Bill Text: HI SB171 | 2023 | Regular Session | Introduced
Bill Title: Relating To Income Tax.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2023-01-23 - Referred to WAM. [SB171 Detail]
Download: Hawaii-2023-SB171-Introduced.html
THE SENATE |
S.B. NO. |
171 |
THIRTY-SECOND LEGISLATURE, 2023 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to income tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the coronavirus (COVID‑19) pandemic followed by an economic downturn and high inflation rates have had significant impacts throughout the State. Although some sectors of the economy have begun to experience improvement, the recovery has been sharply uneven with workers in middle and low-wage jobs being affected disproportionately. This uneven recovery has expanded the gap of income inequality that has steadily grown in the State for generations, which has been further exacerbated by an increased inflation rate of 7.5 per cent that diminishes minor wage gains. The legislature further finds that the current economic climate has adversely affected businesses in a variety of sectors, including tourism.
The legislature also finds that according to a recent University of Hawai‘i Economic Research Organization (UHERO) report, "[t]otal real income from all sources will drop more than [five per cent] for this year as a whole and manage just over [one per cent] growth in 2023, before firming." UHERO also found that while tourism in the State is recovering and "will likely escape an outright contraction in economic activity, it will still be adversely affected by softer global conditions, further interest rate hikes, and temporarily high inflation."
The legislature further finds that one consequence of the current economic climate is significantly reduced tax revenue in the State. Numerous state legislatures have been considering taxing high-income earners at a higher rate in order to ensure their ability to continue operating and providing vital services to the public. The department of taxation has testified on similar prior legislation that it would be able to administer the rate changes proposed by a high-income earner tax increase bill.
Accordingly, the purpose of this Act is to increase the income tax rate on the highest-income earners in the State by five per cent for six years.
SECTION 2. Section 235-51, Hawaii Revised Statutes, is amended by amending subsections (a) through (c) to read as follows:
"(a) There is hereby imposed on the taxable income
of every:
(1) Taxpayer who files a joint return under
section 235‑93; and
(2) Surviving spouse,
a tax determined in accordance with
the following table:
In
the case of any taxable year beginning after December 31, 2017:
If the taxable income is: The tax shall be:
Not over $4,800 1.40% of taxable income
Over $4,800 but $67.00 plus 3.20% of
not over $9,600 excess over $4,800
Over $9,600 but $221.00 plus 5.50% of
not over $19,200 excess over $9,600
Over $19,200 but $749.00 plus 6.40% of
not over $28,800 excess over $19,200
Over $28,800 but $1,363.00 plus 6.80% of
not over $38,400 excess over $28,800
Over $38,400 but $2,016.00 plus 7.20% of
not over $48,000 excess over $38,400
Over $48,000 but $2,707.00 plus 7.60% of
not over $72,000 excess over $48,000
Over $72,000 but $4,531.00 plus 7.90% of
not over $96,000 excess over $72,000
Over $96,000 but $6,427.00 plus 8.25% of
not over $300,000 excess over $96,000
Over $300,000 but $23,257.00 plus 9.00% of
not over $350,000 excess over $300,000
Over $350,000 but $27,757.00 plus 10.00% of
not over $400,000 excess over $350,000
Over $400,000 $32,757.00 plus 11.00% of
excess
over $400,000.
In the case of any taxable year
beginning after December 31, 2022, but before January 1, 2029:
If the taxable income is: The tax shall be:
Not over $4,800 1.40% of taxable income
Over $4,800 but $67.00 plus 3.20% of
not
over $9,600 excess
over $4,800
Over $9,600 but $221.00 plus 5.50% of
not
over $19,200 excess
over $9,600
Over $19,200 but $749.00 plus 6.40% of
not over $28,800 excess over $19,200
Over $28,800 but $1,363.00 plus 6.80% of
not over $38,400 excess over $28,800
Over $38,400 but $2,016.00 plus 7.20% of
not over $48,000 excess
over $38,400
Over $48,000 but $2,707.00 plus 7.60% of
not
over $72,000 excess
over $48,000
Over $72,000 but $4,531.00 plus 7.90% of
not over $96,000 excess over $72,000 Over $96,000 but $6,427.00 plus 8.25% of
not over $300,000 excess over $96,000 Over $300,000 but $23,257.00 plus 9.00% of
not over $350,000 excess over $300,000
Over $350,000 but $27,757.00 plus 10.00% of
not over $400,000 excess over $350,000
Over $400,000 $32,757.00 plus 16.00%
of
excess
over $400,000.
In the case of any taxable year
beginning after December 31, 2028:
If the taxable income is: The tax shall be:
Not over $4,800 1.40% of taxable income
Over $4,800 but $67.00 plus 3.20% of
not
over $9,600 excess
over $4,800
Over $9,600 but $221.00 plus 5.50% of
not
over $19,200 excess
over $9,600
Over $19,200 but $749.00 plus 6.40% of
not over $28,800 excess over $19,200
Over $28,800 but $1,363.00 plus 6.80% of
not over $38,400 excess over $28,800
Over $38,400 but $2,016.00 plus 7.20% of
not over $48,000 excess over $38,400
Over $48,000 but $2,707.00 plus 7.60% of
not
over $72,000 excess
over $48,000
Over $72,000 but $4,531.00 plus 7.90% of
not over $96,000 excess over $72,000 Over $96,000 but $6,427.00 plus 8.25% of
not over $300,000 excess over $96,000 Over $300,000 but $23,257.00 plus 9.00% of
not over $350,000 excess over $300,000
Over $350,000 but $27,757.00 plus 10.00% of
not over $400,000 excess over $350,000
Over $400,000 $32,757.00 plus 11.00%
of
excess over $400,000.
(b) There is hereby imposed on the taxable income
of every head of a household a tax determined in accordance with the following
table:
In
the case of any taxable year beginning after December 31, 2017:
If the taxable income is: The tax shall be:
Not over $3,600 1.40% of taxable income
Over $3,600 but $50.00 plus 3.20% of
not over $7,200 excess over $3,600
Over $7,200 but $166.00 plus 5.50% of
not over $14,400 excess over $7,200
Over $14,400 but $562.00 plus 6.40% of
not over $21,600 excess over $14,400
Over $21,600 but $1,022.00 plus 6.80% of
not over $28,800 excess over $21,600
Over $28,800 but $1,512.00 plus 7.20% of
not over $36,000 excess over $28,800
Over $36,000 but $2,030.00 plus 7.60% of
not over $54,000 excess over $36,000
Over $54,000 but $3,398.00 plus 7.90% of
not over $72,000 excess over $54,000
Over $72,000 but $4,820.00 plus 8.25% of
not over $225,000 excess over $72,000
Over $225,000 but $17,443.00 plus 9.00% of
not over $262,500 excess over $225,000
Over $262,500 but $20,818.00 plus 10.00% of
not over $300,000 excess over $262,500
Over $300,000 $24,568.00 plus 11.00% of
excess
over $300,000.
In the case of any taxable year
beginning after December 31, 2022, but before January 1, 2029:
If the taxable income is: The tax shall be:
Not over $3,600 1.40%
of taxable income
Over $3,600 but $50.00
plus 3.20% of
not over $7,200 excess
over $3,600
Over $7,200 but $166.00
plus 5.50% of
not over $14,400 excess
over $7,200
Over $14,400 but $562.00
plus 6.40% of
not over $21,600 excess
over $14,400
Over $21,600 but $1,022.00
plus 6.80% of
not over $28,800 excess
over $21,600
Over $28,800 but $1,512.00
plus 7.20% of
not over $36,000 excess over $28,800
Over $36,000 but $2,030.00
plus 7.60% of
not over $54,000 excess over $36,000
Over $54,000 but $3,398.00
plus 7.90% of
not over $72,000 excess
over $54,000
Over $72,000 but $4,820.00
plus 8.25% of
not over $225,000 excess
over $72,000
Over $225,000 but $17,443.00
plus 9.00% of
not over $262,500 excess
over $225,000
Over $262,500 but $20,818.00
plus 10.00% of
not over $300,000 excess
over $262,500
Over $300,000 $24,568.00
plus 16.00% of
excess over $300,000.
In the case of any taxable year
beginning after December 31, 2028:
If the taxable income is: The tax shall be:
Not over $3,600 1.40%
of taxable income
Over $3,600 but $50.00
plus 3.20% of
not over $7,200 excess
over $3,600
Over $7,200 but $166.00
plus 5.50% of
not over $14,400 excess
over $7,200
Over $14,400 but $562.00
plus 6.40% of
not over $21,600 excess
over $14,400
Over $21,600 but $1,022.00
plus 6.80% of
not over $28,800 excess
over $21,600
Over $28,800 but $1,512.00
plus 7.20% of
not over $36,000 excess over $28,800
Over $36,000 but $2,030.00
plus 7.60% of
not over $54,000 excess over $36,000
Over $54,000 but $3,398.00
plus 7.90% of
not over $72,000 excess
over $54,000
Over $72,000 but $4,820.00
plus 8.25% of
not over $225,000 excess
over $72,000
Over $225,000 but $17,443.00
plus 9.00% of
not over $262,500 excess
over $225,000
Over $262,500 but $20,818.00
plus 10.00% of
not over $300,000 excess
over $262,500
Over $300,000 $24,568.00
plus 11.00% of
excess over $300,000.
(c) There is hereby imposed on the taxable income
of (1) every unmarried individual (other than a surviving spouse, or the head
of a household) and (2) on the taxable income of every married individual who
does not make a single return jointly with the individual's spouse under
section 235-93 a tax determined in accordance with the following table:
In
the case of any taxable year beginning after December 31, 2017:
If the taxable income is: The tax shall be:
Not over $2,400 1.40% of taxable income
Over $2,400 but $34.00 plus 3.20% of
not over $4,800 excess over $2,400
Over $4,800 but $110.00 plus 5.50% of
not over $9,600 excess over $4,800
Over $9,600 but $374.00 plus 6.40% of
not over $14,400 excess over $9,600
Over $14,400 but $682.00 plus 6.80% of
not over $19,200 excess over $14,400
Over $19,200 but $1,008.00 plus 7.20% of
not over $24,000 excess over $19,200
Over $24,000 but $1,354.00 plus 7.60% of
not over $36,000 excess over $24,000
Over $36,000 but $2,266.00 plus 7.90% of
not over $48,000 excess over $36,000
Over $48,000 but $3,214.00 plus 8.25% of
not over $150,000 excess over $48,000
Over $150,000 but $11,629.00 plus 9.00% of
not over $175,000 excess over $150,000
Over $175,000 but $13,879.00 plus 10.00% of
not over $200,000 excess over $175,000
Over $200,000 $16,379.00 plus 11.00% of
excess
over $200,000.
In the case of any taxable year
beginning after December 31, 2022, but before January 1, 2029:
If the taxable income is: The tax shall be:
Not over $2,400 1.40% of taxable income
Over $2,400 but $34.00 plus 3.20% of
not over $4,800 excess over $2,400
Over $4,800 but $110.00 plus 5.50% of
not over $9,600 excess over $4,800
Over $9,600 but $374.00 plus 6.40% of
not over $14,400 excess over $9,600
Over $14,400 but $682.00 plus 6.80% of
not over $19,200 excess over $14,400
Over $19,200 but $1,008.00 plus 7.20% of
not over $24,000 excess over $19,200
Over $24,000 but $1,354.00 plus 7.60% of
not over $36,000 excess over $24,000
Over $36,000 but $2,266.00 plus 7.90% of
not over $48,000 excess over $36,000
Over $48,000 but $3,214.00 plus 8.25% of
not over $150,000 excess over $48,000
Over $150,000 but $11,629.00 plus 9.00% of
not over $175,000 excess over $150,000
Over $175,000 but $13,879.00 plus 10.00% of
not over $200,000 excess over $175,000
Over $200,000 $16,379.00 plus 16.00%
of
excess
over $200,000.
In the case of any taxable year
beginning after December 31, 2028:
If the taxable income is: The tax shall be:
Not over $2,400 1.40% of taxable income
Over $2,400 but $34.00 plus 3.20% of
not over $4,800 excess over $2,400
Over $4,800 but $110.00 plus 5.50% of
not over $9,600 excess over $4,800
Over $9,600 but $374.00 plus 6.40% of
not over $14,400 excess over $9,600
Over $14,400 but $682.00 plus 6.80% of
not over $19,200 excess over $14,400
Over $19,200 but $1,008.00 plus 7.20% of
not over $24,000 excess over $19,200
Over $24,000 but $1,354.00 plus 7.60% of
not over $36,000 excess over $24,000
Over $36,000 but $2,266.00 plus 7.90% of
not over $48,000 excess over $36,000
Over $48,000 but $3,214.00 plus 8.25% of
not over $150,000 excess over $48,000
Over $150,000 but $11,629.00 plus 9.00% of
not over $175,000 excess over $150,000
Over $175,000 but $13,879.00 plus 10.00% of
not over $200,000 excess over $175,000
Over $200,000 $16,379.00 plus 11.00%
of
excess
over $200,000."
SECTION 3. New statutory material is underscored.
SECTION 4. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2022.
INTRODUCED BY: |
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Report Title:
Income Tax; High Income Taxpayers; Tax Rates
Description:
Raises the state income tax rate by five per cent for taxpayers in the highest income bracket for six years. Applies to taxable years beginning after 12/31/22.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.