§235-2.3  Conformance to the federalInternal Revenue Code; general application.  (a)  For all taxable yearsbeginning after December 31, 2008, as used in this chapter, "InternalRevenue Code" means subtitle A, chapter 1, of the federal Internal RevenueCode of 1986, as amended as of December 31, 2008, as it applies to thedetermination of gross income, adjusted gross income, ordinary income and loss,and taxable income, except those provisions of the Internal Revenue Code andfederal public laws which, pursuant to this chapter, do not apply or areotherwise limited in application and except for the provisions of Public Law109-001 which apply to section 170 of the Internal Revenue Code.  Theprovisions of Public Law 109-001 to accelerate the deduction for charitablecash contributions for the relief of victims of the 2004 Indian Ocean tsunamiare applicable for the calendar year that ended December 31, 2004, and thecalendar year ending December 31, 2005.

Sections 235-2, 235-2.1, and 235-2.2 shallcontinue to be used to determine:

(1)  The basis of property, if a taxpayer firstdetermined the basis of property in a taxable year to which such sectionsapply, and if such determination was made before January 1, 1978; and

(2)  Gross income, adjusted gross income, ordinaryincome and loss, and taxable income for a taxable year to which such sectionsapply where such taxable year begins before January 1, 1978.

(b)  The following Internal Revenue Codesubchapters, parts of subchapters, sections, subsections, and parts ofsubsections shall not be operative for the purposes of this chapter, unlessotherwise provided:

(1)  Subchapter A (sections 1 to 59A) (with respect todetermination of tax liability), except section 1(h)(2) (relating to netcapital gain reduced by the amount taken into account as investment income),except sections 2(a), 2(b), and 2(c) (with respect to the definition of"surviving spouse" and "head of household"), except section41 (with respect to the credit for increasing research activities), exceptsection 42 (with respect to low-income housing credit), and except sections 47and 48, as amended, as of December 31, 1984 (with respect to certaindepreciable tangible personal property).  For treatment, see sections235-110.91, 235-110.7, and 235-110.8;

(2)  Section 78 (with respect to dividends receivedfrom certain foreign corporations by domestic corporations choosing foreign taxcredit);

(3)  Section 86 (with respect to social security andtier 1 railroad retirement benefits);

(4)  Section 103 (with respect to interest on stateand local bonds).  For treatment, see section 235-7(b);

(5)  Section 114 (with respect to extraterritorialincome).  For treatment, any transaction as specified in the transitional rulefor 2005 and 2006 as specified in the American Jobs Creation Act of 2004section 101(d) and any transaction that has occurred pursuant to a bindingcontract as specified in the American Jobs Creation Act of 2004 section 101(f)are inoperative;

(6)  Section 120 (with respect to amounts receivedunder qualified group legal services plans).  For treatment, see section235-7(a)(9) to (11);

(7)  Section 122 (with respect to certain reduceduniformed services retirement pay).  For treatment, see section 235-7(a)(3);

(8)  Section 135 (with respect to income from UnitedStates savings bonds used to pay higher education tuition and fees).  Fortreatment, see section 235-7(a)(1);

(9)  Subchapter B (sections 141 to 150) (with respectto tax exemption requirements for state and local bonds);

(10)  Section 151 (with respect to allowance ofdeductions for personal exemptions).  For treatment, see section 235-54;

(11)  Section 179B (with respect to expensing ofcapital costs incurred in complying with Environmental Protection Agencysulphur regulations);

(12)  Section 181 (with respect to special rules forcertain film and television productions);

(13)  Section 196 (with respect to deduction forcertain unused investment credits);

(14)  Section 199 (with respect to the U.S. productionactivities deduction);

(15)  Section 222 (with respect to qualified tuitionand related expenses);

(16)  Sections 241 to 247 (with respect to specialdeductions for corporations).  For treatment, see section 235-7(c);

(17)  Section 280C (with respect to certain expensesfor which credits are allowable).  For treatment, see section 235-110.91;

(18)  Section 291 (with respect to special rulesrelating to corporate preference items);

(19)  Section 367 (with respect to foreigncorporations);

(20)  Section 501(c)(12), (15), (16) (with respect toexempt organizations);

(21)  Section 515 (with respect to taxes of foreigncountries and possessions of the United States);

(22)  Subchapter G (sections 531 to 565) (with respectto corporations used to avoid income tax on shareholders);

(23)  Subchapter H (sections 581 to 597) (with respectto banking institutions), except section 584 (with respect to common trustfunds).  For treatment, see chapter 241;

(24)  Section 642(a) and (b) (with respect to specialrules for credits and deductions applicable to trusts).  For treatment, seesections 235-54(b) and 235-55;

(25)  Section 646 (with respect to tax treatment ofelecting Alaska Native settlement trusts);

(26)  Section 668 (with respect to interest charge onaccumulation distributions from foreign trusts);

(27)  Subchapter L (sections 801 to 848) (with respectto insurance companies).  For treatment, see sections 431:7-202 and 431:7-204;

(28)  Section 853 (with respect to foreign tax creditallowed to shareholders).  For treatment, see section 235-55;

(29)  Subchapter N (sections 861 to 999) (with respectto tax based on income from sources within or without the United States),except sections 985 to 989 (with respect to foreign currency transactions). For treatment, see sections 235-4, 235-5, and 235-7(b), and 235-55;

(30)  Section 1042(g) (with respect to sales of stockin agricultural refiners and processors to eligible farm cooperatives);

(31)  Section 1055 (with respect to redeemable groundrents);

(32)  Section 1057 (with respect to election to treattransfer to foreign trust, etc., as taxable exchange);

(33)  Sections 1291 to 1298 (with respect to treatmentof passive foreign investment companies);

(34)  Subchapter Q (sections 1311 to 1351) (withrespect to readjustment of tax between years and special limitations);

(35)  Subchapter R (sections 1352 to 1359) (withrespect to election to determine corporate tax on certain internationalshipping activities using per ton rate);

(36)  Subchapter U (sections 1391 to 1397F) (withrespect to designation and treatment of empowerment zones, enterprisecommunities, and rural development investment areas).  For treatment, seechapter 209E;

(37)  Subchapter W (sections 1400 to 1400C) (withrespect to District of Columbia enterprise zone);

(38)  Section 1400O (with respect to education taxbenefits);

(39)  Section 1400P (with respect to housing taxbenefits);

(40)  Section 1400R (with respect to employmentrelief); and

(41)  Section 1400T (with respect to special rules formortgage revenue bonds). [L 1978, c 173, §2(1); am L 1979, c 62, §2(1) to (3);am L 1980, c 235, §1 and c 238, §2; am L 1981, c 3, §2(2), c 208, §2, and c209, §1; am L 1982, c 22, §1(1) and c 25, §1; am L 1983, c 88, §1; am L 1984, c99, §1; am L 1985, c 19, pt of §1; am L 1986, c 283, §1; am L 1987, c 39, §2and c 239, §1(5); am L 1988, c 10, §1(2), c 102, §1, c 107, §2, and c 216, §3;am L 1989, c 13, §1; am L 1990, c 15, §1 and c 289, §2; am L 1991, c 54, §1 andc 137, §2; am L 1992, c 37, §1; am L 1993, c 73, §1; am L 1994, c 13, §2; am L1995, c 7, §1; am L 1996, c 187, §1; am L 1997, c 297, §2; am L 1998, c 113,§1; am L 1999, c 178, §28 and c 198, §1; am L 2000, c 174, §2; am L 2001, c199, §1; am L 2002, c 223, §2; am L 2003, c 172, §2; am L 2004, c 89, §3; am L2005, c 60, §2; am L 2006, c 124, §1; am L 2007, c 84, §1; am L 2008, c 93, §1;am L 2009, c 133, §2]

 

Note

 

  The 2008 amendment applies to taxable years beginning afterDecember 31, 2007; provided that the retroactive and prospective effectivedates contained in the congressional acts relating to the Internal Revenue Codeand enacted during 2007 shall be operative for chapter 235.  L 2008, c 93, §7.

 

Attorney General Opinions

 

  Hawaii's net income tax law incorporates Internal RevenueCode of 1954, as amended, with certain exceptions, for purposes of determininggross income.  Att. Gen. Op. 91-03.