HI SB659

Allows partnerships and limited liability companies to allocate the low-income housing tax credit among partners or members in any manner agreed upon, regardless of federal partnership status, as long as parties are partners or members under Hawaii state law.

Requires taxpayers claiming the low-income housing tax credit to include Internal Revenue Service Form 8609 (or successor form) with their tax returns, with provisions allowing initial claims based on carryover allocation letters if the form has not yet been received.

For buildings placed in service after December 31, 2020, exempts investments from Section 453 (installment method), Section 465 (at-risk limitations), and Section 469 (passive activity loss restrictions) of the Internal Revenue Code.

Caps state tax credits for buildings placed in service after December 31, 2020 at 50 percent of federal credits allocated, and requires Hawaii taxpayer deductions to not exceed deductions claimed on federal returns.

Extends the sunset date for Act 129, Session Laws of Hawaii 2016 from December 31, 2021 to an unspecified future date, and makes the act effective December 1, 2050 for taxable years beginning after December 31, 2050.