Bill Text: HI HB1458 | 2018 | Regular Session | Introduced
Bill Title: Relating To Taxation.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2017-11-30 - Carried over to 2018 Regular Session. [HB1458 Detail]
Download: Hawaii-2018-HB1458-Introduced.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
1458 |
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TWENTY-NINTH LEGISLATURE, 2017 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to taxation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that medium to large businesses should not be allowed to take advantage of employees who live near or below federal poverty levels. The legislature believes that if the majority of a business' employees are welfare recipients, the business has failed in its duty to provide its employees with a living wage.
The purpose of this Act is to provide medium to large businesses with an incentive to provide its employees with a living wage by increasing the corporate income tax rate for companies:
(1) That have twenty or more employees; and
(2) Where the majority of the company's employees have federal adjusted gross incomes that are at or near federal poverty guidelines.
SECTION 2. Section 235-71, Hawaii Revised Statutes, is amended to read as follows:
"§235-71 Tax on corporations; rates; credit of shareholder of regulated investment company. (a) A tax at the rates herein provided shall be assessed, levied, collected, and paid for each taxable year on the taxable income of every corporation, including a corporation carrying on business in partnership, except that in the case of a regulated investment company the tax is as provided by subsection (b) and further that in the case of a real estate investment trust as defined in section 856 of the Internal Revenue Code of 1954 the tax is as provided in subsection (d). "Corporation" includes any professional corporation incorporated pursuant to chapter 415A.
The tax on all taxable income shall be at the
rate of 4.4 per cent if the taxable income is not over $25,000, 5.4 per cent if
over $25,000 but not over $100,000, and on all over $100,000, 6.4 per cent[.];
provided that if the corporation has twenty or more employees and the majority
of the corporation's employees have federal adjusted gross incomes at or below
one hundred twenty-five per cent of the federal poverty guidelines, the tax on
all taxable income shall be at the rate of per cent if the taxable
income is not over $25,000, per cent if over $25,000 but not over
$100,000, and on all over $100,000,
per cent.
(b) In the case of a regulated investment
company there is imposed on the taxable income, computed as provided in
sections 852 and 855 of the Internal Revenue Code but with the changes and
adjustments made by this chapter (without prejudice to the generality of the
foregoing, the deduction for dividends paid is limited to such amount of
dividends as is attributable to income taxable under this chapter), a tax
consisting in the sum of the following: 4.4 per cent if the taxable income is
not over $25,000, 5.4 per cent if over $25,000 but not over $100,000, and on
all over $100,000, 6.4 per cent[.]; provided that if the regulated
investment company has twenty or more employees and the majority of the regulated
investment company's employees have federal adjusted gross incomes at or below
one hundred twenty-five per cent of the federal poverty guidelines, the tax
shall consist in the sum of the
following: per cent
if the taxable income is not over $25,000, per cent if over $25,000 but
not over $100,000, and on all over $100,000,
per cent.
(c) In the case of a shareholder of a regulated investment company there is hereby allowed a credit in the amount of the tax imposed on the amount of capital gains which by section 852(b)(3)(D) of the Internal Revenue Code is required to be included in the shareholder's return and on which there has been paid to the State by the regulated investment company the tax at the rate imposed by subsection (b); the amount of this credit may be applied or refunded as provided in section 235-110.
(d) In the case of a real estate investment
trust there is imposed on the taxable income, computed as provided in sections
857 and 858 of the Internal Revenue Code but with the changes and adjustments
made by this chapter (without prejudice to the generality of the foregoing, the
deduction for dividends paid is limited to such amount of dividends as is
attributable to income taxable under this chapter), a tax consisting in the sum
of the following: 4.4 per cent if the taxable income is not over $25,000, 5.4
per cent if over $25,000 but not over $100,000, and on all over $100,000, 6.4
per cent[.]; provided that if the real estate investment trust has
twenty or more employees and the majority of the real estate investment trust's
employees have federal adjusted gross incomes at or below one hundred
twenty-five per cent of the federal poverty guidelines, the tax shall consist
in the sum of the
following: per cent
if the taxable income is not over $25,000, per cent if over $25,000
but not over $100,000, and on all over $100,000, per
cent.
In addition to any other penalty provided by law any real estate investment trust whose tax liability for any taxable year is deemed to be increased pursuant to section 859(b)(2)(A) or 860(c)(1)(A) after December 31, 1978, (relating to interest and additions to tax determined with respect to the amount of the deduction for deficiency dividends allowed) of the Internal Revenue Code shall pay a penalty in an amount equal to the amount of interest for which such trust is liable that is attributable solely to such increase. The penalty payable under this subsection with respect to any determination shall not exceed one-half of the amount of the deduction allowed by section 859(a), or 860(a) after December 31, 1978, of the Internal Revenue Code for such taxable year.
(e) Any corporation acting as a business entity in more than one state and which is required by this chapter to file a return and whose only activities in this State consist of sales and which does not own or rent real estate or tangible personal property and whose annual gross sales in or into this State during the tax year are not in excess of $100,000 may elect to report and pay a tax of .5 per cent of such annual gross sales.
(f) As used in this section, "federal poverty guidelines" means the guidelines set forth each year by the United States Department of Health and Human Services."
SECTION 3. Section 235-71.5, Hawaii Revised Statutes, is amended to read as follows:
"§235-71.5 Alternative tax for corporations. (a) Section 1201 (with respect to alternative tax for corporations) of the Internal Revenue Code of 1986, as amended as of December 31, 1996, shall be operative for the purposes of this chapter and shall be applied as set forth in this section. If for any taxable year a corporation, regulated investment company, or real estate investment trust has a net capital gain, then, in lieu of the tax imposed by section 235-71, there is hereby imposed a tax (if such tax is less than the tax imposed under section 235-71) which shall consist of the sum of:
(1) A tax computed on the taxable income reduced by the amount of the net capital gain, at the rates and in the manner as if this section had not been enacted, plus
(2) The sum of:
(A) 3.08 per cent of the lesser of:
(i) The net capital gain determined by including only the gain or loss which is properly taken into account for the portion of the taxable year before April 1, 1987 (i.e., the amount in paragraph (1)), or
(ii) The net capital gain for the taxable year, plus
(B) 4 per cent of the excess (if any) of:
(i) The net capital gain for the taxable year, over
(ii) The amount of the net capital gain taken
into account under subparagraph (A)[.];
provided that if the corporation, regulated investment company, or real estate investment trust has twenty or more employees and the majority of the employees have federal adjusted gross incomes at or below one hundred twenty-five per cent of the federal poverty guidelines, the percentages is subparagraphs (A) and (B) shall be per cent.
(b) As used in this section, "federal poverty guidelines" means the guidelines set forth each year by the United States Department of Health and Human Services."
SECTION 4. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2016.
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INTRODUCED BY: |
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Report Title:
Corporate Income Tax; Employee Compensation; Rates
Description:
Increases to an unspecified percentage, the corporate income tax rates for companies: (1) that have 20 or more employees; and (2) the majority of the employees have federal adjusted gross incomes of 125% or less of the federal poverty guidelines set forth each year by the United States Department of Health and Human Services.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
