§235-2.3  Conformance to the federal
Internal Revenue Code; general application.  (a)  For all taxable years
beginning after December 31, 2008, as used in this chapter, "Internal
Revenue Code" means subtitle A, chapter 1, of the federal Internal Revenue
Code of 1986, as amended as of December 31, 2008, as it applies to the
determination of gross income, adjusted gross income, ordinary income and loss,
and taxable income, except those provisions of the Internal Revenue Code and
federal public laws which, pursuant to this chapter, do not apply or are
otherwise limited in application and except for the provisions of Public Law
109-001 which apply to section 170 of the Internal Revenue Code.  The
provisions of Public Law 109-001 to accelerate the deduction for charitable
cash contributions for the relief of victims of the 2004 Indian Ocean tsunami
are applicable for the calendar year that ended December 31, 2004, and the
calendar year ending December 31, 2005.



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



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



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



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



(1)  Subchapter A (sections 1 to 59A) (with respect to
determination of tax liability), except section 1(h)(2) (relating to net
capital 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 section
41 (with respect to the credit for increasing research activities), except
section 42 (with respect to low-income housing credit), and except sections 47
and 48, as amended, as of December 31, 1984 (with respect to certain
depreciable tangible personal property).  For treatment, see sections
235-110.91, 235-110.7, and 235-110.8;



(2)  Section 78 (with respect to dividends received
from certain foreign corporations by domestic corporations choosing foreign tax
credit);



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



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



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



(6)  Section 120 (with respect to amounts received
under qualified group legal services plans).  For treatment, see section
235-7(a)(9) to (11);



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



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



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



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



(11)  Section 179B (with respect to expensing of
capital costs incurred in complying with Environmental Protection Agency
sulphur regulations);



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



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



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



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



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



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



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



(19)  Section 367 (with respect to foreign
corporations);



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



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



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



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



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



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



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



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



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



(29)  Subchapter N (sections 861 to 999) (with respect
to 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 stock
in agricultural refiners and processors to eligible farm cooperatives);



(31)  Section 1055 (with respect to redeemable ground
rents);



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



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



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



(35)  Subchapter R (sections 1352 to 1359) (with
respect to election to determine corporate tax on certain international
shipping activities using per ton rate);



(36)  Subchapter U (sections 1391 to 1397F) (with
respect to designation and treatment of empowerment zones, enterprise
communities, and rural development investment areas).  For treatment, see
chapter 209E;



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



(38)  Section 1400O (with respect to education tax
benefits);



(39)  Section 1400P (with respect to housing tax
benefits);



(40)  Section 1400R (with respect to employment
relief); and



(41)  Section 1400T (with respect to special rules for
mortgage 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 c
209, §1; am L 1982, c 22, §1(1) and c 25, §1; am L 1983, c 88, §1; am L 1984, c
99, §1; am L 1985, c 19, pt of §1; am L 1986, c 283, §1; am L 1987, c 39, §2
and 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 and
c 137, §2; am L 1992, c 37, §1; am L 1993, c 73, §1; am L 1994, c 13, §2; am L
1995, 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, c
199, §1; am L 2002, c 223, §2; am L 2003, c 172, §2; am L 2004, c 89, §3; am L
2005, 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 after
December 31, 2007; provided that the retroactive and prospective effective
dates contained in the congressional acts relating to the Internal Revenue Code
and 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 Revenue
Code of 1954, as amended, with certain exceptions, for purposes of determining
gross income.  Att. Gen. Op. 91-03.