1031 exchange mult istate; state income tax

Dear 1031x: If I am resident of State of Oregon and have business property  there; then, do a 1031 exchange for property in Hawaii, and move/become a  resident of the State of Hawaii, what happens if/when I sell the Hawaii  property in a fully taxable transaction with respect to Hawaii Income tax?  Will my basis for Hawaii Income tax be the reduced/tax-deferred basis and  will I be subject to Hawaii income tax on the same amount that is taxed  for federal income tax purposes? Where can I find more info on this 'cross-border' state tax when  liquidating a 1031 exchange property?

Dear R:  When you defer Federal income tax through IRC Section 1031 almost all States allow deferral of  State income tax as well.  In your example you would first defer your Oregon State income tax.  When you then sold your Hawaii replacement property, Federal and Hawaii State income tax would be due, but nothing would be due to Oregon.  Your tax basis for both Federal and State taxes is the same.   Sincerely,

Steve Hickox
Attorney / President