REPORT TITLE:
LLCs; Taxes


DESCRIPTION:
Provides an exception from the general excise tax licensing,
reporting, and tax liability for a single-member limited
liability company when the member is an individual, is licensed,
and pays the appropriate general excise tax on gross income
derived.  (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1176
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO THE GENERAL EXCISE TAX LICENSING OF SINGLE-MEMBER
   LIMITED LIABILITY COMPANIES.



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

 1      SECTION 1.  Section 237-9.5, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "[[]237-9.5[]]  No separate licensing, filing, or liability
 
 4 for certain revocable trusts[.] and certain single-member limited
 
 5 liability companies.  (a)  In the case of any trust that, for
 
 6 state and federal income tax reporting purposes:
 
 7      (1)  Has no registration or filing requirements separate and
 
 8           apart from its grantor or grantors;
 
 9      (2)  Is subject to the requirement that all items of income,
 
10           deduction, and credit are to be reported by the
 
11           individual grantor or grantors; and
 
12      (3)  Is revocable by the grantor or grantors;
 
13 no licensing, registration, or filing requirements under this
 
14 chapter shall apply; provided that the individual grantor or
 
15 grantors must be licensed under this chapter and pay the
 
16 appropriate general excise tax on trust income, if the trust
 
17 income is from engaging in business.
 
18      (b)  In the case of a single-member limited liability
 
19 company recognized under chapter 428 that, for state and federal
 

 
Page 2                                                     1176
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 income tax reporting purposes:
 
 2      (1)  Has no registration or filing requirements separate and
 
 3           apart from the member;
 
 4      (2)  Is subject to the requirement that all items of income,
 
 5           deduction, and credit are to be reported by the member;
 
 6      (3)  Is an entity that is disregarded as an entity separate
 
 7           from the member; and
 
 8      (4)  Has a member that is an individual;
 
 9 no licensing, registration, or filing requirements under this
 
10 chapter shall apply; provided that the member must be licensed
 
11 under this chapter and pay the appropriate general excise tax on
 
12 the gross income derived by the limited liability company from
 
13 engaging in business."
 
14      SECTION 2.  Statutory material to be repealed is bracketed.
 
15 New statutory material is underscored.
 
16      SECTION 3.  This Act shall take effect on July 1, 1999.