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THE SENATE |
S.B. NO. |
3093 |
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THIRTY-SECOND LEGISLATURE, 2024 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO INCOME TAX.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
""Cost-of-living adjustment factor" means a factor calculated by adding 1.0 to the quotient of the percent change in the Urban Hawaii Consumer Price Index for all items divided by 100, as published by the United States Department of Labor, from July of the preceding calendar year to July of the current calendar year; provided that, if the Urban Hawaii Consumer Price Index is discontinued, the Chained Consumer Price Index for All Urban Consumers, as published by the United States Department of Labor, shall be used to calculate the cost-of-living adjustment factor."
SECTION 2. Section 235-2.4, Hawaii Revised Statutes, is amended as follows:
(1) By amending subsection (a) to read as follows:
"(a) Section 63 (with respect to taxable income defined) of the Internal Revenue Code shall be operative for the purposes of this chapter, subject to the following:
(1) Section 63(c)(1)(B) (relating to the additional standard deduction), 63(c)(1)(C) (relating to the real property tax deduction), 63(c)(1)(D) (relating to the disaster loss deduction), 63(c)(1)(E) (relating to the motor vehicle sales tax deduction), 63(c)(4) (relating to inflation adjustments), 63(c)(7) (defining the real property tax deduction), 63(c)(8) (defining the disaster loss deduction), 63(c)(9) (defining the motor vehicle sales tax deduction), and 63(f) (relating to additional amounts for the aged or blind) of the Internal Revenue Code shall not be operative for purposes of this chapter;
(2) Section 63(c)(2) (relating to the basic standard deduction) of the Internal Revenue Code shall be operative, except that the standard deduction amounts provided therein shall instead mean:
(A) $4,400 in the case of:
(i) A joint return as provided by section 235-93; or
(ii) A surviving spouse (as defined in section 2(a) of the Internal Revenue Code);
(B) $3,212 in the case of a head of household (as defined in section 2(b) of the Internal Revenue Code);
(C) $2,200
in the case of an individual who is not married and who is not a surviving spouse
or head of household; [or]
(D) $2,200 in the case of a married individual filing a separate return;
(E) For each taxable year beginning after December 31, 2023, the director of taxation, no later than December 15 of the preceding calendar year, shall recompute the standard deduction amounts by multiplying the dollar amounts for the preceding taxable year by the cost-of-living adjustment factor, if the cost-of-living adjustment factor is greater than 1.0, and rounding off the resulting product to the nearest $1; provided that, if the cost-of-living adjustment factor is less than or equal to 1.0 in a given year, then no adjustment will occur in the following year;
(3) Section 63(c)(5) (limiting the basic standard deduction in the case of certain dependents) of the Internal Revenue Code shall be operative, except that the limitation shall be the greater of $500 or the individual's earned income; and
(4) The standard deduction amount for nonresidents
shall be calculated pursuant to section 235-5."
(2) By amending subsection (c) to read as follows:
"(c)
Section 68 (with respect to the overall limitation on itemized
deductions) of the Internal Revenue Code shall be operative; provided that [the]:
(1) [Thresholds] The thresholds
shall be [those] the applicable amounts under section 68(b)(1) of the
Internal Revenue Code that were operative for federal tax year [2009;
and] 2013;
(2) For each taxable year beginning after December 31, 2023, the director of
taxation, no later than December 15 of the preceding calendar year, shall
recompute the threshold amounts by multiplying the dollar amounts for the
preceding taxable year by the cost-of-living adjustment factor, if the
cost-of-living adjustment factor is greater than 1.0, and rounding off the
resulting product to the nearest $1; provided that if the cost-of-living
adjustment factor is less than or equal to 1.0 in a given year, then no adjustment
will occur in the following year; and
[(2)] (3) Suspension in section 68(f) shall not be operative
for purposes of this chapter."
(3) By amending subsection (k) to read as follows:
"(k) Section 164 (with respect to taxes) of the Internal Revenue Code shall be operative for the purposes of this chapter, except that:
(1) Section 164(b)(6)(B) (limiting the deduction for state and local taxes) shall not be operative for the purposes of this chapter;
(2) The deductions under section 164(a)(3) and (b)(5) shall not be operative for
corporate taxpayers [and shall be operative only for the following individual
taxpayers:
(A) A taxpayer filing a single return or
a married person filing separately with a federal adjusted gross income of less
than $100,000;
(B) A taxpayer filing as a head of household with a federal adjusted gross income
of less than $150,000; and
(C) A taxpayer filing a joint return or as a surviving spouse with a federal adjusted gross income of less than
$200,000]; and
(3) Section 164(a)(3) shall not be operative for any amounts for which the credit under section 235-55_has been claimed."
SECTION 3. Section 235-51, Hawaii Revised Statutes, is amended to read as follows:
"§235-51 Tax imposed on individuals; rates. (a) There is hereby imposed on the taxable income of every:
(1) Taxpayer who files a joint return under section 235-93; and
(2) Surviving spouse,
a tax determined in accordance with the following table:
[In the case of any taxable
year beginning after December 31, 2017:
If
the taxable income is: The
tax shall be:
Not over $4,800 1.40% of taxable income
Over $4,800 but $67.00 plus 3.20% of
not over $9,600 excess over $4,800
Over $9,600 but $221.00 plus 5.50% of
not over $19,200 excess over $9,600
Over $19,200 but $749.00 plus 6.40% of
not over $28,800 excess over $19,200
Over $28,800 but $1,363.00 plus 6.80% of
not over $38,400 excess over $28,800
Over $38,400 but $2,016.00 plus 7.20% of
not over $48,000 excess over $38,400
Over $48,000 but $2,707.00 plus 7.60% of
not over $72,000 excess over $48,000
Over $72,000 but $4,531.00 plus 7.90% of
not over $96,000 excess over $72,000
Over $96,000 but $6,427.00 plus 8.25% of
not over $300,000 excess over $96,000
Over $300,000 but $23,257.00 plus 9.00% of
not over $350,000 excess over $300,000
Over $350,000 but $27,757.00 plus 10.00%
not
over $400,000 of
excess over $350,000
Over
$400,000 $32,757.00
plus 11.00% of excess over $400,000.]
In
the case of any taxable year beginning after December 31, 2023:
If
the taxable income is: The tax
shall be:
Not
over $5,280 1.40% of
taxable income
Over
$5,280 but $74.00 plus
3.20% of
not over $10,260 excess over $5,280
Over
$10,560 but $243.00
plus 5.50% of
not over $21,120 excess over $10,560
Over
$21,120 but $824.00
plus 6.40% of
not over $31,680 excess over $21,120
Over
$31,680 but $1,500.00
plus 6.80% of
not over $42,240 excess over $31,680
Over
$42,240 but $2,218.00
plus 7.20% of
not over $52,800 excess over $42,240
Over
$52,800 but $2,978.00
plus 7.60% of
not over $79,200 excess over $52,800
Over
$79,200 but $4,984.00
plus 7.90% of
not over $105,600 excess over $79,200
Over
$105,600 but $7070.00
plus 8.25% of
not over $330,000 excess over $105,600
Over
$330,000 but $25,583.00
plus 9.00% of
not over $385,000 excess over $330,000
Over $385,000 but $30,533.00 plus 10.00% of
not over $440,000 excess over $385,000
Over $440,000 $36,033.00 plus 11.00% of excess
over $440,000.
(b) There is hereby imposed on the taxable income of every head of a household a tax determined in accordance with the following table:
[In the case of any taxable
year beginning after December 31, 2017:
If
the taxable income is: The tax
shall be:
Not over $3,600 1.40% of taxable income
Over $3,600 but $50.00 plus 3.20% of
not over $7,200 excess over $3,600
Over $7,200 but $166.00 plus 5.50% of
not over $14,400 excess over $7,200
Over $14,400 but $562.00 plus 6.40% of
not over $21,600 excess over $14,400
Over $21,600 but $1,022.00 plus 6.80% of
not over $28,800 excess over $21,600
Over $28,800 but $1,512.00 plus 7.20% of
not over $36,000 excess over $28,800
Over $36,000 but $2,030.00 plus 7.60% of
not over $54,000 excess over $36,000
Over $54,000 but $3,398.00 plus 7.90% of
not over $72,000 excess over $54,000
Over $72,000 but $4,820.00 plus 8.25% of
not over $225,000 excess over $72,000
Over $225,000 but $17,443.00 plus 9.00% of
not over $262,500 excess over $225,000
Over $262,500 but $20,818.00 plus 10.00% of
not over $300,000 excess over $262,500
Over
$300,000 $24,568.00
plus 11.00% of excess
over $300,000.]
In
the case of any taxable year beginning after December 31, 2023:
If
the taxable income is: The tax
shall be:
Not
over $3,960 1.40% of
taxable income
Over
$3,960 but $55.00 plus
3.20% of
not over $7,920 excess over $3,960
Over
$7,920 but $182.00
plus 5.50% of
not over $15,840 excess over $7,920
Over
$15,840 but $618.00
plus 6.40% of
not over $23,760 excess over $15,840
Over
$23,760 but $1,125.00
plus 6.80% of
not over $31,680 excess over $23,760
Over
$31,680 but $1,663.00
plus 7.20% of
not over $39,600 excess over $31,680
Over
$39,600 but $2,233.00
plus 7.60% of
not over $59,400 excess over $39,600
Over
$59,400 but $3,738.00
plus 7.90% of
not over $79,200 excess over $59,400
Over
$79,200 but $5,302.00
plus 8.25% of
not over $247,500 excess over $79,200
Over
$247,500 but $19,187.00
plus 9.00% of
not over $288,750 excess over $247,500
Over $288,750 but $22,900.00 plus 10.00% of
not over $330,000 excess over $288,750
Over $330,000 $27,025.00 plus 11.00% of
excess over $330,000.(c) There is hereby imposed on the taxable income of (1) every unmarried individual (other than a surviving spouse, or the head of a household) and (2) on the taxable income of every married individual who does not make a single return jointly with the individual's spouse under section 235-93 a tax determined in accordance with the following table:
[In the case of any taxable
year beginning after December 31, 2017:
If
the taxable income is: The tax
shall be:
Not
over $2,400 1.40% of
taxable income
Over
$2,400 but $34.00 plus
3.20% of
not over $4,800 excess over $2,400
Over
$4,800 but $110.00
plus 5.50% of
not over $9,600 excess over $4,800
Over
$9,600 but $374.00
plus 6.40% of
not over $14,400 excess over $9,600
Over
$14,400 but $682.00
plus 6.80% of
not over $19,200 excess over $14,400
Over
$19,200 but $1,008.00
plus 7.20% of
not over $24,000 excess over $19,200
Over
$24,000 but $1,354.00
plus 7.60% of
not over $36,000 excess over $24,000
Over
$36,000 but $2,266.00
plus 7.90% of
not over $48,000 excess over $36,000
Over
$48,000 but $3,214.00
plus 8.25% of
not over $150,000 excess over $48,000
Over
$150,000 but $11,629.00
plus 9.00% of
not over $175,000 excess over $150,000
Over $175,000 but $13,879.00 plus 10.00% of
not over $200,000 excess over $175,000
Over $200,000 $16,379.00 plus 11.00% of
excess over $200,000.]
In
the case of any taxable year beginning after December 31, 2023:
If
the taxable income is: The tax
shall be:
Not
over $2,640 1.40% of
taxable income
Over
$2,640 but $37.00 plus
3.20% of
not over $5,280 excess over $2,640
Over
$5,280 but $121.00
plus 5.50% of
not over $10,560 excess over $5,280
Over
$10,560 but $412.00
plus 6.40% of
not over $15,840 excess over $10,560
Over
$15,840 but $750.00
plus 6.80% of
not over $21,120 excess over $15,840
Over
$21,120 but $1,109.00
plus 7.20% of
not over $26,400 excess over $21,120
Over
$26,400 but $1,489.00
plus 7.60% of
not over $39,600 excess over $26,400
Over
$39,600 but $2,492.00
plus 7.90% of
not over $52,800 excess over $39,600
Over
$52,800 but $3,535.00
plus 8.25% of
not over $165,000 excess over $52,800
Over
$165,000 but $12,791.00
plus 9.00% of
not over $192,500 excess over $165,000
Over $192,500 but $15,266.00 plus 10.00% of
not over $220,000 excess over $192,500
Over
$220,000 $18,016.00
plus 11.00%
of excess over $220,000.
(d) The tax imposed by section 235-2.45 on estates and trusts shall be determined in accordance with the following table:
In the case of any taxable year beginning after December 31, 2001:
If the taxable income is: The tax shall be:
Not over $2,000 1.40% of taxable income
Over $2,000 but $28.00 plus 3.20% of
not over $4,000 excess over $2,000
Over $4,000 but $92.00 plus 5.50% of
not over $8,000 excess
over $4,000
Over $8,000 but $312.00 plus 6.40% of
not over $12,000 excess
over $8,000
Over $12,000 but $568.00 plus 6.80% of
not over $16,000 excess
over $12,000
Over $16,000 but $840.00 plus 7.20% of
not over $20,000 excess
over $16,000
Over $20,000 but $1,128.00 plus 7.60% of
not over $30,000 excess
over $20,000
Over $30,000 but $1,888.00 plus 7.90% of
not over $40,000 excess
over $30,000
Over $40,000 $2,678.00 plus 8.25% of
excess over $40,000.
(e) Any taxpayer, other than a corporation, acting as a business entity in more than one state who is required by this chapter to file a return may elect to report and pay a tax of .5 per cent of the taxpayer's annual gross sales if the:
(1) Taxpayer's only activities in this State consist of sales;
(2) Taxpayer does not own or rent real estate or tangible personal property; and
(3) Taxpayer's annual gross sales in or into this State during the tax year is not in excess of $100,000.
(f) If a taxpayer has a net capital gain for any taxable year to which this subsection applies, then the tax imposed by this section shall not exceed the sum of:
(1) The tax computed at the rates and in the same manner as if this subsection had not been enacted on the greater of:
(A) The taxable income reduced by the amount of net capital gain, or
(B) The amount of taxable income taxed at a rate below 7.25 per cent, plus
(2) A tax of 7.25 per cent of the amount of taxable income in excess of the amount determined under paragraph (1).
This subsection shall apply to individuals, estates, and trusts for taxable years beginning after December 31, 1986.
(g) For each taxable year beginning after December 31, 2024, the director of taxation, no later than December 15 of the preceding calendar year, shall recompute the taxable income amounts within each of the income brackets in subsections (a), (b), and (c) by multiplying the taxable income amounts within each income bracket for the preceding taxable year by the cost-of-living adjustment factor, if the cost-of-living adjustment factor is greater than 1.0, and rounding off the resulting product to the nearest $1. If the cost-of-living adjustment factor is less than or equal to 1.0 in a given year, then no adjustment will occur in the following year. Nothing in this subsection shall be construed as permitting an adjustment to the rates of tax in subsections (a), (b), and (c)."
SECTION 4. Section 235-54, Hawaii Revised Statutes, is amended to read as follows:
"§235-54 Exemptions. (a) In computing the taxable income of any individual, there shall be deducted, in lieu of the personal exemptions allowed by the Internal Revenue Code, personal exemptions computed as follows: Ascertain the number of exemptions which the individual can lawfully claim under the Internal Revenue Code, add an additional exemption for the taxpayer or the taxpayer's spouse who is sixty-five years of age or older within the taxable year, and multiply that number by $1,144, for taxable years beginning after December 31, 1984. A nonresident shall prorate the personal exemptions on account of income from sources outside the State as provided in section 235-5. In the case of an individual with respect to whom an exemption under this section is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual's taxable year begins, the personal exemption amount applicable to such individual under this subsection for such individual's taxable year shall be zero.
(b) In computing the taxable income of an estate or trust there shall be allowed, in lieu of the deductions allowed under subsection (a), the following:
(1) An estate shall be allowed a deduction of $400.
(2) A trust which, under its governing instrument, is required to distribute all of its income currently shall be allowed a deduction of $200.
(3) All other trusts shall be allowed a deduction of $80.
(c) A blind person, a deaf person, and any person totally disabled, in lieu of the personal exemptions allowed by the Internal Revenue Code, shall be allowed, and there shall be deducted in computing the taxable income of a blind person, a deaf person, or a totally disabled person, instead of the exemptions provided by subsection (a), the amount of $7,000.
(d) For each taxable year beginning after December 31, 2023, the director of taxation, no later than December 15 of the preceding calendar year, shall recompute the personal exemption and deduction amounts in this section by multiplying the amount for the preceding taxable year by the cost-of-living adjustment factor, if the cost-of-living adjustment factor is greater than 1.0, and rounding off the resulting product to the nearest $1. If the cost-of-living adjustment factor is less than or equal to 1.0 in a given year, then no adjustment will occur in the following year."
SECTION 5. Section 235-55.6, Hawaii Revised Statutes, is amended to read as follows:
"§235-55.6 Expenses for household and dependent care services necessary for gainful employment. (a) Allowance of credit.
(1) In general. For each resident taxpayer, who files an individual income tax return for a taxable year, and who is not claimed or is not otherwise eligible to be claimed as a dependent by another taxpayer for federal or Hawaii state individual income tax purposes, who maintains a household which includes as a member one or more qualifying individuals (as defined in subsection (b)(1)), there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the applicable percentage of the employment-related expenses (as defined in subsection (b)(2)) paid by the individual during the taxable year. If the tax credit claimed by a resident taxpayer exceeds the amount of income tax payment due from the resident taxpayer, the excess of the credit over payments due shall be refunded to the resident taxpayer; provided that tax credit properly claimed by a resident individual who has no income tax liability shall be paid to the resident individual; and provided further that no refunds or payment on account of the tax credit allowed by this section shall be made for amounts less than $1.
(2) Applicable percentage. For purposes of paragraph (1), the taxpayer's
applicable percentage shall be [determined as follows:
Adjusted gross income Applicable percentage
Not over $25,000 25%
Over $25,000 but 24%
not over $30,000
Over $30,000 but 23%
not over $35,000
Over $35,000 but 22%
not over $40,000
Over $40,000 but 21%
not over $45,000
Over $45,000 but 20%
not over $50,000
Over $50,000 15%.]
equal
to fifty per cent reduced by one percentage point for each $3,000, or fraction
thereof, by which the taxpayer's adjusted gross income exceeds the threshold
amount; provided that the applicable percentage shall not be reduced below
twenty-five per cent.
(3) Threshold amount. For purposes of paragraph (2):
(A) For taxable years beginning after
December 31, 2023, the threshold amount shall be $150,000; and
(B) For each taxable year beginning after December
31, 2024, the director of taxation, no later than December 15 of the preceding calendar
year, shall recompute the threshold amount by multiplying the dollar amount for
the preceding taxable year by the cost-of-living adjustment factor, if the cost‑of‑living
adjustment factor is greater than 1.0, and rounding off the resulting product to
the nearest $1. If the cost-of-living adjustment
factor is less than or equal to 1.0 in a given year, then no adjustment will occur
in the following year.
(b) Definitions of qualifying individual and employment‑related expenses. For purposes of this section:
(1) Qualifying individual. The term "qualifying individual" means:
(A) A dependent of the taxpayer who is under the age of thirteen and with respect to whom the taxpayer is entitled to a deduction under section 235‑54(a),
(B) A dependent of the
taxpayer who is physically or mentally incapable of caring for oneself, or
(C) The spouse of the taxpayer, if the spouse is physically or mentally incapable of caring for oneself.
(2) Employment-related expenses.
(A) In general. The term "employment-related expenses" means amounts paid for the following expenses, but only if such expenses are incurred to enable the taxpayer to be gainfully employed for any period for which there are one or more qualifying individuals with respect to the taxpayer:
(i) Expenses for household services, and
(ii) Expenses for the care of a qualifying individual.
Such term shall not include any amount paid for services outside the taxpayer's household at a camp where the qualifying individual stays overnight.
(B) Exception. Employment-related expenses described in subparagraph (A) which are incurred for services outside the taxpayer's household shall be taken into account only if incurred for the care of:
(i) A qualifying individual described in paragraph (1)(A), or
(ii) A qualifying individual (not described in paragraph (1)(A)) who regularly spends at least eight hours each day in the taxpayer's household.
(C) Dependent care centers. Employment-related expenses described in subparagraph (A) which are incurred for services provided outside the taxpayer's household by a dependent care center (as defined in subparagraph (D)) shall be taken into account only if:
(i) Such center complies with all applicable laws, rules, and regulations of this State, if the center is located within the jurisdiction of this State; or
(ii) Such center complies with all applicable laws, rules, and regulations of the jurisdiction in which the center is located, if the center is located outside the State; and
(iii) The requirements of subparagraph (B) are met.
(D) Dependent care center defined. For purposes of this paragraph, the term "dependent care center" means any facility which:
(i) Provides care for more than six individuals (other than individuals who reside at the facility), and
(ii) Receives a fee, payment, or grant for providing services for any of the individuals (regardless of whether such facility is operated for profit).
(c) Dollar limit on amount creditable. The amount of the employment-related expenses incurred during any taxable year which may be taken into account under subsection (a) shall not exceed:
(1) $10,000 if there is one qualifying individual with respect to the taxpayer for such taxable year, or
(2) $20,000 if there are two or more qualifying individuals with respect to the taxpayer for such taxable year.
The amount determined under paragraph (1) or (2) (whichever is applicable) shall be reduced by the aggregate amount excludable from gross income under section 129 (with respect to dependent care assistance programs) of the Internal Revenue Code for the taxable year.
(d) Earned income limitation.
(1) In general. Except as otherwise provided in this subsection, the amount of the employment-related expenses incurred during any taxable year which may be taken into account under subsection (a) shall not exceed:
(A) In the case of an individual who is not married at the close of such year, such individual's earned income for such year, or
(B) In the case of an individual who is married at the close of such year, the lesser of such individual's earned income or the earned income of the individual's spouse for such year.
(2) Special rule for spouse who is a student or incapable of caring for oneself. In the case of a spouse who is a student or a qualified individual described in subsection (b)(1)(C), for purposes of paragraph (1), such spouse shall be deemed for each month during which such spouse is a full-time student at an educational institution, or is such a qualifying individual, to be gainfully employed and to have earned income of not less than:
(A) $200 if subsection (c)(1) applies for the taxable year, or
(B) $400 if subsection (c)(2) applies for the taxable year.
In the case of any husband and wife,
this paragraph shall apply with respect to only one spouse for any one month.
(e) Special rules. For purposes of this section:
(1) Maintaining household. An individual shall be treated as maintaining a household for any period only if over half the cost of maintaining the household for the period is furnished by the individual (or, if the individual is married during the period, is furnished by the individual and the individual's spouse).
(2) Married couples must
file joint return. If the taxpayer is married
at the close of the taxable year the credit shall be allowed under subsection(a)
only if the taxpayer and the taxpayer's spouse file a joint return for the taxable
year.
(3) Marital status. An individual legally separated from the individual's
spouse under a decree of divorce or of separate maintenance shall not be considered
as married.
(4) Certain married individuals living apart. If:
(A) An individual who is married and who files a separate return:
(i) Maintains as the individual's home a household that constitutes for more than one-half of the taxable year the principal place of abode of a qualifying individual, and
(ii) Furnishes over half of the cost of maintaining the household during the taxable year, and
(B) During the last six months of the taxable year the individual's spouse is not a member of the household, the individual shall not be considered as married.
(5) Special dependency test in case of divorced parents, etc. If:
(A) Paragraph (2) or (4) of section 152(e) of the Internal Revenue Code of 1986, as amended, applies to any child with respect to any calendar year, and
(B) The child is under
age thirteen or is physically or mentally incompetent of caring for the child's
self,
in the case of any taxable year beginning in the calendar
year, the child shall be treated as a qualifying individual described in subsection
(b)(1)(A) or (B) (whichever is appropriate) with respect to the custodial parent
(within the meaning of section 152(e)(1) of the Internal Revenue Code of 1986, as
amended), and shall not be treated as a qualifying individual with respect to the
noncustodial parent.
(6) Payments to related individuals. No credit shall be allowed under subsection (a) for any amount paid by the taxpayer to an individual:
(A) With respect to whom, for the taxable year, a deduction under section 151(c) of the Internal Revenue Code of 1986, as amended (relating to deduction for personal exemptions for dependents) is allowable either to the taxpayer or the taxpayer's spouse, or
(B) Who is a child of the taxpayer (within the meaning of section 151(c)(3) of the Internal Revenue Code of 1986, as amended) who has not attained the age of nineteen at the close of the taxable year.
For purposes of this paragraph, the term "taxable year" means the taxable year of the taxpayer in which the service is performed.
(7) Student. The term "student" means an individual
who, during each of five calendar months during the taxable year, is a full-time
student at an educational organization.
(8) Educational organization. The term "educational organization"
means a school operated by the department of education under chapter 302A, an educational
organization described in section 170(b)(1)(A)(ii) of the Internal Revenue Code
of 1986, as amended, or a university, college, or community college.
(9) Identifying information required with respect to service provider. No credit shall be allowed under subsection (a) for any amount paid to any person unless:
(A) The name, address, taxpayer identification number, and general excise tax license number of the person are included on the return claiming the credit,
(B) If the person is located
outside the State, the name, address, and taxpayer identification number, if any,
of the person and a statement indicating that the service provider is located outside
the State and that the general excise tax license and, if applicable, the taxpayer
identification numbers are not required, or
(C) If the person is an organization described in section 501(c)(3) of the Internal Revenue Code and exempt from tax under section 501(a) of the Internal Revenue Code, the name and address of the person are included on the return claiming the credit.
In the case of a failure to provide the information required under the preceding sentence, the preceding sentence shall not apply if it is shown that the taxpayer exercised due diligence in attempting to provide the information so required.
(f) No credit shall be allowed under this section
for any taxable year in the disallowance period. For purposes of this subsection, the
disallowance period is:
(1) The period of ten taxable years
after the most recent taxable year for which there was a final administrative
or judicial decision that the taxpayer's claim for credit under this section
was due to fraud; and
(2) The period of two taxable years after the most
recent taxable year for which there was a final administrative or judicial decision
disallowing the taxpayer's claim for credit.
[(f)] (g) Rules.
The director of taxation shall prescribe such rules under chapter 91 as may
be necessary to carry out the purposes of this section.
(h) As used in this section,
"adjusted gross income" means adjusted gross income as defined by the
Internal Revenue Code."
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2023; provided that on December 31, 2027, the amendments to section 235-55.6(a), Hawaii Revised Statutes, in section 5 of this Act shall be repealed and section 235-55.6(a), Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day before the effective date of this Act.
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INTRODUCED BY: |
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BY REQUEST |
Report Title:
Income Tax; Standard Deduction; Itemized Deduction; Income Tax Brackets; Personal Exemption; Child and Dependent Care Tax Credit; Conformity with Federal Deductions
Description:
Provides for re-computation of the amounts for standard deduction, itemized deduction, income tax brackets, and personal exemption each tax year, taking into account the cost-of-living adjustment factor. Adds a one-time adjustment to tax brackets. Increases the applicable percentage of the employment-related expenses for which the child and dependent care income tax credit may be claimed; provides for re-computation of the applicable percentage taking into account the cost-of living adjustment factor; and provides for a disallowance period when there is a final administrative or judicial decision finding that the claim was due to fraud or disallowing the credit. Amends state conformity with certain federal deductions.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.