REPORT TITLE:


DESCRIPTION:


 
a                                                     TAX-05(99)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1201
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO THE INCOME TAX.



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

 1      SECTION 1.  Section 235-51, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "235-51 Tax imposed on individuals; rates. (a) There is
 
 4 hereby imposed on the taxable income of [(1)] every taxpayer who
 
 5 files a joint return under section 235-93; and [(2)] every
 
 6 surviving spouse a tax determined in accordance with the
 
 7 [following table:] tax tables prescribed under paragraph (1):
 
 8      (1)  In the case of any taxable year beginning after
 
 9           December 31, 1998:
 
10 If the taxable income is:         The tax shall be:
 
11 Not over $4,000                   1.60% of taxable income
 
12 Over $4,000 but                   $64.00 plus 3.90% of
 
13      not over $8,000                   excess over $4,000
 
14 Over $8,000 but                    $220.00 plus 6.80% of
 
15      not over $16,000                  excess over $8,000
 
16 Over $16,000 but                  $764.00 plus 7.20% of
 
17      not over $24,000                  excess over $16,000
 
18 Over $24,000 but                  $1,340.00 plus 7.50% of
 

 
a                                                     TAX-05(99)
Page 2                                                     1201
                                     H.B. NO.           
                                                        
                                                        

 
 1      not over $32,000                  excess over $24,000
 
 2 Over $32,000 but                  $1,940.00 plus 7.80% of
 
 3      not over $40,000                  excess over $32,000
 
 4 Over $40,000 but                  $2,564.00 plus 8.20% of
 
 5      not over $60,000                  excess over $40,000
 
 6 Over $60,000 but                  $4,204.00 plus 8.50% of
 
 7      not over $80,000                  excess over $60,000
 
 8 Over $80,000                      $5,904.00 plus 8.75% of
 
 9                                        excess over $80,000
 
10      In the case of any taxable year beginning after December 31,
 
11 2000:
 
12 If the taxable income is:         The tax shall be:
 
13 Not over $4,000                   1.50% of taxable income
 
14 Over $4,000 but                   $60.00 plus 3.70% of
 
15      not over $8,000                   excess over $4,000
 
16 Over $8,000 but                   $208.00 plus 6.40% of
 
17      not over $16,000                  excess over $8,000
 
18 Over $16,000 but                  $720.00 plus 6.90% of
 
19      not over $24,000                  excess over $16,000
 
20 Over $24,000 but                  $1,272.00 plus 7.30% of
 
21      not over $32,000                  excess over $24,000
 
22 Over $32,000 but                  $1,856.00 plus 7.60% of
 

 
a                                                     TAX-05(99)
 
Page 3                                                     1201
                                     H.B. NO.           
                                                        
                                                        

 
 1      not over $40,000                  excess over $32,000
 
 2 Over $40,000 but                  $2,464.00 plus 7.90% of
 
 3      not over $60,000                  excess over $40,000
 
 4 Over $60,000 but                  $4,044.00 plus 8.20% of
 
 5      not over $80,000                  excess over $60,000
 
 6 Over $80,000                      $5,684.00 plus 8.50% of
 
 7                                        excess over $80,000
 
 8      In the case of any taxable year beginning after December 31,
 
 9 2001:
 
10 If the taxable income is:         The tax shall be:
 
11 Not over $4,000                   1.40% of taxable income
 
12 Over $4,000 but                   $56.00 plus 3.20% of
 
13      not over $8,000                   excess over $4,000
 
14 Over $8,000 but                   $184.00 plus 5.50% of
 
15      not over $16,000                  excess over $8,000
 
16 Over $16,000 but                  $624.00 plus 6.40% of
 
17      not over $24,000                  excess over $16,000
 
18 Over $24,000 but                  $1,136.00 plus 6.80% of
 
19      not over $32,000                  excess over $24,000
 
20 Over $32,000 but                  $1,680.00 plus 7.20% of
 
21      not over $40,000                  excess over $32,000
 
22 Over $40,000 but                  $2,256.00 plus 7.60% of
 

 
a                                                     TAX-05(99)
 
Page 4                                                     1201
                                     H.B. NO.           
                                                        
                                                        

 
 1      not over $60,000                  excess over $40,000
 
 2 Over $60,000 but                  $3,776.00 plus 7.90% of
 
 3      not over $80,000                  excess over $60,000
 
 4 Over $80,000                      $5,356.00 plus 8.25% of
 
 5                                   excess over $80,000
 
 6      (2)  In the event the conditions of subsection (e) are met,
 
 7           a tax determined by the following tax tables, (Phase 1
 
 8           and Phase 2) applicable to the taxable year, shall be
 
 9           imposed in lieu of the tax imposed under paragraph (1)
 
10           of this subsection.
 
11                              Phase 1
 
12      In the case of any taxable year beginning after December 31,
 
13 2000:
 
14 If the taxable income is:         The tax shall be:
 
15 Not over $4,000                   1.40% of taxable income
 
16 Over $4,000 but                   $56.00 plus 3.20% of
 
17      not over $8,000                   excess over $4,000
 
18 Over $8,000 but                   $184.00 plus 5.50% of
 
19      not over $16,000                  excess over $8,000
 
20 Over $16,000 but                  $624.00 plus 6.40% of
 
21      not over $24,000                  excess over $16,000
 
22 Over $24,000 but                  $1,136.00 plus 6.80% of
 

 
a                                                     TAX-05(99)
 
Page 5                                                     1201
                                     H.B. NO.           
                                                        
                                                        

 
 1      not over $32,000                  excess over $24,000
 
 2 Over $32,000 but                  $1,680.00 plus 7.20% of
 
 3      not over $40,000                  excess over $32,000
 
 4 Over $40,000 but                  $2,256.00 plus 7.60% of
 
 5      not over $60,000                  excess over $40,000
 
 6 Over $60,000 but                  $3,776.00 plus 7.90% of
 
 7      not over $80,000                  excess over $60,000
 
 8 Over $80,000                      $5,356.00 plus 8.25% of
 
 9                                        excess over $80,000
 
10                              Phase 2
 
11      In the case of any taxable year beginning after December 31,
 
12 2001:
 
13 Not over $4,000                   1.30% of taxable income
 
14 Over $4,000 but                   $52.00 plus 3.10% of
 
15      not over $8,000                   excess over $4,000
 
16 Over $8,000 but                   $176.00 plus 5.30% of
 
17      not over $16,000                  excess over $8,000
 
18 Over $16,000 but                  $600.00 plus 6.20% of
 
19      not over $24,000                  excess over $16,000
 
20 Over $24,000 but                  $1,096.00 plus 6.60% of
 
21      not over $32,000                  excess over $24,000
 
22 Over $32,000 but                  $1,624.00 plus 7.00% of
 

 
a                                                     TAX-05(99)
 
Page 6                                                     1201
                                     H.B. NO.           
                                                        
                                                        

 
 1      not over $40,000                  excess over $32,000
 
 2 Over $40,000 but                  $2,184.00 plus 7.40% of
 
 3      not over $60,000                  excess over $40,000
 
 4 Over $60,000 but                  $3,664.00 plus 7.70% of
 
 5      not over $80,000                  excess over $60,000
 
 6 Over $80,000                      $5,204.00 plus 8.00% of
 
 7                                        excess over $80,000
 
 8      (b) There is hereby imposed on the taxable income of every
 
 9 head of a household a tax determined in accordance with the
 
10 [following table:] tax tables prescribed under paragraph (1).
 
11      (1)  In the case of any taxable year beginning after
 
12 December 31, 1998:
 
13 If the taxable income is:         The tax shall be:
 
14 Not over $3,000                   1.60% of taxable income
 
15 Over $3,000 but                   $48.00 plus 3.90% of
 
16      not over $6,000                   excess over $3,000
 
17 Over $6,000 but                   $165.00 plus 6.80% of
 
18      not over $12,000                  excess over $6,000
 
19 Over $12,000 but                  $573.00 plus 7.20% of
 
20      not over $18,000                  excess over $12,000
 
21 Over $18,000 but                  $1,005.00 plus 7.50% of
 
22      not over $24,000                  excess over $18,000
 

 
a                                                     TAX-05(99)
 
Page 7                                                     1201
                                     H.B. NO.           
                                                        
                                                        

 
 1 Over $24,000 but                  $1,455.00 plus 7.80% of
 
 2      not over $30,000                  excess over $24,000
 
 3 Over $30,000 but                  $1,923.00 plus 8.20% of
 
 4      not over $45,000                  excess over $30,000
 
 5 Over $45,000 but                  $3,153.00 plus 8.50% of
 
 6      not over $60,000                  excess over $45,000
 
 7 Over $60,000                      $4,428.00 plus 8.75% of
 
 8                                        excess over $60,000
 
 9      In the case of any taxable year beginning after December 31,
 
10 2000:
 
11 If the taxable income is:         The tax shall be:
 
12 Not over $3,000                   1.50% of taxable income
 
13 Over $3,000 but                   $45.00 plus 3.70% of
 
14      not over $6,000                   excess over $3,000
 
15 Over $6,000 but                   $156.00 plus 6.40% of
 
16      not over $12,000                  excess over $6,000
 
17 Over $12,000 but                  $540.00 plus 6.90% of
 
18      not over $18,000                  excess over $12,000
 
19 Over $18,000 but                  $954.00 plus 7.30% of
 
20      not over $24,000                  excess over $18,000
 
21 Over $24,000 but                  $1,392.00 plus 7.60% of
 
22      not over $30,000                  excess over $24,000
 

 
a                                                     TAX-05(99)
 
Page 8                                                     1201
                                     H.B. NO.           
                                                        
                                                        

 
 1 Over $30,000 but                  $1,848.00 plus 7.90% of
 
 2      not over $45,000                  excess over $30,000
 
 3 Over $45,000 but                  $3,033.00 plus 8.20% of
 
 4      not over $60,000                  excess over $45,000
 
 5 Over $60,000                      $4,263.00 plus 8.50% of
 
 6                                        excess over $60,000
 
 7      In the case of any taxable year beginning after December 31,
 
 8 2001:
 
 9 If the taxable income is:         The tax shall be:
 
10 Not over $3,000                   1.40% of taxable income
 
11 Over $3,000 but                   $42.00 plus 3.20% of
 
12      not over $6,000                   excess over $3,000
 
13 Over $6,000 but                   $138.00 plus 5.50% of
 
14      not over $12,000                  excess over $6,000
 
15 Over $12,000 but                  $468.00 plus 6.40% of
 
16      not over $18,000                  excess over $12,000
 
17 Over $18,000 but                  $852.00 plus 6.80% of
 
18      not over $24,000                  excess over $18,000
 
19 Over $24,000 but                  $1,260.00 plus 7.20% of
 
20      not over $30,000                  excess over $24,000
 
21 Over $30,000 but                  $1,692.00 plus 7.60% of
 
22      not over $45,000                  excess over $30,000
 

 
a                                                     TAX-05(99)
 
Page 9                                                     1201
                                     H.B. NO.           
                                                        
                                                        

 
 1 Over $45,000 but                  $2,832.00 plus 7.90% of
 
 2      not over $60,000                  excess over $45,000
 
 3 Over $60,000                      $4,017.00 plus 8.25% of
 
 4                                        excess over $60,000
 
 5      (2)  In the event the conditions of subsection (e) are met,
 
 6           a tax determined by the following tax tables, (Phase 1
 
 7           and Phase 2) applicable to the taxable year, shall be
 
 8           imposed in lieu of the tax imposed under paragraph (1)
 
 9           of this subsection.
 
10                              Phase 1
 
11      In the case of any taxable year beginning after December 31,
 
12 2000:
 
13 If the taxable income is:         The tax shall be:
 
14 Not over $3,000                   1.40% of taxable income
 
15 Over $3,000 but                   $42.00 plus 3.20% of
 
16      not over $6,000                   excess over $3,000
 
17 Over $6,000 but                   $138.00 plus 5.50% of
 
18      not over $12,000                  excess over $6,000
 
19 Over $12,000 but                  $468.00 plus 6.40% of
 
20      not over $18,000                  excess over $12,000
 
21 Over $18,000 but                  $852.00 plus 6.80% of
 
22      not over $24,000                  excess over $18,000
 

 
a                                                     TAX-05(99)
 
Page 10                                                    1201
                                     H.B. NO.           
                                                        
                                                        

 
 1 Over $24,000 but                  $1,260.00 plus 7.20% of
 
 2      not over $30,000                  excess over $24,000
 
 3 Over $30,000 but                  $1,692.00 plus 7.60% of
 
 4      not over $45,000                  excess over $30,000
 
 5 Over $45,000 but                  $2,832.00 plus 7.90% of
 
 6      not over $60,000                  excess over $45,000
 
 7 Over $60,000                      $4,017.00 plus 8.25% of
 
 8                                        excess over $60,000
 
 9                              Phase 2
 
10      In the case of any taxable year beginning after December 31,
 
11 2001:
 
12 If the taxable income is:         The tax shall be:
 
13 Not over $3,000                   1.30% of taxable income
 
14 Over $3,000 but                   $39.00 plus 3.10% of
 
15      not over $6,000                   excess over $3,000
 
16 Over $6,000 but                   $132.00 plus 5.30% of
 
17      not over $12,000                  excess over $6,000
 
18 Over $12,000 but                  $450.00 plus 6.20% of
 
19      not over $18,000                  excess over $12,000
 
20 Over $18,000 but                  $822.00 plus 6.60% of
 
21      not over $24,000                  excess over $18,000
 
22 Over $24,000 but                  $1,218.00 plus 7.00% of
 

 
a                                                     TAX-05(99)
 
Page 11                                                    1201
                                     H.B. NO.           
                                                        
                                                        

 
 1      not over $30,000                  excess over $24,000
 
 2 Over $30,000 but                  $1,638.00 plus 7.40% of
 
 3      not over $45,000                  excess over $30,000
 
 4 Over $45,000 but                  $2,748.00 plus 7.70% of
 
 5      not over $60,000                  excess over $45,000
 
 6 Over $60,000                      $3,903.00 plus 8.00% of
 
 7                                        excess over $60,000
 
 8      (c) There is hereby imposed on the taxable income of [(1)]
 
 9 every unmarried individual (other than a surviving spouse, or the
 
10 head of a household) and [(2)] on the taxable income of every
 
11 married individual who does not make a single return jointly with
 
12 the individual's spouse under section 235-93 a tax determined in
 
13 accordance with the [following table:] tax tables prescribed
 
14 under paragraph (1).
 
15      (1)  In the case of any taxable year beginning after
 
16           December 31, 1998:
 
17 If the taxable income is:         The tax shall be:
 
18 Not over $2,000                   1.60% of taxable income
 
19 Over $2,000 but                   $32.00 plus 3.90% of
 
20      not over $4,000                   excess over $2,000
 
21 Over $4,000 but                   $110.00 plus 6.80% of
 
22      not over $8,000                   excess over $4,000
 

 
a                                                     TAX-05(99)
 
Page 12                                                    1201
                                     H.B. NO.           
                                                        
                                                        

 
 1 Over $8,000 but                   $382.00 plus 7.20% of
 
 2      not over $12,000                  excess over $8,000
 
 3 Over $12,000 but                  $670.00 plus 7.50% of
 
 4      not over $16,000                  excess over $12,000
 
 5 Over $16,000 but                  $970.00 plus 7.80% of
 
 6      not over $20,000                  excess over $16,000
 
 7 Over $20,000 but                  $1,282.00 plus 8.20% of
 
 8      not over $30,000                  excess over $20,000
 
 9 Over $30,000 but                  $2,102.00 plus 8.50% of
 
10      not over $40,000                  excess over $30,000
 
11 Over $40,000                      $2,952.00 plus 8.75% of
 
12                                        excess over $40,000
 
13      In the case of any taxable year beginning after December 31,
 
14 2000:
 
15 If the taxable income is:         The tax shall be:
 
16 Not over $2,000                   1.50% of taxable income
 
17 Over $2,000 but                   $30.00 plus 3.70% of
 
18      not over $4,000                   excess over $2,000
 
19 Over $4,000 but                   $104.00 plus 6.40% of
 
20      not over $8,000                   excess over $4,000
 
21 Over $8,000 but                   $360.00 plus 6.90% of
 
22      not over $12,000                  excess over $8,000
 

 
a                                                     TAX-05(99)
 
Page 13                                                    1201
                                     H.B. NO.           
                                                        
                                                        

 
 1 Over $12,000 but                  $636.00 plus 7.30% of
 
 2      not over $16,000                  excess over $12,000
 
 3 Over $16,000 but                  $928.00 plus 7.60% of
 
 4      not over $20,000                  excess over $16,000
 
 5 Over $20,000 but                  $1,232.00 plus 7.90% of
 
 6      not over $30,000                  excess over $20,000
 
 7 Over $30,000 but                  $2,022.00 plus 8.20% of
 
 8      not over $40,000                  excess over $30,000
 
 9 Over $40,000                      $2,842.00 plus 8.50% of
 
10                                        excess over $40,000
 
11      In the case of any taxable year beginning after December 31,
 
12 2001:
 
13 If the taxable income is:         The tax shall be:
 
14 Not over $2,000                   1.40% of taxable income
 
15 Over $2,000 but                   $28.00 plus 3.20% of
 
16      not over $4,000                   excess over $2,000
 
17 Over $4,000 but                   $92.00 plus 5.50% of
 
18      not over $8,000                   excess over $4,000
 
19 Over $8,000 but                   $312.00 plus 6.40% of
 
20      not over $12,000                  excess over $8,000
 
21 Over $12,000 but                  $568.00 plus 6.80% of
 
22      not over $16,000                  excess over $12,000
 

 
a                                                     TAX-05(99)
 
Page 14                                                    1201
                                     H.B. NO.           
                                                        
                                                        

 
 1 Over $16,000 but                  $840.00 plus 7.20% of
 
 2      not over $20,000                  excess over $16,000
 
 3 Over $20,000 but                  $1,128.00 plus 7.60% of
 
 4      not over $30,000                  excess over $20,000
 
 5 Over $30,000 but                  $1,888.00 plus 7.90% of
 
 6      not over $40,000                  excess over $30,000
 
 7 Over $40,000                      $2,678.00 plus 8.25% of
 
 8                                        excess over $40,000
 
 9      (2)  In the event the conditions of subsection (e) are met,
 
10           a tax determined by the following tax tables, (Phase 1
 
11           and Phase 2) applicable to the taxable year, shall be
 
12           imposed in lieu of the tax imposed under paragraph (1)
 
13           of this subsection.
 
14                              Phase 1
 
15      In the case of any taxable year beginning after December 31,
 
16 2000:
 
17 If the taxable income is:         The tax shall be:
 
18 Not over $2,000                   1.40% of taxable income
 
19 Over $2,000 but                   $28.00 plus 3.20% of
 
20      not over $4,000                   excess over $2,000
 
21 Over $4,000 but                   $92.00 plus 5.50% of
 
22      not over $8,000                   excess over $4,000
 

 
a                                                     TAX-05(99)
 
Page 15                                                    1201
                                     H.B. NO.           
                                                        
                                                        

 
 1 Over $8,000 but                   $312.00 plus 6.40% of
 
 2      not over $12,000                  excess over $8,000
 
 3 Over $12,000 but                  $568.00 plus 6.80% of
 
 4      not over $16,000                  excess over $12,000
 
 5 Over $16,000 but                  $840.00 plus 7.20% of
 
 6      not over $20,000                  excess over $16,000
 
 7 Over $20,000 but                  $1,128.00 plus 7.60% of
 
 8      not over $30,000                  excess over $20,000
 
 9 Over $30,000 but                  $1,888.00 plus 7.90% of
 
10      not over $40,000                  excess over $30,000
 
11 Over $40,000                      $2,678.00 plus 8.25% of
 
12                                        excess over $40,000
 
13                              Phase 2
 
14      In the case of any taxable year beginning after December 31,
 
15 2001:
 
16 If the taxable income is:         The tax shall be:
 
17 Not over $2,000 1.30% of taxable income
 
18 Over $2,000 but                   $26.00 plus 3.10% of
 
19      not over $4,000                   excess over $2,000
 
20 Over $4,000 but                   $88.00 plus 5.30% of
 
21      not over $8,000                   excess over $4,000
 
22 Over $8,000 but                   $300.00 plus 6.20% of
 

 
a                                                     TAX-05(99)
 
Page 16                                                    1201
                                     H.B. NO.           
                                                        
                                                        

 
 1      not over $12,000                  excess over $8,000
 
 2 Over $12,000 but                  $548.00 plus 6.60% of
 
 3      not over $16,000                  excess over $12,000
 
 4 Over $16,000 but                  $812.00 plus 7.00% of
 
 5      not over $20,000                  excess over $16,000
 
 6 Over $20,000 but                  $1,092.00 plus 7.40% of
 
 7      not over $30,000                  excess over $20,000
 
 8 Over $30,000 but                  $1,832.00 plus 7.70% of
 
 9      not over $40,000                  excess over $30,000
 
10 Over $40,000                      $2,602.00 plus 8.00% of
 
11                                        excess over $40,000
 
12      (d) The tax imposed by section 235-2.4 on estates and trusts
 
13 shall be determined in accordance with the [following table:] tax
 
14 tables prescribed under paragraph (1).
 
15      (1)  In the case of any taxable year beginning after
 
16           December 31, 1998:
 
17 If the taxable income is:         The tax shall be:
 
18 Not over $2,000                   1.60% of taxable income
 
19 Over $2,000 but                   $32.00 plus 3.90% of
 
20      not over $4,000                   excess over $2,000
 
21 Over $4,000 but                   $110.00 plus 6.80% of
 
22      not over $8,000                   excess over $4,000
 

 
a                                                     TAX-05(99)
 
Page 17                                                    1201
                                     H.B. NO.           
                                                        
                                                        

 
 1 Over $8,000 but                   $382.00 plus 7.20% of
 
 2      not over $12,000                  excess over $8,000
 
 3 Over $12,000 but                  $670.00 plus 7.50% of
 
 4      not over $16,000                  excess over $12,000
 
 5 Over $16,000 but                  $970.00 plus 7.80% of
 
 6      not over $20,000                  excess over $16,000
 
 7 Over $20,000 but                  $1,282.00 plus 8.20% of
 
 8      not over $30,000                  excess over $20,000
 
 9 Over $30,000 but                  $2,102.00 plus 8.50% of
 
10      not over $40,000                  excess over $30,000
 
11 Over $40,000                      $2,952.00 plus 8.75% of
 
12                                        excess over $40,000
 
13      In the case of any taxable year beginning after December 31,
 
14 2000:
 
15 If the taxable income is:         The tax shall be:
 
16 Not over $2,000                   1.50% of taxable income
 
17 Over $2,000 but                   $30.00 plus 3.70% of
 
18      not over $4,000                   excess over $2,000
 
19 Over $4,000 but                   $104.00 plus 6.40% of
 
20      not over $8,000                   excess over $4,000
 
21 Over $8,000 but                   $360.00 plus 6.90% of
 
22      not over $12,000                  excess over $8,000
 

 
a                                                     TAX-05(99)
 
Page 18                                                    1201
                                     H.B. NO.           
                                                        
                                                        

 
 1 Over $12,000 but                  $636.00 plus 7.30% of
 
 2      not over $16,000                  excess over $12,000
 
 3 Over $16,000 but                  $928.00 plus 7.60% of
 
 4      not over $20,000                  excess over $16,000
 
 5 Over $20,000 but                  $1,232.00 plus 7.90% of
 
 6      not over $30,000                  excess over $20,000
 
 7 Over $30,000 but                  $2,022.00 plus 8.20% of
 
 8      not over $40,000                  excess over $30,000
 
 9 Over $40,000                      $2,842.00 plus 8.50% of
 
10                                        excess over $40,000
 
11      In the case of any taxable year beginning after December 31,
 
12 2001:
 
13 If the taxable income is:         The tax shall be:
 
14 Not over $2,000                   1.40% of taxable income
 
15 Over $2,000 but                   $28.00 plus 3.20% of
 
16      not over $4,000                   excess over $2,000
 
17 Over $4,000 but                   $92.00 plus 5.50% of
 
18      not over $8,000                   excess over $4,000
 
19 Over $8,000 but                   $312.00 plus 6.40% of
 
20      not over $12,000                  excess over $8,000
 
21 Over $12,000 but                  $568.00 plus 6.80% of
 
22      not over $16,000                  excess over $12,000
 

 
a                                                     TAX-05(99)
 
Page 19                                                    1201
                                     H.B. NO.           
                                                        
                                                        

 
 1 Over $16,000 but                  $840.00 plus 7.20% of
 
 2      not over $20,000                  excess over $16,000
 
 3 Over $20,000 but                  $1,128.00 plus 7.60% of
 
 4      not over $30,000                  excess over $20,000
 
 5 Over $30,000 but                  $1,888.00 plus 7.90% of
 
 6      not over $40,000                  excess over $30,000
 
 7 Over $40,000                      $2,678.00 plus 8.25% of
 
 8                                        excess over $40,000
 
 9      (2)  In the event the conditions of subsection (e) are met,
 
10           a tax determined by the following tax tables, (Phase 1
 
11           and Phase 2) applicable to the taxable year, shall be
 
12           imposed in lieu of the tax imposed under paragraph (1)
 
13           of this subsection.
 
14                              Phase 1
 
15      In the case of any taxable year beginning after December 31,
 
16 2000:
 
17 If the taxable income is:         The tax shall be:
 
18 Not over $2,000 1.40% of taxable income
 
19 Over $2,000 but                   $28.00 plus 3.20% of
 
20      not over $4,000                   excess over $2,000
 
21 Over $4,000 but                   $92.00 plus 5.50% of
 
22      not over $8,000                   excess over $4,000
 

 
a                                                     TAX-05(99)
 
Page 20                                                    1201
                                     H.B. NO.           
                                                        
                                                        

 
 1 Over $8,000 but                   $312.00 plus 6.40% of
 
 2      not over $12,000                  excess over $8,000
 
 3 Over $12,000 but                  $568.00 plus 6.80% of
 
 4      not over $16,000                  excess over $12,000
 
 5 Over $16,000 but                  $840.00 plus 7.20% of
 
 6      not over $20,000                  excess over $16,000
 
 7 Over $20,000 but                  $1,128.00 plus 7.60% of
 
 8      not over $30,000                  excess over $20,000
 
 9 Over $30,000 but                  $1,888.00 plus 7.90% of
 
10      not over $40,000                  excess over $30,000
 
11 Over $40,000                      $2,678.00 plus 8.25% of
 
12                                        excess over $40,000
 
13                              Phase 2
 
14      In the case of any taxable year beginning after December 31,
 
15 2001:
 
16 If the taxable income is:         The tax shall be:
 
17 Not over $2,000                   1.30% of taxable income
 
18 Over $2,000 but                   $26.00 plus 3.10% of
 
19      not over $4,000                   excess over $2,000
 
20 Over $4,000 but                   $88.00 plus 5.30% of
 
21      not over $8,000                   excess over $4,000
 
22 Over $8,000 but                   $300.00 plus 6.20% of
 

 
a                                                     TAX-05(99)
 
Page 21                                                    1201
                                     H.B. NO.           
                                                        
                                                        

 
 1      not over $12,000                  excess over $8,000
 
 2 Over $12,000 but                  $548.00 plus 6.60% of
 
 3      not over $16,000                  excess over $12,000
 
 4 Over $16,000 but                  $812.00 plus 7.00% of
 
 5      not over $20,000                  excess over $16,000
 
 6 Over $20,000 but                  $1,092.00 plus 7.40% of
 
 7      not over $30,000                  excess over $20,000
 
 8 Over $30,000 but                  $1,832.00 plus 7.70% of
 
 9      not over $40,000                  excess over $30,000
 
10 Over $40,000                      $2,602.00 plus 8.00% of
 
11                                        excess over $40,000
 
12      (e)  The tax tables designated as Phases 1 and 2 under
 
13                subsections (a), (b), (c), and (d) shall be
 
14                effective as follows:
 
15      (1)  Phase 1 shall be effective if the general fund tax
 
16                revenues are determined and certified by the
 
17                director of finance to be equal to or greater than
 
18                $2,942.2 million as of June 30, 2000.
 
19      (2)  Phase 2 shall be effective if the general fund tax
 
20                revenues are determined and certified by the
 
21                director of finance to be equal to or greater than
 
22                $3,050 million as of June 30, 2001.
 
23 After certification by the director of finance that the tax
 

 
a                                                     TAX-05(99)
Page 22                                                    1201
                                     H.B. NO.           
                                                        
                                                        

 
 1 tables in Phase 1 or 2 are in effect, the director of taxation
 
 2 shall publish a notice no later than August 31 following the
 
 3 close of the applicable fiscal year,
 
 4      [(e)](f)  Any taxpayer, other than a corporation, acting as
 
 5 a business entity in more than one state who is required by this
 
 6 chapter to file a return may elect to report and pay a tax of .5
 
 7 per cent of its annual gross sales (1) where the taxpayer's only
 
 8 activities in this State consist of sales; and (2) who does not
 
 9 own or rent real estate or tangible personal property; and (3)
 
10 whose annual gross sales in or into this State during the tax
 
11 year is not in excess of $100,000.
 
12      [(f)](g)  If a taxpayer has a net capital gain for any
 
13 taxable year to which this subsection applies, then the tax
 
14 imposed by this section shall not exceed the sum of:
 
15      (1)  The tax computed at the rates and in the same manner as
 
16           if this subsection had not been enacted on the
 
17                greater of:
 
18           (A)  The taxable income reduced by the amount of net
 
19                capital gain, or
 
20           (B)  The amount of taxable income taxed at a rate below
 
21                [7.25 per cent,] the rate in paragraph (3)(A),
 
22                (3)(B), or (3)(C), applicable to the taxable year,
 
23                plus
 

 
a                                                     TAX-05(99)
Page 23                                                    1201
                                     H.B. NO.           
                                                        
                                                        

 
 1      (2)  A tax [of 7.25 per cent of] at the rate provided in
 
 2           paragraph (3)(A), (3)(B), or (3)(C), applicable to the
 
 3           taxable year, on the amount of taxable income in excess
 
 4           of the amount determined under paragraph (1).
 
 5      (3)  For purposes of this subsection, the tax rates are:
 
 6           (A)  6.8 per cent for any taxable year beginning after
 
 7                December 31, 1998;
 
 8           (B)  6.4 per cent for any taxable year beginning after
 
 9                December 31, 2000; except that the rate shall be
 
10                5.5 per cent for any taxable year beginning after
 
11                December 31, 2000, provided the Phase 1 tax tables
 
12                pursuant to subsection (e) are in effect;
 
13           (c)  5.5 per cent for any taxable year beginning after
 
14                December 31, 2001; except that the rate shall be
 
15                5.3 per cent for any taxable year beginning after
 
16                December 31, 2001, provided the Phase 2 tax tables
 
17                pursuant to subsection (e) are in effect.
 
18      [This subsection shall apply to individuals, estates, and
 
19 trusts for taxable years beginning after December 31, 1986.]"
 
20      SECTION 2.  Section 235-15, Hawaii Revised Statutes, is
 
21 repealed.
 

 
a                                                     TAX-05(99)
 
 
 
Page 24                                                    1201
                                     H.B. NO.           
                                                        
                                                        

 
 1      ["235-15  Tax credits to promote the purchase of child
 
 2 passenger restraint systems.(a)  Any taxpayer who files an
 
 3 individual income tax return for a taxable year may claim an
 
 4 income tax credit under this section against the Hawaii state
 
 5 individual income tax.
 
 6      (b)  The tax credit shall be $25; provided that the taxpayer
 
 7 purchases one or more new child passenger restraint systems in
 
 8 the tax year for which the credit is properly claimed; and
 
 9 provided that such restraint system can be shown to be in
 
10 substantial conformity with specifications for such restraint
 
11 systems set forth by the federal motor vehicle safety standards
 
12 which were in effect at the time of such purchase.
 
13      (c)  If the tax credit claimed by the taxpayer under this
 
14 section exceeds the amount of the income tax payments due from
 
15 the taxpayer, the excess of credit over payments due shall be
 
16 refunded to the taxpayer; provided that the tax credit properly
 
17 claimed by a taxpayer who has no income tax liability shall be
 
18 paid to the taxpayer; and provided that no refunds or payments on
 
19 account of the tax credit allowed by this section shall be made
 
20 for amounts less than $1.
 
21      (d)  The director of taxation shall prepare such forms as
 
22 may be necessary to claim a credit under this section, may
 
23 require proof of the claim for the tax credit, and may adopt
 

 
a                                                     TAX-05(99)
Page 25                                                    1201
                                     H.B. NO.           
                                                        
                                                        

 
 1 rules pursuant to chapter 91.
 
 2      (e)  All of the provisions relating to assessments and
 
 3 refunds under this chapter and under section 231-23(c)(1) shall
 
 4 apply to the tax credit under this section.
 
 5      (f)  Claims for the tax credit under this section, including
 
 6 any amended claims, shall be filed on or before the end of the
 
 7 twelfth month following the taxable year for which the credit may
 
 8 be claimed."]
 
 9      SECTION 3.  Section 235-55.85, Hawaii Revised Statutes, is
 
10 amended by amending subsection (b) to read as follows:
 
11      "(b)  Each resident individual taxpayer may claim a
 
12 refundable low-income tax credit multiplied by the number of
 
13 qualified exemptions to which the taxpayer is entitled in
 
14 accordance with the table below; provided that a husband and wife
 
15 filing separate tax returns for a taxable year for which a joint
 
16 return could have been filed by them shall claim only the tax
 
17 credit to which they would have been entitled had a joint return
 
18 been filed.
 
19 Adjusted gross income                  Credit per exemption
 
20      Under $10,000                               $35
 
21 $10,000 under $15,000                             25
 

 
a                                                     TAX-05(99)
 
 
 
Page 26                                                    1201
                                     H.B. NO.           
                                                        
                                                        

 
 1 $15,000 under $20,000                             10
 
 2      [Over] $20,000 and over                       0"
 
 3      SECTION 4.  Statutory material to be repealed is bracketed.
 
 4 New statutory material is underscored.
 
 5      SECTION 5.  This Act shall take effect upon approval;
 
 6 provided that if a taxpayer's taxable year includes the effective
 
 7 date of the tax rate changes (unless that date is the first day
 
 8 of the taxable year), then, (1) the tentative taxes shall be
 
 9 computed by applying the rate for the period before the effective
 
10 date change, and the rate for the period on and after that date,
 
11 to the taxable income for the entire year; and (2) the tax for
 
12 the taxable year shall be the sum of that proportion of each
 
13 tentative tax which the number of days in each period bears to
 
14 the number of days in the entire taxable year; and provided that
 
15 section 2 shall apply to taxable years beginning after December
 
16 31, 2000; and further provided that section 3 shall apply to
 
17 taxable years beginning after December 31, 1998.
 
18 
 
19                           INTRODUCED BY: ________________________
 

 
a                                                     TAX-05(99)