PART IV. 
CORPORATION INCOME TAX



 



§235-71  Tax on corporations; rates; credit
of shareholder of regulated investment company.  (a)  A tax at the rates
herein provided shall be assessed, levied, collected, and paid for each taxable
year on the taxable income of every corporation, including a corporation
carrying on business in partnership, except that in the case of a regulated
investment company the tax is as provided by subsection (b) and further that in
the case of a real estate investment trust as defined in section 856 of the
Internal Revenue Code of 1954 the tax is as provided in subsection (d). 
"Corporation" includes any professional corporation incorporated
pursuant to chapter 415A.



The tax on all taxable income shall be at the
rate of 4.4 per cent if the taxable income is not over $25,000, 5.4 per cent if
over $25,000 but not over $100,000, and on all over $100,000, 6.4 per cent.



(b)  In the case of a regulated investment
company there is imposed on the taxable income, computed as provided in sections
852 and 855 of the Internal Revenue Code but with the changes and adjustments
made by this chapter (without prejudice to the generality of the foregoing, the
deduction for dividends paid is limited to such amount of dividends as is
attributable to income taxable under this chapter), a tax consisting in the sum
of the following:  4.4 per cent if the taxable income is not over $25,000, 5.4
per cent if over $25,000 but not over $100,000, and on all over $100,000, 6.4
per cent.



(c)  In the case of a shareholder of a
regulated investment company there is hereby allowed a credit in the amount of
the tax imposed on the amount of capital gains which by section 852(b)(3)(D) of
the Internal Revenue Code is required to be included in the shareholder's
return and on which there has been paid to the State by the regulated
investment company the tax at the rate imposed by subsection (b); the amount of
this credit may be applied or refunded as provided in section 235-110.



(d)  In the case of a real estate investment trust
there is imposed on the taxable income, computed as provided in sections 857
and 858 of the Internal Revenue Code but with the changes and adjustments made
by this chapter (without prejudice to the generality of the foregoing, the
deduction for dividends paid is limited to such amount of dividends as is
attributable to income taxable under this chapter), a tax consisting in the sum
of the following:  4.4 per cent if the taxable income is not over $25,000, 5.4
per cent if over $25,000 but not over $100,000, and on all over $100,000, 6.4
per cent.  In addition to any other penalty provided by law any real estate
investment trust whose tax liability for any taxable year is deemed to be
increased pursuant to section 859(b)(2)(A) or 860(c)(1)(A) after December 31,
1978, (relating to interest and additions to tax determined with respect to the
amount of the deduction for deficiency dividends allowed) of the Internal
Revenue Code shall pay a penalty in an amount equal to the amount of interest
for which such trust is liable that is attributable solely to such increase. 
The penalty payable under this subsection with respect to any determination
shall not exceed one-half of the amount of the deduction allowed by section
859(a), or 860(a) after December 31, 1978, of the Internal Revenue Code for
such taxable year.



(e)  Any corporation acting as a business
entity in more than one state and which is required by this chapter to file a
return and whose only activities in this State consist of sales and which does
not own or rent real estate or tangible personal property and whose annual
gross sales in or into this State during the tax year are not in excess of
$100,000 may elect to report and pay a tax of .5 per cent of such annual gross
sales. [L Sp 1957, c 1, pt of §2; am L 1965, c 155, §§10, 11, 12 and c 201, §6;
Supp, §121-23; HRS §235-71; am L 1969, c 226, §5; am L 1974, c 10, §2; am L
1978, c 173, §2(13); am L 1979, c 62, §2(11); am L 1983, c 167, §18; am L 1985,
c 270, §4; am L 1987, c 239, §1(19); am L 1988, c 10, §1(3), (4)]