Hawaii would make a number of tax changes, including increasing income quotas, to make up for lost revenue from the coronavirus pandemic and to avoid government employees being put on leave and fired under a House law.
HB 3, introduced Thursday by Rep. Jeanne Kapela, D-Naalehu, would make several tax changes, including increasing the income tax rate. Surviving spouse personal income tax would be charged at 12% on taxable income between $ 450,000 and $ 500,000 and 13% on taxable income over $ 500,000. Under current law, an 11% tax rate applies to personal income over $ 400,000.
Heads of household should be legally charged 12% tax on incomes between $ 350,000 and $ 400,000 and 13% on incomes over $ 400,000. Unmarried persons should be taxed at 12% for income over $ 250,000 and 13% for income over $ 300,000. Heads of household are currently taxed 11% for incomes over $ 300,000 while individuals are currently taxed 11% for incomes over $ 200,000.
The bill is intended to help the state make up for the state’s lost revenue due to the pandemic.
“Legislators also state that there is a need to generate revenue so that the state can achieve its strategic goals, avoid vacation days and layoffs for government employees, and prevent disruption to essential government services,” the bill reads.
The bill would also increase the capital gains tax from 7.25% to 11%, raise the corporate tax rate to 9.6%, and establish a uniform corporate tax rate for all businesses, including regulated investment companies and real estate mutual funds.
The bill would also temporarily remove a wide range of general excise tax exemptions, including exemptions for the amounts deducted from gross receipts of contractors and reimbursements for the cost of purchased materials, plant and equipment received from federal contractors plus costs. The measure also provides for an increase in transportation tax on property sales of $ 1 million or more.
The law, if passed, would come into effect on July 1st. The income tax rate hike would apply to tax years beginning after December 31, 2020, and the temporary waiver of certain exemptions and the transfer tax hike would be lifted on June 30. 2023.
A Senate version of the bill is SB 56.
Representatives for Democratic Governor David Ige did not immediately respond to requests for comment on Friday.
Representatives of Democratic and Republican leaders in the Hawaii legislature did not immediately respond to requests for comment on Friday.
– Arrangement by Joyce Laskowski.
To have this article reprinted, please contact [email protected].