Income/Franchise:
Hawaii: New Law Establishes Elective Entity-Level Taxation for Some Pass-through Entities
S.B. 1437, signed by gov. 6/1/23. Effective on January 1, 2024, and applicable to taxable years beginning after December 31, 2022, new law permits qualifying pass-through entities to make an annual election to pay an entity level state tax (PTET). Correspondingly, every member of an electing pass-through entity is entitled to a nonrefundable credit against their Hawaii income tax equal to the member’s share of the PTET.
See recently issued Multistate Tax Alert for more details on this new PTET, and please contact us with any questions.
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