HRS § 235-71 — Tax on corporations; rates; credit of shareholder of regulated investment company


PART IV
PART IV.
CORPORATION INCOME TAX
§235-71 Tax on corporations; rates; credit
of shareholder of regulated investment company. (a) A tax at the rates
herein provided shall be assessed, levied, collected, and paid for each taxable
year on the taxable income of every corporation, including a corporation
carrying on business in partnership, except that in the case of a regulated
investment company the tax is as provided by subsection (b) and further that in
the case of a real estate investment trust as defined in section 856 of the
Internal Revenue Code of 1954 the tax is as provided in subsection (d).
"Corporation" includes any professional corporation incorporated
pursuant to chapter 415A.
The tax on all taxable income shall be at the
rate of 4.4 per cent if the taxable income is not over $25,000, 5.4 per cent if
over $25,000 but not over $100,000, and on all over $100,000, 6.4 per cent.
(b) In the case of a regulated investment
company there is imposed on the taxable income, computed as provided in
sections 852 and 855 of the Internal Revenue Code but with the changes and
adjustments made by this chapter (without prejudice to the generality of the
foregoing, the deduction for dividends paid is limited to such amount of
dividends as is attributable to income taxable under this chapter), a tax
consisting in the sum of the following: 4.4 per cent if the taxable income is
not over $25,000, 5.4 per cent if over $25,000 but not over $100,000, and on
all over $100,000, 6.4 per cent.
(c) In the case of a shareholder of a
regulated investment company there is hereby allowed a credit in the amount of
the tax imposed on the amount of capital gains which by section 852(b)(3)(D) of
the Internal Revenue Code is required to be included in the shareholder's
return and on which there has been paid to the State by the regulated
investment company the tax at the rate imposed by subsection (b); the amount of
this credit may be applied or refunded as provided in section 235-110.
(d) In the case of a real estate investment
trust there is imposed on the taxable income, computed as provided in sections
857 and 858 of the Internal Revenue Code but with the changes and adjustments
made by this chapter (without prejudice to the generality of the foregoing, the
deduction for dividends paid is limited to such amount of dividends as is
attributable to income taxable under this chapter), a tax consisting in the sum
of the following: 4.4 per cent if the taxable income is not over $25,000, 5.4
per cent if over $25,000 but not over $100,000, and on all over $100,000, 6.4
per cent. In addition to any other penalty provided by law any real estate
investment trust whose tax liability for any taxable year is deemed to be
increased pursuant to section 859(b)(2)(A) or 860(c)(1)(A) after December 31,
1978, (relating to interest and additions to tax determined with respect to the
amount of the deduction for deficiency dividends allowed) of the Internal
Revenue Code shall pay a penalty in an amount equal to the amount of interest
for which the trust is liable that is attributable solely to the increase. The
penalty payable under this subsection with respect to any determination shall
not exceed one-half of the amount of the deduction allowed by section 859(a),
or 860(a) after December 31, 1978, of the Internal Revenue Code for the taxable
year.
Notwithstanding the foregoing, beginning
January 1, 2022, the department shall require a real estate investment trust
subject to this chapter to:
(1) Notify the department, in the manner prescribed
by the department, of its operation as a real estate investment trust in the
State no later than fifteen days from the first day of operation in the State;
provided that, for real estate investment trusts operating in the State as of
July 1, 2021, the department shall be notified no later than January 15, 2022;
(2) Properly designate on its tax return that it is a
real estate investment trust, as required by the department;
(3) Complete its tax return in the specific manner
required by the department, including following line-by-line instructions; and
(4) Submit a copy of the real estate investment
trust's federal tax return covering the same period with each state tax return
that the real estate investment trust files with the department under this
chapter.
Any real estate investment
trust that fails to comply with these requirements shall be assessed a penalty
of $50 per day.
(e) Any corporation acting as a business
entity in more than one state and which is required by this chapter to file a
return and whose only activities in this State consist of sales and which does
not own or rent real estate or tangible personal property and whose annual
gross sales in or into this State during the tax year are not in excess of
$100,000 may elect to report and pay a tax of .5 per cent of such annual gross
sales.