HI SB1437

Authorizes partnerships and S corporations to elect to pay Hawaii income tax at the entity level on a year-by-year basis, with elections filed in the form and manner prescribed by the director of taxation.

Imposes tax on electing pass-through entities equal to the sum of each member's distributive share of Hawaii taxable income multiplied by the highest individual tax rate under section 235-51.

Allows members of electing pass-through entities to claim a credit equal to their share of taxes paid by the entity, with nonresident members exempt from filing individual returns if their only Hawaii income source is from electing pass-through entities.

Permits net losses incurred by electing pass-through entities to be carried forward to subsequent taxable years until exhausted.

Effective July 1, 2050, and applies to taxable years beginning after December 31, 2022.