THE SENATE	S.B. NO.	3124
THIRTIETH LEGISLATURE, 2020		S.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO TAXATION.

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

SECTION 1. The legislature finds that Hawaii has the highest cost of living in the nation. According to the United States Census Bureau, Hawaii's domestic migration problem is worsening, with 13,537 more persons moving away from Hawaii than moving into the State during the 2016-2017 fiscal year. This out-migration has more than doubled since 2014-2015, when Hawaii saw a population loss of six thousand seven hundred persons.

Hawaii's high cost of living creates economic precarity for working families. A survey conducted in 2018 highlighted that nearly one-third of families in the State do not meet self-sufficiency income levels. Moreover, the National Low Income Housing Coalition's Out of Reach report for 2019 found that a minimum wage worker in the Honolulu metropolitan statistical area would need to work one hundred eleven hours per week to afford a one-bedroom rental home at fair market rent and one hundred forty-six hours per week to afford a two-bedroom rental home at fair market rent.

The legislature further finds that Hawaii has one of the highest individual income tax rates in the country. Under the existing income tax rate, a single filer working an average of forty hours a week at the minimum wage of $10.10 per hour for approximately fifty weeks, which equates to $20,200 per year, is required to pay $1,008 plus 7.2 per cent of any taxable income in excess of $19,200. According to the United States Department of Housing and Urban Development, a single person living on Oahu is considered to be a low-income earner if they earn $67,500 or less a year and a person earning $42,200 a year or less is considered to be a very low-income earner. By that standard, an individual earning minimum wage is now considered an extremely low-income earner.

The purpose of this Act is to change the income tax rates for taxable years beginning after December 31, 2020.

SECTION 2. Section 235-51, Hawaii Revised Statutes, is amended by amending subsections (a), (b), and (c) to read as follows:

"(a) There is hereby imposed on the taxable income of every:

(1) Taxpayer who files a joint return under section 235‑93; and

(2) Surviving spouse,

a tax determined in accordance with the following table:

In the case of any taxable year beginning after December 31, 2001:

If the taxable income is: The tax shall be:

Not over $4,000 1.40% of taxable income

Over $4,000 but $56.00 plus 3.20% of

not over $8,000 excess over $4,000

Over $8,000 but $184.00 plus 5.50% of

not over $16,000 excess over $8,000

Over $16,000 but $624.00 plus 6.40% of

not over $24,000 excess over $16,000

Over $24,000 but $1,136.00 plus 6.80% of

not over $32,000 excess over $24,000

Over $32,000 but $1,680.00 plus 7.20% of

not over $40,000 excess over $32,000

Over $40,000 but $2,256.00 plus 7.60% of

not over $60,000 excess over $40,000

Over $60,000 but $3,776.00 plus 7.90% of

not over $80,000 excess over $60,000

Over $80,000 $5,356.00 plus 8.25% of

excess over $80,000.

In the case of any taxable year beginning after December 31, 2006:

If the taxable income is: The tax shall be:

Not over $4,800 1.40% of taxable income

Over $4,800 but $67.00 plus 3.20% of

not over $9,600 excess over $4,800

Over $9,600 but $221.00 plus 5.50% of

not over $19,200 excess over $9,600

Over $19,200 but $749.00 plus 6.40% of

not over $28,800 excess over $19,200

Over $28,800 but $1,363.00 plus 6.80% of

not over $38,400 excess over $28,800

Over $38,400 but $2,016.00 plus 7.20% of

not over $48,000 excess over $38,400

Over $48,000 but $2,707.00 plus 7.60% of

not over $72,000 excess over $48,000

Over $72,000 but $4,531.00 plus 7.90% of

not over $96,000 excess over $72,000

Over $96,000 $6,427.00 plus 8.25% of

excess over $96,000.

In the case of any taxable year beginning after December 31, 2017:

If the taxable income is: The tax shall be:

Not over $4,800 1.40% of taxable income

Over $4,800 but $67.00 plus 3.20% of

not over $9,600 excess over $4,800

Over $9,600 but $221.00 plus 5.50% of

not over $19,200 excess over $9,600

Over $19,200 but $749.00 plus 6.40% of

not over $28,800 excess over $19,200

Over $28,800 but $1,363.00 plus 6.80% of

not over $38,400 excess over $28,800

Over $38,400 but $2,016.00 plus 7.20% of

not over $48,000 excess over $38,400

Over $48,000 but $2,707.00 plus 7.60% of

not over $72,000 excess over $48,000

Over $72,000 but $4,531.00 plus 7.90% of

not over $96,000 excess over $72,000 Over $96,000 but $6,427.00 plus 8.25% of

not over $300,000 excess over $96,000 Over $300,000 but $23,257.00 plus 9.00% of

not over $350,000 excess over $300,000

Over $350,000 but $27,757.00 plus 10.00% of

not over $400,000 excess over $350,000

Over $400,000 $32,757.00 plus 11.00% of

excess over $400,000.

In case of any taxable year beginning after December 31, 2020:

If the taxable income is: The tax shall be:

Not over $12,000 0% of taxable income

Over $12,000 but $0 plus 6.50% of

not over $19,200 excess over $12,000

Over $19,200 but $468.00 plus 7.40% of

not over $28,800 excess over $19,200

Over $28,800 but $1,178.00 plus 7.80% of

not over $38,400 excess over $28,800

Over $38,400 but $1,927.00 plus 8.20% of

not over $48,000 excess over $38,400

Over $48,000 but $2,714.00 plus 8.60% of

not over $72,000 excess over $48,000

Over $72,000 but $4,778.00 plus 8.90% of

not over $96,000 excess over $72,000

Over $96,000 but $6,914.00 plus 9.25% of

not over $300,000 excess over $96,000

Over $300,000 but $25,784.00 plus 10.00% of

not over $350,000 excess over $300,000

Over $350,000 $30,784.00 plus 11.00% of

excess over $350,000.

(b) There is hereby imposed on the taxable income of every head of a household a tax determined in accordance with the following table:

In the case of any taxable year beginning after December 31, 2001:

If the taxable income is: The tax shall be:

Not over $3,000 1.40% of taxable income

Over $3,000 but $42.00 plus 3.20% of

not over $6,000 excess over $3,000

Over $6,000 but $138.00 plus 5.50% of

not over $12,000 excess over $6,000

Over $12,000 but $468.00 plus 6.40% of

not over $18,000 excess over $12,000

Over $18,000 but $852.00 plus 6.80% of

not over $24,000 excess over $18,000

Over $24,000 but $1,260.00 plus 7.20% of

not over $30,000 excess over $24,000

Over $30,000 but $1,692.00 plus 7.60% of

not over $45,000 excess over $30,000

Over $45,000 but $2,832.00 plus 7.90% of

not over $60,000 excess over $45,000

Over $60,000 $4,017.00 plus 8.25% of

excess over $60,000.

In the case of any taxable year beginning after December 31, 2006:

If the taxable income is: The tax shall be:

Not over $3,600 1.40% of taxable income

Over $3,600 but $50.00 plus 3.20% of

not over $7,200 excess over $3,600

Over $7,200 but $166.00 plus 5.50% of

not over $14,400 excess over $7,200

Over $14,400 but $562.00 plus 6.40% of

not over $21,600 excess over $14,400

Over $21,600 but $1,022.00 plus 6.80% of

not over $28,800 excess over $21,600

Over $28,800 but $1,512.00 plus 7.20% of

not over $36,000 excess over $28,800

Over $36,000 but $2,030.00 plus 7.60% of

not over $54,000 excess over $36,000

Over $54,000 but $3,398.00 plus 7.90% of

not over $72,000 excess over $54,000

Over $72,000 $4,820.00 plus 8.25% of

excess over $72,000.

In the case of any taxable year beginning after December 31, 2017:

If the taxable income is: The tax shall be:

Not over $3,600 1.40% of taxable income

Over $3,600 but $50.00 plus 3.20% of

not over $7,200 excess over $3,600

Over $7,200 but $166.00 plus 5.50% of

not over $14,400 excess over $7,200

Over $14,400 but $562.00 plus 6.40% of

not over $21,600 excess over $14,400

Over $21,600 but $1,022.00 plus 6.80% of

not over $28,800 excess over $21,600

Over $28,800 but $1,512.00 plus 7.20% of

not over $36,000 excess over $28,800

Over $36,000 but $2,030.00 plus 7.60% of

not over $54,000 excess over $36,000

Over $54,000 but $3,398.00 plus 7.90% of

not over $72,000 excess over $54,000

Over $72,000 but $4,820.00 plus 8.25% of

not over $225,000 excess over $72,000

Over $225,000 but $17,443.00 plus 9.00% of

not over $262,500 excess over $225,000

Over $262,500 but $20,818.00 plus 10.00% of

not over $300,000 excess over $262,500

Over $300,000 $24,568.00 plus 11.00% of

excess over $300,000.

In case of any taxable year beginning after December 31, 2020:

If the taxable income is: The tax shall be:

Not over $12,000 0% of taxable income

Over $12,000 but $0 plus 6.50% of

not over $14,400 excess over $12,000

Over $14,400 but $156.00 plus 7.40% of

not over $21,600 excess over $14,400

Over $21,600 but $689.00 plus 7.80% of

not over $28,800 excess over $21,600

Over $28,800 but $1,251.00 plus 8.20% of

not over $36,000 excess over $28,800

Over $36,000 but $1,841.00 plus 8.60% of

not over $54,000 excess over $36,000

Over $54,000 but $3,389.00 plus 8.90% of

not over $72,000 excess over $54,000

Over $72,000 but $4,991.00 plus 9.25% of

not over $225,000 excess over $72,000

Over $225,000 but $19,144.00 plus 10.00% of

not over $262,500 excess over $225,000

Over $262,500 $22,894.00 plus 11.00% of

excess over $262,500.

(c) There is hereby imposed on the taxable income of (1) every unmarried individual (other than a surviving spouse, or the head of a household) and (2) on the taxable income of every married individual who does not make a single return jointly with the individual's spouse under section 235-93 a tax determined in accordance with the following table:

In the case of any taxable year beginning after December 31, 2001:

If the taxable income is: The tax shall be:

Not over $2,000 1.40% of taxable income

Over $2,000 but $28.00 plus 3.20% of

not over $4,000 excess over $2,000

Over $4,000 but $92.00 plus 5.50% of

not over $8,000 excess over $4,000

Over $8,000 but $312.00 plus 6.40% of

not over $12,000 excess over $8,000

Over $12,000 but $568.00 plus 6.80% of

not over $16,000 excess over $12,000

Over $16,000 but $840.00 plus 7.20% of

not over $20,000 excess over $16,000

Over $20,000 but $1,128.00 plus 7.60% of

not over $30,000 excess over $20,000

Over $30,000 but $1,888.00 plus 7.90% of

not over $40,000 excess over $30,000

Over $40,000 $2,678.00 plus 8.25% of

excess over $40,000.

In the case of any taxable year beginning after December 31, 2006:

If the taxable income is: The tax shall be:

Not over $2,400 1.40% of taxable income

Over $2,400 but $34.00 plus 3.20% of

not over $4,800 excess over $2,400

Over $4,800 but $110.00 plus 5.50% of

not over $9,600 excess over $4,800

Over $9,600 but $374.00 plus 6.40% of

not over $14,400 excess over $9,600

Over $14,400 but $682.00 plus 6.80% of

not over $19,200 excess over $14,400

Over $19,200 but $1,008.00 plus 7.20% of

not over $24,000 excess over $19,200

Over $24,000 but $1,354.00 plus 7.60% of

not over $36,000 excess over $24,000

Over $36,000 but $2,266.00 plus 7.90% of

not over $48,000 excess over $36,000

Over $48,000 $3,214.00 plus 8.25% of

excess over $48,000.

In the case of any taxable year beginning after December 31, 2017:

If the taxable income is: The tax shall be:

Not over $2,400 1.40% of taxable income

Over $2,400 but $34.00 plus 3.20% of

not over $4,800 excess over $2,400

Over $4,800 but $110.00 plus 5.50% of

not over $9,600 excess over $4,800

Over $9,600 but $374.00 plus 6.40% of

not over $14,400 excess over $9,600

Over $14,400 but $682.00 plus 6.80% of

not over $19,200 excess over $14,400

Over $19,200 but $1,008.00 plus 7.20% of

not over $24,000 excess over $19,200

Over $24,000 but $1,354.00 plus 7.60% of

not over $36,000 excess over $24,000

Over $36,000 but $2,266.00 plus 7.90% of

not over $48,000 excess over $36,000

Over $48,000 but $3,214.00 plus 8.25% of

not over $150,000 excess over $48,000

Over $150,000 but $11,629.00 plus 9.00% of

not over $175,000 excess over $150,000

Over $175,000 but $13,879.00 plus 10.00% of

not over $200,000 excess over $175,000

Over $200,000 $16,379.00 plus 11.00% of

excess over $200,000.

In case of any taxable year beginning after December 31, 2020:

If the taxable income is: The tax shall be:

Not over $12,000 0% of taxable income

Over $12,000 but $0 plus 7.40% of

not over $14,400 excess over $12,000

Over $14,400 but $178.00 plus 7.80% of

not over $19,200 excess over $14,400

Over $19,200 but $552.00 plus 8.20% of

not over $24,000 excess over $19,200

Over $24,000 but $946.00 plus 8.60% of

not over $36,000 excess over $24,000

Over $36,000 but $1,978.00 plus 8.90% of

not over $48,000 excess over $36,000

Over $48,000 but $3,046.00 plus 9.25% of

not over $150,000 excess over $48,000

Over $150,000 but $12,481.00 plus 10.00% of

not over $175,000 excess over $150,000

Over $175,000 $14,981.00 plus 11.00% of

excess over $175,000."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2050, and shall apply to taxable years beginning after December 31, 2020.

Report Title:

Income Tax Rates

Description:

Changes the income tax rates for taxable years beginning after 12/31/2020. Effective 7/1/2050. (SD1)

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