Bill Text: HI SB2924 | 2016 | Regular Session | Amended

---

Bill Title: Taxation; Disclosure of Tax Return Information

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2016-04-28 - Conference committee meeting to reconvene on 04-29-16 2:00PM in conference room 325. [SB2924 Detail]

Download: Hawaii-2016-SB2924-Amended.html

---

THE SENATE	S.B. NO.	2924
TWENTY-EIGHTH LEGISLATURE, 2016		S.D. 2
STATE OF HAWAII		H.D. 2

A BILL FOR AN ACT

 

 

RELATING TO THE DISCLOSURE OF TAX RETURN INFORMATION.

 

 

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

 

     SECTION 1.  Section 231-18, Hawaii Revised Statutes, is amended to read as follows:

     "§231-18  Tax and other officials permitted to inspect returns; reciprocal provisions.  (a)  Notwithstanding the provisions of any law making it unlawful for any person, officer, or employee of the State to make known information imparted by any tax return or permit any tax return to be seen or examined by any person, it shall be lawful to:

     (1)  Permit a duly accredited tax official of the United States, any state or territory, any county of this State, or the Multistate Tax Commission to inspect any tax return or return information of any taxpayer[;] for tax purposes only;

     (2)  Furnish to an official, commission, or the authorized representative thereof an abstract of the return or return information or supply the official, commission, or the authorized representative thereof with information concerning any item contained in the return or return information or disclosed by the report of any investigation of the return or of the subject matter of the return for tax purposes only; [or]

     (3)  Provide tax return information to the auditor pursuant to section 23-5(a)[.];

     (4)  Open for inspection or disclose a return or return information to deputies or employees of the department of the attorney general who are personally and directly engaged in a proceeding before a state grand jury, or who are personally and directly engaged in preparation for or in an investigation that may result in a proceeding pertaining to tax administration that is before a state grand jury or a federal or state court; provided that the return or return information which is inspected or disclosed shall be used solely for that proceeding; provided further that such disclosure shall be made only if:

         (A)  The taxpayer is or may be a party to the proceeding, or the proceeding arose out of or in connection with determining the taxpayer's civil or criminal liability, or the collection of such civil liability, in respect of any tax imposed under this title;

         (B)  The treatment of an item reflected on the return is or may be related to the resolution of an issue in the proceeding or investigation; or

         (C)  The return or return information relates or may relate to a transactional relationship between a person who is or may be a party to the proceeding and the taxpayer that affects or may affect the resolution of an issue in the proceeding or investigation;

     (5)  Disclose in a federal or state judicial or administrative proceeding pertaining to tax administration a return or return information, but only if:

         (A)  The taxpayer is a party to the proceeding, or the proceeding arose out of or in connection with determining the taxpayer's civil or criminal liability, or the collection of such civil liability, in respect of any tax imposed under this title;

         (B)  The treatment of an item reflected on the return is directly related to the resolution of an issue in the proceeding; or

         (C)  The return or return information directly relates to a transactional relationship between a person who is a party to the proceeding and the taxpayer that directly affects the resolution of an issue in the proceeding;

     (6)  Disclose a return or return information to federal, state, or local law enforcement agencies solely for the purpose of the investigation and prosecution of criminal offenses involving possible theft of a taxpayer's identity or fraudulent tax refund claims submitted to the department; or

     (7)  Disclose a return or return information to any person to the extent necessary in connection with the processing, storage, retention, transmission, and reproduction of such returns and return information; the programming, maintenance, repair, testing, and procurement of equipment; and the providing of other services to the department, for purposes of tax administration.  The director may adopt administrative rules regarding the disclosure of returns and return information under this paragraph.

The Multistate Tax Commission may make the information available to a duly accredited tax official of the United States, any state or territory, or the authorized representative thereof, for tax purposes only.

     (b)  Each person and agency that receives information pursuant to this section shall, pursuant to procedures approved by the director of taxation:

     (1)  Establish and maintain a permanent system of standardized records to track all requests for returns or return information made by the person or agency pursuant to this section.  The system shall record the reason for each request, the date of the request, and a description of the information disclosed in response to the person's or agency's request;

     (2)  Establish and maintain a secure place to store the return or return information received by the person or agency; and

     (3)  Restrict access to the requested taxpayer information to only those persons who need the information to execute their responsibilities.

     (c)  The director of taxation may adopt rules, pursuant to chapter 91, to ensure that any parties to which a tax return or tax return information is disclosed under subsection (a) shall take adequate measures to safeguard the tax return or tax return information disclosed.

     (d)  For purposes of this section:

     "Disclose" means making known to any person in any manner a return or return information.

     "Inspection" means any examination of a return or return information.

     "Tax administration" means the administration, management, conduct, direction, and supervision of the execution and application of the federal or state tax laws and tax conventions to which the United States or the State of Hawaii is a party and the development and formulation of tax policy relating to existing or proposed tax laws, related statutes, and tax conventions.  "Tax administration" includes assessment, collection, enforcement, litigation, publication, and statistical gathering functions under such laws, statutes, or conventions.

     "Taxpayer's identity" means the name of a person with respect to whom a return is filed, the person's mailing address, the person's taxpayer identification number, or a combination thereof."

     SECTION 2.  Section 235-116, Hawaii Revised Statutes, is amended to read as follows:

     "§235-116  Disclosure of returns unlawful; penalty.  All tax returns and return information required to be filed, submitted, collected, or maintained under this chapter shall be confidential, including any copy of any portion of a federal return that may be attached to a state tax return, [or] any information reflected in the copy of the federal return[.], any information required under this chapter to be filed or otherwise submitted with any state agency other than the department, or any information required under this chapter to be collected or maintained by any state agency other than the department, except as otherwise provided by law.  It shall be unlawful for any person, or any officer or employee of the State, including the auditor or the auditor's agent with regard to tax return information obtained pursuant to section 23-5(a), to make known intentionally information imparted by any income tax return or estimate made under sections 235-92, 235-94, 235-95, and 235-97 or wilfully to permit any income tax return or estimate so made or copy thereof to be seen or examined by any person other than the taxpayer or the taxpayer's authorized agent, persons duly authorized by the State in connection with their official duties, or the Multistate Tax Commission or the authorized representative thereof, except as otherwise provided by law.  Any offense against the foregoing provisions shall be punishable as a class C felony."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 2030.

Report Title:

Taxation; Disclosure of Tax Return Information

 

Description:

Allows Department of Taxation to disclose tax returns and tax return information to the Department of the Attorney General, federal, state, or local officials, and other persons in civil, criminal, or administrative proceedings and for purposes of information management or provision of administrative services to Department of Taxation.  Establishes information management and security requirements.  Clarifies that income tax information filed with state agencies other than Department of Taxation is confidential to the same extent as information submitted to Department of Taxation.  (SB2924 HD2)

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.