Hawaii 2023 Regular Session

Hawaii House Bill HB954 Compare Versions

Version 1 (Old)

Version 2 (New)

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1		-	HOUSE OF REPRESENTATIVES H.B. NO. 954 THIRTY-SECOND LEGISLATURE, 2023 H.D. 2 STATE OF HAWAII S.D. 2 A BILL FOR AN ACT RELATING TO TAXATION. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
	1	+	HOUSE OF REPRESENTATIVES H.B. NO. 954 THIRTY-SECOND LEGISLATURE, 2023 H.D. 2 STATE OF HAWAII S.D. 1 A BILL FOR AN ACT RELATING TO TAXATION. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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3	3		HOUSE OF REPRESENTATIVES H.B. NO. 954
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13	13		THIRTY-SECOND LEGISLATURE, 2023
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31	31		A BILL FOR AN ACT
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37	37		RELATING TO TAXATION.
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43	43		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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47		-	SECTION 1. Section 235-1, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows: ""Cost-of-living adjustment factor" means a factor calculated by adding 1.0 to the percentage change in the Urban ~~Hawaii Consumer Price Index for all items~~, as published by the United States Department of Labor, from July of the preceding calendar year to July of the current calendar year; provided that, if the ~~Urban Hawaii~~ Consumer Price Index is discontinued, the Chained Consumer Price Index for All Urban Consumers, as published by the United States Department of Labor, shall be used to calculate the cost-of-living adjustment factor." SECTION 2. Section 235-2.4, Hawaii Revised Statutes, is amended as follows: 1. By amending subsection (a) to read: "(a) Section 63 (with respect to taxable income defined) of the Internal Revenue Code shall be operative for the purposes of this chapter, subject to the following: (1) Section 63(c)(1)(B) (relating to the additional standard deduction), 63(c)(1)(C) (relating to the real property tax deduction), 63(c)(1)(D) (relating to the disaster loss deduction), 63(c)(1)(E) (relating to the motor vehicle sales tax deduction), 63(c)(4) (relating to inflation adjustments), 63(c)(7) (defining the real property tax deduction), 63(c)(8) (defining the disaster loss deduction), 63(c)(9) (defining the motor vehicle sales tax deduction), and 63(f) (relating to additional amounts for the aged or blind) of the Internal Revenue Code shall not be operative for purposes of this chapter; (2) Section 63(c)(2) (relating to the basic standard deduction) of the Internal Revenue Code shall be operative[, except that the standard deduction amounts provided therein shall instead mean: (A) $4,400 in the case of: (i) A joint return as provided by section 235‑93; or (ii) A surviving spouse (as defined in section 2(a) of the Internal Revenue Code); (B) $3,212 in the case of a head of household (as defined in section 2(b) of the Internal Revenue Code); (C) $2,200 in the case of an individual who is not married and who is not a surviving spouse or head of household; or (D) $2,200 in the case of a married individual filing a separate return;]; provided that: (A) The standard deduction amounts provided therein shall instead mean: (i) $10,000 in the case of a joint return, as provided by section 235-93, or a surviving spouse, as defined in section 2(a) of the Internal Revenue Code; (ii) $7,500 in the case of a head of household, as defined in section 2(b) of the Internal Revenue Code; (iii) $5,000 in the case of an individual who is not married and who is not a surviving spouse or head of household; or (iv) $5,000 in the case of a married individual filing a separate return; and (B) For each taxable year beginning after December 31, 2023, the director, no later than December 15 of the preceding calendar year, shall recompute the standard deduction amounts by multiplying the dollar amounts for the preceding taxable year by the cost-of-living adjustment factor, if the cost-of-living adjustment factor is greater than zero, and rounding off the resulting product to the nearest $1; provided that if the cost‑of‑living adjustment factor is less than or equal to zero in a given year, then no adjustment will occur in the following year; (3) Section 63(c)(5) (limiting the basic standard deduction in the case of certain dependents) of the Internal Revenue Code shall be operative, except that the limitation shall be the greater of $500 or the individual's earned income; and (4) The standard deduction amount for nonresidents shall be calculated pursuant to section 235-5." 2. By amending subsection (c) to read: "(c) Section 68 (with respect to the overall limitation on itemized deductions) of the Internal Revenue Code shall be operative; provided that [the]: (1) [Thresholds] The thresholds shall be [those] the applicable amounts under section 68(b)(1) of the Internal Revenue Code that were operative for federal tax year [2009; and] 2013; (2) For each taxable year beginning after December 31, 2023, the director of taxation, no later than December 15 of the preceding calendar year, shall recompute the threshold amounts by multiplying the dollar amounts for the preceding taxable year by the cost-of-living adjustment factor, if the cost‑of‑living adjustment factor is greater than zero, and rounding off the resulting product to the nearest $1; provided that if the cost-of-living adjustment factor is less than or equal to zero in a given year, then no adjustment will occur in the following year; and [(2)] (3) Suspension in section 68(f) shall not be operative for purposes of this chapter." 3. By amending subsection (k) to read: "(k) Section 164 (with respect to taxes) of the Internal Revenue Code shall be operative for the purposes of this chapter, except that: (1) Section 164(b)(6)(B) (limiting the deduction for state and local taxes) shall not be operative for the purposes of this chapter; (2) The deductions under section 164(a)(3) and (b)(5) shall not be operative for corporate taxpayers [and shall be operative only for the following individual taxpayers: (A) A taxpayer filing a single return or a married person filing separately with a federal adjusted gross income of less than $100,000; (B) A taxpayer filing as a head of household with a federal adjusted gross income of less than $150,000; and (C) A taxpayer filing a joint return or as a surviving spouse with a federal adjusted gross income of less than $200,000]; and (3) Section 164(a)(3) shall not be operative for any amounts for which the credit under section 235-55 has been claimed." SECTION 3. Section 235-51, Hawaii Revised Statutes, is amended to read as follows: "§235-51 Tax imposed on individuals; rates. (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, 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 the case of any taxable year beginning after December 31, 2022: If the taxable income is: The tax shall be: Not over $5,126 1.40% of taxable income Over $5,126 but $72.00 plus 3.20% of not over $10,253 excess over $5,126 Over $10,253 but $236.00 plus 5.50% of not over $20,506 excess over $10,253 Over $20,506 but $800.00 plus 6.40% of not over $30,758 excess over $20,506 Over $30,758 but $1,456.00 plus 6.80% of not over $41,011 excess over $30,758 Over $41,011 but $2,153.00 plus 7.20% of not over $51,264 excess over $41,011 Over $51,264 but $2,891.00 plus 7.60% of not over $76,896 excess over $51,264 Over $76,896 but $4,839.00 plus 7.90% of not over $102,528 excess over $76,896 Over $102,528 but $6,864.00 plus 8.25% of not over $320,400 excess over $102,528 Over $320,400 but $24,838.00 plus 9.00% of not over $373,800 excess over $320,400 Over $373,800 but $29,644.00 plus 10.00% of not over $427,200 excess over $373,800 Over $427,200 $34,984.00 plus 11.00% of excess over $427,200. (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, 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 the case of any taxable year beginning after December 31, 2022: If the taxable income is: The tax shall be: Not over $3,845 1.40% of taxable income Over $3,845 but $54.00 plus 3.20% of not over $7,690 excess over $3,845 Over $7,690 but $177.00 plus 5.50% of not over $15,379 excess over $7,690 Over $15,379 but $600.00 plus 6.40% of not over $23,069 excess over $15,379 Over $23,069 but $1,092.00 plus 6.80% of not over $30,758 excess over $23,069 Over $30,758 but $1,615.00 plus 7.20% of not over $38,448 excess over $30,758 Over $38,448 but $2,169.00 plus 7.60% of not over $57,672 excess over $38,448 Over $57,672 but $3,630.00 plus 7.90% of not over $76,896 excess over $57,672 Over $76,896 but $5,149.00 plus 8.25% of not over $240,300 excess over $76,896 Over $240,300 but $18,630.00 plus 9.00% of not over $280,350 excess over $240,300 Over $280,350 but $22,234.00 plus 10.00% of not over $320,400 excess over $280,350 Over $320,400 $26,239.00 plus 11.00% of excess over $320,400. (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, 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 the case of any taxable year beginning after December 31, 2022: If the taxable income is: The tax shall be: Not over $2,563 1.40% of taxable income Over $2,563 but $36.00 plus 3.20% of not over $5,126 excess over $2,563 Over $5,126 but $118.00 plus 5.50% of not over $10,253 excess over $5,126 Over $10,253 but $400.00 plus 6.40% of not over $15,379 excess over $10,253 Over $15,379 but $728.00 plus 6.80% of not over $20,506 excess over $15,379 Over $20,506 but $1,077.00 plus 7.20% of not over $25,632 excess over $20,506 Over $25,632 but $1,446.00 plus 7.60% of not over $38,448 excess over $25,632 Over $38,448 but $2,420.00 plus 7.90% of not over $51,264 excess over $38,448 Over $51,264 but $3,432.00 plus 8.25% of not over $160,200 excess over $51,264 Over $160,200 but $12,419.00 plus 9.00% of not over $186,900 excess over $160,200 Over $186,900 but $14,822.00 plus 10.00% of not over $213,600 excess over $186,900 Over $213,600 $17,492.00 plus 11.00% of excess over $213,600. (d) The tax imposed by section 235-2.45 on estates and trusts shall be 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. (e) Any taxpayer, other than a corporation, acting as a business entity in more than one state who is required by this chapter to file a return may elect to report and pay a tax of .5 per cent of the taxpayer's annual gross sales if the: (1) Taxpayer's only activities in this State consist of sales; (2) Taxpayer does not own or rent real estate or tangible personal property; and (3) Taxpayer's annual gross sales in or into this State during the tax year is not in excess of $100,000. (f) If a taxpayer has a net capital gain for any taxable year to which this subsection applies, then the tax imposed by this section shall not exceed the sum of: (1) The tax computed at the rates and in the same manner as if this subsection had not been enacted on the greater of: (A) The taxable income reduced by the amount of net capital gain, or (B) The amount of taxable income taxed at a rate below 7.25 per cent, plus (2) A tax of 7.25 per cent of the amount of taxable income in excess of the amount determined under paragraph (1). This subsection shall apply to individuals, estates, and trusts for taxable years beginning after December 31, 1986. (g) For each taxable year beginning after December 31, 2023, the director, no later than December 15 of the preceding calendar year, shall recompute the taxable income amounts within each of the income brackets in subsections (a), (b), and (c) by multiplying the taxable income amounts within each income bracket for the preceding taxable year by the cost-of-living adjustment factor, if the cost-of-living adjustment factor is greater than zero, and rounding off the resulting product to the nearest $1. If the cost-of-living adjustment factor is less than or equal to zero in a given year, then no adjustment will occur in the following year. Nothing in this subsection shall be construed as permitting an adjustment to the rates of tax in subsections (a), (b), and (c)." SECTION 4. Section 235-54, Hawaii Revised Statutes, is amended to read as follows: "§235-54 Exemptions. (a) In computing the taxable income of any individual, there shall be deducted, in lieu of the personal exemptions allowed by the Internal Revenue Code, personal exemptions computed as follows: Ascertain the number of exemptions which the individual can lawfully claim under the Internal Revenue Code, add an additional exemption for the taxpayer or the taxpayer's spouse who is sixty-five years of age or older within the taxable year, and multiply that number by [$1,144,] $2,288, for taxable years beginning after December 31, [1984.] 2022. A nonresident shall prorate the personal exemptions on account of income from sources outside the State as provided in section 235-5. In the case of an individual with respect to whom an exemption under this section is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual's taxable year begins, the personal exemption amount applicable to such individual under this subsection for such individual's taxable year shall be zero. (b) In computing the taxable income of an estate or trust there shall be allowed, in lieu of the deductions allowed under subsection (a), the following: (1) An estate shall be allowed a deduction of $400. (2) A trust which, under its governing instrument, is required to distribute all of its income currently shall be allowed a deduction of $200. (3) All other trusts shall be allowed a deduction of $80. (c) A blind person, a deaf person, and any person totally disabled, in lieu of the personal exemptions allowed by the Internal Revenue Code, shall be allowed, and there shall be deducted in computing the taxable income of a blind person, a deaf person, or a totally disabled person, instead of the exemptions provided by subsection (a), the amount of $7,000. (d) For each taxable year beginning after December 31, 2023, the director of taxation, no later than December 15 of the preceding calendar year, shall recompute the personal exemption and deduction amounts in this section by multiplying the amount for the preceding taxable year by the cost-of-living adjustment factor, if the cost-of-living adjustment factor is greater than zero, and rounding off the resulting product to the nearest $1. If the cost-of-living adjustment factor is less than or equal to zero in a given year, then no adjustment will occur in the following year." SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 6. This Act shall take effect upon its approval, and shall apply to taxable years beginning after December 31, 2022.
	47	+	SECTION 1. Section 235-1, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows: ""Cost-of-living adjustment factor" means a factor calculated by adding 1.0 to the percentage change in the Consumer Price Index for All Urban Consumers, as published by the United States Department of Labor, from July of the preceding calendar year to July of the current calendar year; provided that, if the Consumer Price Index is discontinued, the Chained Consumer Price Index for All Urban Consumers, as published by the United States Department of Labor, shall be used to calculate the cost-of-living adjustment factor." SECTION 2. Section 235-2.4, Hawaii Revised Statutes, is amended as follows: 1. By amending subsection (a) to read: "(a) Section 63 (with respect to taxable income defined) of the Internal Revenue Code shall be operative for the purposes of this chapter, subject to the following: (1) Section 63(c)(1)(B) (relating to the additional standard deduction), 63(c)(1)(C) (relating to the real property tax deduction), 63(c)(1)(D) (relating to the disaster loss deduction), 63(c)(1)(E) (relating to the motor vehicle sales tax deduction), 63(c)(4) (relating to inflation adjustments), 63(c)(7) (defining the real property tax deduction), 63(c)(8) (defining the disaster loss deduction), 63(c)(9) (defining the motor vehicle sales tax deduction), and 63(f) (relating to additional amounts for the aged or blind) of the Internal Revenue Code shall not be operative for purposes of this chapter; (2) Section 63(c)(2) (relating to the basic standard deduction) of the Internal Revenue Code shall be operative[, except that the standard deduction amounts provided therein shall instead mean: (A) $4,400 in the case of: (i) A joint return as provided by section 235‑93; or (ii) A surviving spouse (as defined in section 2(a) of the Internal Revenue Code); (B) $3,212 in the case of a head of household (as defined in section 2(b) of the Internal Revenue Code); (C) $2,200 in the case of an individual who is not married and who is not a surviving spouse or head of household; or (D) $2,200 in the case of a married individual filing a separate return;]; provided that: (A) The standard deduction amounts provided therein shall instead mean: (i) $10,000 in the case of a joint return, as provided by section 235-93, or a surviving spouse, as defined in section 2(a) of the Internal Revenue Code; (ii) $7,500 in the case of a head of household, as defined in section 2(b) of the Internal Revenue Code; (iii) $5,000 in the case of an individual who is not married and who is not a surviving spouse or head of household; or (iv) $5,000 in the case of a married individual filing a separate return; and (B) For each taxable year beginning after December 31, 2023, the director, no later than December 15 of the preceding calendar year, shall recompute the standard deduction amounts by multiplying the dollar amounts for the preceding taxable year by the cost-of-living adjustment factor, if the cost-of-living adjustment factor is greater than zero, and rounding off the resulting product to the nearest $1; provided that if the cost‑of‑living adjustment factor is less than or equal to zero in a given year, then no adjustment will occur in the following year; (3) Section 63(c)(5) (limiting the basic standard deduction in the case of certain dependents) of the Internal Revenue Code shall be operative, except that the limitation shall be the greater of $500 or the individual's earned income; and (4) The standard deduction amount for nonresidents shall be calculated pursuant to section 235-5." 2. By amending subsection (c) to read: "(c) Section 68 (with respect to the overall limitation on itemized deductions) of the Internal Revenue Code shall be operative; provided that [the]: (1) [Thresholds] The thresholds shall be [those] the applicable amounts under section 68(b)(1) of the Internal Revenue Code that were operative for federal tax year [2009; and] 2013; (2) For each taxable year beginning after December 31, 2023, the director of taxation, no later than December 15 of the preceding calendar year, shall recompute the threshold amounts by multiplying the dollar amounts for the preceding taxable year by the cost-of-living adjustment factor, if the cost‑of‑living adjustment factor is greater than zero, and rounding off the resulting product to the nearest $1; provided that if the cost-of-living adjustment factor is less than or equal to zero in a given year, then no adjustment will occur in the following year; and [(2)] (3) Suspension in section 68(f) shall not be operative for purposes of this chapter." 3. By amending subsection (k) to read: "(k) Section 164 (with respect to taxes) of the Internal Revenue Code shall be operative for the purposes of this chapter, except that: (1) Section 164(b)(6)(B) (limiting the deduction for state and local taxes) shall not be operative for the purposes of this chapter; (2) The deductions under section 164(a)(3) and (b)(5) shall not be operative for corporate taxpayers [and shall be operative only for the following individual taxpayers: (A) A taxpayer filing a single return or a married person filing separately with a federal adjusted gross income of less than $100,000; (B) A taxpayer filing as a head of household with a federal adjusted gross income of less than $150,000; and (C) A taxpayer filing a joint return or as a surviving spouse with a federal adjusted gross income of less than $200,000]; and (3) Section 164(a)(3) shall not be operative for any amounts for which the credit under section 235-55 has been claimed." SECTION 3. Section 235-51, Hawaii Revised Statutes, is amended to read as follows: "§235-51 Tax imposed on individuals; rates. (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, 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 the case of any taxable year beginning after December 31, 2022: If the taxable income is: The tax shall be: Not over $5,126 1.40% of taxable income Over $5,126 but $72.00 plus 3.20% of not over $10,253 excess over $5,126 Over $10,253 but $236.00 plus 5.50% of not over $20,506 excess over $10,253 Over $20,506 but $800.00 plus 6.40% of not over $30,758 excess over $20,506 Over $30,758 but $1,456.00 plus 6.80% of not over $41,011 excess over $30,758 Over $41,011 but $2,153.00 plus 7.20% of not over $51,264 excess over $41,011 Over $51,264 but $2,891.00 plus 7.60% of not over $76,896 excess over $51,264 Over $76,896 but $4,839.00 plus 7.90% of not over $102,528 excess over $76,896 Over $102,528 but $6,864.00 plus 8.25% of not over $320,400 excess over $102,528 Over $320,400 but $24,838.00 plus 9.00% of not over $373,800 excess over $320,400 Over $373,800 but $29,644.00 plus 10.00% of not over $427,200 excess over $373,800 Over $427,200 $34,984.00 plus 11.00% of excess over $427,200. (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, 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 the case of any taxable year beginning after December 31, 2022: If the taxable income is: The tax shall be: Not over $3,845 1.40% of taxable income Over $3,845 but $54.00 plus 3.20% of not over $7,690 excess over $3,845 Over $7,690 but $177.00 plus 5.50% of not over $15,379 excess over $7,690 Over $15,379 but $600.00 plus 6.40% of not over $23,069 excess over $15,379 Over $23,069 but $1,092.00 plus 6.80% of not over $30,758 excess over $23,069 Over $30,758 but $1,615.00 plus 7.20% of not over $38,448 excess over $30,758 Over $38,448 but $2,169.00 plus 7.60% of not over $57,672 excess over $38,448 Over $57,672 but $3,630.00 plus 7.90% of not over $76,896 excess over $57,672 Over $76,896 but $5,149.00 plus 8.25% of not over $240,300 excess over $76,896 Over $240,300 but $18,630.00 plus 9.00% of not over $280,350 excess over $240,300 Over $280,350 but $22,234.00 plus 10.00% of not over $320,400 excess over $280,350 Over $320,400 $26,239.00 plus 11.00% of excess over $320,400. (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, 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 the case of any taxable year beginning after December 31, 2022: If the taxable income is: The tax shall be: Not over $2,563 1.40% of taxable income Over $2,563 but $36.00 plus 3.20% of not over $5,126 excess over $2,563 Over $5,126 but $118.00 plus 5.50% of not over $10,253 excess over $5,126 Over $10,253 but $400.00 plus 6.40% of not over $15,379 excess over $10,253 Over $15,379 but $728.00 plus 6.80% of not over $20,506 excess over $15,379 Over $20,506 but $1,077.00 plus 7.20% of not over $25,632 excess over $20,506 Over $25,632 but $1,446.00 plus 7.60% of not over $38,448 excess over $25,632 Over $38,448 but $2,420.00 plus 7.90% of not over $51,264 excess over $38,448 Over $51,264 but $3,432.00 plus 8.25% of not over $160,200 excess over $51,264 Over $160,200 but $12,419.00 plus 9.00% of not over $186,900 excess over $160,200 Over $186,900 but $14,822.00 plus 10.00% of not over $213,600 excess over $186,900 Over $213,600 $17,492.00 plus 11.00% of excess over $213,600. (d) The tax imposed by section 235-2.45 on estates and trusts shall be 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. (e) Any taxpayer, other than a corporation, acting as a business entity in more than one state who is required by this chapter to file a return may elect to report and pay a tax of .5 per cent of the taxpayer's annual gross sales if the: (1) Taxpayer's only activities in this State consist of sales; (2) Taxpayer does not own or rent real estate or tangible personal property; and (3) Taxpayer's annual gross sales in or into this State during the tax year is not in excess of $100,000. (f) If a taxpayer has a net capital gain for any taxable year to which this subsection applies, then the tax imposed by this section shall not exceed the sum of: (1) The tax computed at the rates and in the same manner as if this subsection had not been enacted on the greater of: (A) The taxable income reduced by the amount of net capital gain, or (B) The amount of taxable income taxed at a rate below 7.25 per cent, plus (2) A tax of 7.25 per cent of the amount of taxable income in excess of the amount determined under paragraph (1). This subsection shall apply to individuals, estates, and trusts for taxable years beginning after December 31, 1986. (g) For each taxable year beginning after December 31, 2023, the director, no later than December 15 of the preceding calendar year, shall recompute the taxable income amounts within each of the income brackets in subsections (a), (b), and (c) by multiplying the taxable income amounts within each income bracket for the preceding taxable year by the cost-of-living adjustment factor, if the cost-of-living adjustment factor is greater than zero, and rounding off the resulting product to the nearest $1. If the cost-of-living adjustment factor is less than or equal to zero in a given year, then no adjustment will occur in the following year. Nothing in this subsection shall be construed as permitting an adjustment to the rates of tax in subsections (a), (b), and (c)." SECTION 4. Section 235-54, Hawaii Revised Statutes, is amended to read as follows: "§235-54 Exemptions. (a) In computing the taxable income of any individual, there shall be deducted, in lieu of the personal exemptions allowed by the Internal Revenue Code, personal exemptions computed as follows: Ascertain the number of exemptions which the individual can lawfully claim under the Internal Revenue Code, add an additional exemption for the taxpayer or the taxpayer's spouse who is sixty-five years of age or older within the taxable year, and multiply that number by [$1,144,] $2,288, for taxable years beginning after December 31, [1984.] 2022. A nonresident shall prorate the personal exemptions on account of income from sources outside the State as provided in section 235-5. In the case of an individual with respect to whom an exemption under this section is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual's taxable year begins, the personal exemption amount applicable to such individual under this subsection for such individual's taxable year shall be zero. (b) In computing the taxable income of an estate or trust there shall be allowed, in lieu of the deductions allowed under subsection (a), the following: (1) An estate shall be allowed a deduction of $400. (2) A trust which, under its governing instrument, is required to distribute all of its income currently shall be allowed a deduction of $200. (3) All other trusts shall be allowed a deduction of $80. (c) A blind person, a deaf person, and any person totally disabled, in lieu of the personal exemptions allowed by the Internal Revenue Code, shall be allowed, and there shall be deducted in computing the taxable income of a blind person, a deaf person, or a totally disabled person, instead of the exemptions provided by subsection (a), the amount of $7,000. (d) For each taxable year beginning after December 31, 2023, the director of taxation, no later than December 15 of the preceding calendar year, shall recompute the personal exemption and deduction amounts in this section by multiplying the amount for the preceding taxable year by the cost-of-living adjustment factor, if the cost-of-living adjustment factor is greater than zero, and rounding off the resulting product to the nearest $1. If the cost-of-living adjustment factor is less than or equal to zero in a given year, then no adjustment will occur in the following year." SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 6. This Act shall take effect upon its approval, and shall apply to taxable years beginning after December 31, 2022.
48	48
49	49		SECTION 1. Section 235-1, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:
50	50
51		-	""Cost-of-living adjustment factor" means a factor calculated by adding 1.0 to the percentage change in the ~~Urban Hawaii~~ Consumer Price Index for all ~~items~~, as published by the United States Department of Labor, from July of the preceding calendar year to July of the current calendar year; provided that, if the ~~Urban Hawaii~~ Consumer Price Index is discontinued, the Chained Consumer Price Index for All Urban Consumers, as published by the United States Department of Labor, shall be used to calculate the cost-of-living adjustment factor."
	51	+	""Cost-of-living adjustment factor" means a factor calculated by adding 1.0 to the percentage change in the Consumer Price Index for All Urban Consumers, as published by the United States Department of Labor, from July of the preceding calendar year to July of the current calendar year; provided that, if the Consumer Price Index is discontinued, the Chained Consumer Price Index for All Urban Consumers, as published by the United States Department of Labor, shall be used to calculate the cost-of-living adjustment factor."
52	52
53	53		SECTION 2. Section 235-2.4, Hawaii Revised Statutes, is amended as follows:
54	54
55	55		1. By amending subsection (a) to read:
56	56
57	57		"(a) Section 63 (with respect to taxable income defined) of the Internal Revenue Code shall be operative for the purposes of this chapter, subject to the following:
58	58
59	59		(1) Section 63(c)(1)(B) (relating to the additional standard deduction), 63(c)(1)(C) (relating to the real property tax deduction), 63(c)(1)(D) (relating to the disaster loss deduction), 63(c)(1)(E) (relating to the motor vehicle sales tax deduction), 63(c)(4) (relating to inflation adjustments), 63(c)(7) (defining the real property tax deduction), 63(c)(8) (defining the disaster loss deduction), 63(c)(9) (defining the motor vehicle sales tax deduction), and 63(f) (relating to additional amounts for the aged or blind) of the Internal Revenue Code shall not be operative for purposes of this chapter;
60	60
61	61		(2) Section 63(c)(2) (relating to the basic standard deduction) of the Internal Revenue Code shall be operative[, except that the standard deduction amounts provided therein shall instead mean:
62	62
63	63		(A) $4,400 in the case of:
64	64
65	65		(i) A joint return as provided by section 235‑93; or
66	66
67	67		(ii) A surviving spouse (as defined in section 2(a) of the Internal Revenue Code);
68	68
69	69		(B) $3,212 in the case of a head of household (as defined in section 2(b) of the Internal Revenue Code);
70	70
71	71		(C) $2,200 in the case of an individual who is not married and who is not a surviving spouse or head of household; or
72	72
73	73		(D) $2,200 in the case of a married individual filing a separate return;]; provided that:
74	74
75	75		(A) The standard deduction amounts provided therein shall instead mean:
76	76
77	77		(i) $10,000 in the case of a joint return, as provided by section 235-93, or a surviving spouse, as defined in section 2(a) of the Internal Revenue Code;
78	78
79	79		(ii) $7,500 in the case of a head of household, as defined in section 2(b) of the Internal Revenue Code;
80	80
81	81		(iii) $5,000 in the case of an individual who is not married and who is not a surviving spouse or head of household; or
82	82
83	83		(iv) $5,000 in the case of a married individual filing a separate return; and
84	84
85	85		(B) For each taxable year beginning after December 31, 2023, the director, no later than December 15 of the preceding calendar year, shall recompute the standard deduction amounts by multiplying the dollar amounts for the preceding taxable year by the cost-of-living adjustment factor, if the cost-of-living adjustment factor is greater than zero, and rounding off the resulting product to the nearest $1; provided that if the cost‑of‑living adjustment factor is less than or equal to zero in a given year, then no adjustment will occur in the following year;
86	86
87	87		(3) Section 63(c)(5) (limiting the basic standard deduction in the case of certain dependents) of the Internal Revenue Code shall be operative, except that the limitation shall be the greater of $500 or the individual's earned income; and
88	88
89	89		(4) The standard deduction amount for nonresidents shall be calculated pursuant to section 235-5."
90	90
91	91		2. By amending subsection (c) to read:
92	92
93	93		"(c) Section 68 (with respect to the overall limitation on itemized deductions) of the Internal Revenue Code shall be operative; provided that [the]:
94	94
95	95		(1) [Thresholds] The thresholds shall be [those] the applicable amounts under section 68(b)(1) of the Internal Revenue Code that were operative for federal tax year [2009; and] 2013;
96	96
97	97		(2) For each taxable year beginning after December 31, 2023, the director of taxation, no later than December 15 of the preceding calendar year, shall recompute the threshold amounts by multiplying the dollar amounts for the preceding taxable year by the cost-of-living adjustment factor, if the cost‑of‑living adjustment factor is greater than zero, and rounding off the resulting product to the nearest $1; provided that if the cost-of-living adjustment factor is less than or equal to zero in a given year, then no adjustment will occur in the following year; and
98	98
99	99		[(2)] (3) Suspension in section 68(f) shall not be operative for purposes of this chapter."
100	100
101	101		3. By amending subsection (k) to read:
102	102
103	103		"(k) Section 164 (with respect to taxes) of the Internal Revenue Code shall be operative for the purposes of this chapter, except that:
104	104
105	105		(1) Section 164(b)(6)(B) (limiting the deduction for state and local taxes) shall not be operative for the purposes of this chapter;
106	106
107	107		(2) The deductions under section 164(a)(3) and (b)(5) shall not be operative for corporate taxpayers [and shall be operative only for the following individual taxpayers:
108	108
109	109		(A) A taxpayer filing a single return or a married person filing separately with a federal adjusted gross income of less than $100,000;
110	110
111	111		(B) A taxpayer filing as a head of household with a federal adjusted gross income of less than $150,000; and
112	112
113	113		(C) A taxpayer filing a joint return or as a surviving spouse with a federal adjusted gross income of less than $200,000]; and
114	114
115	115		(3) Section 164(a)(3) shall not be operative for any amounts for which the credit under section 235-55 has been claimed."
116	116
117	117		SECTION 3. Section 235-51, Hawaii Revised Statutes, is amended to read as follows:
118	118
119	119		"§235-51 Tax imposed on individuals; rates. (a) There is hereby imposed on the taxable income of every:
120	120
121	121		(1) Taxpayer who files a joint return under section 235‑93; and
122	122
123	123		(2) Surviving spouse,
124	124
125	125		a tax determined in accordance with the following table:
126	126
127	127		[In the case of any taxable year beginning after December 31, 2017:
128	128
129	129		If the taxable income is: The tax shall be:
130	130
131	131		Not over $4,800 1.40% of taxable income
132	132
133	133		Over $4,800 but $67.00 plus 3.20% of
134	134
135	135		not over $9,600 excess over $4,800
136	136
137	137		Over $9,600 but $221.00 plus 5.50% of
138	138
139	139		not over $19,200 excess over $9,600
140	140
141	141		Over $19,200 but $749.00 plus 6.40% of
142	142
143	143		not over $28,800 excess over $19,200
144	144
145	145		Over $28,800 but $1,363.00 plus 6.80% of
146	146
147	147		not over $38,400 excess over $28,800
148	148
149	149		Over $38,400 but $2,016.00 plus 7.20% of
150	150
151	151		not over $48,000 excess over $38,400
152	152
153	153		Over $48,000 but $2,707.00 plus 7.60% of
154	154
155	155		not over $72,000 excess over $48,000
156	156
157	157		Over $72,000 but $4,531.00 plus 7.90% of
158	158
159	159		not over $96,000 excess over $72,000
160	160
161	161		Over $96,000 but $6,427.00 plus 8.25% of
162	162
163	163		not over $300,000 excess over $96,000
164	164
165	165		Over $300,000 but $23,257.00 plus 9.00% of
166	166
167	167		not over $350,000 excess over $300,000
168	168
169	169		Over $350,000 but $27,757.00 plus 10.00% of
170	170
171	171		not over $400,000 excess over $350,000
172	172
173	173		Over $400,000 $32,757.00 plus 11.00% of
174	174
175	175		excess over $400,000.]
176	176
177	177		In the case of any taxable year beginning after December 31, 2022:
178	178
179	179		If the taxable income is: The tax shall be:
180	180
181	181		Not over $5,126 1.40% of taxable income
182	182
183	183		Over $5,126 but $72.00 plus 3.20% of
184	184
185	185		not over $10,253 excess over $5,126
186	186
187	187		Over $10,253 but $236.00 plus 5.50% of
188	188
189	189		not over $20,506 excess over $10,253
190	190
191	191		Over $20,506 but $800.00 plus 6.40% of
192	192
193	193		not over $30,758 excess over $20,506
194	194
195	195		Over $30,758 but $1,456.00 plus 6.80% of
196	196
197	197		not over $41,011 excess over $30,758
198	198
199	199		Over $41,011 but $2,153.00 plus 7.20% of
200	200
201	201		not over $51,264 excess over $41,011
202	202
203	203		Over $51,264 but $2,891.00 plus 7.60% of
204	204
205	205		not over $76,896 excess over $51,264
206	206
207	207		Over $76,896 but $4,839.00 plus 7.90% of
208	208
209	209		not over $102,528 excess over $76,896
210	210
211	211		Over $102,528 but $6,864.00 plus 8.25% of
212	212
213	213		not over $320,400 excess over $102,528
214	214
215	215		Over $320,400 but $24,838.00 plus 9.00% of
216	216
217	217		not over $373,800 excess over $320,400
218	218
219	219		Over $373,800 but $29,644.00 plus 10.00% of
220	220
221	221		not over $427,200 excess over $373,800
222	222
223	223		Over $427,200 $34,984.00 plus 11.00% of
224	224
225	225		excess over $427,200.
226	226
227	227		(b) There is hereby imposed on the taxable income of every head of a household a tax determined in accordance with the following table:
228	228
229	229		[In the case of any taxable year beginning after December 31, 2017:
230	230
231	231		If the taxable income is: The tax shall be:
232	232
233	233		Not over $3,600 1.40% of taxable income
234	234
235	235		Over $3,600 but $50.00 plus 3.20% of
236	236
237	237		not over $7,200 excess over $3,600
238	238
239	239		Over $7,200 but $166.00 plus 5.50% of
240	240
241	241		not over $14,400 excess over $7,200
242	242
243	243		Over $14,400 but $562.00 plus 6.40% of
244	244
245	245		not over $21,600 excess over $14,400
246	246
247	247		Over $21,600 but $1,022.00 plus 6.80% of
248	248
249	249		not over $28,800 excess over $21,600
250	250
251	251		Over $28,800 but $1,512.00 plus 7.20% of
252	252
253	253		not over $36,000 excess over $28,800
254	254
255	255		Over $36,000 but $2,030.00 plus 7.60% of
256	256
257	257		not over $54,000 excess over $36,000
258	258
259	259		Over $54,000 but $3,398.00 plus 7.90% of
260	260
261	261		not over $72,000 excess over $54,000
262	262
263	263		Over $72,000 but $4,820.00 plus 8.25% of
264	264
265	265		not over $225,000 excess over $72,000
266	266
267	267		Over $225,000 but $17,443.00 plus 9.00% of
268	268
269	269		not over $262,500 excess over $225,000
270	270
271	271		Over $262,500 but $20,818.00 plus 10.00% of
272	272
273	273		not over $300,000 excess over $262,500
274	274
275	275		Over $300,000 $24,568.00 plus 11.00% of
276	276
277	277		excess over $300,000.]
278	278
279	279		In the case of any taxable year beginning after December 31, 2022:
280	280
281	281		If the taxable income is: The tax shall be:
282	282
283	283		Not over $3,845 1.40% of taxable income
284	284
285	285		Over $3,845 but $54.00 plus 3.20% of
286	286
287	287		not over $7,690 excess over $3,845
288	288
289	289		Over $7,690 but $177.00 plus 5.50% of
290	290
291	291		not over $15,379 excess over $7,690
292	292
293	293		Over $15,379 but $600.00 plus 6.40% of
294	294
295	295		not over $23,069 excess over $15,379
296	296
297	297		Over $23,069 but $1,092.00 plus 6.80% of
298	298
299	299		not over $30,758 excess over $23,069
300	300
301	301		Over $30,758 but $1,615.00 plus 7.20% of
302	302
303	303		not over $38,448 excess over $30,758
304	304
305	305		Over $38,448 but $2,169.00 plus 7.60% of
306	306
307	307		not over $57,672 excess over $38,448
308	308
309	309		Over $57,672 but $3,630.00 plus 7.90% of
310	310
311	311		not over $76,896 excess over $57,672
312	312
313	313		Over $76,896 but $5,149.00 plus 8.25% of
314	314
315	315		not over $240,300 excess over $76,896
316	316
317	317		Over $240,300 but $18,630.00 plus 9.00% of
318	318
319	319		not over $280,350 excess over $240,300
320	320
321	321		Over $280,350 but $22,234.00 plus 10.00% of
322	322
323	323		not over $320,400 excess over $280,350
324	324
325	325		Over $320,400 $26,239.00 plus 11.00% of
326	326
327	327		excess over $320,400.
328	328
329	329		(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:
330	330
331	331		[In the case of any taxable year beginning after December 31, 2017:
332	332
333	333		If the taxable income is: The tax shall be:
334	334
335	335		Not over $2,400 1.40% of taxable income
336	336
337	337		Over $2,400 but $34.00 plus 3.20% of
338	338
339	339		not over $4,800 excess over $2,400
340	340
341	341		Over $4,800 but $110.00 plus 5.50% of
342	342
343	343		not over $9,600 excess over $4,800
344	344
345	345		Over $9,600 but $374.00 plus 6.40% of
346	346
347	347		not over $14,400 excess over $9,600
348	348
349	349		Over $14,400 but $682.00 plus 6.80% of
350	350
351	351		not over $19,200 excess over $14,400
352	352
353	353		Over $19,200 but $1,008.00 plus 7.20% of
354	354
355	355		not over $24,000 excess over $19,200
356	356
357	357		Over $24,000 but $1,354.00 plus 7.60% of
358	358
359	359		not over $36,000 excess over $24,000
360	360
361	361		Over $36,000 but $2,266.00 plus 7.90% of
362	362
363	363		not over $48,000 excess over $36,000
364	364
365	365		Over $48,000 but $3,214.00 plus 8.25% of
366	366
367	367		not over $150,000 excess over $48,000
368	368
369	369		Over $150,000 but $11,629.00 plus 9.00% of
370	370
371	371		not over $175,000 excess over $150,000
372	372
373	373		Over $175,000 but $13,879.00 plus 10.00% of
374	374
375	375		not over $200,000 excess over $175,000
376	376
377	377		Over $200,000 $16,379.00 plus 11.00% of
378	378
379	379		excess over $200,000.]
380	380
381	381		In the case of any taxable year beginning after December 31, 2022:
382	382
383	383		If the taxable income is: The tax shall be:
384	384
385	385		Not over $2,563 1.40% of taxable income
386	386
387	387		Over $2,563 but $36.00 plus 3.20% of
388	388
389	389		not over $5,126 excess over $2,563
390	390
391	391		Over $5,126 but $118.00 plus 5.50% of
392	392
393	393		not over $10,253 excess over $5,126
394	394
395	395		Over $10,253 but $400.00 plus 6.40% of
396	396
397	397		not over $15,379 excess over $10,253
398	398
399	399		Over $15,379 but $728.00 plus 6.80% of
400	400
401	401		not over $20,506 excess over $15,379
402	402
403	403		Over $20,506 but $1,077.00 plus 7.20% of
404	404
405	405		not over $25,632 excess over $20,506
406	406
407	407		Over $25,632 but $1,446.00 plus 7.60% of
408	408
409	409		not over $38,448 excess over $25,632
410	410
411	411		Over $38,448 but $2,420.00 plus 7.90% of
412	412
413	413		not over $51,264 excess over $38,448
414	414
415	415		Over $51,264 but $3,432.00 plus 8.25% of
416	416
417	417		not over $160,200 excess over $51,264
418	418
419	419		Over $160,200 but $12,419.00 plus 9.00% of
420	420
421	421		not over $186,900 excess over $160,200
422	422
423	423		Over $186,900 but $14,822.00 plus 10.00% of
424	424
425	425		not over $213,600 excess over $186,900
426	426
427	427		Over $213,600 $17,492.00 plus 11.00% of
428	428
429	429		excess over $213,600.
430	430
431	431		(d) The tax imposed by section 235-2.45 on estates and trusts shall be determined in accordance with the following table:
432	432
433	433		In the case of any taxable year beginning after December 31, 2001:
434	434
435	435		If the taxable income is: The tax shall be:
436	436
437	437		Not over $2,000 1.40% of taxable income
438	438
439	439		Over $2,000 but $28.00 plus 3.20% of
440	440
441	441		not over $4,000 excess over $2,000
442	442
443	443		Over $4,000 but $92.00 plus 5.50% of
444	444
445	445		not over $8,000 excess over $4,000
446	446
447	447		Over $8,000 but $312.00 plus 6.40% of
448	448
449	449		not over $12,000 excess over $8,000
450	450
451	451		Over $12,000 but $568.00 plus 6.80% of
452	452
453	453		not over $16,000 excess over $12,000
454	454
455	455		Over $16,000 but $840.00 plus 7.20% of
456	456
457	457		not over $20,000 excess over $16,000
458	458
459	459		Over $20,000 but $1,128.00 plus 7.60% of
460	460
461	461		not over $30,000 excess over $20,000
462	462
463	463		Over $30,000 but $1,888.00 plus 7.90% of
464	464
465	465		not over $40,000 excess over $30,000
466	466
467	467		Over $40,000 $2,678.00 plus 8.25% of
468	468
469	469		excess over $40,000.
470	470
471	471		(e) Any taxpayer, other than a corporation, acting as a business entity in more than one state who is required by this chapter to file a return may elect to report and pay a tax of .5 per cent of the taxpayer's annual gross sales if the:
472	472
473	473		(1) Taxpayer's only activities in this State consist of sales;
474	474
475	475		(2) Taxpayer does not own or rent real estate or tangible personal property; and
476	476
477	477		(3) Taxpayer's annual gross sales in or into this State during the tax year is not in excess of $100,000.
478	478
479	479		(f) If a taxpayer has a net capital gain for any taxable year to which this subsection applies, then the tax imposed by this section shall not exceed the sum of:
480	480
481	481		(1) The tax computed at the rates and in the same manner
482	482
483	483		as if this subsection had not been enacted on the greater of:
484	484
485	485		(A) The taxable income reduced by the amount of net capital gain, or
486	486
487	487		(B) The amount of taxable income taxed at a rate below 7.25 per cent, plus
488	488
489	489		(2) A tax of 7.25 per cent of the amount of taxable income in excess of the amount determined under paragraph (1).
490	490
491	491		This subsection shall apply to individuals, estates, and trusts for taxable years beginning after December 31, 1986.
492	492
493	493		(g) For each taxable year beginning after December 31, 2023, the director, no later than December 15 of the preceding calendar year, shall recompute the taxable income amounts within each of the income brackets in subsections (a), (b), and (c) by multiplying the taxable income amounts within each income bracket for the preceding taxable year by the cost-of-living adjustment factor, if the cost-of-living adjustment factor is greater than zero, and rounding off the resulting product to the nearest $1. If the cost-of-living adjustment factor is less than or equal to zero in a given year, then no adjustment will occur in the following year. Nothing in this subsection shall be construed as permitting an adjustment to the rates of tax in subsections (a), (b), and (c)."
494	494
495	495		SECTION 4. Section 235-54, Hawaii Revised Statutes, is amended to read as follows:
496	496
497	497		"§235-54 Exemptions. (a) In computing the taxable income of any individual, there shall be deducted, in lieu of the personal exemptions allowed by the Internal Revenue Code, personal exemptions computed as follows: Ascertain the number of exemptions which the individual can lawfully claim under the Internal Revenue Code, add an additional exemption for the taxpayer or the taxpayer's spouse who is sixty-five years of age or older within the taxable year, and multiply that number by [$1,144,] $2,288, for taxable years beginning after December 31, [1984.] 2022. A nonresident shall prorate the personal exemptions on account of income from sources outside the State as provided in section 235-5. In the case of an individual with respect to whom an exemption under this section is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual's taxable year begins, the personal exemption amount applicable to such individual under this subsection for such individual's taxable year shall be zero.
498	498
499	499		(b) In computing the taxable income of an estate or trust there shall be allowed, in lieu of the deductions allowed under subsection (a), the following:
500	500
501	501		(1) An estate shall be allowed a deduction of $400.
502	502
503	503		(2) A trust which, under its governing instrument, is required to distribute all of its income currently shall be allowed a deduction of $200.
504	504
505	505		(3) All other trusts shall be allowed a deduction of $80.
506	506
507	507		(c) A blind person, a deaf person, and any person totally disabled, in lieu of the personal exemptions allowed by the Internal Revenue Code, shall be allowed, and there shall be deducted in computing the taxable income of a blind person, a deaf person, or a totally disabled person, instead of the exemptions provided by subsection (a), the amount of $7,000.
508	508
509	509		(d) For each taxable year beginning after December 31, 2023, the director of taxation, no later than December 15 of the preceding calendar year, shall recompute the personal exemption and deduction amounts in this section by multiplying the amount for the preceding taxable year by the cost-of-living adjustment factor, if the cost-of-living adjustment factor is greater than zero, and rounding off the resulting product to the nearest $1. If the cost-of-living adjustment factor is less than or equal to zero in a given year, then no adjustment will occur in the following year."
510	510
511	511		SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
512	512
513	513		SECTION 6. This Act shall take effect upon its approval, and shall apply to taxable years beginning after December 31, 2022.
514	514
515		-	Report Title: Income Tax; Income Tax Brackets; Personal Exemption; Standard Deduction; Cost-of-Living Adjustment; Earned Income Tax Credit; Amount Description: Increases the amounts for the income tax brackets and personal exemption and standard deduction amounts for tax year 2023. Adjusts annually for tax years beginning after 12/31/2023, the income tax brackets and personal exemption, and standard deduction amounts by a cost-of-living adjustment factor. Amends the taxable income brackets and income tax rates for each filing status for taxable years beginning after 12/31/2022. ~~Defines "cost of living adjustment factor".~~ (~~SD2~~) The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
	515	+	Report Title: Income Tax; Income Tax Brackets; Personal Exemption; Standard Deduction; Cost-of-living Adjustment; Earned Income Tax Credit; Amount Description: Increases the amounts for the income tax brackets and personal exemption and standard deduction amounts for tax year 2023. Adjusts annually for tax years beginning after 12/31/2023, the income tax brackets and personal exemption, and standard deduction amounts by a cost-of-living adjustment factor. Amends the taxable income brackets and income tax rates for each filing status for taxable years beginning after 12/31/2022. (SD1) The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
516	516
517	517
518	518
519	519		Report Title:
520	520
521	521		Income Tax; Income Tax Brackets; Personal Exemption; Standard Deduction; Cost-of-living Adjustment; Earned Income Tax Credit; Amount
522	522
523	523
524	524
525	525		Description:
526	526
527		-	Increases the amounts for the income tax brackets and personal exemption and standard deduction amounts for tax year 2023. Adjusts annually for tax years beginning after 12/31/2023, the income tax brackets and personal exemption, and standard deduction amounts by a cost-of-living adjustment factor. Amends the taxable income brackets and income tax rates for each filing status for taxable years beginning after 12/31/2022. ~~Defines "cost of living adjustment factor".~~ (~~SD2~~)
	527	+	Increases the amounts for the income tax brackets and personal exemption and standard deduction amounts for tax year 2023. Adjusts annually for tax years beginning after 12/31/2023, the income tax brackets and personal exemption, and standard deduction amounts by a cost-of-living adjustment factor. Amends the taxable income brackets and income tax rates for each filing status for taxable years beginning after 12/31/2022. (SD1)
528	528
529	529
530	530
531	531
532	532
533	533
534	534
535	535		The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.