REPORT TITLE: 
Income tax; capital gains
DESCRIPTION:
Reduces income tax on capital gains to .0001 per cent.

 
HB HMIA 99-253
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        495
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                     A BILL FOR AN ACT

RELATING TO CAPITAL GAINS.



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


 1      SECTION 1.  The purpose of this Act is to amend the income
 
 2 tax law to lower the tax rate for capital gains to .0001 per
 
 3 cent.
 
 4      SECTION 2.  Section 235-51, Hawaii Revised Statutes, is
 
 5 amended by amending subsection (f) to read as follows:
 
 6      "(f)  If a taxpayer has a net capital gain for any taxable
 
 7 year to which this subsection applies, then the tax imposed by
 
 8 this section shall not exceed the sum of:
 
 9      (1)  The tax computed at the rates and in the same manner as
 
10           if this subsection had not been enacted on the greater
 
11           of:
 
12           (A)  The taxable income reduced by the amount of net
 
13                capital gain, or
 
14           (B)  The amount of taxable income taxed at a rate below
 
15                [7.25] .0001 per cent, plus
 
16      (2)  A tax of [7.25] .0001 per cent of the amount of taxable
 
17           income in excess of the amount determined under
 
18           paragraph (1).
 
19      This subsection shall apply to individuals, estates, and
 

 
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 1 trusts for taxable years beginning after December 31, [1986.]
 
 2 1997."
 
 3      SECTION 3.  Section 235-71.5 is amended to read as follows:
 
 4      "[[]235-71.5[]]  Alternative tax for corporations.  Section
 
 5 1201 (with respect to alternative tax for corporations) of the
 
 6 Internal Revenue Code shall be operative for the purposes of this
 
 7 chapter and shall be applied as set forth in this section.  If
 
 8 for any taxable year a corporation, regulated investment company,
 
 9 or real estate investment trust has a net capital gain, then, in 
 
10 lieu of the tax imposed by section 235-71, there is hereby
 
11 imposed a tax (if such tax is less than the tax imposed under
 
12 section 235-71) which shall consist of the sum of:
 
13      (1)  A tax computed on the taxable income reduced by the
 
14           amount of the net capital gain, at the rates and in the
 
15           manner as if this section had not been enacted, plus
 
16      (2)  The sum of:
 
17           (A)  [3.08] 0.0 per cent of the lesser of:
 
18                (i)  The net capital gain determined by including
 
19                     only the gain or loss which is properly taken
 
20                     into account for the portion of the taxable
 
21                     year before April 1, 1987 (i.e., the amount
 
22                     in paragraph (1)), or
 
23               (ii)  The net capital gain for the taxable year,
 

 
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 1                     plus
 
 2           (B)  [4] 0.0 per cent of the excess (if any) of:
 
 3                (i)  The net capital gain for the taxable year,
 
 4                     over
 
 5               (ii)  The amount of the net capital gain taken into
 
 6                     account under subparagraph (A)."
 
 7      SECTION 4.  Statutory material to be repealed is bracketed.
 
 8 New statutory material is underscored.
 
 9      SECTION 5.  This Act, upon its approval, shall apply to
 
10 taxable years beginning after December 31, 1997.
 
11 
 
12 
 
13                         INTRODUCED BY:___________________________
 

 
HB HMIA 99-253