REPORT TITLE:
Conveyance Tax Exemptions


DESCRIPTION:
Exempts from the conveyance tax transfers of real property from
an individual to a corporation, limited liability company, or
partnership that is wholly owned by the individual; or transfers
between a parent company and its wholly owned subsidiary.  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           1010
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO THE CONVEYANCE TAX.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Section 247-3, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "247-3 Exemptions.  The tax imposed by section 247-1 shall
 
 4 not apply to:
 
 5      (1)  Any document or instrument [which] that is executed
 
 6           prior to January 1, 1967[.];
 
 7      (2)  Any document or instrument [which] that is given to
 
 8           secure a debt or obligation[.];
 
 9      (3)  Any document or instrument [which] that only confirms
 
10           or corrects a deed, lease, sublease, assignment,
 
11           transfer, or conveyance previously recorded or
 
12           filed[.];
 
13      (4)  Any document or instrument between husband and wife,
 
14           reciprocal beneficiaries, or parent and child, in which
 
15           only a nominal consideration is paid[.];
 
16      (5)  Any document or instrument in which there is a
 
17           consideration of $100 or less paid or to be paid[.];
 
18      (6)  Any document or instrument conveying real property
 
19           [which] that is executed pursuant to an agreement of
 

 
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                                     S.B. NO.           1010
                                                        
                                                        

 
 1           sale, and where applicable, any assignment of the
 
 2           agreement of sale, or assignments thereof; provided
 
 3           that the taxes under this chapter have been fully paid
 
 4           upon the agreement of sale, and where applicable, upon
 
 5           such assignment or assignments of agreements of
 
 6           sale[.];
 
 7      (7)  Any deed, lease, sublease, assignment of lease,
 
 8           agreement of sale, assignment of agreement of sale,
 
 9           instrument or writing in which the United States or any
 
10           agency or instrumentality thereof or the State or any
 
11           agency, instrumentality, or governmental or political
 
12           subdivision thereof are the only parties thereto[.];
 
13      (8)  Any document or instrument executed pursuant to a tax
 
14           sale conducted by the United States or any agency or
 
15           instrumentality thereof or the State or any agency,
 
16           instrumentality, or governmental or political
 
17           subdivision thereof for delinquent taxes or
 
18           assessments[.];
 
19      (9)  Any document or instrument conveying real property to
 
20           the United States or any agency or instrumentality
 
21           thereof or the State or any agency, instrumentality, or
 
22           governmental or political subdivision thereof pursuant
 
23           to the threat of the exercise or the exercise of the
 

 
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                                     S.B. NO.           1010
                                                        
                                                        

 
 1           power of eminent domain[.];
 
 2     (10)  Any document or instrument [which] that solely conveys
 
 3           or grants an easement or easements[.];
 
 4     (11)  Any document or instrument whereby owners partition
 
 5           their property, whether by mutual agreement or judicial
 
 6           action; provided that the value of each owner's
 
 7           interest in the property after partition is equal in
 
 8           value to that owner's interest before partition[.];
 
 9     (12)  Any document or instrument between marital partners or
 
10           reciprocal beneficiaries who are parties to a divorce
 
11           action or termination of reciprocal beneficiary
 
12           relationship [which] that is executed pursuant to an
 
13           order of the court in the divorce action or termination
 
14           of reciprocal beneficiary relationship[.];
 
15     (13)  Any document or instrument conveying real property from
 
16           a testamentary trust to a beneficiary under the
 
17           trust[.];
 
18     (14)  Any document or instrument conveying real property from
 
19           a grantor to the grantor's revocable living trust, or
 
20           from a grantor's revocable living trust to the grantor
 
21           as beneficiary of the trust[.];
 
22     (15)  Any document or instrument conveying real property, or
 
23           any interest therein, owned by a transferor, whether an
 

 
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                                     S.B. NO.           1010
                                                        
                                                        

 
 1           individual or a business entity, to a business entity
 
 2           that is owned, in whole or in part, by the transferor,
 
 3           or real property, or any interest therein, owned by a
 
 4           business entity conveyed by any document or instrument
 
 5           to an individual or business entity, either of which
 
 6           owns an interest in the transferor.  In the case where
 
 7           real property is conveyed by a transferor to a business
 
 8           entity that is partially owned by the transferor, the
 
 9           value of the transferor's interest in the property
 
10           before the transfer must be equal in value to the
 
11           interest in the tranferee business entity received in
 
12           exchange for the property;
 
13     (16)  Any document or instrument conveying real property, or
 
14           any interest therein, from a business entity to any of
 
15           its shareholders, partners, or members, as the case may
 
16           be, executed in connection with the dissolution and
 
17           liquidation of the business entity; or
 
18     (17)  Any document or instrument conveying real property, or
 
19           any interest therein, executed in connection with the
 
20           conversion of:
 
21           (A)  A general partnership or limited partnership to a
 
22                limited liability company; or
 
23           (B)  A limited liability company to a general
 

 
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                                     S.B. NO.           1010
                                                        
                                                        

 
 1                partnership or limited partnership.
 
 2 As used in this section, "business entity" means a corporation,
 
 3 limited liability company, general partnership, limited
 
 4 partnership, limited liability partnership, or any other form of
 
 5 enterprise other than an individual.  An individual shall include
 
 6 the individual's revocable living trust."
 
 7     SECTION 2.  Statutory material to be repealed is bracketed.
 
 8 New statutory material is underscored.
 
 9     SECTION 3.  This Act shall take effect upon its approval.
 
10 
 
11                           INTRODUCED BY:  _______________________