Bill Text: HI HB825 | 2023 | Regular Session | Amended
Bill Title: Relating To Taxation.
Spectrum: Partisan Bill (Democrat 13-0)
Status: (Introduced - Dead) 2023-02-15 - Passed Second Reading as amended in HD 1 and referred to the committee(s) on FIN with none voting aye with reservations; none voting no (0) and none excused (0). [HB825 Detail]
Download: Hawaii-2023-HB825-Amended.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
825 |
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THIRTY-SECOND LEGISLATURE, 2023 |
H.D. 1 |
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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 there is inequity in the taxation of retirement income and many seniors in Hawaii are struggling to make ends meet.
The purpose of this Act is to address this issue by excluding income received from deferred compensation retirement plans from the state income tax for taxpayers who meet certain income requirements.
SECTION 2. Section 235-7, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) There shall be excluded from gross income, adjusted gross income, and taxable income:
(1) Income not subject to taxation by the State under the Constitution and laws of the United States;
(2) Rights, benefits, and other income exempted from taxation by section 88-91, having to do with the state retirement system, and the rights, benefits, and other income, comparable to the rights, benefits, and other income exempted by section 88-91, under any other public retirement system;
(3) Any compensation received in the form of a pension for past services;
(4) Compensation paid to a patient affected with Hansen's disease employed by the State or the United States in any hospital, settlement, or place for the treatment of Hansen's disease;
(5) Except as otherwise expressly provided, payments made by the United States or this State, under an act of Congress or a law of this State, which by express provision or administrative regulation or interpretation are exempt from both the normal and surtaxes of the United States, even though not so exempted by the Internal Revenue Code itself;
(6) Any income expressly exempted or excluded from the measure of the tax imposed by this chapter by any other law of the State, it being the intent of this chapter not to repeal or supersede any such express exemption or exclusion;
(7) Income received by each member of the reserve components of the Army, Navy, Air Force, Marine Corps, or Coast Guard of the United States of America, and the Hawaii National Guard as compensation for performance of duty, equivalent to pay received for forty-eight drills (equivalent of twelve weekends) and fifteen days of annual duty, at an:
(A) E-1 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2004;
(B) E-2 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2005;
(C) E-3 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2006;
(D) E-4 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2007; and
(E) E-5 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2008;
(8) Income derived from the operation of ships or aircraft if the income is exempt under the Internal Revenue Code pursuant to the provisions of an income tax treaty or agreement entered into by and between the United States and a foreign country[;] provided that the tax laws of the local governments of that country reciprocally exempt from the application of all of their net income taxes, the income derived from the operation of ships or aircraft that are documented or registered under the laws of the United States;
(9) The value of legal services provided by a legal service plan to a taxpayer, the taxpayer's spouse, and the taxpayer's dependents;
(10) Amounts paid, directly or indirectly, by a legal service plan to a taxpayer as payment or reimbursement for the provision of legal services to the taxpayer, the taxpayer's spouse, and the taxpayer's dependents;
(11) Contributions by
an employer to a legal service plan for compensation (through insurance or
otherwise) to the employer's employees for the costs of legal services incurred
by the employer's employees, their spouses, and their dependents; [and]
(12) Amounts received
in the form of a monthly surcharge by a utility acting on behalf of an affected
utility under section 269-16.3; provided that amounts retained by the acting
utility for collection or other costs shall not be included in this exemption[.];
and
(13) Compensation
received from deferred compensation retirement plans, including individual
retirement accounts, and those established under section 401(k) or 403(b) of
the Internal Revenue Code, or any other retirement plan that defers
compensation; provided that this paragraph shall apply only to individuals
whose federal adjusted gross income is less than:
(A) $30,000
for a taxpayer filing a single return or a married person filing separately;
(B) $45,000
for a taxpayer filing as a head of household; and
(C) $60,000
for a taxpayer filing a joint return or as a surviving spouse."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act shall take effect on June 30, 3000.
Report Title:
Deferred Compensation Retirement Plans; Income Tax Exclusion
Description:
Excludes income received from deferred compensation retirement plans from the state income tax for taxpayers who meet certain income requirements. Effective 6/30/3000. (HD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
