‘Do the math.” That’s what we say when we want an answer that’s precise and true. Mathematicians use patterns to formulate new propositions to get to the truth or dispute what’s false. “When mathematical structures are good models of real phenomena, mathematical reasoning can be used to provide insight or predictions,” notes Britannica.

Nareit Hawaii and Faith Action for Community Equity have been “doing the math” for the last three years regarding how much revenue Hawaii would get from real estate investment trusts (REITs) if the tax loophole were closed and they paid Hawaii’s income tax as other non-REIT Hawaii businesses do.

Nareit and Faith Action still cannot agree on an answer.

Catherine Lee of Faith Action for Community Equity claims that a corporate income tax to REITs would generate $64 million a year to help with Hawaii’s needs (“REITs should pay taxes like rest of us,” Star-Advertiser, Island Voices, Jan. 27). But Gladys Quinto Marrone, executive director of Nareit Hawaii, counters that REITs might produce $2.2 million in revenue the first year and maybe only $10 million thereafter (“The truth about REITs and taxes in Hawaii,” Star-Advertiser, Letters, Feb. 2).

Both believe their answers to be true. Why are they calculating extremely disparate answers? They may not be using “models of real phenomena.” In other words, they do not have consistent information on which to base their calculations.

This is where House Bill 286, House Draft 1, comes in to help with creating a “model of real phenomena” for use by the state to arrive at a reliable answer. The Legislature notes that there are no reporting forms specifically for real estate investment trusts, nor are there any clear methods for REITs to annually report their statuses and deductions to the state.

As Hawaii faces major budget shortfalls this year and several years to come, it is imperative that all corporations provide accurate reporting of its assets and revenues generated.

In its testimony of support for the bill, the Tax Foundation of Hawaii explains, the Department of Taxation (DOTAX) “needs a separate reporting form for REITs. Currently REITs file a corporate income tax form, the N-30, for state purposes but report their dividend paid deduction on the return as a miscellaneous deduction. As a result, data on Hawaii REITs is not captured in the Department’s computer system and is, therefore, largely based on guesswork.”

HB 286 aims to rectify this lack of dependable and complete information to eliminate the guesswork.

DOTAX also supports this bill. A fine for a REIT not reporting its existence in Hawaii “adds another compliance tool the Department can use to ensure compliance … and put the Department on notice to expect a tax return from another (REIT).”

Tell your legislators that HB 286 must be passed.

With robust reports, we can “do the math” to obtain accurate information.

With accurate information, our legislators can make informed decisions that will benefit the people of Hawaii.

Evelyn Hao is immediate past president of Faith Action for Community Equity, and a retired Kuhio Elementary School principal.