Bill Text: HI SB2058 | 2020 | Regular Session | Introduced
Bill Title: Relating To The Corporate Dividends Received Deduction.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Engrossed - Dead) 2020-02-11 - Referred to FIN, referral sheet 27 [SB2058 Detail]
Download: Hawaii-2020-SB2058-Introduced.html
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THE SENATE |
S.B. NO. |
2058 |
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THIRTIETH LEGISLATURE, 2020 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO THE CORPORATE DIVIDENDS RECEIVED DEDUCTION.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The purpose of this Act is to correct the net income tax law to eliminate unconstitutional provisions as recognized by the department of taxation in Announcement 98-5 and Tax Information Release 99-2, and thereby to conform the statutory language to the law as administered by the department of taxation.
SECTION 2. Section 235-7, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
"(c) The deductions of or based on dividends paid
or received, allowed to a corporation under chapter 1, subchapter B, part VIII
of the Internal Revenue Code, shall not be allowed. In lieu thereof there shall be allowed as a
deduction the entire amount of dividends received by any corporation upon the
shares of stock of a national banking association[,]; qualifying
dividends, as defined in section 243(b) of the Internal Revenue Code, received
by members of an affiliated group, [or] provided that "includible
corporation" as used therein shall include foreign (non-United States) corporations;
dividends received by a small business investment company operating under the
Small Business Investment Act of 1958 (Public Law 85-699) [upon shares of
stock qualifying under paragraph (3),]; and seventy per cent of the
amount received by any corporation as dividends[:
(1) Upon] upon the shares of stock
of another corporation, if [at the date of payment of the dividend at least
ninety-five per cent of the other corporation's capital stock is owned by one
or more corporations doing business in this State and if the other corporation
is subjected to an income tax in another jurisdiction (but subjection to
federal tax does not constitute subjection to income tax in another jurisdiction);
and
(2) Upon the shares of stock of a bank or
insurance company organized and doing business under the laws of the State;
(3) Upon the shares of stock of another
corporation, if at least fifteen per cent of the latter corporation's business,
for the taxable year of the latter corporation preceding the payment of the
dividend, has been attributed to this State.
However, except for national bank dividends, the
deductions under this subsection are not allowed when they would not have been]
otherwise allowed under section 243 of the Internal Revenue Code[, as
amended by Public Law 85-866, by reason of subsections (b) and (c) of section
246 of the Internal Revenue Code. For
the purposes of this subsection fifteen per cent of a corporation's business
shall be deemed to have been attributed to this State if fifteen per cent or
more of the entire gross income of the corporation as defined in this chapter
(which for the purposes of this subsection shall be computed without regard to
source in the State and shall include income not taxable by reason of the fact
that it is from property not owned in the State or from a trade or business not
carried on in the State in whole or in part), under section 235-5 and the other
provisions of this chapter, shall have been attributed to the State and
subjected to assessment of the taxable income therefrom (including the
determination of the resulting net loss, if any)]."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2019.
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INTRODUCED BY: |
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Report Title:
Income Tax; Dividends Received Deduction
Description:
Repeals the threshold requirements of the income tax deduction for dividends received.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
