's spouse under section 235-93 a tax determined in
 
19 accordance with the following table:
 
20      In the case of any taxable year beginning after December 31,
 
21 1996:
 
22 Not Over $19,500       % of the taxable income
 
23 Over $19,500   $    plus    % of
 

 
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 1      but not over $47,125                                        
 
 2      the excess over $19,500
 
 3 Over $47,125   $    plus    % of
 
 4      but not over $71,800                                        
 
 5      the excess over $47,125
 
 6 Over $71,800   $    plus    % of
 
 7      but not over $128,250                                       
 
 8      the excess over $71,800
 
 9 Over $128,250  $    plus    % of
 
10                the excess over $128,250
 
11      [(d)] (e)  The tax imposed by section 235-2.4 on estates and
 
12 trusts shall be determined in accordance with the following
 
13 table:
 
14      In the case of any taxable year beginning after December 31,
 
15 [1988:] 1998:
 
16 If the taxable income is:                       The tax shall be:
 
17 [Not over $1,500    2% of taxable income
 
18 Over $1,500 but     $30.00 plus 4% of
 
19      not over $2,500                          excess over  $1,500
 
20 Over $2,500 but     $70.00 plus 6% of
 
21      not over $3,500                          excess over  $2,500
 
22 Over $3,500 but     $130.00 plus 7.25% of
 
23      not over $5,500                          excess over  $3,500
 

 
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 1 Over $5,500 but     $275.00 plus 8% of
 
 2      not over $10,500                         excess over  $5,500
 
 3 Over $10,500 but    $675.00 plus 8.75% of
 
 4      not over $15,500                         excess over $10,500
 
 5 Over $15,500 but    $1,112.50 plus 9.5% of
 
 6      not over $20,500                         excess over $15,500
 
 7 Over $20,500   $1,587.50 plus 10% of
 
 8                excess over $20,500]
 
 9 Not Over $1,550        % of the taxable income
 
10 Over $1,550    $    plus    % of
 
11      but not over $3,700                   the excess over $1,550
 
12 Over $3,700    $    plus    % of
 
13      but not over $7,650                   the excess over $5,600
 
14 Over $5,600    $    plus    % of
 
15      but not over $7,650                   the excess over $5,600
 
16 Over $7,650    $    plus    % of
 
17                the excess over $7,650"
 
18 
 
19      SECTION 3.  Section 235-54, Hawaii Revised Statutes, is
 
20 amended to read as follows:
 
21      "�235-54  Exemptions.(a)  In computing the taxable income
 
22 of any individual, there shall be deducted, in lieu of the
 
23 personal exemptions allowed by the Internal Revenue Code,
 

 
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 1 personal exemptions computed as follows: Ascertain the number of
 
 2 exemptions which the individual can lawfully claim under the
 
 3 Internal Revenue Code, add an additional exemption for the
 
 4 taxpayer or the taxpayer's spouse who is sixty-five years of age
 
 5 or older within the taxable year, and multiply that number by
 
 6 [$1,040] $1,500,  for taxable years beginning after December 31,
 
 7 [1984] 1998.  A nonresident shall be entitled to the same
 
 8 personal exemptions as a resident, without proration of the
 
 9 personal exemptions on account of income from sources outside the
 
10 State.  In the case of an individual with respect to whom an
 
11 exemption under this section is allowable to another taxpayer for
 
12 a taxable year beginning in the calendar year in which the
 
13 individual's taxable year begins, the personal exemption amount
 
14 applicable to such individual under this subsection for such
 
15 individual's taxable year shall be zero." 
 
16 
 
17      SECTION 4.  Statutory material to be repealed is bracketed.
 
18 New statutory material is underscored.
 
19 
 

 
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                                     H.B. NO.1260       
                                                        
                                                        

 
 1      SECTION 5.  This Act, upon its approval, shall apply to
 
 2 taxable years beginning after December 31, 1998.
 
 3 
 
 4 
 
 5                         INTRODUCED BY:___________________________
 

 
HB HMIA 99-250