Hawaii-2024-SB3289-Amended

SECTION 1. Section 236E-2, Hawaii Revised Statutes, is amended as follows:

1. By adding a new definition to be appropriately inserted and to read:

""Immediate family member" means a spouse, child, sibling, parent, grandparent, grandchild, stepparent, stepchild, stepsibling, or equivalent adoptive relationships."

2. By amending the definition of "transferred property" to read:

""Transferred property" means:

(1) With respect to a taxable transfer subject to the federal estate tax, the deceased individual's gross estate as defined in section 2031 of the Internal Revenue Code;

(2) With respect to a taxable transfer occurring as a result of a taxable termination as defined in section 2612(a) of the Internal Revenue Code, the taxable amount determined under section 2622(a) of the Internal Revenue Code;

(3) With respect to a taxable transfer occurring as a result of a taxable distribution as defined in section 2612(b) of the Internal Revenue Code, the taxable amount determined under section 2621(a) of the Internal Revenue Code;

(4) With respect to a taxable transfer occurring as a result of a direct skip, as defined in section 2612(c) of the Internal Revenue Code, the taxable amount determined under section 2623 of the Internal Revenue Code; and

(5) With respect to an event which causes the imposition of an additional federal estate tax under section 2032A(c) of the Internal Revenue Code, the qualified real property that was disposed of or which ceased to be used for the qualified use, within the meaning of section 2032A(c)(1) of the Internal Revenue Code[.];

provided that, with respect to a transfer taxable under the federal generation-skipping transfer tax, a transfer to any immediate family member shall not be considered a distribution to a skip person, as defined in section 2613 of the Internal Revenue Code."

SECTION 2. Section 236E-7, Hawaii Revised Statutes, is amended to read as follows:

"§236E-7 Hawaii taxable estate. For the purposes of this chapter, "Hawaii taxable estate" means:

(1) For residents, the federal taxable estate under section 2051, et seq., of the Internal Revenue Code [~~but without regard for the~~], except that:

(A) The deduction for state death taxes paid under section 2058 of the Internal Revenue Code[;] shall not be operative; and

(B) The marital deduction under section 2056 of the Internal Revenue Code shall apply to the passage of any interest in property to any immediate family member;

(2) For nonresidents, the federal taxable estate under section 2051, et seq., of the Internal Revenue Code, [~~but without regard for the~~], except that:

(A) The deduction for state death taxes paid under section 2058 of the Internal Revenue Code[,] shall not be operative; and

(B) The marital deduction under section 2056 of the Internal Revenue Code shall apply to the passage of any interest in property to any immediate family member,

multiplied by a fraction, the numerator of which is the value of the property in the State subject to tax under this chapter, and the denominator of which is the federal gross estate; and

(3) For nonresidents not citizens, the federal taxable estate determined under section 2106 of the Internal Revenue Code, but without regard for the deduction for state death taxes paid under section 2106(a)(4) of the Internal Revenue Code, multiplied by a fraction, the numerator of which is the value of the property with a situs in the State subject to tax under this chapter, and the denominator of which is the federal gross estate."

SECTION 3. Section 236E-17, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The tax shall be the applicable generation-skipping transfer tax rate multiplied by the taxable amount as determined under chapter 13 of the Internal Revenue Code, multiplied by a fraction, the numerator of which is the taxable transfer subject to the tax under subsection (a) and the denominator of which is the total amount of taxable transfers subject to the federal generation-skipping transfer tax[.]; provided that, for the purpose of determining the taxable amount of a transfer taxable under the federal generation-skipping transfer tax, a transfer to any immediate family member shall not be considered a distribution to a skip person, as defined in section 2613 of the Internal Revenue Code."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 3000, and shall apply to decedents dying or taxable transfers occurring after December 31, 2023.

Report Title:

Estate Tax; Generation-Skipping Transfer Tax; Marital Deduction; Transferred Property; Taxable Amount; Immediate Family Members

Description:

Amends the definition of Hawaii taxable estate to provide that the marital deduction under section 2056 of the Internal Revenue Code shall apply to the passage of any interest in property to any immediate family member. Amends the state generation-skipping transfer tax law to provide that a transfer to any immediate family member shall not be considered a distribution to a skip person, as defined in section 2613 of the Internal Revenue Code. Effective 7/1/3000. (HD1)

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

THE SENATE	S.B. NO.	3289
THIRTY-SECOND LEGISLATURE, 2024		S.D. 1
STATE OF HAWAII		H.D. 1