THE SENATE	S.B. NO.	2484
TWENTY-NINTH LEGISLATURE, 2018		S.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO ESTATE TAXES.

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

SECTION 1. The legislature finds that the federal government has significantly raised the threshold for the federal estate tax. The federal estate tax grants an exemption of $5,490,000 per individual and up to $10,980,000 for a surviving spouse; provided that the surviving spouse elects to use portability of the predeceased spouse's exemption on the predeceased spouse's estate tax return. Estates valued at less than these amounts are exempt from paying federal estate taxes. The recently enacted Public Law No. 115-97, originally introduced in Congress as the Tax Cuts and Jobs Act, doubles the threshold to approximately $11,180,000 and $22,360,000, respectively, and will result in a reduction in federal estate tax revenues. According to Internal Revenue Service data, twenty-one estates in Hawaii paid a total of $23,471,000 in federal estate taxes in 2015.

The legislature further finds that these changes to the federal estate tax provide the State with an opportunity to benefit Hawaii residents. By amending Hawaii's estate tax thresholds and rates, the State can capture some of the money that certain residents will no longer be required to pay to the federal government and redirect that money to the State.

The legislature additionally finds that any additional estate tax revenue paid to the State can be used to pay for priorities that the federal government will no longer be able to support due to the significant reduction of estate tax revenues.

The purpose of this Act is to maintain the responsibility of Hawaii residents to pay a fair and equitable tax on large estates.

SECTION 2. Section 236E-8, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) With respect to the estates of decedents dying after January 25, 2012, the tax based on the Hawaii net taxable estate shall be as provided in the following schedule:

If the Hawaii net taxable

estate is: The tax shall be:

$1,000,000 or less 10.0% of the Hawaii net

taxable estate

Over $1,000,000 but $100,000 plus 11.0% of the

not over $2,000,000 amount by which the Hawaii

net taxable estate

exceeds $1,000,000

Over $2,000,000 but $210,000 plus 12% of the

not over $3,000,000 amount by which the Hawaii

net taxable estate

exceeds $2,000,000

Over $3,000,000 but $330,000 plus 13% of the

not over $4,000,000 amount by which the Hawaii

net taxable estate

exceeds $3,000,000

Over $4,000,000 but $460,000 plus 14% of the

not over $5,000,000 amount by which the Hawaii

net taxable estate

exceeds $4,000,000

Over $5,000,000 but $600,000 plus 15.7% of the

not over $10,000,000 amount by which the Hawaii

net taxable estate

exceeds $5,000,000[.]

Over $10,000,000 $1,385,000 plus 20% of the

amount by which the Hawaii

net taxable estate

exceeds $10,000,000."

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

SECTION 4. This Act shall take effect upon its approval and shall apply to decedents dying or taxable transfers occurring after December 31, 2017.

Report Title:

Estate and Generation-Skipping Transfer Tax

Description:

Increases estate taxes for Hawaii net taxable estates valued at over $10,000,000. (SD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.