§235-54  Exemptions.  (a)  [See note
at the end of this section for the different repeal and reenactment dates and
other requirements of the 2009 amendments.  Additionally, this subsection (a)
is effective until December 31, 2010.  For subsection (a) effective on January
1, 2011, see below.]  In computing the taxable income of any individual,
there shall be deducted, in lieu of the personal exemptions allowed by the
Internal Revenue Code of 1986, as amended, and except as provided in subsection
(c), personal exemptions computed as follows:  Ascertain the number of
exemptions which the individual can lawfully claim under the Internal Revenue
Code, add an additional exemption for the taxpayer or the taxpayer's spouse who
is sixty-five years of age or older within the taxable year, and multiply that
number by $1,040, for taxable years beginning after December 31, 1984.  A
nonresident shall prorate the personal exemptions on account of income from
sources outside the State as provided in section 235-5.  In the case of an
individual with respect to whom an exemption under this section is allowable to
another taxpayer for a taxable year beginning in the calendar year in which the
individual's taxable year begins, the personal exemption amount applicable to
such individual under this subsection for such individual's taxable year shall
be zero.



(a)  [Subsection effective January 1, 2011. 
For subsection effective until December 31, 2010, see above.]  In computing
the taxable income of any individual, there shall be deducted, in lieu of the
personal exemptions allowed by the Internal Revenue Code of 1986, as amended,
and except as provided in subsection (c), personal exemptions computed as
follows:  Ascertain the number of exemptions which the individual can lawfully
claim under the Internal Revenue Code, add an additional exemption for the
taxpayer or the taxpayer's spouse who is sixty-five years of age or older
within the taxable year, and multiply that number by $1,144, for taxable years
beginning after December 31, 1984.  A nonresident shall prorate the personal
exemptions on account of income from sources outside the State as provided in
section 235-5.  In the case of an individual with respect to whom an exemption
under this section is allowable to another taxpayer for a taxable year
beginning in the calendar year in which the individual's taxable year begins,
the personal exemption amount applicable to such individual under this
subsection for such individual's taxable year shall be zero.



(b)  In computing the taxable income of an
estate or trust there shall be allowed, in lieu of the deductions allowed under
subsection (a), the following:



(1)  An estate shall be allowed a deduction of $400.



(2)  A trust which, under its governing instrument, is
required to distribute all of its income currently shall be allowed a deduction
of $200.



(3)  All other trusts shall be allowed a deduction of
$80.



(c)  The phaseout under section 151(d)(3) of
the Internal Revenue Code of 1986, as amended, shall apply to this section;
provided that the threshold income amounts under section 151(d)(3)(C) of the
Internal Revenue Code of 1986, as amended, shall be reduced by twenty-five per
cent for the purposes of this subsection; provided further that the threshold
income amounts under section 151(d)(3)(C) of the Internal Revenue Code of 1986,
as amended, used to determine the twenty-five per cent reduction under this
subsection shall be maintained at the amounts in place on July 1, 2008.



(d)  A blind person, a deaf person, and any
person totally disabled, in lieu of the personal exemptions allowed by the
Internal Revenue Code, shall be allowed, and there shall be deducted in
computing the taxable income of a blind person, a deaf person, or a totally
disabled person, instead of the exemptions provided by subsection (a), the
amount of $7,000. [L Sp 1957, c 1, pt of §2; am L 1960, c 4, §1; Supp, §121-11;
HRS §235-54; am L 1970, c 90, §2 and c 180, §2; am L 1978, c 181, §1; am L
1980, c 241, §2; am L 1985, c 78, §1; am L 1987, c 239, §1(15); am L 1999, c
253, §4; am L 2009, c 60, §3; am L Sp 2009, c 14, §1]



 



Note



 



  The L 2009, c 60 amendment of subsection (a) applies to
taxable years beginning after December 31, 2010 and is repealed and reenacted
on December 31, 2015.  L 2009, c 60, §6(2) and (3).  Effect of amendment on
underpayments.  L 2009, c 60, §4.



  The L Sp 2009, c 14 amendment applies to taxable years
beginning after December 31, 2008 and is repealed and reenacted on June 30,
2015.  L Sp 2009, c 14, §3.



 



Law Journals and Reviews



 



  Rule of Strict Construction in Tax Cases, a Question of
Classification or Exemption, Arthur B. Reinwald, 11 HBJ 98.



 



Case Notes



 



  Statutes granting exemptions are strictly construed against
taxpayer.  56 H. 321, 536 P.2d 91.