Hawaii 2024 Regular Session

Hawaii Senate Bill SR134 Compare Versions

Only one version of the bill is available at this time.

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1	1	THE SENATE S.R. NO. 134 THIRTY-SECOND LEGISLATURE, 2024 STATE OF HAWAII SENATE RESOLUTION requesting the department of taxation to conduct a study on DISALLOWING the dividends paid deduction for real estate investment trusts.
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3	3	THE SENATE S.R. NO. 134
4	4	THIRTY-SECOND LEGISLATURE, 2024
5	5	STATE OF HAWAII
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7	7	THE SENATE
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9	9	S.R. NO.
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11	11	134
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13	13	THIRTY-SECOND LEGISLATURE, 2024
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17	17	STATE OF HAWAII
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29	29	SENATE RESOLUTION
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35	35	requesting the department of taxation to conduct a study on DISALLOWING the dividends paid deduction for real estate investment trusts.
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41	41	WHEREAS, real estate investment trusts were established by the federal government to give investors, especially small investors, access to income-producing real estate; and WHEREAS, the Internal Revenue Code allows a dividends paid deduction to the real estate investment trust, thereby allowing the real estate investment trust to not pay tax on income distributed to its shareholders, who would then pay tax on that income; and WHEREAS, existing state law conforms to these provisions but creates an anomaly because a real estate investment trust that does business in Hawaii and pays dividends to shareholders outside the State results in no Hawaii income tax collected, because shareholders pay tax on dividends to the state in which they reside, not where the income was generated; and WHEREAS, while some real estate investment trusts that do business in Hawaii have shareholders who reside in the State, a substantial majority do not; and WHEREAS, real estate investment trusts own more real estate in Hawaii per capita than in any other state; now, therefore, BE IT RESOLVED by the Senate of the Thirty-second Legislature of the State of Hawaii, Regular Session of 2024, that the Department of Taxation is requested to conduct a study on the advantages and disadvantages of disallowing the dividends paid deduction for real estate investment trusts; and BE IT FURTHER RESOLVED the study is requested to estimate the change in revenue collected by the State after disallowing the dividends paid deduction, including the impact to the amount of general excise taxes collected from the operation of hotels owned by real estate investment trusts, other corporate income tax deductions that real estate investment trusts could take, and any differences in the levels of maintenance and capital improvements to properties between real estate investment trusts and non-real estate investment trust owners; and BE IT FURTHER RESOLVED that the study consider other states' treatment of the dividends paid deduction for real estate investment trusts, and any impacts or effects resulting therefrom; and BE IT FURTHER RESOLVED that the study consider possible exceptions to disallowing the dividends paid deduction for real estate investment trusts, and any impacts or effects resulting therefrom; and BE IT FURTHER RESOLVED that a certified copy of this Resolution be transmitted to the Director of Taxation. OFFERED BY: _____________________________ Report Title: Taxation; Real Estate Investment Trusts; Dividends Paid Deduction;
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43	43	WHEREAS, real estate investment trusts were established by the federal government to give investors, especially small investors, access to income-producing real estate; and
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47	47	WHEREAS, the Internal Revenue Code allows a dividends paid deduction to the real estate investment trust, thereby allowing the real estate investment trust to not pay tax on income distributed to its shareholders, who would then pay tax on that income; and
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51	51	WHEREAS, existing state law conforms to these provisions but creates an anomaly because a real estate investment trust that does business in Hawaii and pays dividends to shareholders outside the State results in no Hawaii income tax collected, because shareholders pay tax on dividends to the state in which they reside, not where the income was generated; and
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55	55	WHEREAS, while some real estate investment trusts that do business in Hawaii have shareholders who reside in the State, a substantial majority do not; and
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59	59	WHEREAS, real estate investment trusts own more real estate in Hawaii per capita than in any other state; now, therefore,
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63	63	BE IT RESOLVED by the Senate of the Thirty-second Legislature of the State of Hawaii, Regular Session of 2024, that the Department of Taxation is requested to conduct a study on the advantages and disadvantages of disallowing the dividends paid deduction for real estate investment trusts; and
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67	67	BE IT FURTHER RESOLVED the study is requested to estimate the change in revenue collected by the State after disallowing the dividends paid deduction, including the impact to the amount of general excise taxes collected from the operation of hotels owned by real estate investment trusts, other corporate income tax deductions that real estate investment trusts could take, and any differences in the levels of maintenance and capital improvements to properties between real estate investment trusts and non-real estate investment trust owners; and
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71	71	BE IT FURTHER RESOLVED that the study consider other states' treatment of the dividends paid deduction for real estate investment trusts, and any impacts or effects resulting therefrom; and
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75	75	BE IT FURTHER RESOLVED that the study consider possible exceptions to disallowing the dividends paid deduction for real estate investment trusts, and any impacts or effects resulting therefrom; and
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79	79	BE IT FURTHER RESOLVED that a certified copy of this Resolution be transmitted to the Director of Taxation.
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87	87	OFFERED BY: _____________________________
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91	91	OFFERED BY:
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145	145	Report Title:
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147	147	Taxation; Real Estate Investment Trusts; Dividends Paid Deduction;