Bill > HB1918

This bill, effective July 1, 3000, aims to impose a conveyance tax, which is a tax on the transfer of property, on situations where a controlling interest in an entity that owns real property is transferred, treating it similarly to a direct sale of real estate. A "controlling interest" is defined as owning 50% or more of a corporation's voting stock or capital, profits, or beneficial interest, or the same percentage in a partnership or other entity. The bill clarifies that this tax will not apply to transfers that are merely a change in the identity or form of ownership of an entity if the beneficial ownership remains the same, such as transfers between entities wholly owned by the same common owner. It also establishes that the tax will be applied at the lowest rate for certain transfers, including those involving mergers, dissolutions of limited partnerships to their corporate general partners, transfers to certified low-income housing developers, and transfers to or from wholly-owned corporations or limited liability companies. Furthermore, the bill specifies that if the transferor of a controlling interest fails to pay the tax, the transferee (the one acquiring the interest) and the entity itself will be jointly responsible for its payment. The bill also amends existing law to include the transfer of a controlling interest within the scope of the conveyance tax and clarifies how the tax is calculated based on the fair market value of the real property owned by the entity at the time of the controlling interest transfer.

Agriculture and Natural Resources, Budget and Finance

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=HB&billnumber=1918&year=2026