Report Title:
Tax Administration; Interest Rate Modification
Description:
Changes from 2/3% to 1/3% the interest rate payable to the taxpayer on overpayments of taxes. (SD1)
THE SENATE |
S.B. NO. |
1327 |
TWENTY-FIFTH LEGISLATURE, 2009 |
S.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO THE RATE OF INTEREST APPLICABLE TO OVERPAYMENTS OF TAX.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 231-23, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d) This subsection shall apply to a refund for an overpayment of a tax.
(1) If the tax return as filed by a taxpayer shows that
the amount already paid, whether or not on the basis of installments, exceeds
the amount determined to be the correct amount of the tax due, and the taxpayer
requests a refund of the overpayment, the amount of overpayment together with
interest, if any, shall be refunded in the manner provided in subsection (c).
The interest shall be allowed and paid at the rate of [two- thirds] one-third
of one per cent for each month or fraction thereof, beginning with the first
calendar day after the due date of the return or, if the return is filed after
the prescribed due date, the first month following the month the return is
received, and continuing until the date that the director approves the refund
voucher. If the director approves the refund voucher within ninety days from
the due date or the date the return is received, whichever is later, and the
comptroller of the State sends the taxpayer a refund warrant within forty-five
days from the date of the director's approval, no interest on the overpayment [will]
shall be allowed or paid. However, if either the director or the
comptroller exceeds the time allowed herein, interest will be computed from the
first calendar day after the due date of the return, or from the first
month following the month the return is received by the director if the return
is filed after the prescribed due date, until the date that the comptroller
sends the refund warrant to the taxpayer.
(2) If any overpayment of taxes results or arises from:
(A) [the] The taxpayer filing an
amended return[,]; or [from]
(B) [a] A determination made by
the director;
and [such] the overpayment is not
shown on the original return as filed by the taxpayer, interest on the
overpayment shall be allowed and paid from the first calendar day after the due
date of the original return, or[, if the original return is filed
after the prescribed due date,] from the first month following the
month the return is received[,] by the director if the original
return is filed after the prescribed due date, to the date that the
director signs the refund voucher. If the comptroller does not send the refund
warrant to the taxpayer within forty-five days after the director's approval,
interest will continue until the date that the comptroller sends the refund
warrant to the taxpayer.
(3) For purposes of a net income tax return, if any
overpayment of any taxes results from a carryback of a net operating loss, the
overpayment shall be deemed to have been made at the close of the taxable year
in which the net operating loss arises. To the extent that the carryback of
net operating loss results in reducing the amount of underpayment of taxes for
prior taxable year or years, interest [which] that would be
chargeable because of the underpayment shall not be applicable with respect to
that amount or amounts [which] that are carried back.
(4) In the case of credit, interest shall be allowed and paid from the first calendar day after the due date of the return, the first month following the month the return is received by the director, or the date of payment, whichever is later, to the date the credit is taken; provided that the director may make a refund of any credit to a taxpayer where the taxpayer has no underpayment against which to apply the credit."
SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 3. This Act shall take effect upon its approval and apply to taxable years beginning after December 31, 2008.