Bill Text: HI SB1198 | 2022 | Regular Session | Amended
Bill Title: Relating To Tax Administration.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2021-12-10 - Carried over to 2022 Regular Session. [SB1198 Detail]
Download: Hawaii-2022-SB1198-Amended.html
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THE SENATE |
S.B. NO. |
1198 |
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THIRTY-FIRST LEGISLATURE, 2021 |
S.D. 2 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO TAX ADMINISTRATION.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 231-8.5, Hawaii Revised Statutes, is amended to read as follows:
"§231-8.5 Electronic filing of tax returns. (a) The department may allow filing by
electronic, telephonic, or optical means of any tax return, application,
report, or other document required under the provisions of title 14 administered
by the department.
(b) If the requirements of subsection (c) are
satisfied, the department may require electronic filing of any tax return,
application, report, or other document required under the provisions of title 14 administered
by the department for the following taxpayers:
(1) For withholding tax filings required under chapter 235, only employers whose total tax liability under sections 235-61 and 235-62 for the calendar or fiscal year exceeds $40,000;
(2) For income tax filings required
under chapter 235, only taxpayers who are [subject]:
(A) Subject
to tax
under section 235-71, 235-71.5, or 235-72;
(B) Required
to file partnership returns under section 235-95; provided that the partnership's
gross income exceeds $250,000 for the taxable year;
(C) Required to
file S corporation returns under section 235-128; provided that the S
corporation's gross income exceeds $250,000 for the taxable year;
or
(D) Subject to
tax under section 235-51, 235-52, or 235-53; provided that the taxpayer’s
federal adjusted gross income, as reported on the taxpayer’s Hawaii income tax
return, exceeds $100,000 for the taxable year;
(3) For
general excise tax filings required under chapter 237, only taxpayers whose
total tax liability under chapter 237 for the calendar or fiscal year exceeds $4,000;
(4) For
transient accommodations tax filings required under chapter 237D, only
operators and plan managers whose total tax liability under chapter 237D for
the calendar or fiscal year exceeds $4,000; and
(5) For
filings
required under the following chapters, all taxpayers subject to tax under those
chapters:
(A) 236E;
(B) 239;
(C) 241;
(D) 243;
(E) 244D;
(F) 245; and
(G) 251.
(c) As a prerequisite to requiring electronic
filing under subsection (b), the department shall provide:
(1) An
electronic
filing option to the taxpayer; and
(2) No
less than
ninety days prior written notice to the general public of the department's
intention to require electronic filing.
(d) Notwithstanding subsection (b), any return
that is prepared by a tax return preparer, as defined in section 231‑36.5,
shall be filed electronically; provided that this subsection shall only apply
if an electronic filing option is available and the tax return preparer reasonably
expects to prepare more than ten returns of that same tax type in the calendar
year.
If a return that is
required to be filed electronically under this subsection is not filed
electronically, the tax return preparer who prepared the return and the taxpayer
shall each be subject to a penalty of $50 for every failure to electronically
file a return, unless it is shown that the failure is due to reasonable cause
and not due to neglect.
[(d)] (e) The date of filing shall be the date the tax
return, application, report, or other document is transmitted to the department
in a form and manner prescribed by departmental rules adopted pursuant to
chapter 91. The department may determine
alternative methods for the signing, subscribing, or verifying of a tax return,
application, report, or other document that shall have the same validity and consequences as the actual signing
by the taxpayer. A filing under this
section shall be treated in the same manner as a filing subject to the
penalties under section 231-39.
[(e)] (f) If a person who is required by the department
under subsection (b) to electronically file any tax return fails to file using
an approved method, unless it is shown that the failure is due to reasonable
cause and not to neglect, the person shall be liable for a penalty of two per
cent of the amount of the tax required to be shown on the return. If no tax is required to be shown on the
return, the department may determine by administrative rule the penalty imposed."
SECTION 2. Section 231-9.9, Hawaii Revised Statutes, is amended as follows:
1.
By amending subsection (a) to read:
"(a) The director of taxation is authorized to
require every person or tax return preparer subject to mandatory electronic
filing under section 231-8.5 and every person whose tax liability for any
one taxable year exceeds $100,000 and who files a tax return for any tax,
including consolidated filers, to remit taxes by one of the means of electronic
funds transfer approved by the department; provided that for withholding taxes
under section 235-62, electronic funds transfers shall apply to annual tax
liabilities that exceed $40,000. [Notwithstanding
the tax liability thresholds in this subsection, the director of taxation is
authorized to require any person who is required to electronically file a
federal return or electronically remit any federal taxes to the federal
government, to electronically file a state return and electronically remit any
state taxes under title 14 to the department. The director is authorized
to grant an exemption to the electronic filing and payment requirements for
good cause.]"
2. By amending subsections (c) and (d) to read:
"(c) If a person who is required under subsection
(a) to [file a return electronically or] remit taxes by one of the means
of electronic funds transfer approved by the department fails [to file
electronically or] to remit the taxes using an approved method [on or
before the date prescribed therefor], unless it is shown that the failure
is due to reasonable cause and not to neglect, there shall be added to the tax
required to be so remitted a penalty of two per cent of the amount of the tax. The penalty under this subsection is in
addition to any penalty set forth in section 231-39.
(d) No later than twenty days prior to the convening of each regular session, the department shall submit a report to the legislature containing:
(1) The number of
taxpayers who were assessed the two per cent penalty pursuant to subsection
(c); and
[(2) The amounts of
each assessment; and
(3)] (2) The total amount of assessments [collected]
for the previous year."
SECTION 3. Section 231-10.8, Hawaii Revised Statutes, is amended to read as follows:
"[[]§231-10.8[]] Tax
clearance fees. The department may
charge a fee of $20 for each tax clearance application submitted [and $5 for
each certified copy of a tax clearance]."
SECTION 4. Section 231-28, Hawaii Revised Statutes, is amended to read as follows:
"§231-28 Tax clearance before procuring liquor licenses.
No liquor licenses shall be issued or
renewed unless the applicant therefor shall present to the issuing agency, a
certificate [signed] issued by the [director of taxation,]
department, showing that the applicant does not owe the State any delinquent
taxes, penalties, or interest; or that the applicant has entered into and is
complying with an installment plan agreement with the department [of
taxation] for the payment of delinquent taxes in installments. Notwithstanding any law to the contrary,
the department may disclose tax information relevant to the applicant's state
tax compliance to the issuing agency."
SECTION 5. Section 232-24, Hawaii Revised Statutes, is amended to read as follows:
"§232-24 Taxes paid pending appeal. (a) The tax paid upon the
amount of any assessment, actually in dispute and in excess of that admitted by
the taxpayer, and covered by an appeal to the tax appeal court duly taken,
shall, pending the final determination of the appeal, be paid by the director of
finance into the "litigated claims fund". If the final determination is in whole or in
part in favor of the appealing taxpayer, the director of finance shall repay to
the taxpayer out of the fund, or if investment of the fund should result in a
deficit therein, out of the general fund of the State, the amount of the tax
paid upon the amount held by the court to have been excessive or nontaxable,
together with from the date of each payment into the litigated claims fund, the
interest to be paid from the general fund of the State. [For purposes of this section, the rate of
interest shall be computed by reference to section 6621(a) (with respect to
interest rate determination) of the Internal Revenue Code of 1986, as of
January 1, 2010.] The balance, if any,
of the payment made by the appealing taxpayer, or the whole of the payment, in
case the decision is wholly in favor of the assessor, shall, upon the final
determination become a realization under the tax law concerned.
(b) For purposes of this section, the interest
shall be computed using the following interest rates:
(1) For
corporations whose overpayments are $10,000 or less, 3 per cent;
(2) For
corporations whose overpayments exceed $10,000, 1.5 per cent; and
(3) For all other
taxpayers, 4 per cent.
(c) In a case of an appeal to a board of review, the tax paid, if any, upon the amount of the assessment actually in dispute and in excess of that admitted by the taxpayer, shall during the pendency of the appeal and until and unless an appeal is taken to the tax appeal court, be held by the director of finance in a special deposit. In the event of final determination of the appeal in the board of review, the director of finance shall repay to the appealing taxpayer out of the deposit the amount of the tax paid upon the amount held by the board to have been excessive or nontaxable, if any, the balance, if any, or the whole of the deposit, in case the decision is wholly in favor of the assessor, to become a realization under the tax law concerned."
SECTION 6. Section 235-20.5, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) The moneys in the fund shall be used for the
following purposes:
(1) Issuing comfort letters, letter rulings, written opinions,
and other guidance to taxpayers;
(2) Issuing
certificates under [section] 235-110.9;
(3) Administering
the operations of the special enforcement section;
(4) Funding
support staff positions in the special enforcement section; [and]
(5) Developing,
implementing, and providing taxpayer education programs, including tax
publications[.];
(6) Funding information technology and related positions that are exempt from chapter 76;
(7) Funding the operations of the criminal investigation section, including support staff positions; and
(8) Funding the operations of the administrative
rules office."
SECTION 7. If any provision of
this Act, or the application thereof to any person or circumstance, is held
invalid, the invalidity does not affect other provisions or applications of
this Act that can be given effect without the invalid provision or application,
and to this end the provisions of this Act are severable.
SECTION 8.
Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 9. This Act shall take effect on July 1, 2050; provided that section 2 shall take effect on January 1, 2022.
Report Title:
Tax Administration; Electronic Filing; Electronic Funds Transfer; Tax Clearances; Interest Rate
Description:
Allows the Department of Taxation to mandate the electronic filing of partnership and S-corporation returns if the taxpayer's gross receipts exceed $250,000 and individual tax returns if the federal adjusted gross income, as shown on the taxpayer's Hawaii return, exceeds $100,000. Requires certain tax return preparers to file returns electronically. Amends the rules for electronic funds transfer to remove the authorization to require electronic funds transfer or electronic filing if the federal government required that person to file or pay electronically. Requires electronic funds transfers for tax return preparers and any person subject to mandatory electronic filing. Removes the timeliness requirement from the electronic funds transfer penalty. Removes the authority of the department to charge for certified copies of tax clearances. Amends the statute that mandates tax clearances for liquor license holders. Clarifies the interest rate for payments made to taxpayers out of the litigated claims fund. Expands the permissible uses of the tax administration special fund. Effective 7/1/2050. (SD2)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
