REPORT TITLE: 
Income tax rates
DESCRIPTION:
Accelerates the governor's phase 2 income tax cuts.

 
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HOUSE OF REPRESENTATIVES                H.B. NO.1573       
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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________________________________________________________________


                     A BILL FOR AN ACT

RELATING TO INCOME TAX RATE REDUCTIONS.



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


 1      SECTION 1.  The purpose of this Act is to accelerate the
 
 2 governor's phase 2 income tax cuts which were passed by the
 
 3 legislature during the 1998 Regular Session.
 
 4      SECTION 2.  Section 235-51, Hawaii Revised Statutes, is
 
 5 amended to read as follows:
 
 6                 "PART III.  INDIVIDUAL INCOME TAX
 
 7 
 
 8      §235-51  Tax imposed on individuals; rates.(a)  There is
 
 9 hereby imposed on the taxable income of (1) every taxpayer who
 
10 files a joint return under section 235-93; and (2) every
 
11 surviving spouse a tax determined in accordance with the
 
12 following table:
 
13      In the case of any taxable year beginning after December 31,
 
14 1998:
 
15 If the taxable income is:                       The tax shall be:
 
16 Not over $4,000     1.60% of taxable income
 
17 Over $4,000 but     $64.00 plus 3.90% of
 
18      not over $8,000                           excess over $4,000
 
19 Over $8,000 but     $220.00 plus 6.80% of
 

 
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 1      not over $16,000                          excess over $8,000
 
 2 Over $16,000 but    $764.00 plus 7.20% of
 
 3      not over $24,000                         excess over $16,000
 
 4 Over $24,000 but    $1,340.00 plus 7.50% of
 
 5      not over $32,000                         excess over $24,000
 
 6 Over $32,000 but    $1,940.00 plus 7.80% of
 
 7      not over $40,000                         excess over $32,000
 
 8 Over $40,000 but    $2,564.00 plus 8.20% of
 
 9      not over $60,000                         excess over $40,000
 
10 Over $60,000 but    $4,204.00 plus 8.50% of
 
11      not over $80,000                         excess over $60,000
 
12 Over $80,000   $5,904.00 plus 8.75% of
 
13                excess over $80,000
 
14      In the case of any taxable year beginning after December 31,
 
15 [2000] 1999:
 
16 If the taxable income is:                       The tax shall be:
 
17 Not over $4,000     1.50% of taxable income
 
18 Over $4,000 but     $60.00 plus 3.70% of
 
19      not over $8,000                           excess over $4,000
 
20 Over $8,000 but     $208.00 plus 6.40% of
 
21      not over $16,000                          excess over $8,000
 
22 Over $16,000 but    $720.00 plus 6.90% of
 
23      not over $24,000                         excess over $16,000
 

 
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 1 Over $24,000 but    $1,272.00 plus 7.30% of
 
 2      not over $32,000                         excess over $24,000
 
 3 Over $32,000 but    $1,856.00 plus 7.60% of
 
 4      not over $40,000                         excess over $32,000
 
 5 Over $40,000 but    $2,464.00 plus 7.90% of
 
 6      not over $60,000                         excess over $40,000
 
 7 Over $60,000 but    $4,044.00 plus 8.20% of
 
 8      not over $80,000                         excess over $60,000
 
 9 Over $80,000   $5,684.00 plus 8.50% of
 
10                excess over $80,000
 
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 $4,000     1.40% of taxable income
 
15 Over $4,000 but     $56.00 plus 3.20% of
 
16      not over $8,000                           excess over $4,000
 
17 Over $8,000 but     $184.00 plus 5.50% of
 
18      not over $16,000                          excess over $8,000
 
19 Over $16,000 but    $624.00 plus 6.40% of
 
20      not over $24,000                         excess over $16,000
 
21 Over $24,000 but    $1,136.00 plus 6.80% of
 
22      not over $32,000                         excess over $24,000
 
23 Over $32,000 but    $1,680.00 plus 7.20% of
 

 
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 1      not over $40,000                         excess over $32,000
 
 2 Over $40,000 but    $2,256.00 plus 7.60% of
 
 3      not over $60,000                         excess over $40,000
 
 4 Over $60,000 but    $3,776.00 plus 7.90% of
 
 5      not over $80,000                         excess over $60,000
 
 6 Over $80,000   $5,356.00 plus 8.25% of
 
 7                excess over $80,000
 
 8      (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:
 
11      In the case of any taxable year beginning after December 31,
 
12 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
 
23 Over $24,000 but    $1,455.00 plus 7.80% of
 

 
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 1      not over $30,000                         excess over $24,000
 
 2 Over $30,000 but    $1,923.00 plus 8.20% of
 
 3      not over $45,000                         excess over $30,000
 
 4 Over $45,000 but    $3,153.00 plus 8.50% of
 
 5      not over $60,000                         excess over $45,000
 
 6 Over $60,000   $4,428.00 plus 8.75% of
 
 7                excess over $60,000
 
 8      In the case of any taxable year beginning after December 31,
 
 9 [2000] 1999:
 
10 If the taxable income is:                       The tax shall be:
 
11 Not over $3,000     1.50% of taxable income
 
12 Over $3,000 but     $45.00 plus 3.70% of
 
13      not over $6,000                           excess over $3,000
 
14 Over $6,000 but     $156.00 plus 6.40% of
 
15      not over $12,000                          excess over $6,000
 
16 Over $12,000 but    $540.00 plus 6.90% of
 
17      not over $18,000                         excess over $12,000
 
18 Over $18,000 but    $954.00 plus 7.30% of
 
19      not over $24,000                         excess over $18,000
 
20 Over $24,000 but    $1,392.00 plus 7.60% of
 
21      not over $30,000                         excess over $24,000
 
22 Over $30,000 but    $1,848.00 plus 7.90% of
 
23      not over $45,000                         excess over $30,000
 

 
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 1 Over $45,000 but    $3,033.00 plus 8.20% of
 
 2      not over $60,000                         excess over $45,000
 
 3 Over $60,000   $4,263.00 plus 8.50% of
 
 4                excess over $60,000
 
 5      In the case of any taxable year beginning after December 31,
 
 6 2001:
 
 7 If the taxable income is:                       The tax shall be:
 
 8 Not over $3,000     1.40% of taxable income
 
 9 Over $3,000 but     $42.00 plus 3.20% of
 
10      not over $6,000                           excess over $3,000
 
11 Over $6,000 but     $138.00 plus 5.50% of
 
12      not over $12,000                          excess over $6,000
 
13 Over $12,000 but    $468.00 plus 6.40% of
 
14      not over $18,000                         excess over $12,000
 
15 Over $18,000 but    $852.00 plus 6.80% of
 
16      not over $24,000                         excess over $18,000
 
17 Over $24,000 but    $1,260.00 plus 7.20% of
 
18      not over $30,000                         excess over $24,000
 
19 Over $30,000 but    $1,692.00 plus 7.60% of
 
20      not over $45,000                         excess over $30,000
 
21 Over $45,000 but    $2,832.00 plus 7.90% of
 
22      not over $60,000                         excess over $45,000
 
23 Over $60,000   $4,017.00 plus 8.25% of
 

 
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 1                excess over $60,000
 
 2      (c)  There is hereby imposed on the taxable income of (1)
 
 3 every unmarried individual (other than a surviving spouse, or the
 
 4 head of a household) and (2) on the taxable income of every
 
 5 married individual who does not make a single return jointly with
 
 6 the individual's spouse under section 235-93 a tax determined in
 
 7 accordance with the following table:
 
 8      In the case of any taxable year beginning after December 31,
 
 9 1998:
 
10 If the taxable income is:                       The tax shall be:
 
11 Not over $2,000     1.60% of taxable income
 
12 Over $2,000 but     $32.00 plus 3.90% of
 
13      not over $4,000                           excess over $2,000
 
14 Over $4,000 but     $110.00 plus 6.80% of
 
15      not over $8,000                           excess over $4,000
 
16 Over $8,000 but     $382.00 plus 7.20% of
 
17      not over $12,000                          excess over $8,000
 
18 Over $12,000 but    $670.00 plus 7.50% of
 
19      not over $16,000                         excess over $12,000
 
20 Over $16,000 but    $970.00 plus 7.80% of
 
21      not over $20,000                         excess over $16,000
 
22 Over $20,000 but    $1,282.00 plus 8.20% of
 
23      not over $30,000                         excess over $20,000
 

 
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 1 Over $30,000 but    $2,102.00 plus 8.50% of
 
 2      not over $40,000                         excess over $30,000
 
 3 Over $40,000   $2,952.00 plus 8.75% of
 
 4                excess over $40,000
 
 5      In the case of any taxable year beginning after December 31,
 
 6 [2000] 1999:
 
 7 If the taxable income is:                       The tax shall be:
 
 8 Not over $2,000     1.50% of taxable income
 
 9 Over $2,000 but     $30.00 plus 3.70% of
 
10      not over $4,000                           excess over $2,000
 
11 Over $4,000 but     $104.00 plus 6.40% of
 
12      not over $8,000                           excess over $4,000
 
13 Over $8,000 but     $360.00 plus 6.90% of
 
14      not over $12,000                          excess over $8,000
 
15 Over $12,000 but    $636.00 plus 7.30% of
 
16      not over $16,000                         excess over $12,000
 
17 Over $16,000 but    $928.00 plus 7.60% of
 
18      not over $20,000                         excess over $16,000
 
19 Over $20,000 but    $1,232.00 plus 7.90% of
 
20      not over $30,000                         excess over $20,000
 
21 Over $30,000 but    $2,022.00 plus 8.20% of
 
22      not over $40,000                         excess over $30,000
 
23 Over $40,000   $2,842.00 plus 8.50% of
 

 
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 1                excess over $40,000
 
 2      In the case of any taxable year beginning after December 31,
 
 3 2001:
 
 4 If the taxable income is:                       The tax shall be:
 
 5 Not over $2,000     1.40% of taxable income
 
 6 Over $2,000 but     $28.00 plus 3.20% of
 
 7      not over $4,000                           excess over $2,000
 
 8 Over $4,000 but     $92.00 plus 5.50% of
 
 9      not over $8,000                           excess over $4,000
 
10 Over $8,000 but     $312.00 plus 6.40% of
 
11      not over $12,000                          excess over $8,000
 
12 Over $12,000 but    $568.00 plus 6.80% of
 
13      not over $16,000                         excess over $12,000
 
14 Over $16,000 but    $840.00 plus 7.20% of
 
15      not over $20,000                         excess over $16,000
 
16 Over $20,000 but    $1,128.00 plus 7.60% of
 
17      not over $30,000                         excess over $20,000
 
18 Over $30,000 but    $1,888.00 plus 7.90% of
 
19      not over $40,000                         excess over $30,000
 
20 Over $40,000   $2,678.00 plus 8.25% of
 
21                excess over $40,000
 
22      (d)  The tax imposed by section 235-2.4 on estates and
 
23 trusts shall be determined in accordance with the following
 

 
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 1 table:
 
 2      In the case of any taxable year beginning after December 31,
 
 3 1998:
 
 4 If the taxable income is:                       The tax shall be:
 
 5 Not over $2,000     1.60% of taxable income
 
 6 Over $2,000 but     $32.00 plus 3.90% of
 
 7      not over $4,000                           excess over $2,000
 
 8 Over $4,000 but     $110.00 plus 6.80% of
 
 9      not over $8,000                           excess over $4,000
 
10 Over $8,000 but     $382.00 plus 7.20% of
 
11      not over $12,000                          excess over $8,000
 
12 Over $12,000 but    $670.00 plus 7.50% of
 
13      not over $16,000                         excess over $12,000
 
14 Over $16,000 but    $970.00 plus 7.80% of
 
15      not over $20,000                         excess over $16,000
 
16 Over $20,000 but    $1,282.00 plus 8.20% of
 
17      not over $30,000                         excess over $20,000
 
18 Over $30,000 but    $2,102.00 plus 8.50% of
 
19      not over $40,000                         excess over $30,000
 
20 Over $40,000   $2,952.00 plus 8.75% of
 
21                excess over $40,000
 
22      In the case of any taxable year beginning after December 31,
 
23 [2000] 1999:
 

 
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 1 If the taxable income is:                       The tax shall be:
 
 2 Not over $2,000     1.50% of taxable income
 
 3 Over $2,000 but     $30.00 plus 3.70% of
 
 4      not over $4,000                           excess over $2,000
 
 5 Over $4,000 but     $104.00 plus 6.40% of
 
 6      not over $8,000                           excess over $4,000
 
 7 Over $8,000 but     $360.00 plus 6.90% of
 
 8      not over $12,000                          excess over $8,000
 
 9 Over $12,000 but    $636.00 plus 7.30% of
 
10      not over $16,000                         excess over $12,000
 
11 Over $16,000 but    $928.00 plus 7.60% of
 
12      not over $20,000                         excess over $16,000
 
13 Over $20,000 but    $1,232.00 plus 7.90% of
 
14      not over $30,000                         excess over $20,000
 
15 Over $30,000 but    $2,022.00 plus 8.20% of
 
16      not over $40,000                         excess over $30,000
 
17 Over $40,000   $2,842.00 plus 8.50% of
 
18                excess over $40,000
 
19      In the case of any taxable year beginning after December 31,
 
20 2001:
 
21 If the taxable income is:                       The tax shall be:
 
22 Not over $2,000     1.40% of taxable income
 
23 Over $2,000 but     $28.00 plus 3.20% of
 
24      not over $4,000                           excess over $2,000
 

 
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 1 Over $4,000 but     $92.00 plus 5.50% of
 
 2      not over $8,000                           excess over $4,000
 
 3 Over $8,000 but     $312.00 plus 6.40% of
 
 4      not over $12,000                          excess over $8,000
 
 5 Over $12,000 but    $568.00 plus 6.80% of
 
 6      not over $16,000                         excess over $12,000
 
 7 Over $16,000 but    $840.00 plus 7.20% of
 
 8      not over $20,000                         excess over $16,000
 
 9 Over $20,000 but    $1,128.00 plus 7.60% of
 
10      not over $30,000                         excess over $20,000
 
11 Over $30,000 but    $1,888.00 plus 7.90% of
 
12      not over $40,000                         excess over $30,000
 
13 Over $40,000   $2,678.00 plus 8.25% of
 
14                excess over $40,000
 
15      (e)  Any taxpayer, other than a corporation, acting as a
 
16 business entity in more than one state who is required by this
 
17 chapter to file a return may elect to report and pay a tax of .5
 
18 per cent of its annual gross sales (1) where the taxpayer's only
 
19 activities in this State consist of sales; and (2) who does not
 
20 own or rent real estate or tangible personal property; and (3)
 
21 whose annual gross sales in or into this State during the tax
 
22 year is not in excess of $100,000.
 
23      (f)  If a taxpayer has a net capital gain for any taxable
 

 
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 1 year to which this subsection applies, then the tax imposed by
 
 2 this section shall not exceed the sum of:
 
 3      (1)  The tax computed at the rates and in the same manner as
 
 4           if this subsection had not been enacted on the greater
 
 5           of:
 
 6           (A)  The taxable income reduced by the amount of net
 
 7                capital gain, or
 
 8           (B)  The amount of taxable income taxed at a rate below
 
 9                7.25 per cent, plus
 
10      (2)  A tax of 7.25 per cent of the amount of taxable income
 
11           in excess of the amount determined under paragraph (1).
 
12      This subsection shall apply to individuals, estates, and
 
13 trusts for taxable years beginning after December 31, 1986."
 
14      SECTION 3.  Statutory material to be repealed is bracketed.
 
15 New statutory material is underscored.
 
16      SECTION 4.  This Act shall take effect on July 1, 1999. 
 
17                         INTRODUCED BY:___________________________
 

 
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