STAND. COM. REP. NO. 536

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 1002

       S.D. 1

 

 

 

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

 

Sir:

 

     Your Committee on Ways and Means, to which was referred S.B. No. 1002 entitled:

 

"A BILL FOR AN ACT RELATING TO CONFORMITY TO THE INTERNAL REVENUE CODE,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to conform Hawaii's income and estate and generation-skipping transfer tax laws to the Internal Revenue Code of 1986, as amended, as of December 31, 2016.

 

     Your Committee received testimony in support of this measure from the Department of Taxation and one individual.

 

     Your Committee received comments on this measure from the Tax Foundation of Hawaii.

 

     Your Committee finds that this annual conformity measure is submitted by the Department of Taxation in compliance with section 235-2.5, Hawaii Revised Statutes, which requires the department to annually submit a measure to maintain state income tax conformity with the federal Internal Revenue Code.  This measure is also intended to comply with section 236E-4, Hawaii Revised Statutes, which requires the department to annually submit a measure to maintain state estate and generation-skipping transfer tax conformity with the federal Internal Revenue Code.  The purpose of conformity is to update the state tax laws with those changes made to the federal Internal Revenue Code during the past year and to adopt those changes that are appropriate for Hawaii law.

 

     Your Committee believes that, given the Department of Taxation's testimony that the revenue impact of this measure is indeterminate, more information on the possible revenue impact is needed before taking final action on this measure.

 

     Accordingly, your Committee has amended this measure by:

 

     (1)  Changing the effective date to January 1, 2050;

 

     (2)  Providing that the portions of the measure relating to the income tax law apply to taxable years beginning after December 31, 2049; and

 

     (3)  Providing that the portions of the measure relating to the estate and generation-skipping transfer tax apply to decedents dying or taxable transfers occurring after December 31, 2049,

 

to facilitate further discussion on the measure.

 

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1002, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1002, S.D. 1, and be placed on the calendar for Third Reading.

 

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

 

 

 

________________________________

JILL N. TOKUDA, Chair