§420-16 Tax exemption; credit. The corporation shall not be subject to any taxes based upon or measured by income which are levied by the State; and the securities, evidences of indebtedness, and shares of the capital stock issued by the corporation established under this chapter, their transfer, and income therefrom and deposits of financial institutions invested therein, shall at all times be free from taxation within the State.

Any stockholder, member, or other holder of any securities, evidences of indebtedness, or shares of the capital stock of the corporation who realizes a loss from the sale, redemption, or other disposition of any securities, evidences of indebtedness, or shares of the capital stock of the corporation, including any loss realized on a partial or complete liquidation of the corporation, and who is not entitled to deduct the loss in computing any of the stockholder's, member's, or other holder's taxes to the State shall be entitled to credit against any taxes subsequently becoming due to the State from the stockholder, member, or other holder, a percentage of the loss equivalent to the highest rate of tax assessed for the year in which the loss occurs upon mercantile and business corporations. [L 1957, c 288, §15; Supp, §176A-15; HRS §420-16]