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THE SENATE |
S.B. NO. |
34 |
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THIRTY-SECOND LEGISLATURE, 2023 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to taxation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 235-68, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:
"(a) As used in this section:
"Nonresident person" means every person other than a resident person.
"Property" or "real property" has the meaning as the same term is defined in section 231-1.
"Resident person" means any:
(1) Individual included in the definition of resident in section 235-1;
(2) Corporation incorporated or granted a certificate of authority under chapter 414, 414D, or 415A;
(3) Partnership formed or registered under chapter 425 or 425E;
(4) Foreign partnership qualified to transact business pursuant to chapter 425 or 425E;
(5) Limited liability company formed under chapter 428 or any foreign limited liability company registered under chapter 428; provided that if a single member limited liability company has not elected to be taxed as a corporation, the single member limited liability company shall be disregarded for purposes of this section and this section shall be applied as if the sole member is the transferor;
(6) Limited liability partnership formed under chapter 425;
(7) Foreign limited liability partnership qualified to transact business under chapter 425;
(8) Trust included in the definition of resident trust in section 235-1; or
(9) Estate included in the definition of resident estate in section 235-1.
"Residential real property"
means fee simple or leasehold real property upon which is situated:
(1) From
one to four dwelling units; or
(2) A
residential condominium or cooperative apartment,
the
primary use of which is occupancy as a residence by any natural person or
persons, regardless of whether the property owner resides on the property.
"Transferee" means any person, the State and the counties and their respective subdivisions, agencies, authorities, and boards, acquiring real property which is located in Hawaii.
"Transferor" means any person disposing real property that is located in Hawaii.
(b)
Unless otherwise provided in this section, every transferee shall deduct
and withhold a tax equal to 7.25 per cent of the amount realized on the
disposition of Hawaii real property[.]; provided that, if the real
property being disposed of is residential real property, the transferee shall
instead deduct and withhold a tax equal to seventy-five per cent of the amount
realized on the disposition of the Hawaii real property.
Every person required to withhold a tax under this section is made liable for the tax and is relieved of liability for or upon the claim or demand of any other person for the amount of any payments to the department made in accordance with this section."
SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 3. This Act, upon its approval, shall apply to real estate dispositions that occur on or after September 15, 2023.
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INTRODUCED BY: |
_____________________________ |
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Report Title:
Hawaii Real Property Tax Law; Income Taxation; Residential Real Property; Nonresidents
Description:
Amends the taxes withheld on the amount realized by nonresidents from the disposition of Hawaii residential real property from 7.25% to 75%. Applies to real estate dispositions that occur on or after 9/15/2023.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.