HOUSE OF REPRESENTATIVES
TWENTY-SIXTH LEGISLATURE, 2011
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO TAXATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 236D-2, Hawaii Revised Statutes, is amended as follows:
1. By amending the definitions of "federal credit" and "Internal Revenue Code" to read:
""Federal credit" means:
For a transfer, the maximum amount of the
credit for state death taxes allowed by section 2011 of the Internal Revenue
Code, as it existed on December 31, 2000, for the decedent's adjusted taxable
estate; (2)] For a generation-skipping transfer, the
maximum amount of the credit for state taxes allowed by section 2604 of the
Internal Revenue Code as it existed on December 31, 2000; and
(3)] (2) For a noncitizen transfer, the
maximum amount of the credit for state death taxes allowed by section 2102 of
the Internal Revenue Code, as it existed on December 31, 2000, for the
decedent's adjusted taxable estate.
"Internal Revenue Code" means the
Internal Revenue Code of 1986, as amended and renumbered, as of December 31,
2009; provided that sections [
2011,] 2102[ ,] and 2604 of the
Internal Revenue Code shall mean those sections as of December 31, 2000; and
provided further that section 2058 shall not be operative for purposes of this
chapter. "Internal Revenue Code" includes the federal tax principles
of alter ego, nominee, sham transaction, substance over form, economic
substance, or business purpose, as those principles are developed by statute or
common law. The Internal Revenue Code, for purposes of this chapter, shall be
applied using changes in nomenclature and other language, including the
omission of inapplicable language or the insertion of interpretive language,
where necessary to effectuate the intent of this chapter."
2. By repealing the definition of "section 2011":
"Section 2011" means
section 2011 of the Internal Revenue Code as
it existed on December 31, 2000."]
SECTION 2. Section 236D-3, Hawaii Revised Statutes, is amended to read as follows:
Residents; tax imposed; credit for tax paid other state. (a) A tax in [ an
amount equal to the federal credit] accordance with the following table
is imposed on the transfer of the taxable estate of every resident[ .]:
If the taxable estate is: The tax shall be:
Not over $3,560,000 Zero
Over $3,560,000 but not over
$3,600,000 9.6% of the amount by which the taxable estate exceeds $3,560,000
Over $3,600,000 but not over
$4,100,000 $3,840 plus 10.4% of the amount by which the taxable estate exceeds $3,600,000
Over $4,100,000 but not over
$5,100,000 $55,840 plus 11.2% of the amount by which the taxable estate exceeds $4,100,000
Over $5,100,000 but not over
$6,100,000 $167,840 plus 12% of the amount by which the taxable estate exceeds $5,100,000
Over $6,100,000 but not over
$7,100,000 $287,840 plus 12.8% of the amount by which the taxable estate exceeds $6,100,000
Over $7,100,000 but not over
$8,100,000 $415,840 plus 13.6% of the amount by which the taxable estate exceeds $7,100,000
Over $8,100,000 but not over
$9,100,000 $551,840 plus 14.4% of the amount by which the taxable estate exceeds $8,100,000
Over $9,100,000 but not over
$10,100,000 $695,840 plus 15.2% of the amount by which the taxable estate exceeds $9,100,000
Over $10,100,000 $847,840 plus 16% of the amount by which the taxable estate exceeds $10,100,000
(b) If any property of a resident is subject
to a death tax imposed by another state [
for which a credit is allowed by
section 2011]; and, if the tax imposed by the other state is not qualified
by a reciprocal provision allowing the property to be taxed in the state of
decedent's domicile, the amount of the tax due under this section shall be
credited with the lesser of:
(1) The amount of the death tax paid the other state and credited against the federal estate tax; or
(2) An amount computed by multiplying the [
credit] tax imposed under subsection (a) by a fraction, the
numerator of which is the value of the property subject to the death tax
imposed by the other state, and the denominator of which is the value of the
decedent's gross estate."
SECTION 3. Section 236D-4, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) The tax shall be computed by
multiplying the [
federal credit] the tax imposed on the transfer of
the decedent's taxable estate under section 236D-3(a) by a fraction, the
numerator of which is the value of the property located in Hawaii, and the
denominator of which is the value of the decedent's gross estate."
SECTION 4. Section 236D-2.5, Hawaii Revised Statutes, is repealed.
[§236D-2.5] Taxation under
chapter 236D; applicable exclusion amount. Notwithstanding any
other law to the contrary, a decedent shall be entitled to all applicable
exclusion or exemption amounts as determined under the Internal Revenue Code as
of December 31, 2009, before being subject to any taxes imposed under this
chapter, including up to a $3,500,000 applicable exclusion amount allowed by
section 2010 of the Internal Revenue Code on December 31, 2009, as further
adjusted by law."]
SECTION 5. Section 235-55, Hawaii Revised Statutes, is repealed.
§235-55 Tax credits for resident
taxpayers. (a) Whenever an individual or person liable to the
taxes imposed upon individuals, who is a resident of the State or who has filed
a joint resident return under section 235-93, has become liable for income
taxes to a state, or to the District of Columbia, Puerto Rico, or any other
territory or possession of the United States, or to a foreign country upon any
part of the individual's or person's taxable income for the taxable year,
derived or received from sources without the State and taxed under the laws of
such other jurisdiction irrespective of the residence or domicile of the
recipient, there shall be credited against the tax payable by the individual or
person under this chapter the tax so paid by the individual or person to the other
jurisdiction upon the individual's or person's producing for the department of
taxation satisfactory evidence: (1) Of such tax payment; and (2) That the laws of the other jurisdiction
do not allow the individual or person a credit against the taxes imposed by
such jurisdiction for the taxes paid or payable under this chapter, or do allow
such credit in an amount which has been deducted in computing the amount of
credit sought under this section. (b) The application of such credit,
however: (1) Shall not be allowed with respect to
any taxable income or any tax which under subchapter N of chapter 1 of the
Internal Revenue Code of 1954 (which is applicable for federal purposes but not
for state purposes) is or may be the subject of an exclusion, exemption, or tax
credit; and (2) Shall not operate to reduce the tax
payable under this chapter to an amount less than that which would have been
payable had the taxpayer been taxable only on the income from property owned,
personal services performed, trade or business carried on, and other sources in
the State. (c) If any taxes paid to another
jurisdiction for which a taxpayer has been allowed a credit under this section
are at any time credited or refunded to the taxpayer, such fact shall be
reported by the taxpayer to the department within twenty days after the credit
or refund. Failure to make such report shall be deemed failure to make a
return and subject to the penalties imposed by law in such cases. A tax equal
to the credit allowed for the taxes so credited or refunded shall be due and
payable from the taxpayer upon notice and demand from the department. If the
amount of such tax is not paid within ten days from the date of the notice and
demand, the taxpayer shall be subject to the usual penalties and interest for
delinquency in payment. (d) Nothing in this section shall be
construed to permit a credit against the taxes imposed by this chapter on
account of federal income taxes."]
SECTION 6. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:
EXCISE TAX ON DIRECT BROADCAST SATELLITE SERVICE PROVIDERS
§ -1 Definitions. For the purposes of this chapter:
"Department" means the department of taxation.
"Direct broadcast satellite service" means the distribution or broadcasting of video programming or services by satellite directly to a subscriber's or paying customer's receiving equipment.
(1) Means revenues derived from supplying of regular subscriber direct broadcast satellite service and includes installation fees, disconnect and reconnect fees, and fees for regular direct broadcast satellite service benefits;
(2) But does not include per-program or per-channel charges, leased channel revenues, advertising revenues, and other income not derived from the supplying of regular subscriber direct broadcast satellite service.
"Provider" means a provider of direct broadcast satellite service.
§ -2 Imposition of tax. (a) There is hereby levied and shall be assessed and collected annually privilege taxes against providers on account of their business and other activities in the State measured by gross revenue derived from the sale of direct broadcast satellite services, multiplied by per cent.
(b) The tax imposed by subsection (a) shall not apply to internet access services, including services purchased, used, or sold to provide direct broadcast satellite services.
§ -3 Remittance. The tax imposed by this chapter is due and payable to the department on or before the last day of the first month following the end of each calendar quarter.
§ -4 Report; when due. (a) A provider subject to the tax imposed by this chapter shall file a report with the department on a form prescribed by the department. The report is due on the date the tax is due under section -3.
(b) The report shall include a statement of the gross revenues received from the provision of direct broadcast satellite services and tax due during the preceding quarterly period and any other information required by the department.
§ -5 Records. (a) A provider subject to the tax imposed by this chapter shall maintain the necessary records and any other information required by the department to determine the amounts of the tax that the provider is required to remit and any credit that the provider is entitled to claim under this chapter.
(b) The records shall be open at all times to inspection by the department.
§ -6 Information shown on subscriber bill. A provider may show, as a separate line item on each bill of each subscriber, the amount of the total bill resulting from any tax imposed under this chapter.
§ -7 Rules. The department may adopt rules under chapter 91 necessary to enforce this chapter.
§ -8 Allocation of revenue. The revenue from the tax imposed by this chapter shall be deposited to the credit of the general fund."
SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 8. This Act shall take effect upon its approval; provided that:
(1) Parts I and II shall apply to taxable years beginning after December 31, 2010; and
(2) Part III shall take effect on January 1, 2012, and shall apply to taxable years beginning after December 31, 2011.
Estate and Transfer Tax; Tax Credits for Resident Taxpayers; Excise Tax on Direct Broadcast Satellite Service Providers
Amends the method of computing the estate and transfer tax. Repeals income tax credit for resident taxpayers for income taxes paid to other jurisdictions. Imposes an excise tax on direct broadcast satellite service providers. (HD1 Proposed)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.