§241-4  Measure and rate of tax.  (a) 
The measure of the tax imposed by this chapter is the entire net income from
all sources for the preceding calendar year, or in the case of a taxpayer
operating on a fiscal year basis, for the preceding fiscal year.  The tax shall
be at the rate of seven and ninety-two one hundredths per cent of the entire
net income from all sources.



(b)  The "entire net income from all
sources" shall be determined in the same manner as the "taxable
income" of a corporation, as provided by chapter 235, with the following
changes and adjustments:



(1)  There is included in gross income interest
received upon the obligations of the United States or its possessions, or upon
securities issued under the authority of an act of Congress, or upon state,
territorial, municipal, county, or other bonds or securities whether or not the
income from such obligations, bonds, or securities, is tax free.  Section
235-7(a)(1), (5), and (6) does not apply.



(2)  Deductions connected with income which by this
chapter are required to be included in the computation of net income shall be
allowed, but deductions connected with income which by this chapter are not to
be included in the computation of net income shall not be allowed.  Section
235-7(e)(1) does not apply.



(3)  Debts ascertained to be worthless and charged off
on the books of the taxpayer within the income year may be deducted, or in the
discretion of the department of taxation may be treated as a reasonable
addition to a reserve for bad debts; provided that when satisfied that a debt
is recoverable only in part, the department may allow the debt to be charged
off in part.



(4)  In the case of any life insurance company (as
defined by the Internal Revenue Code), which is determined to be a financial corporation
as defined by this chapter, sections 801, 811, and 812 of the Internal Revenue
Code do not apply.  The total of the deductions allowed by sections 807 and 810
of the Internal Revenue Code shall not exceed the amount of the required
interest, as defined by section 807 of the Internal Revenue Code.



(5)  Section 582 (with respect to bonds, etc., losses
and gains of financial institutions) of the Internal Revenue Code shall be
operative for the purposes of this chapter. [L Sp 1957, c 1, pt of §10(a); am L
Sp 1959 2d, c 1, §16; am L 1965, c 155, §21; Supp, §127-4; HRS §241-4; am L
1975, c 52, §1; am L 1978, c 173, §3; am L 1979, c 62, §3; am L 1985, c 19, §3;
am L 1987, c 39, §6; am L 1988, c 69, §2; am L 1992, c 106, §14; am L 1995, c
85, §1]