Bill Text: HI SB22 | 2014 | Regular Session | Amended
Bill Title: Conveyance Tax; Sale of Stock; Realty
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced - Dead) 2013-12-18 - Carried over to 2014 Regular Session. [SB22 Detail]
Download: Hawaii-2014-SB22-Amended.html
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THE SENATE |
S.B. NO. |
22 |
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TWENTY-SEVENTH LEGISLATURE, 2013 |
S.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 it is ambiguous whether or not existing law imposes a conveyance tax on the transfer or conveyance of realty in instances where an entity or individual sells, transfers, or exchanges stock of an entity that holds title to realty, or any interest therein, that is located in Hawaii to an unrelated entity or individual.
The legislature further finds that it is reasonable for transfers of realty via the sale, transfer, or exchange of stock to be subject to the State's conveyance tax, just as direct transfers of real estate via purchase and sale agreements are subject to the conveyance tax.
The purpose of this Act is to:
(2) Provide for specific exceptions to this requirement.
SECTION 2. Section 247-1, Hawaii Revised Statutes, is amended to read as follows:
"§247-1 Imposition of tax. (a) There is hereby imposed and shall be levied, collected, and paid, a tax as hereinafter provided, on all transfers or conveyances of realty or any interest therein, by way of deeds, leases, subleases, assignments of lease, agreements of sale, stock transfers under subsection (b), assignments of agreement of sale, instruments, writings, and any other document, whereby any lands, interests in land, tenements, or other realty sold shall be granted, assigned, transferred, or otherwise conveyed to, or vested in, the purchaser or purchasers, lessee or lessees, sublessee or sublessees, assignee or assignees, or any other person or persons, by the person's or their direction.
(b) The sale, transfer, or exchange of stock by a legal entity or individual that owns or leases realty located in the State or has a controlling interest in the realty to an unrelated entity or individual, to the extent that the sale, transfer, or exchange of stock reflects changes in ownership or control of the realty, shall be deemed a transfer or conveyance of an interest in the realty for purposes of subsection (a) and taxed accordingly. The conveyance tax shall be based upon the lesser of the most recent county real property tax assessed value of the realty or, if available, a current qualified appraisal by a licensed real estate appraiser in the State. This subsection shall not apply to:
(1) Any sale or transfer that consists of the change in identity or form of ownership of an entity where there is no change in the beneficial ownership, including transfers to an entity wholly owned, directly or indirectly, by the same common ownership as the transferor; or
(2) Any transfer from a limited partner to a general partner of a limited partnership that owns an affordable rental housing project for which low-income housing tax credits have been issued under section 235-110.8 or 241-4.7 or section 42 of the Internal Revenue Code.
(c) For purposes of this section:
"Controlling interest" means:
(1) In the case of a corporation, either fifty per cent or more of the total combined voting power of all classes of stock of the corporation entitled to vote, or fifty per cent or more of the capital, profits, or beneficial interest in the voting stock of the corporation; and
(2) In the case of a partnership, association, trust, or other entity, fifty per cent or more of the capital, profits, or beneficial interest in the partnership, association, trust, or other entity.
"Unrelated entity or individual" means an entity or individual that does not have a controlling interest in the transferring entity prior to the sale, transfer, or exchange of stock, or series of sales, transfers, or exchanges of stock within a twelve-month period."
SECTION 3. Section 247-6, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) Any party, with the exception of governmental bodies, agencies, or officers, to a document or instrument subject to this chapter, or the party's authorized representative, shall file, in the manner and place which the director of taxation shall prescribe, a certificate of conveyance setting forth the actual and full consideration of the property transferred, or the value of the property transferred by way of the transfer of a controlling interest as that term is defined in section 247-1, including any lien or encumbrance on the property, and any other facts as the director may by rules prescribe. The certificate of conveyance shall be verified by a written declaration thereon that the statements made therein are subject to the penalties in section 231-36. The certificate shall be appended to the document or instrument made subject to this chapter and shall be filed with the director simultaneously with the aforementioned document or instrument for the imprinting of the required seal or seals."
SECTION 4. New statutory material is underscored.
SECTION 5. This Act shall take effect on July 1, 2013.
Report Title:
Conveyance Tax; Sale of Stock; Realty
Description:
Clarifies that the sale, transfer, or exchange of a legal entity's stock, to the extent that the sale, transfer, or exchange of stock reflects changes in ownership or control of realty located in the State, shall be deemed a transfer or conveyance of realty that is subject to the conveyance tax when the sale, transfer, or exchange of the stock is executed with an unrelated entity or individual. Provides for exceptions. (SD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
