HI HB1362

Establishes a state tax law permitting partnerships and S corporations to elect to pay Hawaii income tax at the entity level for each taxable year, with elections being irrevocable once made.

Imposes tax on electing pass-through entities equal to the sum of all members' distributive shares and guaranteed payments of Hawaii taxable income multiplied by the highest individual tax rate under section 235-51, excluding corporate members' income from taxation.

Allows members of electing pass-through entities to claim a tax credit for their pro rata share of taxes paid by the entity, with excess credits being non-refundable.

Permits nonresident individuals whose only Hawaii income source is from electing pass-through entities to avoid filing individual income tax returns if the entity pays the required taxes.

Allows resident and part-year resident members to claim credits for similar taxes paid to other states or the District of Columbia on partnership or S corporation income.