HI HB475

Adds Section 857(b)(2)(B) to the list of inoperative Internal Revenue Code sections, making the federal dividends paid deduction for real estate investment trusts (REITs) inapplicable under Hawaii tax law.

For taxable years beginning before January 1, 2020, limits the REIT dividends paid deduction to dividends attributable to income taxable under Hawaii law.

For taxable years beginning after December 31, 2019, completely disallows any deductions for dividends paid by REITs.

Directs 10 percent of revenues generated from the REIT tax to the Department of Business, Economic Development, and Tourism for economic development funding in the state.

Effective for taxable years beginning after December 31, 2112.