Hawaii Sale and Assignment of a Percentage Ownership Interest in a Limited Liability Company

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US-01377BG
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Description

A limited liability company (LLC) is a separate legal entity that can conduct business just like a corporation with many of the advantages of a partnership. It is taxed as a partnership. Its owners are called members and receive income from the LLC just as a partner would. Management of an LLC is vested in its members. An operating agreement is executed by the members and operates much the same way a partnership agreement operates. Profits and losses are shared according to the terms of the operating agreement.


A membership interest may be used to refer to the ownership interest of a member in the LLC. The word unit is often used to reflect the membership interests of a member in the LLC. Some LLC's issue membership interest certificates. To become a new member of the LLC the consent of majority of the members is necessary. A transfer of units of an existing member does not automatically include membership into the LLC.

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FAQ

Every state levies a transfer tax when real property (land or homes) sells. Hawaii is no exception. The only difference is that the Hawaii tax can be extremely confusing. No surprise there, right?

On actual and full consideration paid for the transfer of realty, including leases and subleases, a tax is imposed. The tax ranges from 10¢ per $100 for conveyances under $600,000 to $1.00 per $100 for conveyances in excess of $10 million.

How Is the Conveyance Tax Determined? One dollar and twenty-five cents ($1.25) per $100 of the actual and full consideration for properties with a value of $10,000,000 or greater . The conveyance tax imposed for each transaction shall be not less than one dollar ($1.00).

In general, the statute of limitations for the Department to assess or levy additional taxes is three years from the date the annual tax return was filed or three years from the due date of the annual tax return, whichever is later.

Conveyance tax is a tax imposed on the transfer of real property at the state, county, or municipal level. This tax is generally calculated as a percentage of the sale price.

Form P-64B is used to request an exemption from the conveyance tax. Depending on the type of transaction, Form P-64B must either be (1) submitted to the Department of Taxation, Technical Section for approval of the exemption, or (2) filed directly with the BOC.

Every state levies a transfer tax when real property (land or homes) sells. Hawaii is no exception. The only difference is that the Hawaii tax can be extremely confusing. No surprise there, right?

The person responsible for the tax is generally the transferor, grantor, lessor, sublessor, conveyor, or other person conveying the real property interest (HRS §247-3). The ® standard purchase contract directs escrow to charge the conveyance tax to the seller.

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Hawaii Sale and Assignment of a Percentage Ownership Interest in a Limited Liability Company