HI HB1726

Amends Section 235-2.45 of Hawaii Revised Statutes to make Section 857 of the Internal Revenue Code (taxation of real estate investment trusts and beneficiaries) operative for Hawaii tax purposes, except that the federal deduction for dividends paid under Section 857(b)(2)(B) shall not apply.

Modifies Section 235-71 to treat real estate investment trusts as corporations subject to standard corporate income tax rates of 4.4%, 5.4%, and 6.4% based on taxable income brackets, without the ability to deduct dividends paid to shareholders.

Repeals the previous subsection (d) of Section 235-71 that had provided separate tax treatment and penalty provisions specific to real estate investment trusts.

Applies to taxable years beginning after December 31, 2013, with an effective date of July 1, 2030.

Preserves existing rights, duties, and penalties that accrued before the effective date.