HOUSE OF REPRESENTATIVES
TWENTY-EIGHTH LEGISLATURE, 2015
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO TAXATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Income inequality is rapidly growing in the United States and Hawaii. On average, the poorest Hawaii taxpayers pay thirteen cents on every dollar in income taxes. Those earning more than $400,000 per year pay closer to eight cents on every dollar. In Hawaii, low-income families feel the repercussions of this inequality more strongly than almost anywhere else. Hawaii's low-income tax payers pay higher taxes than similarly situated individuals in all but three other states. This effect is especially felt by low-income families with children who, by comparison, face the second-highest effective tax burden in the nation.
The purpose of this Act is to reduce income inequality in Hawaii and reduce the tax burden on working families living at or below the poverty line by:
(1) Increasing the income tax credit amounts for the refundable food/excise tax credit and the low-income household renters tax credit;
(2) Amending gross income thresholds for households qualifying for the low-income household renters credit; and
(3) Rebalancing this increase in income tax credits for low-income households by extending the elevated tax brackets for high-income earners for an additional five years.
SECTION 2. Section 235-55.7, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
"(c) Each [
(1) Taxpayer with an adjusted gross income of less than $30,000;
(2) Each married couple filing a joint return with an adjusted gross income of less than $60,000;
(3) Each married couple filing separate returns, if a joint return could have been filed with an adjusted gross income of less than $60,000;
(4) Head of a household with an adjusted gross income of less than $60,000, or
(5) Qualifying widow or widower with an adjusted gross income of less than $60,000,
who has paid more than $1,000 in rent during the
taxable year for which the credit is claimed may claim a tax credit of [
$75 multiplied by the number of qualified exemptions to which the
taxpayer is entitled; provided each taxpayer sixty-five years of age or over
may claim double the tax credit; and provided that a resident individual who
has no income or no income taxable under this chapter may also claim the tax
credit as set forth in this section."
SECTION 3. Section 235-55.85, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) Each resident individual taxpayer may claim a refundable food/excise tax credit multiplied by the number of qualified exemptions to which the taxpayer is entitled in accordance with the table below; provided that a husband and wife filing separate tax returns for a taxable year for which a joint return could have been filed by them shall claim only the tax credit to which they would have been entitled had a joint return been filed.
Adjusted gross income Credit per exemption
Under $5,000 [
$5,000 under $10,000 [
$10,000 under $15,000 [
$15,000 under $20,000 [
$20,000 under $30,000 [
$30,000 under $40,000 [
$40,000 under $50,000 [
$50,000 and over 0"
SECTION 4. Section 6 of Act 60, Session Laws of Hawaii 2009, as amended by section 4 of Act 97, Session Laws of Hawaii 2011, is amended to read as follows:
"SECTION 6. This Act shall take effect upon approval; provided that:
(1) Section 2 shall apply to taxable years beginning after December 31, 2008;
(2) Sections 1 and 3 shall apply to taxable years beginning after December 31, 2012; and
(3) On December 31, [
section 2 shall be repealed and section 235-51(a), (b), and (c), Hawaii Revised
Statutes, shall be reenacted in the form in which it read on the day before the
effective date of this Act."
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect upon its approval; provided that sections 2 and 3 shall apply to taxable years beginning after December 31, 2014.
Income Tax; Refundable Food/Excise Tax Credit; Low-income Household Renters Credit; Taxation
Extends the high-earner income tax brackets established pursuant to Act 60, Session Laws of Hawaii 2009 by an additional five years. Raises the income tax credits provided to low-income households by the refundable food/excise tax credit and low-income household renters credit. Amends gross income thresholds for households qualifying for the low-income household renters credit. (HB886 HD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.