Income Tax

Requires organizations that file a Form 990 with the Internal
Revenue Service to file a copy of the form with the department of
taxation.  (HB1682 HD1)

HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  Section 235-101, Hawaii Revised Statutes, is
 2 amended to read as follows:
 3      "235-101  Federal returns and assessments, when copies are
 4 required.(a)  In prescribing the form of return the department
 5 of taxation may require that a person who is required to file a
 6 federal income tax return include in the person's return a
 7 reconciliation of the return with the person's federal return, or
 8 that the person furnish with the return and as a part thereof a
 9 copy of the federal return.
10      (b)  It shall be the duty of every person who is required by
11 section 235-92 to make a return, to report to the department, as
12 to any taxable year governed by this chapter, if:
13      (1)  [the] The amount of taxable income as returned to the
14           United States is changed, corrected, or adjusted by an
15           officer of the United States or other competent
16           authority[, or];
17      (2)  [a] A change in taxable income results from a
18           renegotiation of a contract with the United States or a
19           subcontract thereunder[, or];

Page 2                                                     1682
                                     H.B. NO.           H.D. 1

 1      (3)  [a] A recomputation of the income tax imposed by the
 2           United States under the Internal Revenue Code results
 3           from any cause[,]; or
 4      (4)  [an] An amended income tax return is made to the United
 5           States.
 6 The report shall be made within ninety days after the change,
 7 correction, adjustment, or recomputation is finally determined or
 8 the amended return is filed, as the case may be.  The report
 9 required by this subsection shall be made in the form of an
10 amendment of the person's return filed under this chapter.  The
11 amended return shall be accompanied by a copy of the document
12 issued by the United States under (1) to (3).  The statutory
13 period for the assessment of any deficiency or the determination
14 of any refund attributable to this report shall not expire before
15 the expiration of one year from the date the department is
16 notified by the taxpayer or the Internal Revenue Service,
17 whichever is earlier, of such a report in writing.  Before the
18 expiration of this one-year period, the department and the
19 taxpayer may agree in writing to the extension of this period.
20 The period so agreed upon may be further extended by subsequent
21 agreements in writing made before the expiration of the period
22 previously agreed upon.

Page 3                                                     1682
                                     H.B. NO.           H.D. 1

 1      (c)  Whenever, in the opinion of the department, it is
 2 necessary to examine any federal income tax return of any
 3 taxpayer or any determination, assessment, or report related
 4 thereto, the department may compel the taxpayer to produce for
 5 inspection a copy of any federal return, copies of all statements
 6 and schedules in support thereof, and copies of all
 7 determinations, assessments, and reports related thereto. 
 8      (d)  Any person who is required to file federal form 990
 9 under section 6033 of the Internal Revenue Code shall file a copy
10 of the completed and filed form 990 with the department."
11      SECTION 2.  The legislative auditor shall compile the
12 information contained in every federal form 990 for any person
13 required to file under section 6033 of the Internal Revenue Code.
14 The auditor may consult with the speaker of the house of
15 representatives and the president of the senate to determine the
16 scope of the information to be compiled.  The auditor shall
17 submit a report of the compiled information to the legislature
18 prior to each regular session in an even-numbered year.
19      SECTION 3.  Statutory material to be repealed is bracketed.
20 New statutory material is underscored.
21      SECTION 4.  This Act, upon its approval, shall apply to
22 taxable years beginning after December 31, 1998.