Income/Franchise tax Hawaii: New Law Updates State Conformity to IRC; Decouples from IRC §108(i) & IRC §382(n)

H.B. 2594, signed by gov. 5/17/10. Effective immediately, new law generally updates statutory references to the Internal Revenue Code (IRC), providing that for taxable years beginning after December 31, 2009, references to the Internal Revenue Code in Hawaii corporate and individual income tax laws refer to the federal law in effect as amended as of December 31, 2009 (previously, December 31, 2008). Among other specific conformity and non-conformity provisions, the bill decouples from:

- The deferral of recognition of income from discharge of certain business indebtedness as enacted by the federal American Recovery and Reinvestment Act of 2009 under IRC Sec. 108(i), and
- Internal Revenue Code Sec. 382(n) regarding the treatment of a change in ownership of a bank or other corporation.