HRS § 235-2.5 — Administration, adoption, and interrelationship of Internal Revenue Code and Public Laws with this chapter


§235-2.5 Administration, adoption, and
interrelationship of Internal Revenue Code and Public Laws with this chapter. (a)
Reference in provisions of the Internal Revenue Code which are operative in
this State to provisions in the Internal Revenue Code which are not operative
in this State shall be considered inoperative for the purposes of determining
gross income, adjusted gross income, ordinary income and loss, and taxable
income; provided that:
(1) References to time limits and other
administrative provisions in subtitle F (sections 6001 to 7873) of the Internal
Revenue Code contained in operative sections of the Internal Revenue Code shall
be deemed references to applicable provisions of this chapter or chapter 231 or
232, and in the absence of applicable provisions in this chapter or chapters
231 or 232, then to rules adopted by the director of taxation under subsection
(b);
(2) If inoperative provisions of the Internal Revenue
Code have been codified in this chapter such references shall be deemed
references to the codified provisions in this chapter. Transitory and savings
provisions in federal Public Laws amending sections of the Internal Revenue
Code operative in this chapter shall be operative for the purposes of this
chapter. Provisions in this chapter or chapter 231 or 232 in conflict with the
Internal Revenue Code or transitory or savings provisions in federal Public Law
shall control; and
(3) Retroactive and prospective provisions in federal
Public Laws amending sections of the federal Internal Revenue Code operative in
this chapter and retroactive and prospective provisions in federal Public Laws
that are operative in this chapter affecting taxable years beginning or ending
before the December 31 date in section 235-2.3 shall be operative for the
purposes of this chapter; provided that the effective dates in Public Law 96-471
placing it in effect for the taxable year 1980 shall be operative for the
purposes of this chapter.
(b) The director of taxation may adopt by rule
under chapter 91 the rules and regulations promulgated by the United States
Secretary of Treasury or a delegate of the Secretary relating to the provisions
of subtitle A, chapter 1 or 6, of the Internal Revenue Code operative in this
chapter and any administrative provisions of the Internal Revenue Code
(subtitle F, sections 6001 to 7873) not in conflict with or similar to
provisions contained in this chapter or chapter 231 or 232 either by reference
or by setting them forth in full.
(c) The department of taxation shall submit to
each regular session of the legislature a bill to amend sections 235-2.3, 235-2.4,
and 235-2.45 and such other sections and subsections of this chapter as may be
necessary to adopt the Internal Revenue Code as it exists on the December 31 preceding such regular session. In
submitting the bill the department may provide that certain amendments to the
Internal Revenue Code by Congress during the preceding calendar year shall not
be operative in this State or as operative are limited in their operation. The
department shall also prepare a digest and explanation of the amended
provisions of the Internal Revenue Code recommended for operation, as well as
those provisions that are limited in their operation, or that are not
recommended for operation, and shall submit with the bill required by this
subsection the digest, explanation, and a statement of revenue impact of the
adoption of the bill. In preparing the bill, digest, and explanation the
department may request the assistance of the office of the legislative
reference bureau.
It is the intent of the legislature that it
shall each year adopt all amendments to the Internal Revenue Code for the
calendar year preceding the year in which the legislature meets; provided that
the legislature may choose to adopt none of the amendments to the Internal
Revenue Code or may provide that certain amendments are limited in their
operation.