THE SENATE

S.B. NO.

570

TWENTY-SIXTH LEGISLATURE, 2011

S.D. 2

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO TAXATION.

 

 

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

 

     SECTION 1.  Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§235-     Annual adjustments for inflation.  (a)  The following dollar amounts in this chapter shall be multiplied by the cost-of-living adjustment for the calendar year:

     (1)  The standard deduction amounts provided in section 235-2.4(a);

     (2)  The minimum and maximum taxable income rate bracket dollar amounts provided in sections 235-51(a), (b), and (c); provided that the tax rate applicable to each income bracket may not be changed; and

     (3)  Every personal exemption multiplier amount provided in section 235-54, except for the multiplier amount in subsection (b).

If any of the dollar amounts, as adjusted, are not multiples of $50, any increase shall be rounded to the nearest $50.  If the cost-of-living adjustment for any taxable year is 1.000 or less, no adjustment shall be made for that taxable year.

     (b)  As used in this section:

     "Consumer price index" means the average over a twelve-month period of the National Consumer Price Index, not seasonably adjusted, published monthly by the Bureau of Labor Statistics, United States Department of Labor, designated as the "National Consumer Price Index for All Urban Consumers-United States City Average."

     "Cost-of-living adjustment" means the consumer price index for the twelve-month period ending June 30 of the preceding calendar year divided by the consumer price index for the twelve-month period ending June 30, 2009."

     SECTION 2.  Section 235-2.4, Hawaii Revised Statutes, is amended by amending subsection (h) to read as follows:

     "(h)  Section 164 (with respect to taxes) of the Internal Revenue Code shall be operative for the purposes of this chapter, except that sections 164(a)(6) and 164(b)(6) shall not be operative for the purposes of this [chapter.] chapter; provided that amounts allowed as a deduction under section 164(a)(3) and 164(b)(5) shall be reduced as follows:

     (1)  For a taxpayer filing a single return or a married person filing separately, the deduction shall be reduced in accordance with the following table:

If federal adjusted       The reduction shall be:

     gross income is:

Less than $75,000         50% for taxable years

                               beginning after December 31, 2010

                          75% for taxable years

                               beginning after December 31, 2011

                          100% for taxable years

                               beginning after December 31, 2012

$75,000 and over          100% for taxable years

                               beginning after December 31, 2010.

     (2)  For a taxpayer filing as a head of household, the deduction shall be reduced in accordance with the following table:

If federal adjusted       The reduction shall be:

     gross income is:

Less than $112,500        50% for taxable years

                               beginning after December 31, 2010

                          75% for taxable years

                               beginning after December 31, 2011

                          100% for taxable years

                               beginning after December 31, 2012

$112,500 and over         100% for taxable years

                               beginning after December 31, 2010.

     (3)  For a taxpayer filing a joint return or as a surviving spouse, the deduction shall be reduced in accordance with the following table:

If federal adjusted       The reduction shall be:

     gross income is:

Less than $150,000        50% for taxable years

                               beginning after December 31, 2010

                          75% for taxable years

                               beginning after December 31, 2011

                          100% for taxable years

                               beginning after December 31, 2012

$150,000 and over         100% for taxable years

                               beginning after December 31, 2010."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 2050; provided that this Act shall apply to taxable years beginning after December 31, 2010.

 

Report Title:

Taxation; Indexing for Inflation; General Excise Tax Deduction

 

Description:

Indexes income tax amounts for inflation.  Eliminates, immediately or in phases, the state income tax deduction for general excise taxes paid by a taxpayer in taxable years beginning after 12/31/10, depending upon the taxpayer's federal adjusted gross income and filing status.  Effective 07/01/2050.  (SD2)

 

 

 

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