RELATING TO NET INVESTMENT INCOME TAX.

HB2407

HOUSE OF REPRESENTATIVES

H.B. NO.

2407

THIRTY-THIRD LEGISLATURE,
2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to net investment income tax
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION 1.
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Chapter 235, Hawaii Revised Statutes, is
amended by adding a new section to be appropriately designated and to read as
follows:

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"
�235-
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Net
investment income tax.
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(a)
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In addition to the taxes imposed by this chapter, on every individual,
estate, or trust, there is imposed a net investment income tax for each taxable
year equal to per cent of the lesser of either:

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(1)
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The net
investment income; or

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(2)
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The federal
modified adjusted gross income, less the threshold amount.

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(b)
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For an individual who is not a resident for
the entire taxable year, the tax under this section shall be calculated as if
the individual were a resident for the entire year, and that amount shall be
multiplied by a fraction in which:

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(1)
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The numerator
is the individual's net investment income allocated to the State pursuant to
section 235-23; and

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(2)
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The denominator
is the individual's total amount of net investment income for the taxable year.

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(c)
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For an estate or trust, the tax under this section
shall be calculated by multiplying the net investment income tax liability by a
fraction in which:

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(1)
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The numerator
is the amount of the estate or trust's net investment income allocated to the State
pursuant to section 235-23; and

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(2)
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The denominator
is the estate or trust's total net investment income.

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(d)
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For the purposes of this section:

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"Federal modified adjusted
gross income" has the same meaning as in section 1411(d) of the Internal
Revenue Code.

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"Net investment income"
has the same meaning as in section 1411(c) of the Internal Revenue Code.
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"Net investment income" includes interest
on obligations issued by state and local governments other than the State and
its subdivisions, net gain excluded under section 1202 of the Internal Revenue
Code, and net gain excluded under section 1400Z-2 of the Internal Revenue Code.
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"Net investment income" does not
include interest on United States obligations that the State is prohibited from
taxing under federal law.

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"Threshold amount" has
the same meaning as in section 1411(b) of the Internal Revenue Code.
"

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SECTION 2.
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New statutory material is underscored.

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SECTION 3.
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This Act shall take effect upon its approval.

INTRODUCED BY:

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Report Title:

Taxation;
Net Investment Income Tax

Description:

Establishes
a net investment income tax.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.