Act 295 exempts from the conveyance tax transfers of real property in connection with a merger or consolidation, or in connection with the dissolution of a limited partnership to a corporate general partner. Act 295 is effective on July 6, 1999.
The conveyance tax is imposed on transfers of real property or any interest therein by way of deeds, long-term leases (unexpired terms of five years or more), agreements of sale, or any other documents at the rate of ten cents per $100 of consideration.
Act 295 amends Hawaii Revised Statutes (HRS) section 247-3 to exempt from the conveyance tax any document or instrument conveying real property from an entity that is a party to a merger or consolidation (corporations under HRS chapter 415, professional corporations under HRS chapter 415A, nonprofit corporations under HRS chapter 415B, agricultural associations under HRS chapter 421, consumer cooperative associations under HRS chapter 421C, or limited liability companies under HRS chapter 428) to the surviving or new entity.
Act 295 also exempts from the conveyance tax all transfers of real property from a dissolving limited partnership to its corporate general partner that owns, directly or indirectly, at least a ninety percent interest in the limited partnership under the rules of section 318 (with respect to constructive ownership of stock) of the federal Internal Revenue Code of 1986, as amended, to the constructive ownership of interests in the limited partnership.
Act 295 will facilitate business entity mergers and other transactions affecting the form of business structures.
Forms and other tax information may be downloaded from the Department's website at http://www.state.hi.us/tax/tax.html. On Oahu, forms may be ordered by calling the Department's Forms Request Line at: 587-7572. Persons who are not calling from Oahu may call: 1-800-222-7572 to receive forms by mail or 808-678-0522 from a fax machine to receive forms by fax.
RAY K. KAMIKAWA
Director of Taxation