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

(b)  The "entire net income from allsources" shall be determined in the same manner as the "taxableincome" of a corporation, as provided by chapter 235, with the followingchanges and adjustments:

(1)  There is included in gross income interestreceived upon the obligations of the United States or its possessions, or uponsecurities issued under the authority of an act of Congress, or upon state,territorial, municipal, county, or other bonds or securities whether or not theincome from such obligations, bonds, or securities, is tax free.  Section235-7(a)(1), (5), and (6) does not apply.

(2)  Deductions connected with income which by thischapter are required to be included in the computation of net income shall beallowed, but deductions connected with income which by this chapter are not tobe included in the computation of net income shall not be allowed.  Section235-7(e)(1) does not apply.

(3)  Debts ascertained to be worthless and charged offon the books of the taxpayer within the income year may be deducted, or in thediscretion of the department of taxation may be treated as a reasonableaddition to a reserve for bad debts; provided that when satisfied that a debtis recoverable only in part, the department may allow the debt to be chargedoff in part.

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

(5)  Section 582 (with respect to bonds, etc., lossesand gains of financial institutions) of the Internal Revenue Code shall beoperative for the purposes of this chapter. [L Sp 1957, c 1, pt of §10(a); am LSp 1959 2d, c 1, §16; am L 1965, c 155, §21; Supp, §127-4; HRS §241-4; am L1975, 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, c85, §1]