REPORT TITLE:DESCRIPTION:a TAX-05(99) 1201 HOUSE OF REPRESENTATIVES H.B. NO. TWENTIETH LEGISLATURE, 1999 STATE OF HAWAII ________________________________________________________________ ________________________________________________________________ A BILL FOR AN ACT RELATING TO THE INCOME TAX.BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:1 SECTION 1. Section 235-51, Hawaii Revised Statutes, is 2 amended to read as follows: 3 "§235-51 Tax imposed on individuals; rates.(a) Thereis 4 hereby imposed on the taxable income of [(1)] everytaxpayer who 5 files a joint return under section 235-93; and[(2)] every 6 surviving spouse a tax determined in accordancewith the 7 [following table:]tax tables prescribed underparagraph (1):8 (1) In the case of any taxable year beginning after 9 December 31, 1998: 10 If the taxable income is: The tax shall be: 11 Not over $4,000 1.60% of taxable income 12 Over $4,000 but $64.00 plus 3.90% of 13 not over $8,000 excess over $4,000 14 Over $8,000 but $220.00 plus 6.80% of 15 not over $16,000 excess over $8,000 16 Over $16,000 but $764.00 plus 7.20% of 17 not over $24,000 excess over $16,000 18 Over $24,000 but $1,340.00 plus 7.50% of a TAX-05(99) Page 2 1201 H.B. NO. 1 not over $32,000 excess over $24,000 2 Over $32,000 but $1,940.00 plus 7.80% of 3 not over $40,000 excess over $32,000 4 Over $40,000 but $2,564.00 plus 8.20% of 5 not over $60,000 excess over $40,000 6 Over $60,000 but $4,204.00 plus 8.50% of 7 not over $80,000 excess over $60,000 8 Over $80,000 $5,904.00 plus 8.75% of 9 excess over $80,000 10 In the case of any taxable year beginning after December 31, 11 2000: 12 If the taxable income is: The tax shall be: 13 Not over $4,000 1.50% of taxable income 14 Over $4,000 but $60.00 plus 3.70% of 15 not over $8,000 excess over $4,000 16 Over $8,000 but $208.00 plus 6.40% of 17 not over $16,000 excess over $8,000 18 Over $16,000 but $720.00 plus 6.90% of 19 not over $24,000 excess over $16,000 20 Over $24,000 but $1,272.00 plus 7.30% of 21 not over $32,000 excess over $24,000 22 Over $32,000 but $1,856.00 plus 7.60% of a TAX-05(99) Page 3 1201 H.B. NO. 1 not over $40,000 excess over $32,000 2 Over $40,000 but $2,464.00 plus 7.90% of 3 not over $60,000 excess over $40,000 4 Over $60,000 but $4,044.00 plus 8.20% of 5 not over $80,000 excess over $60,000 6 Over $80,000 $5,684.00 plus 8.50% of 7 excess over $80,000 8 In the case of any taxable year beginning after December 31, 9 2001: 10 If the taxable income is: The tax shall be: 11 Not over $4,000 1.40% of taxable income 12 Over $4,000 but $56.00 plus 3.20% of 13 not over $8,000 excess over $4,000 14 Over $8,000 but $184.00 plus 5.50% of 15 not over $16,000 excess over $8,000 16 Over $16,000 but $624.00 plus 6.40% of 17 not over $24,000 excess over $16,000 18 Over $24,000 but $1,136.00 plus 6.80% of 19 not over $32,000 excess over $24,000 20 Over $32,000 but $1,680.00 plus 7.20% of 21 not over $40,000 excess over $32,000 22 Over $40,000 but $2,256.00 plus 7.60% of a TAX-05(99) Page 4 1201 H.B. NO. 1 not over $60,000 excess over $40,000 2 Over $60,000 but $3,776.00 plus 7.90% of 3 not over $80,000 excess over $60,000 4 Over $80,000 $5,356.00 plus 8.25% of 5 excess over $80,000 6(2)In the event the conditions of subsection (e) are met,7a tax determined by the following tax tables, (Phase 18and Phase 2) applicable to the taxable year, shall be9imposed in lieu of the tax imposed under paragraph (1)10of this subsection.11Phase 112In the case of any taxable year beginning after December 31,132000:14If the taxable income is:The tax shall be:15Not over $4,0001.40% of taxable income16Over $4,000 but$56.00 plus 3.20% of17not over $8,000excess over $4,00018Over $8,000 but$184.00 plus 5.50% of19not over $16,000excess over $8,00020Over $16,000 but$624.00 plus 6.40% of21not over $24,000excess over $16,00022Over $24,000 but$1,136.00 plus 6.80% ofa TAX-05(99) Page 5 1201 H.B. NO. 1not over $32,000excess over $24,0002Over $32,000 but$1,680.00 plus 7.20% of3not over $40,000excess over $32,0004Over $40,000 but$2,256.00 plus 7.60% of5not over $60,000excess over $40,0006Over $60,000 but$3,776.00 plus 7.90% of7not over $80,000excess over $60,0008Over $80,000$5,356.00 plus 8.25% of9excess over $80,00010Phase 211In the case of any taxable year beginning after December 31,122001:13Not over $4,0001.30% of taxable income14Over $4,000 but$52.00 plus 3.10% of15not over $8,000excess over $4,00016Over $8,000 but$176.00 plus 5.30% of17not over $16,000excess over $8,00018Over $16,000 but$600.00 plus 6.20% of19not over $24,000excess over $16,00020Over $24,000 but$1,096.00 plus 6.60% of21not over $32,000excess over $24,00022Over $32,000 but$1,624.00 plus 7.00% ofa TAX-05(99) Page 6 1201 H.B. NO. 1not over $40,000excess over $32,0002Over $40,000 but$2,184.00 plus 7.40% of3not over $60,000excess over $40,0004Over $60,000 but$3,664.00 plus 7.70% of5not over $80,000excess over $60,0006Over $80,000$5,204.00 plus 8.00% of7excess over $80,0008 (b) There is hereby imposed on the taxable income of every 9 head of a household a tax determined in accordance with the 10 [following table:]tax tables prescribed under paragraph (1).11(1)In the case of any taxable year beginning after 12 December 31, 1998: 13 If the taxable income is: The tax shall be: 14 Not over $3,000 1.60% of taxable income 15 Over $3,000 but $48.00 plus 3.90% of 16 not over $6,000 excess over $3,000 17 Over $6,000 but $165.00 plus 6.80% of 18 not over $12,000 excess over $6,000 19 Over $12,000 but $573.00 plus 7.20% of 20 not over $18,000 excess over $12,000 21 Over $18,000 but $1,005.00 plus 7.50% of 22 not over $24,000 excess over $18,000 a TAX-05(99) Page 7 1201 H.B. NO. 1 Over $24,000 but $1,455.00 plus 7.80% of 2 not over $30,000 excess over $24,000 3 Over $30,000 but $1,923.00 plus 8.20% of 4 not over $45,000 excess over $30,000 5 Over $45,000 but $3,153.00 plus 8.50% of 6 not over $60,000 excess over $45,000 7 Over $60,000 $4,428.00 plus 8.75% of 8 excess over $60,000 9 In the case of any taxable year beginning after December 31, 10 2000: 11 If the taxable income is: The tax shall be: 12 Not over $3,000 1.50% of taxable income 13 Over $3,000 but $45.00 plus 3.70% of 14 not over $6,000 excess over $3,000 15 Over $6,000 but $156.00 plus 6.40% of 16 not over $12,000 excess over $6,000 17 Over $12,000 but $540.00 plus 6.90% of 18 not over $18,000 excess over $12,000 19 Over $18,000 but $954.00 plus 7.30% of 20 not over $24,000 excess over $18,000 21 Over $24,000 but $1,392.00 plus 7.60% of 22 not over $30,000 excess over $24,000 a TAX-05(99) Page 8 1201 H.B. NO. 1 Over $30,000 but $1,848.00 plus 7.90% of 2 not over $45,000 excess over $30,000 3 Over $45,000 but $3,033.00 plus 8.20% of 4 not over $60,000 excess over $45,000 5 Over $60,000 $4,263.00 plus 8.50% of 6 excess over $60,000 7 In the case of any taxable year beginning after December 31, 8 2001: 9 If the taxable income is: The tax shall be: 10 Not over $3,000 1.40% of taxable income 11 Over $3,000 but $42.00 plus 3.20% of 12 not over $6,000 excess over $3,000 13 Over $6,000 but $138.00 plus 5.50% of 14 not over $12,000 excess over $6,000 15 Over $12,000 but $468.00 plus 6.40% of 16 not over $18,000 excess over $12,000 17 Over $18,000 but $852.00 plus 6.80% of 18 not over $24,000 excess over $18,000 19 Over $24,000 but $1,260.00 plus 7.20% of 20 not over $30,000 excess over $24,000 21 Over $30,000 but $1,692.00 plus 7.60% of 22 not over $45,000 excess over $30,000 a TAX-05(99) Page 9 1201 H.B. NO. 1 Over $45,000 but $2,832.00 plus 7.90% of 2 not over $60,000 excess over $45,000 3 Over $60,000 $4,017.00 plus 8.25% of 4 excess over $60,000 5(2)In the event the conditions of subsection (e) are met,6a tax determined by the following tax tables, (Phase 17and Phase 2) applicable to the taxable year, shall be8imposed in lieu of the tax imposed under paragraph (1)9of this subsection.10Phase 111In the case of any taxable year beginning after December 31,122000:13If the taxable income is:The tax shall be:14Not over $3,0001.40% of taxable income15Over $3,000 but$42.00 plus 3.20% of16not over $6,000excess over $3,00017Over $6,000 but$138.00 plus 5.50% of18not over $12,000excess over $6,00019Over $12,000 but$468.00 plus 6.40% of20not over $18,000excess over $12,00021Over $18,000 but$852.00 plus 6.80% of22not over $24,000excess over $18,000a TAX-05(99) Page 10 1201 H.B. NO. 1Over $24,000 but$1,260.00 plus 7.20% of2not over $30,000excess over $24,0003Over $30,000 but$1,692.00 plus 7.60% of4not over $45,000excess over $30,0005Over $45,000 but$2,832.00 plus 7.90% of6not over $60,000excess over $45,0007Over $60,000$4,017.00 plus 8.25% of8excess over $60,0009Phase 210In the case of any taxable year beginning after December 31,112001:12If the taxable income is:The tax shall be:13Not over $3,0001.30% of taxable income14Over $3,000 but$39.00 plus 3.10% of15not over $6,000excess over $3,00016Over $6,000 but$132.00 plus 5.30% of17not over $12,000excess over $6,00018Over $12,000 but$450.00 plus 6.20% of19not over $18,000excess over $12,00020Over $18,000 but$822.00 plus 6.60% of21not over $24,000excess over $18,00022Over $24,000 but$1,218.00 plus 7.00% ofa TAX-05(99) Page 11 1201 H.B. NO. 1not over $30,000excess over $24,0002Over $30,000 but$1,638.00 plus 7.40% of3not over $45,000excess over $30,0004Over $45,000 but$2,748.00 plus 7.70% of5not over $60,000excess over $45,0006Over $60,000$3,903.00 plus 8.00% of7excess over $60,0008 (c) There is hereby imposed on the taxable income of [(1)] 9 every unmarried individual (other than a surviving spouse, or the 10 head of a household) and [(2)] on the taxable income of every 11 married individual who does not make a single return jointly with 12 the individual's spouse under section 235-93 a tax determined in 13 accordance with the [following table:]tax tables prescribed14under paragraph (1).15(1)In the case of any taxable year beginning after 16 December 31, 1998: 17 If the taxable income is: The tax shall be: 18 Not over $2,000 1.60% of taxable income 19 Over $2,000 but $32.00 plus 3.90% of 20 not over $4,000 excess over $2,000 21 Over $4,000 but $110.00 plus 6.80% of 22 not over $8,000 excess over $4,000 a TAX-05(99) Page 12 1201 H.B. NO. 1 Over $8,000 but $382.00 plus 7.20% of 2 not over $12,000 excess over $8,000 3 Over $12,000 but $670.00 plus 7.50% of 4 not over $16,000 excess over $12,000 5 Over $16,000 but $970.00 plus 7.80% of 6 not over $20,000 excess over $16,000 7 Over $20,000 but $1,282.00 plus 8.20% of 8 not over $30,000 excess over $20,000 9 Over $30,000 but $2,102.00 plus 8.50% of 10 not over $40,000 excess over $30,000 11 Over $40,000 $2,952.00 plus 8.75% of 12 excess over $40,000 13 In the case of any taxable year beginning after December 31, 14 2000: 15 If the taxable income is: The tax shall be: 16 Not over $2,000 1.50% of taxable income 17 Over $2,000 but $30.00 plus 3.70% of 18 not over $4,000 excess over $2,000 19 Over $4,000 but $104.00 plus 6.40% of 20 not over $8,000 excess over $4,000 21 Over $8,000 but $360.00 plus 6.90% of 22 not over $12,000 excess over $8,000 a TAX-05(99) Page 13 1201 H.B. NO. 1 Over $12,000 but $636.00 plus 7.30% of 2 not over $16,000 excess over $12,000 3 Over $16,000 but $928.00 plus 7.60% of 4 not over $20,000 excess over $16,000 5 Over $20,000 but $1,232.00 plus 7.90% of 6 not over $30,000 excess over $20,000 7 Over $30,000 but $2,022.00 plus 8.20% of 8 not over $40,000 excess over $30,000 9 Over $40,000 $2,842.00 plus 8.50% of 10 excess over $40,000 11 In the case of any taxable year beginning after December 31, 12 2001: 13 If the taxable income is: The tax shall be: 14 Not over $2,000 1.40% of taxable income 15 Over $2,000 but $28.00 plus 3.20% of 16 not over $4,000 excess over $2,000 17 Over $4,000 but $92.00 plus 5.50% of 18 not over $8,000 excess over $4,000 19 Over $8,000 but $312.00 plus 6.40% of 20 not over $12,000 excess over $8,000 21 Over $12,000 but $568.00 plus 6.80% of 22 not over $16,000 excess over $12,000 a TAX-05(99) Page 14 1201 H.B. NO. 1 Over $16,000 but $840.00 plus 7.20% of 2 not over $20,000 excess over $16,000 3 Over $20,000 but $1,128.00 plus 7.60% of 4 not over $30,000 excess over $20,000 5 Over $30,000 but $1,888.00 plus 7.90% of 6 not over $40,000 excess over $30,000 7 Over $40,000 $2,678.00 plus 8.25% of 8 excess over $40,000 9(2)In the event the conditions of subsection (e) are met,10a tax determined by the following tax tables, (Phase 111and Phase 2) applicable to the taxable year, shall be12imposed in lieu of the tax imposed under paragraph (1)13of this subsection.14Phase 115In the case of any taxable year beginning after December 31,162000:17If the taxable income is:The tax shall be:18Not over $2,0001.40% of taxable income19Over $2,000 but$28.00 plus 3.20% of20not over $4,000excess over $2,00021Over $4,000 but$92.00 plus 5.50% of22not over $8,000excess over $4,000a TAX-05(99) Page 15 1201 H.B. NO. 1Over $8,000 but$312.00 plus 6.40% of2not over $12,000excess over $8,0003Over $12,000 but$568.00 plus 6.80% of4not over $16,000excess over $12,0005Over $16,000 but$840.00 plus 7.20% of6not over $20,000excess over $16,0007Over $20,000 but$1,128.00 plus 7.60% of8not over $30,000excess over $20,0009Over $30,000 but$1,888.00 plus 7.90% of10not over $40,000excess over $30,00011Over $40,000$2,678.00 plus 8.25% of12excess over $40,00013Phase 214In the case of any taxable year beginning after December 31,152001:16If the taxable income is:The tax shall be:17Not over $2,000 1.30% of taxable income18Over $2,000 but$26.00 plus 3.10% of19not over $4,000excess over $2,00020Over $4,000 but$88.00 plus 5.30% of21not over $8,000excess over $4,00022Over $8,000 but$300.00 plus 6.20% ofa TAX-05(99) Page 16 1201 H.B. NO. 1not over $12,000excess over $8,0002Over $12,000 but$548.00 plus 6.60% of3not over $16,000excess over $12,0004Over $16,000 but$812.00 plus 7.00% of5not over $20,000excess over $16,0006Over $20,000 but$1,092.00 plus 7.40% of7not over $30,000excess over $20,0008Over $30,000 but$1,832.00 plus 7.70% of9not over $40,000excess over $30,00010Over $40,000$2,602.00 plus 8.00% of11excess over $40,00012 (d) The tax imposed by section 235-2.4 on estates and trusts 13 shall be determined in accordance with the [following table:]tax14tables prescribed under paragraph (1).15(1)In the case of any taxable year beginning after 16 December 31, 1998: 17 If the taxable income is: The tax shall be: 18 Not over $2,000 1.60% of taxable income 19 Over $2,000 but $32.00 plus 3.90% of 20 not over $4,000 excess over $2,000 21 Over $4,000 but $110.00 plus 6.80% of 22 not over $8,000 excess over $4,000 a TAX-05(99) Page 17 1201 H.B. NO. 1 Over $8,000 but $382.00 plus 7.20% of 2 not over $12,000 excess over $8,000 3 Over $12,000 but $670.00 plus 7.50% of 4 not over $16,000 excess over $12,000 5 Over $16,000 but $970.00 plus 7.80% of 6 not over $20,000 excess over $16,000 7 Over $20,000 but $1,282.00 plus 8.20% of 8 not over $30,000 excess over $20,000 9 Over $30,000 but $2,102.00 plus 8.50% of 10 not over $40,000 excess over $30,000 11 Over $40,000 $2,952.00 plus 8.75% of 12 excess over $40,000 13 In the case of any taxable year beginning after December 31, 14 2000: 15 If the taxable income is: The tax shall be: 16 Not over $2,000 1.50% of taxable income 17 Over $2,000 but $30.00 plus 3.70% of 18 not over $4,000 excess over $2,000 19 Over $4,000 but $104.00 plus 6.40% of 20 not over $8,000 excess over $4,000 21 Over $8,000 but $360.00 plus 6.90% of 22 not over $12,000 excess over $8,000 a TAX-05(99) Page 18 1201 H.B. NO. 1 Over $12,000 but $636.00 plus 7.30% of 2 not over $16,000 excess over $12,000 3 Over $16,000 but $928.00 plus 7.60% of 4 not over $20,000 excess over $16,000 5 Over $20,000 but $1,232.00 plus 7.90% of 6 not over $30,000 excess over $20,000 7 Over $30,000 but $2,022.00 plus 8.20% of 8 not over $40,000 excess over $30,000 9 Over $40,000 $2,842.00 plus 8.50% of 10 excess over $40,000 11 In the case of any taxable year beginning after December 31, 12 2001: 13 If the taxable income is: The tax shall be: 14 Not over $2,000 1.40% of taxable income 15 Over $2,000 but $28.00 plus 3.20% of 16 not over $4,000 excess over $2,000 17 Over $4,000 but $92.00 plus 5.50% of 18 not over $8,000 excess over $4,000 19 Over $8,000 but $312.00 plus 6.40% of 20 not over $12,000 excess over $8,000 21 Over $12,000 but $568.00 plus 6.80% of 22 not over $16,000 excess over $12,000 a TAX-05(99) Page 19 1201 H.B. NO. 1 Over $16,000 but $840.00 plus 7.20% of 2 not over $20,000 excess over $16,000 3 Over $20,000 but $1,128.00 plus 7.60% of 4 not over $30,000 excess over $20,000 5 Over $30,000 but $1,888.00 plus 7.90% of 6 not over $40,000 excess over $30,000 7 Over $40,000 $2,678.00 plus 8.25% of 8 excess over $40,000 9(2)In the event the conditions of subsection (e) are met,10a tax determined by the following tax tables, (Phase 111and Phase 2) applicable to the taxable year, shall be12imposed in lieu of the tax imposed under paragraph (1)13of this subsection.14Phase 115In the case of any taxable year beginning after December 31,162000:17If the taxable income is:The tax shall be:18Not over $2,000 1.40% of taxable income19Over $2,000 but$28.00 plus 3.20% of20not over $4,000excess over $2,00021Over $4,000 but$92.00 plus 5.50% of22not over $8,000excess over $4,000a TAX-05(99) Page 20 1201 H.B. NO. 1Over $8,000 but$312.00 plus 6.40% of2not over $12,000excess over $8,0003Over $12,000 but$568.00 plus 6.80% of4not over $16,000excess over $12,0005Over $16,000 but$840.00 plus 7.20% of6not over $20,000excess over $16,0007Over $20,000 but$1,128.00 plus 7.60% of8not over $30,000excess over $20,0009Over $30,000 but$1,888.00 plus 7.90% of10not over $40,000excess over $30,00011Over $40,000$2,678.00 plus 8.25% of12excess over $40,00013Phase 214In the case of any taxable year beginning after December 31,152001:16If the taxable income is:The tax shall be:17Not over $2,0001.30% of taxable income18Over $2,000 but$26.00 plus 3.10% of19not over $4,000excess over $2,00020Over $4,000 but$88.00 plus 5.30% of21not over $8,000excess over $4,00022Over $8,000 but$300.00 plus 6.20% ofa TAX-05(99) Page 21 1201 H.B. NO. 1not over $12,000excess over $8,0002Over $12,000 but$548.00 plus 6.60% of3not over $16,000excess over $12,0004Over $16,000 but$812.00 plus 7.00% of5not over $20,000excess over $16,0006Over $20,000 but$1,092.00 plus 7.40% of7not over $30,000excess over $20,0008Over $30,000 but$1,832.00 plus 7.70% of9not over $40,000excess over $30,00010Over $40,000$2,602.00 plus 8.00% of11excess over $40,00012(e)The tax tables designated as Phases 1 and 2 under13subsections (a), (b), (c), and (d) shall be14effective as follows:15(1)Phase 1 shall be effective if the general fund tax16revenues are determined and certified by the17director of finance to be equal to or greater than18$2,942.2 million as of June 30, 2000.19(2)Phase 2 shall be effective if the general fund tax20revenues are determined and certified by the21director of finance to be equal to or greater than22$3,050 million as of June 30, 2001.23After certification by the director of finance that the taxa TAX-05(99) Page 22 1201 H.B. NO. 1tables in Phase 1 or 2 are in effect, the director of taxation2shall publish a notice no later than August 31 following the3close of the applicable fiscal year,4 [(e)](f)Any taxpayer, other than a corporation, acting as 5 a business entity in more than one state who is required by this 6 chapter to file a return may elect to report and pay a tax of .5 7 per cent of its annual gross sales (1) where the taxpayer's only 8 activities in this State consist of sales; and (2) who does not 9 own or rent real estate or tangible personal property; and (3) 10 whose annual gross sales in or into this State during the tax 11 year is not in excess of $100,000. 12 [(f)](g)If a taxpayer has a net capital gain for any 13 taxable year to which this subsection applies, then the tax 14 imposed by this section shall not exceed the sum of: 15 (1) The tax computed at the rates and in the same manner as 16 if this subsection had not been enacted on the 17 greater of: 18 (A) The taxable income reduced by the amount of net 19 capital gain, or 20 (B) The amount of taxable income taxed at a rate below 21 [7.25 per cent,]the rate in paragraph (3)(A),22(3)(B), or (3)(C), applicable to the taxable year,23 plus a TAX-05(99) Page 23 1201 H.B. NO. 1 (2) A tax [of 7.25 per cent of]at the rate provided in2paragraph (3)(A), (3)(B), or (3)(C), applicable to the3taxable year, onthe amount of taxable income in excess 4 of the amount determined under paragraph (1). 5(3)For purposes of this subsection, the tax rates are:6(A)6.8 per cent for any taxable year beginning after7December 31, 1998;8(B)6.4 per cent for any taxable year beginning after9December 31, 2000; except that the rate shall be105.5 per cent for any taxable year beginning after11December 31, 2000, provided the Phase 1 tax tables12pursuant to subsection (e) are in effect;13(c)5.5 per cent for any taxable year beginning after14December 31, 2001; except that the rate shall be155.3 per cent for any taxable year beginning after16December 31, 2001, provided the Phase 2 tax tables17pursuant to subsection (e) are in effect.18 [This subsection shall apply to individuals, estates, and 19 trusts for taxable years beginning after December 31, 1986.]" 20 SECTION 2. Section 235-15, Hawaii Revised Statutes, is 21 repealed. a TAX-05(99) Page 24 1201 H.B. NO. 1 ["§235-15 Tax credits to promote the purchase of child 2passenger restraint systems.(a) Any taxpayer who files an 3 individual income tax return for a taxable year may claim an 4 income tax credit under this section against the Hawaii state 5 individual income tax. 6 (b) The tax credit shall be $25; provided that the taxpayer 7 purchases one or more new child passenger restraint systems in 8 the tax year for which the credit is properly claimed; and 9 provided that such restraint system can be shown to be in 10 substantial conformity with specifications for such restraint 11 systems set forth by the federal motor vehicle safety standards 12 which were in effect at the time of such purchase. 13 (c) If the tax credit claimed by the taxpayer under this 14 section exceeds the amount of the income tax payments due from 15 the taxpayer, the excess of credit over payments due shall be 16 refunded to the taxpayer; provided that the tax credit properly 17 claimed by a taxpayer who has no income tax liability shall be 18 paid to the taxpayer; and provided that no refunds or payments on 19 account of the tax credit allowed by this section shall be made 20 for amounts less than $1. 21 (d) The director of taxation shall prepare such forms as 22 may be necessary to claim a credit under this section, may 23 require proof of the claim for the tax credit, and may adopt a TAX-05(99) Page 25 1201 H.B. NO. 1 rules pursuant to chapter 91. 2 (e) All of the provisions relating to assessments and 3 refunds under this chapter and under section 231-23(c)(1) shall 4 apply to the tax credit under this section. 5 (f) Claims for the tax credit under this section, including 6 any amended claims, shall be filed on or before the end of the 7 twelfth month following the taxable year for which the credit may 8 be claimed."] 9 SECTION 3. Section 235-55.85, Hawaii Revised Statutes, is 10 amended by amending subsection (b) to read as follows: 11 "(b) Each resident individual taxpayer may claim a 12 refundable low-income tax credit multiplied by the number of 13 qualified exemptions to which the taxpayer is entitled in 14 accordance with the table below; provided that a husband and wife 15 filing separate tax returns for a taxable year for which a joint 16 return could have been filed by them shall claim only the tax 17 credit to which they would have been entitled had a joint return 18 been filed. 19 Adjusted gross income Credit per exemption 20 Under $10,000 $35 21 $10,000 under $15,000 25 a TAX-05(99) Page 26 1201 H.B. NO. 1 $15,000 under $20,000 10 2 [Over] $20,000and over0" 3 SECTION 4. Statutory material to be repealed is bracketed. 4 New statutory material is underscored. 5 SECTION 5. This Act shall take effect upon approval; 6 provided that if a taxpayer's taxable year includes the effective 7 date of the tax rate changes (unless that date is the first day 8 of the taxable year), then, (1) the tentative taxes shall be 9 computed by applying the rate for the period before the effective 10 date change, and the rate for the period on and after that date, 11 to the taxable income for the entire year; and (2) the tax for 12 the taxable year shall be the sum of that proportion of each 13 tentative tax which the number of days in each period bears to 14 the number of days in the entire taxable year; and provided that 15 section 2 shall apply to taxable years beginning after December 16 31, 2000; and further provided that section 3 shall apply to 17 taxable years beginning after December 31, 1998. 18 19 INTRODUCED BY: ________________________ a TAX-05(99)