Bill Text: HI HB486 | 2017 | Regular Session | Amended

Hawaii House Bill 486 (Prior Session Legislation)

Bill Title: Relating To The Mortgage Interest Deduction.

Spectrum: Partisan Bill (Democrat 10-0)

Status: (Engrossed - Dead) 2017-03-09 - Referred to WAM. [HB486 Detail]

Download: Hawaii-2017-HB486-Amended.html

HOUSE OF REPRESENTATIVES	H.B. NO.	486
TWENTY-NINTH LEGISLATURE, 2017		H.D. 2
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO THE MORTGAGE INTEREST DEDUCTION.

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

SECTION 1. The purpose of this Act is to eliminate the mortgage interest deduction for second homes under Hawaii income tax law and transfer an equivalent amount into the rental housing revolving fund.

SECTION 2. Section 235-2.4, Hawaii Revised Statutes, is amended by amending subsection (h) to read as follows:

"(h) Section 163 (with respect to interest) of the Internal Revenue Code shall be operative for the purposes of this chapter, except that provisions in section 163(d)(4)(B) (defining net investment income to exclude dividends), section 163(e)(5)(F) (suspension of applicable high-yield discount obligation (AHYDO) rules), section 163(h)(4)(A)(i)(II) (definition of qualified residence for home mortgage interest deduction), section 163(h)(4)(A)(ii)(II) (treatment of home mortgage interest deduction for married individuals filing separately), and section 163(i)(1) as it applies to debt instruments issued after January 1, 2010, (defining AHYDO) shall not be operative for the purposes of this chapter."

SECTION 3. Section 235-119, Hawaii Revised Statutes, is amended to read as follows:

"§235-119 Taxes, state realizations. All income taxes shall be for the use of the State and shall be paid into the state treasury at such times as the director of finance shall direct[.]; provided that an amount equal to the tax revenues attributable to the inoperativeness of section 163(h)(4)(A)(i)(II)(definition of qualified residence for home mortgage interest deduction) and section 163(h)(4)(A)(ii)(II)(treatment of home mortgage interest deduction for married individuals filing separately), of the Internal Revenue Code of 1986, as amended, pursuant to section 235-2.4(h), shall be deposited into the rental housing revolving fund established pursuant to section 201H-202."

SECTION 4. The department of budget and finance, in consultation with the department of taxation, shall submit a report on the administration of this Act to the legislature no later than twenty days prior to the convening of the regular sessions of 2018, 2019, 2020, 2021, and 2022.

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect on July 1, 2030, and shall apply to taxable years beginning after December 31, 2016.

Report Title:

Income Tax; Mortgage Interest Deduction

Description:

Eliminates the mortgage interest deduction for second homes under the Hawaii Income Tax Law. Specifies that the revenue gain attributable to this measure be deposited into the Rental Housing Revolving Fund. Requires the Department of Budget and Finance, in consultation with the Department of Taxation, to submit reports on the administration of this measure to the Legislature prior to the 2018, 2019, 2020, 2021, and 2022 Regular Sessions. (HB486 HD2)

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