Nareit has submitted testimony to Rep. Sylvia Luke, chair of the Hawaii state legislature’s finance committee, opposing HB 2702.
The bill was introduced on Jan. 24, 2018. It would require REITs to file either a composite (entity-level) tax return or pay withholding tax attributable to distributions to non-resident shareholders based on their pro rata share of a REIT’s income attributable to Hawaii.
Also, the bill would require REITs to include on their Hawaii corporate income tax returns the name, address, and social security or federal identification number of each person owning stock in the REIT at any time during the taxable year.
Nareit’s testimony states that HB 2702 “proposes an unworkable system.”
All of the testimony submitted to Luke can be found here.
Meanwhile, Hawaii’s Senate Ways and Means Committee held a hearing on a related bill, S.B. 3067, but deferred its decision on the bill until Feb. 21.
In response to a question from one of the committee members during the hearing, a State Deputy Attorney General noted that the bill raises potential constitutional issues with respect to taxation of passive investors. Nareit will continue to vigorously oppose these bills.
More information on the status of Hawaii’s REIT legislation can be found here.
(Contact: Dara Bernstein at dbernstein@nareit.com)