THE SENATE
S.B. NO.
430
THIRTY-THIRD LEGISLATURE, 2025
S.D. 1
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO TAXATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 231-23, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d) This subsection shall apply to a refund for an overpayment of a tax:
(1) If the tax return as filed by a taxpayer shows the amount already paid exceeds the amount determined to be the correct amount of the tax due, whether or not the tax was paid by installments, and the taxpayer requests a refund of the overpayment, the amount of the overpayment shall be refunded in the manner provided in subsection (c) within ninety days of the due date of the tax return or the date the tax return is filed, whichever is later; provided that interest on the overpayment shall be paid:
(A) To the taxpayer if the amount overpaid is not refunded within ninety days; and
(B) At the rate [[Struck through: of one-third of one per cent]] [Underlined: set by title 26 United States Code section 6621(a)(1) applicable to the first day of January for each year] of the refund amount [[Struck through: for each month or fraction thereof]] [Underlined: compounded daily] after the ninety-day period, until the refund and any applicable interest is paid to the taxpayer;
(2) If any overpayment of taxes results or arises from:
(A) The taxpayer filing an amended return; or
(B) A determination made by the director; and
the overpayment is not shown on the original return as filed by the taxpayer, the amount overpaid shall be refunded to the taxpayer within ninety days from the due date of the original return or the date the overpayment is discovered under subparagraphs (A) or (B), whichever occurred later; provided that interest shall be paid to the taxpayer if the amount overpaid is not refunded within ninety days and at the rate [[Struck through: of one-third of one per cent]] [Underlined: set by title 26 United States Code section 6621(a)(1) applicable to the first day of January for each year] of the refund amount [[Struck through: for each month or fraction thereof]] [Underlined: compounded daily] after the ninety-day period, until the refund and any applicable interest is paid to the taxpayer;
(3) For purposes of a net income tax return, if any overpayment of any taxes results from a carryback of a net operating loss, the overpayment shall be deemed to have been made at the close of the taxable year in which the net operating loss arises. To the extent that the carryback of net operating loss results in reducing the amount of underpayment of taxes for prior taxable year or years, interest that would be chargeable because of the underpayment shall not be applicable with respect to that amount or amounts that are carried back; and
(4) In the case of credit, interest shall be paid in the same manner as paragraph (1)."
SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 3. This Act shall take effect on July 1, 2050, and shall apply to taxable years beginning after December 31, 2024.
Report Title:
Income Tax; Refund
Description:
Requires the Department of Taxation to provide refunds to taxpayers at the same interest rate as the federal government. Effective 7/1/2025. (SD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.