HOUSE OF REPRESENTATIVES

H.B. NO.

345

TWENTY-EIGHTH LEGISLATURE, 2015

H.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO TAXATION.

 

 

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

 


SECTION 1. Chapter 247, Hawaii Revised Statutes, is amended by adding five new sections to be appropriately designated and to read as follows:

"247-A Definitions. For the purposes of this chapter, unless otherwise expressly stated:

"Consideration" means the price actually paid or required to be paid for real property or an interest therein, including:

(1) Payment for an option or contract to purchase real property, whether or not expressed in the deed and whether paid or required to be paid by money, property, or any other thing of value;

(2) Cancellation or discharge of an indebtedness or obligation; and

(3) The amount of any mortgage, purchase money mortgage, lien or other encumbrance, whether or not the underlying indebtedness is assumed or taken subject to the encumbrance;

provided that, in the case of a controlling interest in any entity that owns real property, consideration shall mean the fair market value of the real property or interest therein, apportioned based upon the percentage of the ownership interest in the entity transferred or acquired.

"Conveyance" means the transfer or transfers of any interest in real property by any method, including but not limited to sale, exchange, assignment, surrender, mortgage foreclosure, transfer in lieu of foreclosure, option, trust indenture, taking by eminent domain, conveyance upon liquidation or by a receiver, or transfer or acquisition of a controlling interest in an entity with an interest in real property. Conveyance of an interest in real property shall include the creation of a leasehold or sublease.

"Grantee" means the person who obtains real property or interest therein as the result of a conveyance.

"Grantor" means the person making the conveyance of real property or interest therein. Where the conveyance consists of a transfer or an acquisition of a controlling interest in an entity that has an interest in real property, "grantor" means the entity that has an interest in real property or a shareholder or partner transferring stock or partnership interest, respectively.

"Interest in real property" includes title in fee, a leasehold interest, a beneficial interest, an encumbrance, development rights, space rights, air rights, or any other interest with the right to the use or occupancy of real property or the right to receive rents, profits, or other income derived from real property.

"Real property" means every estate or right, legal or equitable, present or future, vested or contingent, in lands, tenements, or hereditaments, including buildings, structures, and other improvements thereon, that are located in whole or in part within the State.

247-B Controlling interest; defined; application. (a) For the purposes of this chapter, "controlling interest" means:

(1) In the case of a corporation:

(A) Fifty per cent or more of the total combined voting power of all classes of stock of the corporation; or

(B) Fifty per cent or more of the capital, profits, or beneficial interest in the voting stock of the corporation; and

(2) In the case of a partnership, association, trust, or other entity, fifty per cent or more of the capital, profits, or beneficial interest in the partnership, association, trust, or other entity.

(b) In the case of a corporation that has an interest in real property, a transfer or acquisition of a controlling interest in the corporation occurs when a person, or group of persons acting in concert, transfers or acquires a total of fifty per cent or more of the voting stock in the corporation.

In the case of a partnership, association, trust, or other entity having an interest in real property, a transfer or acquisition occurs when a person, or group of persons acting in concert, transfers or acquires a total of fifty per cent or more of the capital, profits, or beneficial interest in the entity.

For the purposes of this subsection:

(1) Persons are acting in concert when they have a relationship such that one person influences or controls the actions of another. For example, if a parent corporation and a wholly-owned subsidiary corporation each sell or purchase a twenty-five per cent interest in an entity, the two corporations shall be considered to have acted in concert to transfer or acquire a controlling interest in the entity; and

(2) Individuals or entities not commonly controlled or owned shall be treated as acting in concert when the unity with which the sellers or purchasers have negotiated and will consummate the transfer of ownership interests indicates they are acting as a single entity. If the transfers or acquisitions are completely independent, with each grantor selling or grantee buying without regard to the identity of the other grantors or grantees, then the transfers or acquisitions shall be treated as separate transfers or acquisitions. The grantors or grantees may be required to provide a sworn statement that their transfers or acquisitions are independent of each other. Factors that indicate whether persons are acting in concert shall include the following:

(A) The transfers or acquisitions are closely related in time;

(B) There are few grantors or grantees;

(C) The contracts of sale contain mutual terms; and

(D) The grantors or grantees have entered into an agreement, in addition to the sales contract, binding themselves to a course of action with respect to the transfer or acquisition.

(c) Notwithstanding the definition of "controlling interest" and the exercise thereof in subsections (a) and (b), the tax imposed by this chapter shall apply to:

(1) The original conveyance of shares of stock in a cooperative housing corporation as defined in section 421I-1, or limited-equity housing cooperative as defined in section 421H-1, in connection with the grant or transfer of a right of occupancy by the cooperative housing corporation or limited-equity housing cooperative; and

(2) The subsequent conveyance of the stock in a cooperative housing corporation or limited-equity housing cooperative in connection with the grant or transfer of a right of occupancy by the owner thereof.

(d) For purposes of determining whether or not a controlling interest is transferred or acquired, only transfers or acquisitions of interests occurring on or after July 1, 2015, shall be added together.

A transfer or acquisition made on or after July 1, 2015, does not have to be included, for purposes of determining whether or not a controlling interest is transferred or acquired; provided that the transfer or acquisition is made pursuant to a binding written contract that was entered into before July 1, 2015.

(e) In the case of a transfer or acquisition of an interest in an entity that has an interest in real property, on or after July 1, 2015, that is followed by a subsequent transfer or acquisition of an additional interest or interests in the same entity, the transfers or acquisitions shall be added together to determine if a transfer or acquisition of a controlling interest has occurred.

(f) In the case of a transfer or acquisition of a controlling interest in an entity, on or after July 1, 2015, where the conveyance tax is paid on that transfer or acquisition and there is a subsequent transfer or acquisition of an additional interest in the same entity, it shall be considered that a second transfer or acquisition of a controlling interest has occurred, which shall be subject to the conveyance tax.

(g) No transfer or acquisition of an interest in an entity that has an interest in real property shall be added to another transfer or acquisition of an interest in the same entity if the transfers or acquisitions occur more than three years apart, unless the transfers or acquisitions were so timed as part of a plan to avoid the conveyance tax.

(h) For the purposes of applying the tax imposed under this chapter to the transfer or acquisition of a controlling interest in an entity, the tax shall be imposed when there is a transfer or an acquisition of a controlling interest in the same conveyance.

247-C Taxation at the lowest rate. Notwithstanding any exemption under section 247-3, the tax imposed by section 247-1 shall apply to the following conveyances at the lowest rate provided in section 247-2(1), regardless of the amount of consideration:

(1) Any document or instrument conveying real property, or any interest therein, from an entity that is a party to a merger or consolidation under chapter 414, 414D, 415A, 421, 421C, 425, 425E, or 428 to the surviving or new entity;

(2) Any document or instrument conveying real property, or any interest therein, from a dissolving limited partnership to its corporate general partner that owns, directly or indirectly, at least a ninety per cent interest in the limited partnership, as determined by applying section 318 (with respect to constructive ownership of stock) of the Internal Revenue Code of 1986, as amended, to the constructive ownership of interests in the partnership; and

(3) Any document or instrument conveying real property, or any interest therein, to or from a wholly owned corporation or limited liability company.

247-D Disclosure of certificates unlawful; penalty. (a) A certificate of conveyance required to be filed under section 247-6, and the report of any investigation of the certificate or of the subject matter of the certificate, shall be confidential.

It shall be unlawful for any person or any officer or employee of the State to:

(1) Intentionally make known any certificate or certificate information filed pursuant to this chapter, or any report of any investigation of the certificate or of the subject matter of the certificate; or

(2) Wilfully permit any certificate, certificate information, or report so made, or any copy thereof, to be seen or examined by any person;

provided that, for tax purposes, the grantor or grantee, their authorized agent, or persons with a material interest in the certificate, certificate information, or report may examine the certificate, certificate information, or report.

(b) For the purposes of this section, unless otherwise provided by law, persons with a material interest in a certificate, certificate information, or report shall include:

(1) Trustees;

(2) Partners;

(3) In the case of a corporate certificate, persons named in a board resolution or a one per cent shareholder;

(4) The person authorized to act for a corporation in dissolution;

(5) The shareholder of an S corporation;

(6) In case of an estate's or decedent's certificate, the personal representative, trustee, heir, or beneficiary of the estate or trust;

(7) The committee, trustee, or guardian of any person specified in paragraphs (1) to (6) who is incompetent;

(8) The trustee in bankruptcy or receiver and the attorney-in-fact of any person specified in paragraphs (1) to (7);

(9) Persons duly authorized by the State in connection with their official duties;

(10) Any officer or employee of any county in the State for official county business purposes, including real property tax assessment;

(11) Any duly accredited tax official of the United States or of any state or territory;

(12) The Multistate Tax Commission or its authorized representative;

(13) Members of a limited liability company; and

(14) A person contractually obligated to pay the taxes assessed against another when the latter person is under audit by the department of taxation.

Any violation of this subsection shall be a misdemeanor.

(c) Nothing in this section shall prohibit the registrar of conveyances or the assistant registrar of the land court from imprinting a seal, under section 247-5, indicating the amount of tax paid.

(d) No recorded instrument effecting a conveyance shall be considered a certificate for the purposes of this section.

247-E Conformity to Constitution, etc. In computing the amounts of any tax imposed under this chapter, there shall be excepted or deducted from the amounts of consideration so much thereof as, under the Constitution and laws of the United States, the State is prohibited from taxing, but only so long as and only to the extent that the State is so prohibited."

SECTION 2. Section 247-1, Hawaii Revised Statutes, is amended to read as follows:

"247-1 Imposition of tax. There is hereby imposed and shall be levied, collected, and paid, a tax [as hereinafter provided, on all transfers or conveyances of realty or any interest therein, by way of deeds, leases, subleases, assignments of lease, agreements of sale, assignments of agreement of sale, instruments, writings, and any other document, whereby any lands, interests in land, tenements, or other realty sold shall be granted, assigned, transferred, or otherwise conveyed to, or vested in, the purchaser or purchasers, lessee or lessees, sublessee or sublessees, assignee or assignees, or any other person or persons, by the person's or their direction.] on each conveyance of any interest in real property."

SECTION 3. Section 247-2, Hawaii Revised Statutes, is amended to read as follows:

"247-2 Basis and rate of tax. The tax imposed by section 247-1 shall be based [on] upon the [actual and full] consideration [(whether cash or otherwise, including any promise, act, forbearance, property interest, value, gain, advantage, benefit, or profit)], paid or to be paid for all [transfers or conveyance] conveyances of [realty] real property, or any interest therein, that shall include any liens or encumbrances thereon at the time of sale, lease, sublease, assignment, transfer, or conveyance[,] and shall be at the following rates:

(1) Except as provided in paragraph (2):

(A) Ten cents per $100 for [properties with a value of] conveyances where the consideration is less than $600,000;

(B) Twenty cents per $100 for [properties with a value of] conveyances where the consideration is at least $600,000, but less than $1,000,000;

(C) Thirty cents per $100 for [properties with a value of] conveyances where the consideration is at least $1,000,000, but less than $2,000,000;

(D) Fifty cents per $100 for [properties with a value of] conveyances where the consideration is at least $2,000,000, but less than $4,000,000;

(E) Seventy cents per $100 for [properties with a value of] conveyances where the consideration is at least $4,000,000, but less than $6,000,000;

(F) Ninety cents per $100 for [properties with a value of] conveyances where the consideration is at least $6,000,000, but less than $10,000,000; and

(G) One dollar per $100 for [properties with a value of] conveyances where the consideration is $10,000,000 or greater; and

(2) For the [sale] conveyance of a condominium or single family residence for which the purchaser is ineligible for a county homeowner's exemption on property tax:

(A) Fifteen cents per $100 for [properties with a value of] conveyances where the consideration is less than $600,000;

(B) Twenty-five cents per $100 for [properties with a value of] conveyances where the consideration is at least $600,000, but less than $1,000,000;

(C) Forty cents per $100 for [properties with a value of] conveyances where the consideration is at least $1,000,000, but less than $2,000,000;

(D) Sixty cents per $100 for [properties with a value of] conveyances where the consideration is at least $2,000,000, but less than $4,000,000;

(E) Eighty-five cents per $100 for [properties with a value of] conveyances where the consideration is at least $4,000,000, but less than $6,000,000;

(F) One dollar and ten cents per $100 for [properties with a value of] conveyances where the consideration is at least $6,000,000, but less than $10,000,000; and

(G) One dollar and twenty-five cents per $100 for [properties with a value of] conveyances where the consideration is $10,000,000 or greater,

of [such actual and full] the consideration; provided that in the case of a lease or sublease, this chapter shall apply only to a lease or sublease whose full unexpired term is for a period of five years or more, and in those cases, including (where appropriate) those cases where the lease has been extended or amended, the tax in this chapter shall be based on the cash value of the lease rentals discounted to present day value and capitalized at the rate of six per cent, plus the actual and full consideration paid or to be paid for any and all improvements, if any, that shall include on-site as well as off-site improvements, applicable to the leased premises; and provided further that the tax imposed for each transaction shall be not less than $1."

SECTION 4. Section 247-3, Hawaii Revised Statutes, is amended to read as follows:

"247-3 Exemptions. The tax imposed by section 247-1 shall not apply to[:] the following conveyances:

(1) Any [document or instrument] conveyance that is executed prior to January 1, 1967;

(2) Any [document or instrument] conveyance that is given to secure a debt or obligation;

(3) Any [document or instrument] conveyance that only confirms or corrects a deed, lease, sublease, assignment, transfer, or conveyance previously recorded or filed;

(4) Any [document or instrument] conveyance between husband and wife, reciprocal beneficiaries, or parent and child, in which only a nominal consideration is paid;

(5) Any [document or instrument] conveyance in which there is a consideration of $100 or less paid or to be paid;

(6) Any [document or instrument conveying real property that is] conveyance executed pursuant to an agreement of sale, and where applicable, any assignment of the agreement of sale, or assignments thereof; provided that the taxes under this chapter have been fully paid upon the agreement of sale, and where applicable, upon such assignment or assignments of agreements of sale;

(7) Any [deed, lease, sublease, assignment of lease, agreement of sale, assignment of agreement of sale, instrument or writing] conveyance in which the United States or any agency or instrumentality thereof or the State or any agency, instrumentality, or governmental or political subdivision thereof are the only parties thereto;

(8) Any [document or instrument] conveyance executed pursuant to a tax sale conducted by the United States or any agency or instrumentality thereof or the State or any agency, instrumentality, or governmental or political subdivision thereof for delinquent taxes or assessments;

(9) Any [document or instrument conveying real property] conveyance to the United States or any agency or instrumentality thereof or the State or any agency, instrumentality, or governmental or political subdivision thereof pursuant to the threat of the exercise or the exercise of the power of eminent domain;

(10) Any [document or instrument] conveyance that solely conveys or grants an easement or easements;

(11) Any [document or instrument] conveyance whereby owners partition their real property, whether by mutual agreement or judicial action; provided that the value of each owner's interest in the real property after partition is equal in value to that owner's interest before partition;

(12) Any [document or instrument] conveyance between marital partners or reciprocal beneficiaries who are parties to a divorce action or termination of reciprocal beneficiary relationship that is executed pursuant to an order of the court in the divorce action or termination of reciprocal beneficiary relationship;

(13) Any [document or instrument conveying real property] conveyance from a testamentary trust to a beneficiary under the trust;

(14) Any [document or instrument conveying real property] conveyance from a grantor to the grantor's revocable living trust, or from a grantor's revocable living trust to the grantor as beneficiary of the trust;

[(15) Any document or instrument conveying real property, or any interest therein, from an entity that is a party to a merger or consolidation under chapter 414, 414D, 415A, 421, 421C, 425, 425E, or 428 to the surviving or new entity;

(16) Any document or instrument conveying real property, or any interest therein, from a dissolving limited partnership to its corporate general partner that owns, directly or indirectly, at least a ninety per cent interest in the partnership, determined by applying section 318 (with respect to constructive ownership of stock) of the federal Internal Revenue Code of 1986, as amended, to the constructive ownership of interests in the partnership; and

  [(17)]] (15) Any [document or instrument] conveyance that conforms to the transfer on death deed as authorized under chapter 527[.];

(16) Any conveyance from a limited partner to a general partner of a limited partnership that owns an affordable rental housing project for which low-income housing tax credits have been issued under section 235-110.8 or 241-4.7 or section 42 of the Internal Revenue Code of 1986, as amended; and

(17) Any conveyance that consists solely of a change in controlling interest in an entity holding an interest in real property between persons with ownership interests in such entity for a minimum of three years immediately preceding the transfer; provided that the entity holding the interest in real property has no more than ten persons with ownership interests immediately before transfer; provided further that for the purpose of this paragraph spouses shall be considered separate persons."

SECTION 5. Section 247-4, Hawaii Revised Statutes, is amended to read as follows:

"247-4 Payment and liability of the tax. (a) The tax imposed by this chapter shall be paid by the grantor[, lessor, sublessor, assignor, transferor, seller, conveyor, or any other person conveying realty, or any interest therein, by a document or instrument subject to section 247-1; except, however,]; provided that in the case where the United States or any agency or instrumentality thereof or the State or any agency, instrumentality, or governmental or political subdivision thereof is the grantor[, lessor, sublessor, assignor, transferor, seller, or conveyor], the tax shall be paid by the grantee[, lessee, sublessee, assignee, transferee, purchaser, or conveyee, as the case may be].

(b) The tax imposed by this chapter shall be paid at [such] a place or places as the director of taxation may direct and shall be due and payable no later than ninety days after the taxable [transaction,] conveyance and in any event prior to the imprinting of the seal or seals as provided by section 247-5. Penalties and interest shall be added to and become a part of the tax, when and as provided by section 231-39.

(c) If the grantor has failed to pay the tax imposed by this chapter at the time required by subsection (b) or if the grantor is exempt from the tax, the grantee shall pay the tax. If the grantee is required to pay the tax because the grantor has failed to pay, the grantor and the grantee shall be jointly and severally liable for the tax.

(d) For the purposes of this chapter, all conveyances shall be presumed taxable. Where the consideration includes property other than money, the consideration shall be presumed to be the fair market value of the real property or interest therein. These presumptions shall prevail until disproven, and the burden of disproving the presumptions shall be on the person liable for payment of the tax."

SECTION 6. Section 247-5, Hawaii Revised Statutes, is amended to read as follows:

"247-5 Imprinting of seal[. The]; evidence of payment. (a) Except for a conveyance where no instrument evidencing the conveyance is recorded or filed with the registrar of conveyances or the assistant registrar of the land court, the tax shall be evidenced as paid by the imprinting of an appropriate seal or seals on the document or instrument, which imprinting or seal itself shall indicate on its face the amount of the tax paid. The seal or seals shall be so imprinted upon the payment of the tax, together with the appropriate penalty and interest where applicable, and, in any event, prior to the recordation or filing of the document or instrument with the registrar of conveyances or the assistant registrar of the land court.

(b) For the purposes of this chapter, the director may require that the documents or instruments be brought to any of the various offices of the department of taxation for an examination of the instrument or document, or for the purpose of having the seal imprinted on the document or instrument."

SECTION 7. Section 247-6, Hawaii Revised Statutes, is amended to read as follows:

"247-6 Certificate of conveyance required. (a) [Any party,] The grantor and the grantee, with the exception of governmental bodies, agencies, or officers, [to a document or instrument subject to this chapter,] or the [party's] grantor's or grantee's authorized representative[,] shall file, in the manner and place [which] that the director of taxation shall prescribe, a certificate of conveyance setting forth the [actual and full] consideration of the [property transferred,] conveyance, including any lien or encumbrance on the real property[,] or interest therein, and any other facts as the director may by rules prescribe. The certificate of conveyance shall be verified by a written declaration thereon that the statements made therein are subject to the penalties in section 231-36. The certificate shall be appended to [the] any document or instrument made subject to this chapter and shall be filed with the director simultaneously with the aforementioned document or instrument for the imprinting of the required seal or seals.

(b) No certificate of conveyance is required to be filed for any document or instrument made exempt by section 247-3, except that in the following situations, [a] an exemption certificate shall be filed in the manner and place that the director shall prescribe, within ninety days after the [transaction] conveyance or prior to the recordation or filing of the document or instrument with the registrar of conveyances or the assistant registrar of the land court or after the ninety-day period, recordation, or filing as the director shall prescribe:

(1) For any [document or instrument described] conveyance exempted under section 247-3(3), [any party to the document or instrument] the grantor and the grantee shall file a certificate declaring that the [document or instrument] conveyance merely confirms or corrects a deed, lease, sublease, assignment, transfer, or conveyance previously recorded or filed.

(2) For any [document or instrument described] conveyance exempted under section 247-3(4), [any party to the document or instrument] the grantor and the grantee shall file a certificate declaring the amount of the nominal consideration paid and marital or parental relationship of the [parties.] grantor and the grantee.

(3) For any [document or instrument described] conveyance exempted under section 247-3(5), [any party to the document or instrument] the grantor and the grantee shall file a certificate declaring the reasons why the consideration is $100 or less.

(4) For any [document or instrument described in] conveyance exempted under section 247-3(6), [any party to the document or instrument] the grantor and the grantee shall file a certificate declaring that the [document or instrument] conveyance is made pursuant to an agreement of sale, and where applicable, an assignment or assignments of agreements of sale.

(5) For any [document or instrument described] conveyance exempted under section 247-3(8), [any person made a party to the document or instrument as] the grantee[, assignee, or transferee] shall file a certificate declaring the full and actual consideration of the property transferred.

(6) For any [document or instrument described] conveyance exempted under section 247-3(11), [any party to the document or instrument] the grantor and the grantee shall file a certificate declaring each owner's:

(A) Undivided interest in the real property and the value of that interest before partition; and

(B) Proportionate interest and the value of that interest after partition.

(7) For any [document or instrument described] conveyance exempted under section 247-3(12), [any party to the document or instrument] the grantor and the grantee shall file a certificate declaring that the [document or instrument] conveyance is made pursuant to an order of the court and containing the court case number.

(8) For any [document or instrument described] conveyance exempted under section 247-3(13), [any party to the document or instrument] the grantor and the grantee shall file a certificate declaring that the document or instrument conveys real property from a testamentary trust to a trust beneficiary.

(9) For any [document or instrument described] conveyance exempted under section 247-3(14), [any party to the document or instrument] the grantor and the grantee shall file a certificate declaring that the document or instrument conveys real property from the grantor to a grantor's revocable living trust or from a grantor's revocable living trust to the grantor.

(10) For any conveyance exempted under section 247-3(15), the grantor and the grantee shall file a certificate declaring that the conveyance conforms to the transfer on death deed, as authorized under chapter 527.

(11) For any conveyance exempted under section 247-3(16), the grantor and the grantee shall file a certificate declaring that the conveyance is from a limited partner to a general partner of a limited partnership that owns an affordable rental housing project for which low-income housing tax credits have been issued under section 235-110.8 or 241-4.7 or section 42 of the Internal Revenue Code of 1986, as amended.

(12) For any conveyance exempted under section 247-3(17), the grantor and the grantee shall file a certificate declaring that the conveyance consists solely of a change in controlling interest in an entity holding an interest in real property between persons with ownership interests in the entity for a minimum of three years immediately preceding the transfer and that the entity holding the interest in real property had no more than ten persons with ownership interests immediately before the transfer.

(c) The form of the certificate and the procedure to be followed for the submission of the [certificate] certificates shall be prescribed by the director.

(d) Notwithstanding the foregoing, where the director deems it impracticable to require the filing of a certificate or certificates or to obtain the signatures of any or all [parties] grantors or grantees to a certificate or certificates required under this section, the director [may], in the director's discretion, may waive the requirement of filing the certificate or certificates or of securing the signature of any or all [parties to the certificate or certificates.] grantors or grantees.

(e) No document or instrument, on account of which a certificate is required to be filed with the office of the director under this section, shall be accepted for recordation or filing with the registrar of conveyances or the assistant registrar of the land court, unless the certificate has been duly filed.

(f) If any or all of the grantors or any or all of the grantees, or their authorized representatives, have failed to sign a certificate under this section, the certificate shall be accepted if it is signed by any one of the grantors or by any one of the grantees; provided that the grantors and grantees not signing the certificate, personally or through their authorized representative, shall not be relieved of any liability for the tax imposed by this chapter, and the period of limitations for assessment of tax or of additional tax shall not apply to such grantor or grantee.

[(f)] (g) Within twenty-one business days after the end of each week, or as soon thereafter as possible, the director of taxation shall provide to the administrator of each county's real property assessment division, without charge, an image of all certificates of conveyance that were filed. For each certificate of conveyance, the image shall include the following:

(1) Document number;

(2) Date of the filing;

(3) Name of grantor and grantee;

(4) Tax map key number;

(5) Location of the real property by island; and

(6) Address for real property assessment notice and tax bill."

SECTION 8. Section 247-6.5, Hawaii Revised Statutes, is amended to read as follows:

"247-6.5 Limitation period for assessment, levy, collection, or credit. The amount of conveyance taxes imposed by this chapter shall be assessed or levied, and the overpayment, if any, shall be credited within three years after filing of the [certificate] certificates prescribed by section 247-6. No proceeding in court without assessment for the collection of the taxes shall be begun after the expiration of the three-year period. Where the assessment of the tax imposed by this chapter has been made within the period of limitation applicable thereto, the tax may be collected by levy or by a proceeding in court under chapter 231; provided that the levy is made or the proceeding was begun within fifteen years after the assessment of the tax. For any tax that has been assessed prior to July 1, 2009, the levy or proceeding shall be barred after June 30, 2024.

Notwithstanding any other provision to the contrary in this section, the limitation on collection after assessment in this section shall be suspended for the period:

(1) The taxpayer agrees to suspend the period;

(2) The assets of the taxpayer are in control or custody of a court in any proceeding before any court of the United States or any state, and for six months thereafter;

(3) An offer in compromise under section 231-3(10) is pending; and

(4) During which the taxpayer is outside the State if the period of absence is for a continuous period of at least six months; provided that if at the time of the taxpayer's return to the State the period of limitations on collection after assessment would expire before the expiration of six months from the date of the taxpayer's return, the period shall not expire before the expiration of the six months.

In the case of a false or fraudulent certificate filed with the intent to evade tax, or of a failure to file a certificate, the tax may be assessed or levied at any time."

SECTION 9. Section 247-9, Hawaii Revised Statutes, is amended to read as follows:

"247-9 Enforcement and administration. The director of taxation shall administer and enforce the taxes imposed by this chapter. The director may prescribe rules and regulations not inconsistent with the provisions herein for their detailed and efficient administration. At any time after the making of a conveyance [or transfer] subject to the tax imposed by this chapter, the director may investigate and ascertain whether the tax, in the proper amount, was paid. For this purpose, the director may invoke all statutory powers vested in the director, including but not limited to section 231-7."

SECTION 10. In codifying the new sections added by section 1 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 11. This Act shall apply to conveyances of interests in real property occurring after June 30, 2015.

SECTION 12. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 13. This Act shall take effect on July 1, 2050.



 

Report Title:

Conveyance Tax; Controlling Interest Transfer

 

Description:

Imposes a conveyance tax on the conveyance of a controlling interest of an entity that has an interest in real property in the State. Applies to conveyances occurring after June 30, 2015. (HB345 HD1)

 

 

 

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