Haw. Rev. Stat. § 236E- — HI Code / Division 1 / Title 14 / Chapter 236E / Section 236E-
11 Extension of time to file return.
Status: in_force

If a federal transfer tax return is due and the date for filing the federal return or the date for payment of the federal transfer tax is extended by the Internal Revenue Service, the filing of the return and payment of the tax imposed by this chapter shall be due on the respective dates specified by the Internal Revenue Service in granting a request for extension. If the request for extension is granted by the Internal Revenue Service, the person required to file the Hawaii transfer tax return shall file along with the return required under this chapter a copy of the request for extension showing approval of the extension by the Internal Revenue Service. If a request for extension of time to file the federal return is denied by the Internal Revenue Service, no penalty shall be due under this chapter if the return required by this chapter is filed within the time specified by the Internal Revenue Service for filing the federal return. If a request for extension of time to pay the federal transfer tax is denied by the Internal Revenue Service, no penalty shall be due under this chapter if the tax is paid within the time specified by the Internal Revenue Service for paying the federal transfer tax. The extension shall be made by filing a true copy of the federal extension or extensions of time for filing or payment, or both, with the return required under section 236E-9.

If a federal transfer tax return is not due, the director of taxation may grant a reasonable extension of time for filing returns under rules as the department shall prescribe. [L 2012, c 220, pt of §1; am L 2018, c 27, §11](a) If the amount paid with respect to any taxable transfer is less than the amount due under this chapter, the department shall assess the underpayment from the person responsible for payment, as follows:

(1) If a federal transfer tax return is due, a proceeding to assess the underpayment amount shall commence within:

(A) Three years from the date the federal transfer tax return was filed; or

(B) One year after the date of final determination of the related federal transfer tax,

whichever is later; or

(2) If a federal transfer tax return is not due, a proceeding to assess the underpayment amount shall commence within:

(A) Three years from the date the Hawaii transfer tax return was filed; or

(B) One year after the date of final determination of the related Hawaii transfer tax,

whichever is later.

(b) Amounts set forth on a duly filed and accepted federal return for valuations of property, the gross estate, federal taxable estate, and applicable exclusion amount shall be conclusive for purposes of this chapter, and the return required under this chapter shall use the same amounts as the corresponding amounts on the federal return; provided that with regard to a decedent who was in a valid civil union or recognized equivalent under the laws of the State, but that is not recognized by the Internal Revenue Code as a marriage for federal tax purposes, computations of the valuations of property, the gross estate, federal taxable estate, and applicable exclusion amount shall be made as if the civil union or recognized equivalent under the laws of the State were recognized as a marriage.

(c) If the amount paid with respect to any taxable transfer is more than the amount due under this chapter, the department shall refund the excess to the person entitled to the refund together with interest at the existing statutory rate of interest in the manner provided in section 231-23, as follows:

(1) If a federal transfer tax return was due, an application for refund shall be filed with the department within:

(A) One year after the last date allowable under the Internal Revenue Code for filing a claim for refund of any part of the related federal transfer tax; or

(B) One year after the date of final determination of the related federal transfer tax,

whichever is later; or

(2) If a federal transfer tax return was not due, an application for refund shall be filed with the department within:

(A) Three years from the date the Hawaii transfer tax return was filed; or

(B) One year after the date of final determination of the related Hawaii transfer tax,

whichever is later.

(d) As to all tax payments for which a refund or credit is not authorized by this section, including, without prejudice to the generality of the foregoing, cases of unconstitutionality, the remedies provided by appeal or by section 40-35 are exclusive. [L 2012, c 220, pt of §1; am L 2013, c 60, §5; am L 2018, c 27, §13](a) An exclusion from a Hawaii taxable estate shall be allowed to the estate of every decedent against the tax imposed by section 236E-8. For the purpose of this section, the applicable exclusion amount is equal to:

(1) The federal applicable exclusion amount;

(2) The exemption equivalent of the unified credit reduced by the amount of taxable gifts made by the decedent that reduces the amount of the federal applicable exclusion amount; or

(3) The exemption equivalent of the unified credit on the decedent's federal estate tax return,

as set forth for the decedent in chapter 11 of the Internal Revenue Code as amended as of December 21, 2017, as if the decedent died on December 31, 2017, and as further adjusted pursuant to subsection (b).

(b) The applicable exclusion amount calculated in subsection (a) shall be further adjusted as follows:

(1) For residents, 100 per cent of the applicable exclusion amount;

(2) For nonresidents, an amount computed by multiplying the applicable exclusion amount by a fraction, the numerator of which is the value of the property in the State subject to tax under this chapter, and the denominator of which is the federal gross estate; and

(3) For nonresidents not citizens, an amount computed by multiplying the exemption equivalent of the unified credit by a fraction, the numerator of which is the value of the property in the State subject to tax under this chapter, and the denominator of which is the federal gross estate.

(c)(1) For the purposes of this chapter, every decedent having property in the State shall be presumed to have died a resident of the State. The burden of proof in an estate tax proceeding shall be upon any decedent's estate claiming exemption from the tax imposed by this chapter by reason of the decedent's alleged nonresidency;

(2) Any person required to make and file a tax return under this chapter, who believes that the decedent died a nonresident of the State, may file a request for determination of domicile in writing with the department, stating the specific grounds upon which the request is founded, provided:

(A) The person has filed the return required under this chapter;

(B) At least two hundred seventy days, but no more than three years, have elapsed since the due date of the return or, if applicable, the extended due date of the return;

(C) The person has not been notified, in writing, by the department that a written agreement of compromise with the taxing authorities of another jurisdiction, under section 236E-24, is being negotiated; and

(D) The department has not previously determined whether the decedent died a resident of the State;

(3) Not later than one hundred eighty days following receipt of a request for determination, the department shall determine whether the decedent died a resident or a nonresident of the State. If the department commences negotiations over a written agreement of compromise with the taxing authorities of another jurisdiction after a request for determination of domicile is filed, the one hundred eighty day period shall be tolled for the duration of the negotiations. If, before the expiration of the one hundred eighty day period, both the department and the person required to make and file a tax return under this chapter have consented in writing to the making of a determination after such time, the determination may be made at any time prior to the expiration of the period agreed upon. The period agreed upon may be extended by subsequent agreements; provided that the agreements are made in writing before the expiration of the period previously agreed upon;

(4) The department shall mail notice of the proposed determination to the person required to make and file a tax return under this chapter. The notice shall briefly set forth the department's findings of fact and the basis of decision in each case decided adversely to the person. Sixty days after the date on which it is mailed, a notice of proposed determination shall constitute a final determination, unless the person required to make and file a tax return under this chapter has filed an appeal of the determination as provided in section 236E-18; and

(5) Nothing in this subsection shall be construed to relieve any person filing a request for determination of domicile of the obligation to pay the correct amount of tax on or before the due date of the tax. [L 2012, c 220, pt of §1; am L 2013, c 60, §3; am L 2014, c 44, §3; am L 2018, c 27, §8 ; am L 2019, c 69, §6 ]
Haw. Rev. Stat. § 231-36 — HI Code / Division 1 / Title 14 / Chapter 231 / Section 231-36
False and fraudulent statements; aiding and abetting.
Status: in_force

(a) Any person who wilfully makes and subscribes any return, statement, or other document required to be made under title 14, except chapter 238, which contains or is verified by a written declaration that it is true and correct as to every material matter, and which the person does not believe to be true and correct as to every material matter shall be guilty of a class C felony and, upon conviction, shall be subject to one or any combination of the following:

(1) A fine of not more than $100,000;

(2) Imprisonment of not more than three years; or

(3) Probation;

provided that a corporation shall be fined not more than $500,000; and provided further that, if the person wilfully makes and subscribes any return, statement, or other document required to be made under chapter 238, which contains or is verified by a written declaration that it is true and correct as to every material matter and which the person does not believe to be true and correct, then the person shall be guilty of a misdemeanor and, upon conviction, shall be subject to one or any combination of the following:

(1) A fine of not more than $2,000;

(2) Imprisonment of not more than one year; or

(3) Probation.

(b) Any person who wilfully aids or assists in, or procures, counsels, or advises the preparation or presentation of any tax return, affidavit, claim, or other document required to be made under title 14, which is fraudulent or is false as to any material matter, regardless of whether the falsity or fraud is with the knowledge or consent of the person authorized or required to present the return, affidavit, claim, or document shall be guilty of a class C felony and, upon conviction, shall be subject to one or any combination of the following:

(1) A fine of not more than $100,000;

(2) Imprisonment of not more than three years; or

(3) Probation;

provided that a corporation shall be fined not more than $500,000. [L 1932 2d, c 40, §14; RL 1935, §1902; RL 1945, §5136; RL 1955, §115-40; HRS §231-36; am L 1995, c 92, §6; am L 1998, c 103, §1; am L 1999, c 303, §3]
Haw. Rev. Stat. § 249-9.6 — HI Code / Division 1 / Title 14 / Chapter 249 / Section 249-9.6
Special number plates; Polynesian Voyaging Society authorized.
Status: in_force

(a) Notwithstanding any law to the contrary, the director of finance shall issue to any registered owner of a motor vehicle, who is a resident of the State, upon completed application and payment of the required fees, a special number plate for the registered owner's motor vehicle commemorating the Polynesian Voyaging Society.

(b) The director of finance of the city and county of Honolulu, in consultation with the directors of finance of the counties of Kauai, Maui, and Hawaii; chiefs of police of the city and county of Honolulu and the counties of Kauai, Maui, and Hawaii; and board of directors of the Polynesian Voyaging Society, shall establish a special number plate design that:

(1) Contains words, images, or both, that indicate the special number plate is issued to recognize the Polynesian Voyaging Society;

(2) Is similar in shape and size to the uniform state number plate prescribed by law; and

(3) Does not obstruct the visibility of the numbers or letters or any other information that is required by law to be on a number plate and is readily identifiable and distinguishable under actual traffic conditions.

(c) The special number plate design shall not:

(1) Infringe upon or otherwise violate any trademark, trade name, service mark, copyright, or other proprietary or property right;

(2) Represent any obscene or degrading image, idea, word, or phrase;

(3) Advertise or endorse a product, brand, or service that is provided for sale;

(4) Promote any religious belief; or

(5) Promote any philosophy based on prejudice or that is contrary to state civil rights laws.

(d) Each special number plate shall be securely fastened to the motor vehicle in lieu of the uniform state number plate.

(e) The director of finance shall charge a special number plate fee at least equal to the county's cost of providing the special number plate and administrative costs, if any, plus a fundraising fee to be determined by the director of finance in consultation with the board of directors of the Polynesian Voyaging Society. The fundraising fee shall be in addition to any other state or county fees collected for a motor vehicle registration or license plate.

(f) The director of finance may charge an additional fundraising fee of the same or a different amount as the fundraising fee established pursuant to subsection (e), for the renewal of a special number plate. If an additional fundraising fee is implemented pursuant to this subsection, the director of finance shall revoke the special number plate of any registered owner of a motor vehicle who fails to pay the additional fundraising fee imposed by this subsection.

(g) The revenue generated by the fundraising fees, or a portion of the revenue generated by the fundraising fees as determined by the director of finance, shall be deposited in the name of the Polynesian Voyaging Society in a separate account. The director of finance shall determine the most efficient means of directing the revenue generated by the fundraising fees to the Polynesian Voyaging Society.

(h) The director of finance may revoke all special number plates issued pursuant to this section if the total number of registered owners of motor vehicles that obtain the special number plates is less than one hundred fifty within three years of issuance of the first special number plate.

(i) Nothing in this section shall be construed as to apply to any plates issued pursuant to sections 249-9.2 or 249-9.5.

(j) For the purposes of this section, unless a different meaning appears from the context, "special number plate" means a license plate that represents the Polynesian Voyaging Society. [L 2021, c 11, §1]
Haw. Rev. Stat. § 235-127 — HI Code / Division 1 / Title 14 / Chapter 235 / Section 235-127
Distributions.
Status: in_force

(a) Subject to subsection (c), a distribution made by an S corporation with respect to its stock to a resident shareholder shall be taken into account by the shareholder for purposes of section 235-4 and shall be taxable under section 235-51 to the extent that the distribution is treated as a dividend or as gain from the sale or exchange of property pursuant to section 1368 of the Internal Revenue Code.

(b) Subject to subsection (c), a distribution of money made by a corporation with respect to its stock to a resident shareholder during a post-termination transition period shall not be taken into account by the shareholder for purposes of section 235-4 to the extent the distribution is applied against and reduces the adjusted basis of the stock of the shareholder in accordance with section 1371(e) of the Internal Revenue Code.

(c) In applying sections 1368 and 1371(e) of the Internal Revenue Code to any distribution referred to in subsection (a) or (b):

(1) The term "adjusted basis of the stock" means the adjusted basis of the shareholder's stock as determined under section 235-124; and

(2) The accumulated adjustments account for this State shall be equal to, and shall be adjusted in the same manner as, the S corporation's accumulated adjustments account defined in section 1368(e)(1)(A) of the Internal Revenue Code, except that the account shall also be adjusted by any modifications required to be made pursuant to section 235-123(a). [L 1990, c 16, pt of §1]
Haw. Rev. Stat. § 247-9 — HI Code / Division 1 / Title 14 / Chapter 247 / Section 247-9
Enforcement and administration.
Status: in_force

The director of taxation shall administer and enforce the taxes imposed by this chapter. The director may prescribe rules and regulations not inconsistent with the provisions herein for their detailed and efficient administration. At any time after the making of a conveyance or transfer subject to the tax imposed by this chapter, the director may investigate and ascertain whether the tax, in the proper amount, was paid. For this purpose, the director may invoke all statutory powers vested in the director, including but not limited to section 231-7.
Haw. Rev. Stat. § 231-65 — HI Code / Division 1 / Title 14 / Chapter 231 / Section 231-65
Tax liens; notice, form of.
Status: in_force

The notice of sale shall contain the names of the persons assessed, the names of the present owners (so far as shown by the records of the tax office and the records, if any, in the office of the assistant registrar of the land court), the character and amount of the tax, and the tax year or years, with interest, penalties, costs, expenses, and charges accrued or to accrue to the date appointed for the sale, a brief description of the property to be sold, and the time and place of sale, and shall warn the persons assessed, and all persons having or claiming to have any mortgage or other lien thereon or any legal or equitable right, title, or other interest in the property, that unless the tax, with all interest, penalties, costs, expenses, and charges accrued to the date of payment, is paid before the time of sale appointed, the property advertised for sale will be sold as advertised. The state tax collector may include in one advertisement of notice of sale notice of foreclosure upon more than one parcel of real property, whether or not owned by the same person and whether or not the liens are for the same tax year or years.
Haw. Rev. Stat. § 232-12 — HI Code / Division 1 / Title 14 / Chapter 232 / Section 232-12
Powers when hearing appeals.
Status: in_force

The tax appeal court when hearing appeals, shall, in respect to the summoning and examination of witnesses and the production of papers and documents and punishment for contempts and otherwise carrying out its duties and functions, have all the powers and authority of a circuit court.
Haw. Rev. Stat. § 237-24 — HI Code / Division 1 / Title 14 / Chapter 237 / Section 237-24
Amounts not taxable.
Status: in_force

This chapter shall not apply to the following amounts:

(1) Amounts received under life insurance policies and contracts paid by reason of the death of the insured;

(2) Amounts received (other than amounts paid by reason of death of the insured) under life insurance, endowment, or annuity contracts, either during the term or at maturity or upon surrender of the contract;

(3) Amounts received under any accident insurance or health insurance policy or contract or under workers' compensation acts or employers' liability acts, as compensation for personal injuries, death, or sickness, including also the amount of any damages or other compensation received, whether as a result of action or by private agreement between the parties on account of the personal injuries, death, or sickness;

(4) The value of all property of every kind and sort acquired by gift, bequest, or devise, and the value of all property acquired by descent or inheritance;

(5) Amounts received by any person as compensatory damages for any tort injury to the person, or to the person's character reputation, or received as compensatory damages for any tort injury to or destruction of property, whether as the result of action or by private agreement between the parties (provided that amounts received as punitive damages for tort injury or breach of contract injury shall be included in gross income);

(6) Amounts received as salaries or wages for services rendered by an employee to an employer;

(7) Amounts received as alimony and other similar payments and settlements;

(8) Amounts collected by distributors as fuel taxes on "liquid fuel" imposed by chapter 243, and the amounts collected by such distributors as a fuel tax imposed by any Act of the Congress of the United States;

(9) Taxes on liquor imposed by chapter 244D on dealers holding permits under that chapter;

(10) The amounts of taxes on cigarettes and tobacco products imposed by chapter 245 on wholesalers or dealers holding licenses under that chapter and selling the products at wholesale;

(11) Federal excise taxes imposed on articles sold at retail and collected from the purchasers thereof and paid to the federal government by the retailer;

(12) The amounts of federal taxes under chapter 37 of the Internal Revenue Code, or similar federal taxes, imposed on sugar manufactured in the State, paid by the manufacturer to the federal government;

(13) An amount up to, but not in excess of, $2,000 a year of gross income received by any blind, deaf, or totally disabled person engaging, or continuing, in any business, trade, activity, occupation, or calling within the State; a corporation all of whose outstanding shares are owned by an individual or individuals who are blind, deaf, or totally disabled; a general, limited, or limited liability partnership, all of whose partners are blind, deaf, or totally disabled; or a limited liability company, all of whose members are blind, deaf, or totally disabled;

(14) Amounts received by a producer of sugarcane from the manufacturer to whom the producer sells the sugarcane, where:

(A) The producer is an independent cane farmer, so classed by the Secretary of Agriculture under the Sugar Act of 1948 (61 Stat. 922, chapter 519) as the Act may be amended or supplemented;

(B) The value or gross proceeds of sale of the sugar, and other products manufactured from the sugarcane, is included in the measure of the tax levied on the manufacturer under section 237-13(1) or (2);

(C) The producer's gross proceeds of sales are dependent upon the actual value of the products manufactured therefrom or the average value of all similar products manufactured by the manufacturer; and

(D) The producer's gross proceeds of sales are reduced by reason of the tax on the value or sale of the manufactured products;

(15) Money paid by the State or eleemosynary child-placing organizations to foster parents for their care of children in foster homes;

(16) Amounts received by a cooperative housing corporation from its shareholders in reimbursement of funds paid by such corporation for lease rental, real property taxes, and other expenses of operating and maintaining the cooperative land and improvements; provided that such a cooperative corporation is a corporation:

(A) Having one and only one class of stock outstanding;

(B) Each of the stockholders of which is entitled solely by reason of the stockholder's ownership of stock in the corporation, to occupy for dwelling purposes a house, or an apartment in a building owned or leased by the corporation; and

(C) No stockholder of which is entitled (either conditionally or unconditionally) to receive any distribution not out of earnings and profits of the corporation except in a complete or partial liquidation of the corporation; and

(17) Amounts received by a contractor of the Patient-Centered Community Care program that is established by the United States Department of Veterans Affairs pursuant to title 38 United States Code section 8153, as amended, for the actual costs or advancements to third party health care providers pursuant to a contract with the United States. [L 1935, c 141, §4(2); am L 1939, c 47, §1; am L 1943, c 81, §2; RL 1945, §5460; am L 1945, c 253, §4; am L 1947, c 213, §1; am L 1949, c 343, §11; am L 1953, c 229, §1; am L 1955, c 246, §5; RL 1955, §117-21; am L 1957, c 34, §11(k); am L 1959, c 277, §4(a); am L Sp 1959 2d, c 1, §16; am L 1964, c 5, §2; am L 1965, c 201, §§3, 25; am L 1966, c 28, §4; am L 1967, c 297, §§3, 4; HRS §237-24; am L 1968, c 26, §2; am L 1971, c 204, §7; am L 1973, c 91, §3; am L 1975, c 41, §1; am L 1979, c 74, §1 and c 105, §24; am L 1985, c 16, §7 and c 88, §1; gen ch 1985; am L 1986, c 86, §1, c 306, §2, and c 340, §9; am L 1987, c 7, §1, c 15, §1, c 39, §5, and c 292, §1; am L 1988, c 65, §2; am L 1989, c 8, §1; am L 1992, c 107, §1; am L 1993, c 43, §1 and c 220, pt of §2; am L 1994, c 141, §2; am L 2002, c 110, §3; am L 2009, c 70, §§2, 4; am L 2013, c 164, §2; am L 2014, c 143, §2]
Haw. Rev. Stat. § 231-55 — HI Code / Division 1 / Title 14 / Chapter 231 / Section 231-55
Finalization of setoff; credit on debt.
Status: in_force

Upon completion of the hearing and appeal process set out in section 231-54, or upon the debtor's failure to timely request a hearing pursuant to that section, the setoff shall become final. The amount of the setoff after deduction of any charge authorized by section 231-56 shall be credited by the claimant agency against the debtor's debt.
Haw. Rev. Stat. § 249-4 — HI Code / Division 1 / Title 14 / Chapter 249 / Section 249-4
Exemptions for new vehicles and official vehicles.
Status: in_force

All new vehicles, otherwise taxable under sections 249-1 to 249-13, in stock for purposes of sale, shall be exempt from the tax herein provided, and number plates for all these vehicles may be issued as now and hereafter provided by ordinance of the county. All motor vehicles owned or leased for twelve months or longer by the State or any county and all motor vehicles and motorcycles owned or leased for twelve months or longer by police officers of the State or any county that actually are used by them in their travel on official business shall be exempt from the tax herein provided, and number plates for all these vehicles may be issued as provided by ordinance of the county; provided that the director of finance may charge the State an amount equal to the cost to the county of the number plates issued to the State. [RL 1935, pt of §2157; am L 1937, c 214, §1, subs 3; am L 1941, c 193, §1; RL 1945, pt of §5704; am L 1951, c 222, pt of §3; am L 1953, c 143, pt of §2; RL 1955, §130-4; HRS §249-4; am L 1989, c 355, §1; am L 1992, c 247, §1]
Haw. Rev. Stat. § 231-36.4 — HI Code / Division 1 / Title 14 / Chapter 231 / Section 231-36.4
Wilful failure to collect and pay over tax.
Status: in_force

Any person required to collect, account for, and pay over any tax imposed by title 14, who wilfully fails to collect or truthfully account for and pay over such tax shall be guilty of a class C felony, in addition to other penalties provided by law and, upon conviction, shall be subject to one or any combination of the following:

(1) A fine of not more than $100,000;

(2) Imprisonment of not more than five years; or

(3) Probation;

provided that a corporation shall be fined not more than $500,000. [L 2009, c 166, §21]
Haw. Rev. Stat. § 231-31 — HI Code / Division 1 / Title 14 / Chapter 231 / Section 231-31
Nonresidents engaged in business, etc.
Status: in_force

§231-31 Nonresidents engaged in business, etc., service of process on, designation of agent for service of process. Every nonresident individual who, jointly, severally, or jointly and severally, is subject to a tax upon the gross or net income from, or sales of, an occupation, trade, or business carried on in the State, in whole or in part, or upon the carrying on of the occupation, trade, or business, or upon the use or keeping for use of property therein, shall file with the department of taxation in the form and manner prescribed by the department, the name and address of a person residing within the State upon whom process may be served, and in default of the designation, and if the nonresident individual cannot be found in the State, service of process in any action for the collection of the taxes may be made on any manager, superintendent, or other person in charge, employed in the carrying on of the occupation, trade, or business, with like effect as if the person so served had been designated by the nonresident as the nonresident's agent for such purpose; provided that nothing therein shall preclude the service of process in any other manner provided by law.
Haw. Rev. Stat. § 235-68 — HI Code / Division 1 / Title 14 / Chapter 235 / Section 235-68
Withholding of tax on the disposition of real property by nonresident persons.
Status: in_force

(a) As used in this section:

"Nonresident person" means every person other than a resident person.

"Property" or "real property" has the meaning as the same term is defined in section 231-1.

"Resident person" means any:

(1) Individual included in the definition of resident in section 235-1;

(2) Corporation incorporated or granted a certificate of authority under chapter 414, 414D, or 415A;

(3) Partnership formed or registered under chapter 425 or 425E;

(4) Foreign partnership qualified to transact business pursuant to chapter 425 or 425E;

(5) Limited liability company formed under chapter 428 or any foreign limited liability company registered under chapter 428; provided that if a single member limited liability company has not elected to be taxed as a corporation, the single member limited liability company shall be disregarded for purposes of this section and this section shall be applied as if the sole member is the transferor;

(6) Limited liability partnership formed under chapter 425;

(7) Foreign limited liability partnership qualified to transact business under chapter 425;

(8) Trust included in the definition of resident trust in section 235-1; or

(9) Estate included in the definition of resident estate in section 235-1.

"Transferee" means any person, the State and the counties and their respective subdivisions, agencies, authorities, and boards, acquiring real property which is located in Hawaii.

"Transferor" means any person disposing real property that is located in Hawaii.

(b) Unless otherwise provided in this section, every transferee shall deduct and withhold a tax equal to 7.25 per cent of the amount realized on the disposition of Hawaii real property. Every person required to withhold a tax under this section is made liable for the tax and is relieved of liability for or upon the claim or demand of any other person for the amount of any payments to the department made in accordance with this section.

(c) Every transferee required by this section to withhold tax under subsection (b) shall make a return of the amount withheld to the department of taxation not more than twenty days following the transfer date.

(d) No person shall be required to deduct and withhold any amount under subsection (b), if the transferor furnishes to the transferee an affidavit by the transferor stating the transferor's taxpayer identification number and:

(1) The transferor is a resident person; or

(2) That by reason of a nonrecognition provision of the Internal Revenue Code as operative under this chapter or the provisions of any United States treaty, the transferor is not required to recognize any gain or loss with respect to the transfer;

(3) A brief description of the transfer; and

(4) A brief summary of the law and facts supporting the claim that recognition of gain or loss is not required with respect to the transfer.

This subsection shall not apply if the transferee has actual knowledge that the affidavit referred to in this subsection is false.

(e) An application for a withholding certificate may be submitted by the transferor to the department setting forth:

(1) The name, address, and taxpayer identification number, if any, of the parties to the transaction and the location and general description of the real property to be transferred; and

(2) A calculation and written justification showing that the transferor will not realize any gain with respect to the transfer; or

(3) A calculation and written justification showing that there will be insufficient proceeds to pay the withholding required under subsection (b) after payment of all costs, including selling expenses and the amount of any mortgage or lien secured by the property.

Upon receipt of the application, the department shall determine whether the transferor has realized or will realize any gain with respect to the transfer, or whether there will be insufficient proceeds to pay the withholding. If the department is satisfied that no gain will be realized or that there will be insufficient proceeds to pay the withholding, it shall issue a withholding certificate stating the amount to be withheld, if any.

The submission of an application for a withholding certificate to the department does not relieve the transferee of its obligation to withhold or to make a return of the tax under subsections (b) and (c).

(f) No person shall be required to deduct and withhold any amount under subsection (b) if one or more individual transferors furnishes to the transferee an affidavit by the transferor stating the transferor's taxpayer identification number, that for the year preceding the date of the transfer the property has been used by the transferor as a principal residence, and that the amount realized for the property does not exceed $300,000.

(g) The department may enter into written agreements with persons who engage in more than one real property transaction in a calendar year or other persons to whom meeting the withholding requirements of this section are not practicable. The written agreements may allow the use of a withholding method other than that prescribed by this section or may waive the withholding requirement under this section. [L 1990, c 213, §1; am L 1991, c 279, §1; am L 1995, c 92, §8; am L 1997, c 178, §2; am L 2002, c 40, §6; am L 2003, c 210, §3; am L 2005, c 23, §1; am L 2018, c 122, §1]
Haw. Rev. Stat. § 251-1 — HI Code / Division 1 / Title 14 / Chapter 251 / Section 251-1
Definitions.
Status: in_force

As used in this chapter, unless the context otherwise requires:

"Car-sharing organization" means a rental motor vehicle lessor that operates a membership program in which:

(1) Self-service access to a fleet of vehicles is provided, with or without requiring a reservation, exclusively to members of the organization who have paid a membership fee;

(2) Members are charged a usage rate, either hourly or by the minute, for each use of a vehicle;

(3) Members are not required to enter into a separate written agreement with the organization each time the member reserves and uses a vehicle; and

(4) The average paid use period for all vehicles provided by the organization during any taxable period is six hours or less.

"Department" means the department of taxation.

"Lessor" means any person in the business of providing rental motor vehicles to the public.

"Person" has the same meaning as defined in section 237-1.

"Rental motor vehicle" or "vehicle" means every vehicle which is:

(1) Self-propelled and every vehicle which is propelled by electric power but which is not operated upon rails which is rented or leased or offered for rent or lease in this State, whether for personal or commercial use, for a period of six months or less; and

(2) Designed to carry seventeen passengers or fewer.

"Rental motor vehicle" or "vehicle" shall not include:

(1) Mopeds as defined in section 286-2;

(2) Any trucks, truck-tractors, tractor-semitrailer combinations, or truck-trailer combinations, with:

(A) A manufacturer's nominal carrying capacity of one thousand pounds or more; and

(B) A barrier or separation between the operator's compartment and the cargo area; and

(3) Cargo vans with no more than two seats, including the driver's seat; provided that vans with a recreational vehicle converter package and vans with quick release passenger seats shall not be classified as cargo vans.

"Surcharge tax" means the rental motor vehicle and tour vehicle surcharge tax established under this chapter.

"Tour vehicle" means any vehicle, including vans, minibuses, and buses used for the purpose of transporting persons for pleasure or sightseeing trips, or transporting persons to pleasure or sightseeing cruises or destinations. The term does not include any vehicle used solely for the purposes of transporting individuals to and from a place of work or a public or private school or of transporting persons with disabilities.

"Tour vehicle operator" means a person who owns, manages, or dispatches tour vehicles. [L 1991, c 263, pt of §1; am L 1992, c 77, §1 and c 126, §1; am L 2014, c 110, §3; am L 2021, c 117, §28]
Haw. Rev. Stat. § 244D-10 — HI Code / Division 1 / Title 14 / Chapter 244D / Section 244D-10
Inspection.
Status: in_force

The director of taxation, or the duly authorized agent of the director, may examine all records required to be kept under this chapter, and books, papers, and records of any person engaged in the sale of liquor to verify the accuracy of the payment of the tax imposed by this chapter and other compliance with this chapter and regulations adopted pursuant thereto. Every person in possession of books, papers, and records and the person's agents and employees shall give the director or the duly authorized agent of the director, the means, facilities, and opportunities for examination. [L Sp 1984 1st, c 1, pt of §2; gen ch 1985; am L 1986, c 344, §8; am L 2022, c 76, §3]
Haw. Rev. Stat. § 238-6 — HI Code / Division 1 / Title 14 / Chapter 238 / Section 238-6
Collection of tax by seller; penalty.
Status: in_force

(a) For purposes of the taxes due under sections 238-2 and 238-2.3, every seller having in the State, regularly or intermittently, any property, tangible or intangible, any place of business, or any representation as hereinabove defined, (and irrespective of the seller's having or not having qualified to do business in the State) shall, if the seller makes sales of property, services, or contracting for use in the State (whether or not the sales are made in the State), collect from the purchaser the taxes imposed by sections 238-2 and 238-2.3, on the use of the property, services, or contracting so sold by the seller, if the seller is not subject to the use tax under this chapter on the importation of the property into the State. The collection shall be made within twenty days after the accrual of the tax or within such other period as shall be fixed by the director of taxation upon the application of the seller, and the seller shall give to the purchaser a receipt therefor in the manner and form prescribed by the director; provided that this subsection shall not apply to vehicles registered under section 286-50.

(b) The director, in the director's discretion, upon application therefor and under terms and conditions prescribed by the director, may relieve any seller of the duty of collecting and paying over the tax imposed by subsection (a) above, if the director is satisfied that the tax can be effectively collected by other means. Exemption from the duty of collecting the tax may be canceled at any time when the director finds that the tax cannot be effectively collected by other means. The director likewise may terminate the duty and authority of any seller to collect and pay over the tax imposed by subsection (a) above if the director finds, as to such seller, that the tax cannot be effectively collected by such means.

(c) The director, in the director's discretion, upon application therefor and under terms and conditions prescribed by the director, may authorize the collection of the tax imposed by this chapter by a seller not otherwise required to collect the tax. The seller, when so authorized, shall have the duty of collecting and paying over the tax in the same manner and subject to the same requirements as set out in subsection (a). The authority may be canceled at any time when, in the judgment of the director, the tax can more effectively be collected by other means.

(d) In case any seller required or authorized to collect the tax under this chapter fails to collect the same, or having collected the tax fails to pay over the same as provided by this chapter, the seller shall nevertheless be personally liable to the State for the amount of the tax, but it shall be a defense to such liability that the indebtedness for the price is a worthless account actually charged off for income tax purposes, if and to the extent that the collections of the price do not equal the tax.

(e) Every seller required or authorized to collect the tax shall make returns and payments of the tax at the same time and in the same manner as is provided with respect to taxpayer by section 238-5. All provisions of this chapter with respect to returns, reports, records, payments, penalties, and interest, appeals, investigations, and audits, assessments, tax collections procedure, criminal offenses, and the general administrative powers and duties of the director, shall apply to such sellers the same as to taxpayers.

(f) The tax collected pursuant to this section shall be held in trust for the State and for payment to the proper collecting officer in the manner and at the time required by this chapter. Any person collecting such tax who appropriates or converts the same to the person's own use or to any use other than the payment of the tax as herein provided, and who fails to pay over the amount of tax so collected at the time required by this chapter, shall be deemed guilty of an embezzlement of property of the State and shall be fined more than five times the amount of money so embezzled or imprisoned at hard labor not more than ten years, and any failure by the person so collecting the tax to pay the same over within the time provided by this chapter, after demand therefor, shall be taken and held to be prima facie evidence of the embezzlement. [L 1965, c 155, pt of §2; Supp, §119-6; HRS §238-6; gen ch 1985; am L 1990, c 184, §10; am L 1999, c 70, §7; am L 2000, c 198, §12; am L 2003, c 135, §7; am L 2004, c 114, §5]
Haw. Rev. Stat. § 249-7 — HI Code / Division 1 / Title 14 / Chapter 249 / Section 249-7
Number plates.
Status: in_force

(a) Upon receipt of the tax the director of finance shall number and register the vehicle in the owner's name in a permanent record or book to be kept by the director for this purpose, and shall furnish the owner thereof with a receipt showing upon its face the license number issued for the vehicle and the fact that the license tax has been paid thereon for the whole or the remainder of the current year in which the receipt is issued. The director of finance shall also furnish the owner, upon the original registration of the vehicle, two number plates for the vehicle or one plate in the case of trailers, semitrailers, or motorcycles with the registration number marked thereon. Upon the payment of the tax for each year a tag or emblem bearing a serial number and the month and year of expiration shall be provided to the owner. Transfer of current number plates, tag, or emblem, except as authorized by this chapter or by chapter 286, is punishable by a fine of not more than $50 for each offense.

(b) Upon an original registration the director of finance shall fix, and shall charge to the owner, a fee equal to the cost of the number plate and tag or emblem plus the administrative cost of furnishing the plate and tag or emblem and effecting the registration. Upon the issuance of a new series of number plates as determined by the directors of finance of each county through majority consent, the director of finance shall charge the owner a fee equal to the costs of the number plate plus the administrative cost of furnishing the plates. Upon issuing a tag or emblem, the director of finance shall charge the owner a fee of 50 cents. The owner shall securely fasten the number plates on the vehicle, one on the front and the other on the rear, at a location provided by the manufacturer or in the absence of such a location upon the bumpers of the vehicle and in conformance with section 291-31, in such a manner as to prevent the plates from swinging. Number plates shall at all times be displayed entirely unobscured and be kept reasonably clean. In the case of trailers, semitrailers, or motorcycles, one plate shall be used and it shall be fastened to the rear thereof at a location provided by the manufacturer or in the absence of such a location at the rear thereof, and in the case of motorcycles in conformance with section 291-31.

(c) Upon the issuance of the tag or emblem the owner shall affix the tag or emblem to the top right portion of the rear number plate, except that all vehicles owned by the State, any county government, any board of water supply, and official representatives of any foreign governments shall be issued registrations which need be renewed only in the new plate issue year.

(d) After the initial payment of the tax and the original registration of a vehicle as herein specified, a motor vehicle shall not be required to be reweighed in any succeeding year unless it has been so altered or changed as to increase or diminish its weight. No new number plates shall, however, be issued to a new owner except as provided in sections 249-7.5 and 249-8.

(e) If an owner of a vehicle registered in any county, upon the disposition of the vehicle, requests that the license plates furnished to the owner with respect to the registration of the vehicle be assigned to another vehicle subsequently acquired by the owner, the assignment may be made by the director of finance at the director's discretion. To defray additional administrative costs incurred by acceding to those requests, the director of finance shall charge a fee of $5 for each reassignment of license plates, in addition to the fee for registration. The procedure for registering the vehicles shall otherwise be identical with that provided by this section. [RL 1935, pt of §2157; am L 1937, c 214, §1, subs 4; RL 1945, §5708; am L 1951, c 162, §2; am L 1953, c 158, §1; RL 1955, §130-7; am L 1961, c 10, §1; am L 1966, c 49, §3; HRS §249-7; am L 1968, c 45, §2; am L 1980, c 47, §1 and c 133, §2; am L 1982, c 237, §1; gen ch 1985; am L 1990, c 132, §1; am L 2007, c 7, §1]
Haw. Rev. Stat. § 235-10 — HI Code / Division 1 / Title 14 / Chapter 235 / Section 235-10
REPEALED.
Status: in_force

L 1978, c 173, §2(8).
Haw. Rev. Stat. § 238-8 — HI Code / Division 1 / Title 14 / Chapter 238 / Section 238-8
Appeal, correction of assessment.
Status: in_force

If any person having made the return and paid the tax as provided by this chapter feels aggrieved by the assessment so made upon the person by the director of taxation, the person may appeal the assessment in the manner and within the time and in all other respects as provided in section 235-114, for which purpose the word "income" shall be deemed to refer to purchase price or value, as the case may be. The hearing and disposition of the appeal, including the distribution of costs shall be as provided in chapter 232.
Haw. Rev. Stat. § 235-110.93 — HI Code / Division 1 / Title 14 / Chapter 235 / Section 235-110.93
Important agricultural land qualified agricultural cost tax credit.
Status: repealed

(a) There shall be allowed to each taxpayer an important agricultural land qualified agricultural cost tax credit that may be claimed in taxable years beginning after the taxable year during which the tax credit under section 235-110.46 is repealed, exhausted, or expired. The credit shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed. The tax credit amount shall be determined as follows:

(1) In the first year in which the credit is claimed, the lesser of the following:

(A) Twenty-five per cent of the qualified agricultural costs incurred by the taxpayer after July 1, 2008; or

(B) $625,000;

(2) In the second year in which the credit is claimed, the lesser of the following:

(A) Fifteen per cent of qualified agricultural costs incurred by the taxpayer after July 1, 2008; or

(B) $250,000; and

(3) In the third year in which the credit is claimed, the lesser of the following:

(A) Ten per cent of the qualified agricultural costs incurred by the taxpayer after July 1, 2008; or

(B) $125,000.

The taxpayer may incur qualified agricultural costs during a taxable year in anticipation of claiming the credit in future taxable years during which the credit is available. The taxpayer may claim the credit in any taxable year after the taxable year during which the taxpayer incurred the qualified agricultural costs upon which the credit is claimed. The taxpayer also may claim the credit in consecutive or inconsecutive taxable years until exhausted.

(b) No other credit may be claimed under this chapter for qualified agricultural costs for which a credit is claimed under this section for the taxable year.

(c) The amount of the qualified agricultural costs eligible to be claimed under this section shall be reduced by the amount of funds received by the taxpayer during the taxable year from the irrigation repair and maintenance special fund under section 167-24.

(d) The cost upon which the tax credit is computed shall be determined at the entity level. In the case of a partnership, S corporation, estate, trust, or other pass through entity, distribution and share of the credit shall be determined pursuant to section 235-110.7(a).

If a deduction is taken under section 179 (with respect to election to expense depreciable business assets) of the Internal Revenue Code, no tax credit shall be allowed for that portion of the qualified agricultural cost for which a deduction was taken.

The basis of eligible property for depreciation or accelerated cost recovery system purposes for state income taxes shall be reduced by the amount of credit allowable and claimed. No deduction shall be allowed for that portion of otherwise deductible qualified agricultural costs on which a credit is claimed under this section.

(e) If the credit under this section exceeds the taxpayer's net income tax liability for the taxable year, the excess of the credit over liability shall be refunded to the taxpayer; provided that no refunds or payments on account of the credits allowed by this section shall be made for amounts less than $1.

All claims for a tax credit under this section, including amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit is claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

(f) The director of taxation:

(1) Shall prepare any forms that may be necessary to claim a credit under this section;

(2) May require the taxpayer to furnish information to ascertain the validity of the claim for credit made under this section; and

(3) May adopt rules pursuant to chapter 91 to effectuate this section.

(g) The department of agriculture and biosecurity shall:

(1) Maintain records of the total amount of qualified agricultural costs for each taxpayer claiming a credit;

(2) Verify the amount of the qualified agricultural costs claimed;

(3) Total all qualified agricultural costs claimed; and

(4) Certify the total amount of the tax credit for each taxable year.

Upon each determination, the department of agriculture and biosecurity shall issue a certificate to the taxpayer verifying the qualifying agricultural costs and the credit amount certified for each taxable year. For a taxable year, the department of agriculture and biosecurity may certify a credit for a taxpayer who could have claimed the credit in a previous taxable year, but chose not to because the maximum annual credit amount under subsection (h) was reached in that taxable year.

The taxpayer shall file the certificate with the taxpayer's tax return with the department of taxation. Notwithstanding the department of agriculture and biosecurity's certification authority under this section, the director of taxation may audit and adjust certification to conform to the facts.

Notwithstanding any other law to the contrary, the information required by this subsection shall be available for public inspection and dissemination under chapter 92F.

(h) If in any taxable year the annual amount of certified credits reaches $7,500,000 in the aggregate, the department of agriculture and biosecurity shall immediately discontinue certifying credits and notify the department of taxation. In no instance shall the department of agriculture and biosecurity certify a total amount of credits exceeding $7,500,000 per taxable year. To comply with this restriction, the department of agriculture and biosecurity shall certify credits on a first come, first served basis.

The department of taxation shall not allow the aggregate amount of credits claimed to exceed that amount per taxable year.

(i) The department of agriculture and biosecurity, in consultation with the department of taxation, shall annually determine the information necessary to provide a quantitative and qualitative assessment of the outcomes of the tax credit.

Every taxpayer, no later than the last day of the taxable year following the close of the taxpayer's taxable year in which the credit is claimed, shall submit a certified written statement to the department of agriculture and biosecurity. Failure to provide the information shall result in ineligibility and a recapture of any credit already claimed for that taxable year. The amount of the recaptured tax credit shall be added to the taxpayer's tax liability for the taxable year in which the recapture occurs.

Notwithstanding any law to the contrary, a statement submitted under this subsection shall be a public document.

(j) The department of agriculture and biosecurity, in consultation with the department of taxation, shall annually submit a report evaluating the effectiveness of the tax credit. The report shall include but not be limited to findings and recommendations to improve the effectiveness of the tax credit to further encourage the development of agricultural businesses.

(k) As used in this section:

"Agricultural business" means any person with a commercial agricultural, silvicultural, or aquacultural facility or operation, including:

(1) The care and production of livestock and livestock products, poultry and poultry products, apiary products, and plant and animal production for nonfood uses;

(2) The planting, cultivating, harvesting, and processing of crops; and

(3) The farming or ranching of any plant or animal species in a controlled salt, brackish, or freshwater environment;

provided that the principal place of the agricultural business is maintained in the State and more than fifty per cent of the land the agricultural business owns or leases, excluding land classified as conservation land, is important agricultural land.

"Important agricultural lands" means lands identified and designated as important agricultural lands pursuant to part III of chapter 205.

"Net income tax liability" means income tax liability reduced by all other credits allowed under this chapter.

"Qualified agricultural costs" means expenditures for:

(1) The plans, design, engineering, construction, renovation, repair, maintenance, and equipment for:

(A) Roads or utilities, primarily for agricultural purposes, where the majority of the lands serviced by the roads or utilities, excluding lands classified as conservation lands, are important agricultural lands;

(B) Agricultural processing facilities in the State, primarily for agricultural purposes, where the majority of the crops or livestock processed, harvested, treated, washed, handled, or packaged are from agricultural businesses;

(C) Water wells, reservoirs, dams, water storage facilities, water pipelines, ditches, or irrigation systems in the State, primarily for agricultural purposes, providing water for lands, the majority of which, excluding lands classified as conservation lands, are important agricultural lands; and

(D) Agricultural housing in the State, exclusively for agricultural purposes; provided that:

(i) The housing units are occupied solely by farmers or employees for agricultural businesses and their immediate family members;

(ii) The housing units are owned by the agricultural business;

(iii) The housing units are in the general vicinity, as determined by the department of agriculture and biosecurity, of agricultural lands owned or leased by the agricultural business; and

(iv) The housing units conform to any other conditions that may be required by the department of agriculture and biosecurity;

(2) Feasibility studies, regulatory processing, and legal and accounting services related to the items under paragraph (1);

(3) Equipment, primarily for agricultural purposes, used to cultivate, grow, harvest, or process agricultural products by an agricultural business; and

(4) Regulatory processing, studies, and legal and other consultant services related to obtaining or retaining sufficient water for agricultural activities and retaining the right to farm on lands identified as important agricultural lands.

(l) The department of agriculture and biosecurity shall cease certifying credits pursuant to this section for taxable years beginning after December 31, 2030; provided that a taxpayer with accumulated, but unclaimed, certified credits may continue claiming the credits in subsequent taxable years until exhausted.

[(m)] The department of taxation, in consultation with the department of agriculture and biosecurity, shall submit to the legislature an annual report, no later than twenty days prior to the convening of each regular session, beginning with the regular session of 2010, regarding the quantitative and qualitative assessment of the impact of the important agricultural land qualified agricultural cost tax credit. [L 2008, c 233, §§4, 5; am L 2014, c 101, §1; am L 2018, c 87, §1; am L 2022, c 139, §2; am L 2025, c 236, §17]
Haw. Rev. Stat. § 237-24.7 — HI Code / Division 1 / Title 14 / Chapter 237 / Section 237-24.7
Additional amounts not taxable.
Status: in_force

In addition to the amounts not taxable under section 237-24, this chapter shall not apply to:

(1) Amounts received by the operator of a hotel from the owner of the hotel or from a time share association, and amounts received by the suboperator of a hotel from the owner of the hotel, from a time share association, or from the operator of the hotel, in amounts equal to and that are disbursed by the operator or suboperator for employee wages, salaries, payroll taxes, insurance premiums, and benefits, including retirement, vacation, sick pay, and health benefits. As used in this paragraph:

"Employee" means employees directly engaged in the day-to-day operation of the hotel and employed by the operator or suboperator.

"Hotel" means an operation as defined in section 445-90 or a time share plan as defined in section 514E-1.

"Operator" means any person who, pursuant to a written contract with the owner of a hotel or time share association, operates or manages the hotel for the owner or time share association.

"Owner" means the fee owner or lessee under a recorded lease of a hotel.

"Suboperator" means any person who, pursuant to a written contract with the operator, operates or manages the hotel as a subcontractor of the operator.

"Time share association" means an "association" as that term is defined in section 514E-1;

(2) Amounts received by the operator of a county transportation system operated under an operating contract with a political subdivision, where the political subdivision is the owner of the county transportation system. As used in this paragraph:

"County transportation system" means a mass transit system of motorized buses providing regularly scheduled transportation within a county.

"Operating contract" or "contract" means a contract to operate and manage a political subdivision's county transportation system, which provides that:

(A) The political subdivision shall exercise substantial control over all aspects of the operator's operation;

(B) The political subdivision controls the development of transit policy, service planning, routes, and fares; and

(C) The operator develops in advance a draft budget in the same format as prescribed for agencies of the political subdivision. The budget must be subject to the same constraints and controls regarding the lawful expenditure of public funds as any public sector agency, and deviations from the budget must be subject to approval by the appropriate political subdivision officials involved in the budgetary process.

"Operator" means any person who, pursuant to an operating contract with a political subdivision, operates or manages a county transportation system.

"Owner" means a political subdivision that owns or is the lessee of all the properties and facilities of the county transportation system (including buses, real estate, parking garages, fuel pumps, maintenance equipment, office supplies, etc.), and that owns all revenues derived therefrom;

(3) Surcharge taxes on rental motor vehicles imposed by chapter 251 and passed on and collected by persons holding certificates of registration under that chapter;

(4) Amounts received by the operator of orchard properties from the owner of the orchard property in amounts equal to and that are disbursed by the operator for employee wages, salaries, payroll taxes, insurance premiums, and benefits, including retirement, vacation, sick pay, and health benefits. As used in this paragraph:

"Employee" means an employee directly engaged in the day-to-day operations of the orchard properties and employed by the operator.

"Operator" means a producer who, pursuant to a written contract with the owner of the orchard property, operates or manages the orchard property for the owner where the property contains an area sufficient to make the undertaking economically feasible.

"Orchard property" means any real property that is used to raise trees with a production life cycle of fifteen years or more producing fruits or nuts having a normal period of development from the initial planting to the first commercially saleable harvest of not less than three years.

"Owner" means a fee owner or lessee under a recorded lease of orchard property;

(5) Amounts received under property and casualty insurance policies for damage or loss of inventory used in the conduct of a trade or business located within the State or a portion thereof that is declared a natural disaster area by the governor pursuant to section 209-2;

(6) Amounts received as compensation by community organizations, school booster clubs, and nonprofit organizations under a contract with the chief election officer for the provision and compensation of precinct officials and other election-related personnel, services, and activities, pursuant to section 11-5;

(7) Interest received by a person domiciled outside the State from a trust company (as defined in section 412:8-101) acting as payment agent or trustee on behalf of the issuer or payees of an interest bearing instrument or obligation, if the interest would not have been subject to tax under this chapter if paid directly to the person domiciled outside the State without the use of a paying agent or trustee; provided that if the interest would otherwise be taxable under this chapter if paid directly to the person domiciled outside the State, it shall not be exempt solely because of the use of a Hawaii trust company as a paying agent or trustee;

(8) Amounts received by a management company from related entities engaged in the business of selling interstate or foreign common carrier telecommunications services in amounts equal to and that are disbursed by the management company for employee wages, salaries, payroll taxes, insurance premiums, and benefits, including retirement, vacation, sick pay, and health benefits. As used in this paragraph:

"Employee" means employees directly engaged in the day-to-day operation of related entities engaged in the business of selling interstate or foreign common carrier telecommunications services and employed by the management company.

"Management company" means any person who, pursuant to a written contract with a related entity engaged in the business of selling interstate or foreign common carrier telecommunications services, provides managerial or operational services to that entity.

"Related entities" means:

(A) An affiliated group of corporations within the meaning of section 1504 (with respect to affiliated group defined) of the federal Internal Revenue Code of 1986, as amended;

(B) A controlled group of corporations within the meaning of section 1563 (with respect to definitions and special rules) of the federal Internal Revenue Code of 1986, as amended;

(C) Those entities connected through ownership of at least eighty per cent of the total value and at least eighty per cent of the total voting power of each entity (or combination thereof), including partnerships, associations, trusts, S corporations, nonprofit corporations, limited liability partnerships, or limited liability companies; and

(D) Any group or combination of the entities described in paragraph (C) constituting a unitary business for income tax purposes;

whether or not the entity is located within or without the State or licensed under this chapter; and

(9) Amounts received as grants under section 206M-15. [L 1989, c 351, §1; am L 1991, c 229, §1 and c 263, §10; am L 1992, c 252, §1; am L 1993, c 129, §§2, 4 and c 315, §2; am L 1994, c 230, §§2, 4; am L 1995, c 11, §16, c 71, §4, and c 133, §1; am L 1998, c 214, §2 and c 245, §2; am L 1999, c 165, §2; am L 2001, c 35, §3; am L 2007, c 239, §§2, 4; am L 2009, c 196, §5; am L 2010, c 91, §1; am L 2013, c 163, §1; am L 2023, c 109, §3]
Haw. Rev. Stat. § 238-16 — HI Code / Division 1 / Title 14 / Chapter 238 / Section 238-16
Rules and regulations.
Status: in_force

The director of taxation may adopt and promulgate rules and regulations to carry out the purposes of this chapter.
Haw. Rev. Stat. § 231-27 — HI Code / Division 1 / Title 14 / Chapter 231 / Section 231-27
Partial payment of taxes.
Status: in_force

Whenever a taxpayer makes a partial payment of a particular assessment of taxes, the amount received by the department of taxation shall first be credited to interest, then to penalties, and then to principal.
Haw. Rev. Stat. § 241-3 — HI Code / Division 1 / Title 14 / Chapter 241 / Section 241-3
Imposition of tax on other banks, building and loan associations, financial services loan companies, financial corporations, small business investment
Status: in_force

§241-3 Imposition of tax on other banks, building and loan associations, financial services loan companies, financial corporations, small business investment companies, trust companies, mortgage loan companies, financial holding companies, development companies, and subsidiaries. Every bank, other than a national banking association, every building and loan association, every financial services loan company, financial corporation, small business investment company, trust company, mortgage loan company, financial holding company, development company, and subsidiary located or doing business in the State, shall annually pay a franchise tax measured as, and at the rate, provided in section 241-4. [L Sp 1957, c 1, pt of §10(a); am L 1965, c 224, §6; Supp, §127-3; HRS §241-3; am L 1976, c 203, §3(2); am L 1982, c 92, §3(2); am L 1989, c 266, §3; am L 1992, c 106, §13]
Haw. Rev. Stat. § 231-15.5 — HI Code / Division 1 / Title 14 / Chapter 231 / Section 231-15.5
Disclosure by return preparers.
Status: in_force

(a) Any person who is engaged in the business of preparing, or providing services in connection with the preparation of, tax returns or any person who, for compensation, prepares any tax return for any other person and, without the written consent or request of the person for whom the return is prepared:

(1) Discloses any information furnished to the return preparer or person providing services for or in connection with the preparation of any return; or

(2) Uses the information for any purpose other than to prepare or assist in preparing any return,

shall be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $1,000 or imprisoned not more than one year, or both.

(b) Except as otherwise provided, this section shall not apply to a disclosure of information if the disclosure is made pursuant to section 231-3 or an order of a court. [L 1973, c 106, §1; am L 1974, c 128, §1; am L 2017, c 12, §33]
Haw. Rev. Stat. § 231-25.5 — HI Code / Division 1 / Title 14 / Chapter 231 / Section 231-25.5
Cost recovery fees for the administration of taxes.
Status: in_force

(a) The department may charge and add a fee to any amount due in accordance with the department's duties and powers under section 231-3 for:

(1) Any cost or expense incurred by the department as a result of any action taken to enforce the collection of taxes administered under title 14, including levy, seizure, foreclosure, and other similar acts, after the department has mailed written notice demanding payment and advising that continued failure to pay the amount due may result in collection action, including the imposition of fees pursuant to this section. Any such fee charged against the taxpayer for costs, fees, and other charges, may include attorneys' fees, collection agency fees, court filing fees, recording fees, and similar fees, incurred by the department in connection with the collection action;

(2) Department-sponsored seminars or workshops, including educational materials in various media formats;

(3) Research and reference materials published on magnetic media, CD-ROM, or other machine-readable form; and

(4) The re-issuance of refund checks to taxpayers; provided that no fee shall be charged if the amount of the refund check is less than the fee.

(b) The director may waive any fee imposed by the department under title 14 in cases of hardship as determined by the director.

(c) Interest shall not accrue with respect to any fee charged under this section.

(d) Notwithstanding any other provisions provided under title 14, whenever a taxpayer makes a partial payment of a particular delinquent amount, the amount received by the department shall first be credited to the fees provided by this section, in the order that the fees were charged.

(e) The department shall prescribe the procedures relating to the charging of fees, the waiver of fees, the documents and services for which fees may be charged, and the amount of the fees, increasing or decreasing the fees as necessary, pursuant to rules adopted under chapter 91. [L 1995, c 14, §1; am L 1996, c 131, §1]
Haw. Rev. Stat. § 249-9.9 — HI Code / Division 1 / Title 14 / Chapter 249 / Section 249-9.9
[ §249-9.
Status: in_force

[ §249-9.9] Special number plates for Malama Puuloa; authorized. (a) Notwithstanding any law to the contrary, the director of finance shall issue to any registered owner of a motor vehicle, who is a resident of the State and has completed the application and paid the required fees, a special number plate for the registered owner's motor vehicle that commemorates Malama Puuloa and observes the organization's contributions to the restoration of Puuloa, also known as Pearl Harbor.

(b) The director of finance of the city and county of Honolulu, in consultation with the directors of finance of the counties of Kauai, Maui, and Hawaii; the chiefs of police of the city and county of Honolulu and the counties of Kauai, Maui, and Hawaii; and the chief executive officer of Hui o Ho`ohonua shall establish a special number plate design that:

(1) Contains words, images, or both, that indicate the special number plate is issued to recognize Malama Puuloa;

(2) Is similar in shape and size to the uniform state number plate prescribed by law;

(3) Does not exceed four and one-half inches in height by four and one-half inches in width;

(4) Complies with all other requirements in section 249-9(a); and

(5) Does not obstruct the visibility of the number or letters or any other information that is required by law to be on a number plate and is readily identifiable and distinguishable under actual traffic conditions;

provided that the director of finance of the city and county of Honolulu may also establish additional special number plate designs in conformance with this subsection and subsection (c) that jointly or separately recognize Malama Puuloa.

(c) The special number plate design shall not:

(1) Infringe upon or otherwise violate any trademark, trade name, service mark, copyright, or other proprietary or property right;

(2) Represent any obscene or degrading image, idea, word, or phrase;

(3) Advertise or endorse a product, brand, or service that is provided for sale;

(4) Promote any religious belief; or

(5) Promote any philosophy based on prejudice or that is contrary to state civil rights laws.

(d) Each special number plate shall be securely fastened to the motor vehicle in lieu of the uniform state number plate.

(e) The director of finance shall charge a special number plate fee at least equal to the county's cost of providing the special number plate and administrative costs, if any, plus a fundraising fee to be determined by the director of finance in consultation with the chief executive officer of Hui o Ho`ohonua. The fundraising fee shall be in addition to any other state or county fees collected for a motor vehicle registration or license plate.

(f) The director of finance may charge an additional fundraising fee, of the same or a different amount as the fundraising fee established pursuant to subsection (e), for the renewal of a special number plate. If an additional fundraising fee is implemented pursuant to this subsection, the director of finance shall not renew and instead shall revoke the special number plate of the registered owner of a motor vehicle who fails to pay the additional fundraising fee imposed by this subsection.

(g) The revenue generated by the fundraising fees, or a portion of the revenue generated by the fundraising fees as determined by the director of finance, shall be deposited in the name of Malama Puuloa in a separate county budget account. The director of finance shall determine the most efficient means of directing the net revenue generated by the fundraising fees to Malama Puuloa, as appropriate, to fund the restoration of Puuloa, or Pearl Harbor.

(h) The director of finance may revoke all special number plates issued pursuant to this section if the total number of registered owners of motor vehicles who obtain the special number plates is less than one hundred fifty within three years of issuance of the first special number plate.

(i) Nothing in this section shall be construed to apply to any plates issued pursuant to section 249-9.2.

(j) For the purposes of this section, unless a different meaning appears from the context, "special number plate" means a license plate that commemorates Malama Puuloa. [L 2024, c 81, §2]
Haw. Rev. Stat. § 245-2 — HI Code / Division 1 / Title 14 / Chapter 245 / Section 245-2
License.
Status: in_force

(a) It shall be unlawful for any person to engage in the business of a wholesaler or dealer in the State without having received first a license therefor issued by the department of taxation under this chapter; provided that this section shall not be construed to supersede any other law relating to licensing of persons in the same business.

(b) The license shall be issued by the department upon application therefor, in the form and manner required by rule of the department, and the payment of a fee of $250, and shall be renewable annually on July 1 for the twelve months ending the succeeding June 30.

(c) Any license issued under this chapter shall not be assignable and shall be conspicuously displayed on the licensed premises of the licensee. Whenever a license is defaced, destroyed, or lost, or the licensed premises are relocated, the department may issue a duplicate license to the licensee upon the payment of a fee of 50 cents.

(d) The department may suspend, revoke, or decline to renew any license issued under this chapter whenever the department finds that the applicant or licensee has failed to comply with this chapter or any rule adopted under this chapter, or for any other good cause. Good cause includes but is not limited to instances where an applicant or licensee has:

(1) Submitted a false or fraudulent application or provided a false statement in an application;

(2) Possessed or displayed a false or fraudulent license;

(3) Failed to comply with, violated, or been convicted of violating any county, state, or federal law directly pertaining to the sale, importation, acquisition, possession, stamping, distribution, transportation, or smuggling of cigarettes, counterfeit cigarettes, counterfeit tax stamps, or other tobacco products; or

(4) Failed to maintain complete and accurate records when and if required to be kept.

Upon suspending or revoking any license, the department may request that the licensee immediately surrender the license or any duplicate issued to or printed by the licensee, and the licensee shall surrender the license or duplicate promptly to the department as requested.

(e) Whenever the department suspends, revokes, or declines to renew a license, the department shall notify the applicant or licensee immediately and afford the applicant or licensee a hearing, if requested; provided that a hearing has not already been afforded. The department shall provide no less than thirty days' notice to the applicant or licensee of a hearing afforded under this subsection. After the hearing, the department shall:

(1) Rescind its order of suspension;

(2) Continue the suspension;

(3) Revoke the license;

(4) Rescind its order of revocation;

(5) Decline to renew the license; or

(6) Renew the license. [L 1939, c 220, §3; RL 1945, §5752; RL 1955, §125-2; am L Sp 1957, c 1, §8(a); am L Sp 1959 2d, c 1, §16; HRS §245-2; am L 1993, c 220, §8; am L 1995, c 92, §17; am L 2005, c 131, §§3, 9(2); am L 2009, c 30, §2; am L 2021, c 116, §7; am L 2023, c 62, §3]
Haw. Rev. Stat. § 235-71.5 — HI Code / Division 1 / Title 14 / Chapter 235 / Section 235-71.5
Alternative tax for corporations.
Status: in_force

Section 1201 (with respect to alternative tax for corporations) of the Internal Revenue Code of 1986, as amended as of December 31, 1996, shall be operative for the purposes of this chapter and shall be applied as set forth in this section. If for any taxable year a corporation, regulated investment company, or real estate investment trust has a net capital gain, then, in lieu of the tax imposed by section 235-71, there is hereby imposed a tax (if such tax is less than the tax imposed under section 235-71) which shall consist of the sum of:

(1) A tax computed on the taxable income reduced by the amount of the net capital gain, at the rates and in the manner as if this section had not been enacted, plus

(2) The sum of:

(A) 3.08 per cent of the lesser of:

(i) The net capital gain determined by including only the gain or loss which is properly taken into account for the portion of the taxable year before April 1, 1987 (i.e., the amount in paragraph (1)), or

(ii) The net capital gain for the taxable year, plus

(B) 4 per cent of the excess (if any) of:

(i) The net capital gain for the taxable year, over

(ii) The amount of the net capital gain taken into account under subparagraph (A). [L 1988, c 10, §1(1); am L 1998, c 113, §3]
Haw. Rev. Stat. § 244D-4.3 — HI Code / Division 1 / Title 14 / Chapter 244D / Section 244D-4.3
Exemption for sales of liquor shipped out of the State.
Status: in_force

(a) There shall be exempted from, and excluded from the measure of, the taxes imposed by this chapter all of the value or gross proceeds arising from the manufacture, production, or sale of liquor shipped by the manufacturer, producer, or seller to a point outside the State where the liquor is resold or otherwise consumed or used outside the State.

(b) For the purposes of this section, the manufacturer, producer, or seller shall take from the purchaser, a certificate, in such form as the department shall prescribe, certifying that the liquor purchased is to be resold or otherwise consumed or used outside the State. Any purchaser who shall furnish such a certificate shall be obligated to pay to the seller, upon demand, if the liquor purchased is not resold or otherwise consumed or used outside the State, the amount of the additional tax which by reason thereof is imposed upon the seller. [L 1997, c 20, §2]
Haw. Rev. Stat. § 249-9.2 — HI Code / Division 1 / Title 14 / Chapter 249 / Section 249-9.2
Special number plates; military service.
Status: in_force

(a) In lieu of the number plates contracted on behalf of the counties by the director of finance of the city and county of Honolulu, the director of finance shall provide, for a fee, one set of special number plates upon the receipt of an application together with:

(1) Specific proof that the applicant was awarded the Purple Heart by the United States Department of Defense for wounds received in military or naval combat against an armed enemy of the United States;

(2) Certification that the applicant is a veteran;

(3) Specific proof that the applicant was serving the United States in the military or as a civilian, on Oahu, or offshore at a distance of not more than three miles at the time of the December 7, 1941, attack on Pearl Harbor. Certification from the Hawaii state chairperson of the Pearl Harbor Survivors Association shall constitute sufficient proof;

(4) Specific proof that the applicant was confined as a prisoner of war while providing military service to the United States;

(5) Certification from the United States Department of Veterans Affairs or the state office of veterans' services that the applicant is a combat veteran or a veteran of the Vietnam conflict, the Korean conflict, World War II, the Persian Gulf conflict, the Iraq war, or the Afghanistan war; or

(6) Specific proof that the applicant would qualify for a gold star lapel button under the criteria established by title 10 United States Code section 1126; provided that the applicant shall not be disqualified for the special number plates because the applicant is the grandparent of the deceased member of the United States armed forces;

provided that applicants, except civilian applicants under paragraph (3) and civilian applicants and applicants who are currently serving the United States in the military under paragraph (6), shall also provide a copy of the applicant's most recent discharge paper or separation document that indicates an honorable discharge or general (under honorable conditions) discharge from active duty.

(b) The design of the plates for:

(1) Purple heart recipients shall include the words "COMBAT WOUNDED";

(2) Veterans shall include the word "VETERAN";

(3) Pearl Harbor survivors shall include the words "PEARL HARBOR SURVIVOR";

(4) Former prisoners of war shall include the words "FORMER PRISONER OF WAR";

(5) Combat veterans shall include the words "COMBAT VETERAN";

(6) Veterans of the Vietnam conflict shall include the words "VIETNAM VETERAN";

(7) Veterans of the Korean conflict shall include the words "KOREA VETERAN";

(8) Veterans of World War II shall include the words "WORLD WAR II VETERAN";

(9) Veterans of the Persian Gulf conflict shall include the words "PERSIAN GULF VETERAN";

(10) Veterans of the Iraq war shall include the words "IRAQ VETERAN";

(11) Veterans of the Afghanistan war shall include the words "AFGHANISTAN VETERAN"; and

(12) Gold star family members, including grandparents, shall include the words "GOLD STAR FAMILY".

These designations shall be imprinted on the left side of the license plates in a manner similar to congressional and honorary consul license plates.

(c) Registration certificates and license plates issued under this section shall not be transferable to any other person. Special number plates for military service shall be assigned to a noncommercial passenger motor vehicle, a noncommercial motorcycle, or motor scooter registered in the name of the qualified applicant and shall be available in any category of special number plates for military service. Prior to the transfer of the ownership of the qualified person's vehicle to another party, the special number plates shall be surrendered to the director of finance as a condition to the issuance of replacement special number plates; provided that the director of finance shall allow the survivor of the qualified person, upon request, to retain the front special number plate as a memorial.

(d) The director of finance shall authorize the design of a license plate that is readily identifiable and distinguishable under actual traffic conditions and shall adopt rules pursuant to chapter 91 to carry out this section. [L 1991, c 210, §2; am L 1996, c 85, §2 and c 86, §2; am L 1997, c 326, §3; am L 1999, c 208, §3; am L 2001, c 57, §1; am L 2002, c 254, §1; am L 2010, c 78, §1; am L 2011, c 70, §1; am L 2024, c 83, §1]
Haw. Rev. Stat. § 235-55.75 — HI Code / Division 1 / Title 14 / Chapter 235 / Section 235-55.75
Refundable earned income tax credit.
Status: in_force

(a) [Repeal and reenactment on December 31, 2027. L 2023, c 163, §5.] Each qualifying individual taxpayer may claim a refundable earned income tax credit. Unless otherwise provided by law, the tax credit, for the appropriate taxable year, shall be forty per cent of the federal earned income tax credit allowed and properly claimed under section 32 of the Internal Revenue Code and reported as such on the individual ' s federal income tax return.

(b) For a part-year resident or a nonresident, the tax credit shall equal the amount of the tax credit calculated in subsection (a) multiplied by the ratio of Hawaii adjusted gross income to federal adjusted gross income.

(c) For purposes of this section, "qualifying individual taxpayer" means a resident or nonresident individual that:

(1) Files a federal income tax return for the taxable year claiming the earned income tax credit under section 32 of the Internal Revenue Code; and

(2) Files a Hawaii income tax return using the filing status used on the federal income tax return for the taxable year and claiming the same dependents claimed on the federal income tax return for the taxable year.

(d) The credit allowed under this section shall be claimed against the net income tax liability for the taxable year. If the tax credit claimed by the taxpayer under this section exceeds the amount of the income tax payments due from the taxpayer, the excess of credit over payments due shall be refunded to the taxpayer; provided that the tax credit properly claimed by a taxpayer who has no income tax liability shall be paid to the taxpayer; provided further that no refunds or payments on account of the tax credit allowed by this section shall be made for amounts less than $1. All claims, including amended claims, for a tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

(e) No credit shall be allowed under this section for any taxable year in the disallowance period. For purposes of this subsection, the disallowance period is:

(1) The period of ten taxable years after the most recent taxable year for which there was a final administrative or judicial decision that the taxpayer's claim for credit under this section was due to fraud; and

(2) The period of two taxable years after the most recent taxable year for which there was a final administrative or judicial decision disallowing the taxpayer's claim for credit.

(f) The director of taxation:

(1) Shall prepare any forms necessary to claim a tax credit under this section;

(2) May require proof of the claim for the tax credit;

(3) Shall alert eligible taxpayers of the tax credit using appropriate and available means;

(4) Shall prepare an annual public report to the legislature and the governor containing the:

(A) Number of credits granted for the prior calendar year;

(B) Total amount of the credits granted; and

(C) Average value of the credits granted to taxpayers whose earned income falls within various income ranges; and

(5) May adopt rules pursuant to chapter 91 to effectuate this section.

(g) If nonrefundable credits claimed under this section for any of the four consecutive taxable years beginning after December 31, 2017, exceed the taxpayer's income tax liability for the original claim year, the excess of the tax credits over liability may be used as a credit against the taxpayer's net income tax liability in subsequent years until exhausted; provided that no credit carried forward under this subsection shall be used as a credit for a taxable year beginning after December 31, 2024. No nonrefundable credits claimed for the taxable year beginning after December 31, 2021, and carried forward under this section, shall be used as a credit for a taxable year beginning after December 31, 2025. [L 2017, c 107, §1; am L 2022, c 114, §2; am L 2023, c 163, §2; am L 2025, c 25, §1]
Haw. Rev. Stat. § 239-11 — HI Code / Division 1 / Title 14 / Chapter 239 / Section 239-11
§ §239-11 and 239-12 REPEALED.
Status: repealed

§ §239-11 and 239-12 REPEALED. L 2021, c 117, §§33, 34.
Haw. Rev. Stat. § 237-43 — HI Code / Division 1 / Title 14 / Chapter 237 / Section 237-43
Bulk sales; transfers; penalties.
Status: in_force

(a) In any case of the sale or transfer in bulk of the whole, or a large part of a stock of merchandise and fixtures, or merchandise, or fixtures, or other assets or property of a business, otherwise than in the ordinary course of trade, business, commerce, or sales, the seller shall make a written and verified report of the bulk sale or transfer to the department not later than ten days after the possession, or the control, or the title of the property, or any part thereof, has passed to the purchaser. The report shall contain the name and address of the purchaser, a brief description of the property sold and the purchase price, the date when the sale or transfer is to be or was consummated, and such other facts as the department may require. The purchaser may make the report for the seller.

(b) The purchaser of the property shall withhold payment of the purchase price until the receipt of a certificate from the department to the effect that all taxes, penalties, and interest levied or accrued under title 14 for taxes administered by the department against the seller, or constituting a lien upon the property, have been paid. A certificate shall not be issued while the department investigates (including by audit) whether taxes have been levied or accrued against the seller. The certificate shall show on its face that the department has had notice of the bulk sale or transfer, and shall also show the names of the seller and purchaser, a brief description of the property sold or transferred, and the date of consummation of the sale or transfer, together with such other information as the department shall prescribe.

(c) If the required report of the bulk sale or transfer is not made, or if the taxes, penalties, and interest shall not be paid within twenty days after the sale or transfer, or within such further time as the department may allow, the purchaser shall be personally liable to pay to the State the amount of all taxes, penalties, and interest levied or accrued under title 14 for taxes administered by the department against the seller or constituting a lien upon the property, together with penalties and interest thereafter accruing, not exceeding, however, the amount of the purchase price. The issuance of a certificate in the prescribed form shall be a complete defense to the bulk sale or transfer liability imposed in the preceding sentence, but shall not be a defense to any liability of the purchaser under any other provision of law for liabilities and obligations. Any purchaser succeeding to the liabilities of the seller under this section shall make a written report thereof upon the next due date for the reporting of gross income taxes.

(d) For purposes of this section:

"Property" means anything that may be the subject of ownership, including every kind of asset, whether real or personal, tangible or intangible, and without limitation, such as land and buildings, goodwill, notes, accounts, and other intangible property. The term "property" shall not include any interest in residential real property.

"Purchase price" means the total fair market value, as of the date of sale or transfer, of all property transferred, whether or not money or property is exchanged therefor.

"Purchaser" means any person who receives property in a bulk sale or transfer, whether or not money or property is exchanged therefor.

"Sale" means the transfer of property for compensation.

"Seller" means any person who sells or transfers any property in a bulk sale or transfer, whether or not money or property is exchanged therefor.

"Transfer" means the sale, conveyance, or distribution by any mode, direct or indirect, absolute or conditional, voluntary or involuntary, of title to or beneficial ownership in property, or interest therein. The term "transfer" does not include a bona fide, arm's length:

(1) Creation, modification, or termination of a lease interest;

(2) Creation, modification, or release of a lien or encumbrance; or

(3) Transfer occurring as a result of the enforcement of a lien.

(e) Failure to make the report required by this section shall be punishable by a fine of not more than $100. Any seller who wilfully fails to make the report required by this section shall, in addition to other penalties provided by law, be guilty of a misdemeanor and upon conviction thereof, shall be fined not more than $5,000 or imprisoned not more than one year, or both.

(f) The purchaser shall have the purchaser's remedy against the seller for the amount of taxes, penalties, or interest paid by the purchaser.

(g) This section supplements and does not displace any remedies available to the department under the Uniform Fraudulent Transfer Act and the principles of law and equity. [L 1941, c 265, §8; RL 1945, §5476; RL 1955, §117-40; am L Sp 1959 2d, c 1, §16; HRS §237-43; gen ch 1985; am L 1995, c 92, §14 as superseded by c 120, §1; am L 1996, c 132, §§1, 2]
Haw. Rev. Stat. § 237-23 — HI Code / Division 1 / Title 14 / Chapter 237 / Section 237-23
Exemptions, persons exempt, applications for exemption.
Status: in_force

(a) This chapter shall not apply to the following persons:

(1) Public service companies as that term is defined in section 239-2, with respect to the gross income, either actual gross income or gross income estimated and adjusted, that is included in the measure of the tax imposed by chapter 239;

(2) Public utilities owned and operated by the State or any county, or other political subdivision thereof;

(3) Fraternal benefit societies, orders, or associations, operating under the lodge system, or for the exclusive benefit of the members of the fraternity itself, operating under the lodge system, and providing for the payment of death, sick, accident, a legal service plan, or other benefits to the members of the societies, orders, or associations, and to their dependents;

(4) Corporations, associations, trusts, or societies organized and operated exclusively for religious, charitable, scientific, or educational purposes, as well as that of operating senior citizens housing facilities qualifying for a loan under the laws of the United States as authorized by section 202 of the Housing Act of 1959, as amended, as well as that of operating a legal service plan, as well as that of operating or managing a homeless facility, or any other program for the homeless authorized under part XVII of chapter 346;

(5) Business leagues, chambers of commerce, boards of trade, civic leagues, agricultural and horticultural organizations, and organizations operated exclusively for the benefit of the community and for the promotion of social welfare that shall include the operation of a legal service plan, and from which no profit inures to the benefit of any private stockholder or individual;

(6) Hospitals, infirmaries, and sanitaria;

(7) Companies that provide potable water to residential communities that lack any access to public utility water services and are tax exempt under section 501(c)(12) of the Internal Revenue Code of 1986, as amended;

(8) Cooperative associations incorporated under chapter 421 or Code section 521 cooperatives which fully meet the requirements of section 421-23, except Code section 521 cooperatives need not be organized in Hawaii; provided that:

(A) The exemption shall apply only to the gross income derived from activities that are pursuant to purposes and powers authorized by chapter 421, except those provisions pertaining to or requiring corporate organization in Hawaii do not apply to Code section 521 cooperatives;

(B) The exemption shall not relieve any person who receives any proceeds of sale from the association of the duty of returning and paying the tax on the total gross proceeds of the sales on account of which the payment was made, in the same amount and at the same rate as would apply thereto had the sales been made directly by the person, and all those persons shall be so taxable; and

(C) As used in this paragraph, "Code section 521 cooperatives" mean associations that qualify as a cooperative under section 521 (with respect to exemption of farmers' cooperatives from tax) of the Internal Revenue Code of 1986, as amended;

(9) Persons affected with Hansen's disease and kokuas, with respect to business within the county of Kalawao;

(10) Corporations, companies, associations, or trusts organized for the establishment and conduct of cemeteries no part of the net earnings of which inures to the financial benefit of any private stockholder or individual; provided that the exemption shall apply only to the activities of those persons in the conduct of cemeteries and shall not apply to any activity the primary purpose of which is to produce income, even though the income is to be used for or in the furtherance of the exempt activities of those persons; and

(11) Nonprofit shippers associations operating under part 296 of the Civil Aeronautics Board Economic Regulations.

(b) The exemptions enumerated in subsection (a)(3) to (7) shall apply only:

(1) To those persons who shall have registered with the department of taxation by filing a written application for registration in such form as the department shall prescribe, shall have paid the registration fee of $20, and shall have had the exemption allowed by the department or by a court or tribunal of competent jurisdiction upon appeal from any assessment resulting from disallowance of the exemption by the department;

(2) To activities from which no profit inures to the benefit of any private stockholder or individual, except for death or other benefits to the members of fraternal societies; and

(3) To the fraternal, religious, charitable, scientific, educational, communal, or social welfare activities of such persons, or to the activities of hospitals, infirmaries, sanitaria, and potable water companies, as such, and not to any activity the primary purpose of which is to produce income even though the income is to be used for or in furtherance of the exempt activities of such persons.

(c) To obtain allowance of an exemption:

(1) A person under subsection (a)(3) to (7), who has received or applied for recognition of tax exempt status under section 501(c)(3), (4), (6), (8), or (12) of the Internal Revenue Code of 1986, as amended, or who is a subordinate person of a person who has received a group exemption letter under section 501(c)(3), (4), (6), (8), or (12) of the Internal Revenue Code of 1986, as amended, shall register with the department by filing a statement attaching a copy of the exemption or application for recognition of exempt status and any particular facts that the department may require; and

(2) All other persons under subsection (a)(3) to (7) shall file an application for exemption in the form of an affidavit or affidavits setting forth in general all facts affecting the right to the exemption and any particular facts that the department may require, to which shall be attached any records, papers, and other information as the department may prescribe.

(d) For all persons, the statement registering the person with the department or application for exemption shall be filed on or before March 31 of the first year of registration or within three months after the commencement of business. In the event of allowance of the exemption, no further statement or application therefor need be filed unless there is a material change in the facts. In the event of disallowance of the exemption, a license may be obtained upon payment of the required fee as provided by section 237-9, less the $20 already paid under this section, which shall be credited thereon. In the event the registrant has a license under this chapter, no further fee shall be required for registration under this section.

(e) The department for good cause may extend the time for registration or the time for filing an application for exemption. [L 1935, c 141, §4(1); am L 1941, c 265, §2; RL 1945, §5459; am L 1945, c 158, §1 and c 253, §3; am L 1949, c 234, §3; RL 1955, §117-20; am L Sp 1957, c 1, §3(y), (z); am L 1959, c 252, §39 and c 277, §3; am L Sp 1959 2d, c 1, §16; am L 1963, c 147, §1; am L 1965, c 201, §38 and c 224, §3; am L 1967, c 39, §1 and c 159, §1; HRS §237-23; am L 1969, c 152, §1; am L 1970, c 180, §12; am L 1971, c 4, §3; am L 1976, c 156, §10 and c 203, §5; am L 1979, c 105, §23; am L 1980, c 213, §1; am L 1982, c 92, §5; am L 1987, c 39, §4; am L 1988, c 173, §2; am L 1989, c 6, §4 and c 266, §3; am L 1990, c 109, §1; am L 1991, c 212, §4 and c 286, §3; am L 1992, c 106, §7; am L Sp 1995, c 20, §5; am L 1997, c 350, §17; am L 1998, c 212, §3; am L 2001, c 125, §1; am L 2007, c 249, §17; am L 2010, c 89, §4; am L 2012, c 34, §21 and c 184, §3; am L 2015, c 18, §1]
Haw. Rev. Stat. § 237-13 — HI Code / Division 1 / Title 14 / Chapter 237 / Section 237-13
Imposition of tax.
Status: in_force

There is hereby levied and shall be assessed and collected annually privilege taxes against persons on account of their business and other activities in the State measured by the application of rates against values of products, gross proceeds of sales, or gross income, whichever is specified, as follows:

(1) Tax on manufacturers.

(A) Upon every person engaging or continuing within the State in the business of manufacturing, including compounding, canning, preserving, packing, printing, publishing, milling, processing, refining, or preparing for sale, profit, or commercial use, either directly or through the activity of others, in whole or in part, any article or articles, substance or substances, commodity or commodities, the amount of the tax to be equal to the value of the articles, substances, or commodities, manufactured, compounded, canned, preserved, packed, printed, milled, processed, refined, or prepared for sale, as shown by the gross proceeds derived from the sale thereof by the manufacturer or person compounding, preparing, or printing them, multiplied by one-half of one per cent.

(B) The measure of the tax on manufacturers is the value of the entire product for sale.

(2) Tax on business of selling tangible personal property; producing.

(A) Upon every person engaging or continuing in the business of selling any tangible personal property whatsoever, there is likewise hereby levied, and shall be assessed and collected, a tax equivalent to four per cent of the gross proceeds of sales of the business; provided that, in the case of a wholesaler, the tax shall be equal to one-half of one per cent of the gross proceeds of sales of the business; and provided further that insofar as the sale of tangible personal property is a wholesale sale under section 237-4(a)(8), the tax shall be one-half of one per cent of the gross proceeds. Upon every person engaging or continuing within this State in the business of a producer, the tax shall be equal to one-half of one per cent of the gross proceeds of sales of the business, or the value of the products, for sale.

(B) Gross proceeds of sales of tangible property in interstate and foreign commerce shall constitute a part of the measure of the tax imposed on persons in the business of selling tangible personal property, to the extent, under the conditions, and in accordance with the provisions of the Constitution of the United States and the Acts of the Congress of the United States which may be now in force or may be hereafter adopted, and whenever there occurs in the State an activity to which, under the Constitution and Acts of Congress, there may be attributed gross proceeds of sales, the gross proceeds shall be so attributed.

(C) No manufacturer or producer, engaged in such business in the State and selling the manufacturer's or producer's products for delivery outside of the State (for example, consigned to a mainland purchaser via common carrier f.o.b. Honolulu), shall be required to pay the tax imposed in this chapter for the privilege of so selling the products, and the value or gross proceeds of sales of the products shall be included only in determining the measure of the tax imposed upon the manufacturer or producer.

(D) A manufacturer or producer, engaged in such business in the State, shall pay the tax imposed in this chapter for the privilege of selling its products in the State, and the value or gross proceeds of sales of the products, thus subjected to tax, may be deducted insofar as duplicated as to the same products by the measure of the tax upon the manufacturer or producer for the privilege of manufacturing or producing in the State; provided that no producer of agricultural products who sells the products to a purchaser who will process the products outside the State shall be required to pay the tax imposed in this chapter for the privilege of producing or selling those products.

(E) A taxpayer selling to a federal cost-plus contractor may make the election provided for by paragraph (3)(C), and in that case the tax shall be computed pursuant to the election, notwithstanding this paragraph or paragraph (1) to the contrary.

(F) The department, by rule, may require that a seller take from the purchaser of tangible personal property a certificate, in a form prescribed by the department, certifying that the sale is a sale at wholesale; provided that:

(i) Any purchaser who furnishes a certificate shall be obligated to pay to the seller, upon demand, the amount of the additional tax that is imposed upon the seller whenever the sale in fact is not at wholesale; and

(ii) The absence of a certificate in itself shall give rise to the presumption that the sale is not at wholesale unless the sales of the business are exclusively at wholesale.

(3) Tax upon contractors.

(A) Upon every person engaging or continuing within the State in the business of contracting, the tax shall be equal to four per cent of the gross income of the business.

(B) In computing the tax levied under this paragraph, there shall be deducted from the gross income of the taxpayer so much thereof as has been included in the measure of the tax levied under subparagraph (A), on another taxpayer who is a contractor, as defined in section 237-6; provided that any person claiming a deduction under this paragraph shall be required to show in the person's return the name and general excise number of the person paying the tax on the amount deducted by the person.

(C) In computing the tax levied under this paragraph against any federal cost-plus contractor, there shall be excluded from the gross income of the contractor so much thereof as fulfills the following requirements:

(i) The gross income exempted shall constitute reimbursement of costs incurred for materials, plant, or equipment purchased from a taxpayer licensed under this chapter, not exceeding the gross proceeds of sale of the taxpayer on account of the transaction; and

(ii) The taxpayer making the sale shall have certified to the department that the taxpayer is taxable with respect to the gross proceeds of the sale, and that the taxpayer elects to have the tax on gross income computed the same as upon a sale to the state government.

(D) A person who, as a business or as a part of a business in which the person is engaged, erects, constructs, or improves any building or structure, of any kind or description, or makes, constructs, or improves any road, street, sidewalk, sewer, or water system, or other improvements on land held by the person (whether held as a leasehold, fee simple, or otherwise), upon the sale or other disposition of the land or improvements, even if the work was not done pursuant to a contract, shall be liable to the same tax as if engaged in the business of contracting, unless the person shows that at the time the person was engaged in making the improvements the person intended, and for the period of at least one year after completion of the building, structure, or other improvements the person continued to intend to hold and not sell or otherwise dispose of the land or improvements. The tax in respect of the improvements shall be measured by the amount of the proceeds of the sale or other disposition that is attributable to the erection, construction, or improvement of such building or structure, or the making, constructing, or improving of the road, street, sidewalk, sewer, or water system, or other improvements. The measure of tax in respect of the improvements shall not exceed the amount which would have been taxable had the work been performed by another, subject as in other cases to the deductions allowed by subparagraph (B). Upon the election of the taxpayer, this paragraph may be applied notwithstanding that the improvements were not made by the taxpayer, or were not made as a business or as a part of a business, or were made with the intention of holding the same. However, this paragraph shall not apply in respect of any proceeds that constitute or are in the nature of rent, which shall be taxable under paragraph (9); provided that insofar as the business of renting or leasing real property under a lease is taxed under section 237-16.5, the tax shall be levied by section 237-16.5.

(4) Tax upon theaters, amusements, radio broadcasting stations, etc.

(A) Upon every person engaging or continuing within the State in the business of operating a theater, opera house, moving picture show, vaudeville, amusement park, dance hall, skating rink, radio broadcasting station, or any other place at which amusements are offered to the public, the tax shall be equal to four per cent of the gross income of the business, and in the case of a sale of an amusement at wholesale under section 237-4(a)(13), the tax shall be one-half of one per cent of the gross income.

(B) The department may require that the person rendering an amusement at wholesale take from the licensed seller a certificate, in a form prescribed by the department, certifying that the sale is a sale at wholesale; provided that:

(i) Any licensed seller who furnishes a certificate shall be obligated to pay to the person rendering the amusement, upon demand, the amount of additional tax that is imposed upon the seller whenever the sale is not at wholesale; and

(ii) The absence of a certificate in itself shall give rise to the presumption that the sale is not at wholesale unless the person rendering the sale is exclusively rendering the amusement at wholesale.

(5) Tax upon sales representatives, etc. Upon every person classified as a representative or purchasing agent under section 237-1, engaging or continuing within the State in the business of performing services for another, other than as an employee, there is likewise hereby levied and shall be assessed and collected a tax equal to four per cent of the commissions and other compensation attributable to the services so rendered by the person.

(6) Tax on service business.

(A) Upon every person engaging or continuing within the State in any service business or calling including professional services not otherwise specifically taxed under this chapter, there is likewise hereby levied and shall be assessed and collected a tax equal to four per cent of the gross income of the business, and in the case of a wholesaler under section 237-4(a)(10), the tax shall be equal to one-half of one per cent of the gross income of the business.

(B) The department may require that the person rendering a service at wholesale take from the licensed seller a certificate, in a form prescribed by the department, certifying that the sale is a sale at wholesale; provided that:

(i) Any licensed seller who furnishes a certificate shall be obligated to pay to the person rendering the service, upon demand, the amount of additional tax that is imposed upon the seller whenever the sale is not at wholesale; and

(ii) The absence of a certificate in itself shall give rise to the presumption that the sale is not at wholesale unless the person rendering the sale is exclusively rendering services at wholesale.

(C) Where any person is engaged in the business of selling interstate or foreign common carrier telecommunication services within and without the State, other than as a home service provider, the tax shall be imposed on that portion of gross income received by a person from service which is originated or terminated in this State and is charged to a telephone number, customer, or account in this State notwithstanding any other state law (except for the exemption under section 237-23(a)(1)) to the contrary. If, under the Constitution and laws of the United States, the entire gross income as determined under this paragraph of a business selling interstate or foreign common carrier telecommunication services cannot be included in the measure of the tax, the gross income shall be apportioned as provided in section 237-21; provided that the apportionment factor and formula shall be the same for all persons providing those services in the State.

(D) Where any person is engaged in the business of a home service provider, the tax shall be imposed on the gross income received or derived from providing interstate or foreign mobile telecommunications services to a customer with a place of primary use in this State when the services originate in one state and terminate in another state, territory, or foreign country; provided that all charges for mobile telecommunications services which are billed by or for the home service provider are deemed to be provided by the home service provider at the customer's place of primary use, regardless of where the mobile telecommunications originate, terminate, or pass through; provided further that the income from charges specifically derived from interstate or foreign mobile telecommunications services, as determined by books and records that are kept in the regular course of business by the home service provider in accordance with section 239-24, shall be apportioned under any apportionment factor or formula adopted under subparagraph (C). Gross income shall not include:

(i) Gross receipts from mobile telecommunications services provided to a customer with a place of primary use outside this State;

(ii) Gross receipts from mobile telecommunications services that are subject to the tax imposed by chapter 239;

(iii) Gross receipts from mobile telecommunications services taxed under section 237-13.8; and

(iv) Gross receipts of a home service provider acting as a serving carrier providing mobile telecommunications services to another home service provider's customer.

For the purposes of this paragraph, "charges for mobile telecommunications services", "customer", "home service provider", "mobile telecommunications services", "place of primary use", and "serving carrier" have the same meaning as in section 239-22.

(7) Tax on insurance producers. Upon every person engaged as a licensed producer pursuant to chapter 431, there is hereby levied and shall be assessed and collected a tax equal to 0.15 per cent of the commissions due to that activity.

(8) Tax on receipts of sugar benefit payments. Upon the amounts received from the United States government by any producer of sugar (or the producer's legal representative or heirs), as defined under and by virtue of the Sugar Act of 1948, as amended, or other Acts of the Congress of the United States relating thereto, there is hereby levied a tax of one-half of one per cent of the gross amount received; provided that the tax levied hereunder on any amount so received and actually disbursed to another by a producer in the form of a benefit payment shall be paid by the person or persons to whom the amount is actually disbursed, and the producer actually making a benefit payment to another shall be entitled to claim on the producer's return a deduction from the gross amount taxable hereunder in the sum of the amount so disbursed. The amounts taxed under this paragraph shall not be taxable under any other paragraph, subsection, or section of this chapter.

(9) Tax on other business. Upon every person engaging or continuing within the State in any business, trade, activity, occupation, or calling not included in the preceding paragraphs or any other provisions of this chapter, there is likewise hereby levied and shall be assessed and collected, a tax equal to four per cent of the gross income thereof. In addition, the rate prescribed by this paragraph shall apply to a business taxable under one or more of the preceding paragraphs or other provisions of this chapter, as to any gross income thereof not taxed thereunder as gross income or gross proceeds of sales or by taxing an equivalent value of products, unless specifically exempted. [L 1935, c 141, §2 I; am L 1939, c 252, §§1, 2; am L 1943, c 81, pt of §1; RL 1945, §5455; am L 1945, c 100, §3 and c 253, §2; am L 1947, c 111, §9 and c 113, §7; am L 1953, c 183, §3; RL 1955, §117-14; am L 1957, c 34, §§5, 11(d) to (g); am L Sp 1957, c 1, §3(e) to (s); am L Sp 1959 2d, c 1, §16; am L 1960, c 4, §§2, 3, 4 and c 24, §1; am L 1962, c 27, §1; am L 1965, c 155, §14(a) to (h); am L 1966, c 28, §3; HRS §237-13; am L 1969, c 137, §1; am L 1970, c 180, §10; am L 1971, c 204, §§5, 6; am L 1977, c 160, §1; am L 1978, c 144, §2; am L 1982, c 204, §8; am L 1986, c 324, §1; am L 1991, c 21, §1; am L 1992, c 106, §6; am L 1993, c 188, §1; am L 1994, c 141, §1; am L 1997, c 353, §3; am L 1998, c 169, §§1, 3; am L 1999, c 71, §6 and c 173, §2; am L 2000, c 198, §3; am L 2002, c 209, §3; am L 2003, c 135, §3 and c 212, §3; am L 2008, c 16, §6; am L 2014, c 42, §2; am L 2015, c 22, §3; am L 2018, c 166, §2]
Haw. Rev. Stat. § 235-122 — HI Code / Division 1 / Title 14 / Chapter 235 / Section 235-122
Taxation of an S corporation and its shareholders.
Status: in_force

(a) An election under section 1361(b)(3) and (e), or 1362(a) of the Internal Revenue Code shall be effective for the purposes of this chapter. Evidence of a valid election for federal purposes shall be submitted to the department in such form and at such time the department may prescribe.

(b) Except as provided in the following sentence, an S corporation shall not be subject to the tax imposed by section 235-71. If income of an S corporation is subject to federal income tax, then such income as modified by section 235-123, to the extent it constitutes income attributable to the State, shall be taxed at the highest marginal rate of tax imposed on the net income of corporations. If an S corporation is required to pay a tax to this State by reason of the preceding sentence, then the income attributable to the State of the S corporation shall be reduced by the amount of the tax.

(c) Each shareholder's pro rata share of income attributable to the State and each resident shareholder's pro rata share of income not attributable to the State, to the extent modified pursuant to section 235-123, shall be taken into account by the shareholder in the manner provided in section 1366 of the Internal Revenue Code for the purposes of section 235-4 and shall be taxable under section 235-51. [L 1990, c 16, pt of §1; am L 1997, c 297, §5]
Haw. Rev. Stat. § 244D-7 — HI Code / Division 1 / Title 14 / Chapter 244D / Section 244D-7
Payment of tax; penalties.
Status: in_force

At the time of the filing of the return required under section 244D-6 and within the time prescribed therefor, each taxpayer shall pay to the department of taxation the tax imposed by this chapter, required to be shown by the return.

Penalties and interest shall be added to and become a part of the tax, when and as provided by section 231-39. [L Sp 1984 1st, c 1, pt of §2]
Haw. Rev. Stat. § 251-7 — HI Code / Division 1 / Title 14 / Chapter 251 / Section 251-7
Filing of returns.
Status: in_force

All monthly, quarterly, semiannual, and annual returns shall be transmitted in the form and manner prescribed by the department.
Haw. Rev. Stat. § 237D-8.6 — HI Code / Division 1 / Title 14 / Chapter 237D / Section 237D-8.6
Reconciliation; form requirement.
Status: in_force

(a) On or before the twentieth day of the fourth month following the close of the taxable year, every person who has become liable for the payment of taxes under this chapter during the preceding taxable year and who has furnished transient accommodations which were exempt, for any portion of the taxable year, from the tax imposed under this chapter, shall file a reconciliation for transient accommodations as prescribed by the director indicating the amount of gross income that was subject to such tax and the amount that was subject to the general excise tax imposed under chapter 237.

(b) On or before the twentieth day of the fourth month following the close of the taxable year, every plan manager who has become liable for the payment of taxes under this chapter during the preceding taxable year shall file a reconciliation indicating the period of time that the owner of a resort time share vacation unit was subject to the general excise tax or the tax under section 237D-2(a). [L 1988, c 241, pt of §1; am L 1998, c 156, §23]
Haw. Rev. Stat. § 237D-1 — HI Code / Division 1 / Title 14 / Chapter 237D / Section 237D-1
Definitions.
Status: in_force

Whenever used in this chapter, unless the context otherwise requires:

"Cruise fare" means the total amount paid by a transient for a cruise ship cabin on a cruise ship, inclusive of any mandatory fees imposed by a cruise ship operator, owner, or representative thereof on a transient for the use of shipboard services, facilities, meals, and onboard entertainment, but does not include optional charges for shipboard services, meals, excursions, and onboard entertainment beyond the mandatory fee amount.

"Cruise ship" means any ship that docks at any port in the State that charges a fee for and provides cruise ship cabins to transients.

"Cruise ship cabin" means an accommodation or living quarter on a cruise ship that is provided to a transient.

"Department" means the department of taxation.

"Fair market rental value" means an amount equal to one-half of the gross daily maintenance fees that are paid by the owner and are attributable to the time share unit located in Hawaii. Gross daily maintenance fees include maintenance costs, operational costs, insurance, repair costs, administrative costs, taxes, other than transient accommodations taxes, resort fees, and other costs including payments required for reserves or sinking funds. Amounts paid for optional goods and services such as food and beverage services or beach chair or umbrella rentals shall be excluded from fair market rental value.

"Gross rental" or "gross rental proceeds" means the gross receipts, cash or accrued, of the taxpayer received as compensation for the furnishing of transient accommodations or entering into arrangements to furnish transient accommodations and the value proceeding or accruing from the furnishing of transient accommodations or entering into arrangements to furnish transient accommodations, including resort fees without any deductions on account of the cost of property or services sold, the cost of materials used, labor cost, taxes, royalties, interest, discounts, or any other expenses whatsoever. "Gross rental" or "gross rental proceeds" includes the gross receipts derived from cruise fares. Every taxpayer shall be presumed to be dealing on a cash basis unless the taxpayer proves to the satisfaction of the department of taxation that the taxpayer is dealing on an accrual basis and the taxpayer's books are so kept, or unless the taxpayer employs or is required to employ the accrual basis for the purposes of the tax imposed by chapter 237 for any taxable year in which event the taxpayer shall report the taxpayer's gross income for the purposes of this chapter on the accrual basis for the same period.

The words "gross rental" or "gross rental proceeds" shall not be construed to include the amounts of taxes imposed by chapter 237 or this chapter on operators of transient accommodations, transient accommodations brokers, travel agencies, and tour packagers and passed on, collected, and received from the consumer as part of the receipts received as compensation for the furnishing of transient accommodations or entering into arrangements to furnish transient accommodations.

Where transient accommodations are furnished through arrangements made by a transient accommodations broker, travel agency, or tour packager at noncommissionable negotiated contract rates and the gross income is divided between the operator of transient accommodations on the one hand and the transient accommodations broker, travel agency, or tour packager on the other hand, the tax imposed by this chapter shall apply to each operator and transient accommodations broker, travel agency, or tour packager with respect to that person's respective portion of the proceeds and no more.

For purposes of this definition, where the operator maintains a schedule of rates for identifiable groups of individuals, such as kamaainas, upon which the accommodations are leased, let, or rented, gross rental or gross rental proceeds means the receipts collected and received based upon the scheduled rates and recorded as receipts in its books and records.

"Lease", "let", or "rental" means the leasing or renting of living quarters or sleeping or housekeeping accommodations in hotels, apartment hotels, motels, condominiums or units defined in chapter 514B, cooperative apartments, rooming houses, or other places in which lodgings are regularly furnished to transients for a consideration, without transfer of the title of such property.

"Local contact" means an individual residing on the same island as the transient accommodation or resort time share vacation unit or an entity with a place of business and at least one employee, officer, partner, member, or other person working on behalf of the company who is residing on the same island as the transient accommodation or resort time share vacation unit.

"Occupant" means an owner of a resort time share vacation plan or other person occupying the resort time share vacation unit.

"Operator" means any person operating a transient accommodation, whether as owner or proprietor or as lessee, sublessee, mortgagee in possession, licensee, or otherwise, or engaging or continuing in any service business which involves the actual furnishing of transient accommodation.

"Owner" means any person who owns a resort time share vacation interest; provided that to the extent and for those purposes provided in an agreement of sale, the vendee under the agreement of sale shall be considered the owner of the resort time share vacation interest.

"Plan manager" means a person who undertakes the duties, responsibilities, and obligations of managing a resort time share vacation plan or is required to act for a resort time share vacation plan under this chapter.

"Resort fee" means any mandatory charge or surcharge imposed by an operator, owner, or representative thereof to a transient for the use of the transient accommodation's property, services, or amenities.

"Resort time share vacation interest" means any interest in a resort time share vacation unit or plan which entitles the owner thereof to the use, occupancy, or possession of a resort time share vacation unit on a periodically recurring basis.

"Resort time share vacation plan" means any plan or program subject to chapter 514E in which the use, occupancy, or possession of one or more resort time share vacation units circulates among various persons for less than a sixty-day period in any year, for any occupant. The term resort time share vacation plan includes both resort time share vacation ownership plans and resort time share vacation use plans, as follows:

(1) "Resort time share vacation ownership plan" means any arrangement whether by tenancy in common, sale, deed, or by other means, whereby the purchaser receives an ownership interest and the right to use the property for a specific or discernible period by temporal division.

(2) "Resort time share vacation use plan" means any arrangement, excluding normal hotel operations, whether by membership agreement, lease, rental agreement, license, use agreement, security, or other means, whereby the purchaser receives a right to use accommodations or facilities, or both, in a resort time share vacation unit for a specific or discernible period by temporal division, but does not receive an ownership interest.

"Resort time share vacation unit" means the actual and promised accommodations, and related facilities, which are the subject of a resort time share vacation plan.

"Taxpayer" means any person liable for any tax in this chapter.

"Transient accommodations" means the furnishing of a room, apartment, suite, single family dwelling, shelter, or the like to a transient for less than one hundred eighty consecutive days for each letting in a hotel, apartment hotel, motel, condominium or unit as defined in chapter 514B, cooperative apartment, vehicle equipped with or advertised as including sleeping accommodations, dwelling unit, or rooming house that provides living quarters, sleeping, or housekeeping accommodations, or other place in which lodgings are regularly furnished to transients.

"Transient accommodations broker" means any person or entity, including but not limited to persons who operate online websites, online travel agencies, or online booking agencies, that offers, lists, advertises, or accepts reservations or collects whole or partial payment for transient accommodations or resort time share vacation interests, units, or plans. [L 1986, c 340, pt of §1; am L 1988, c 65, §2 and c 241, §2; am L 1990, c 185, §3; am L 1998, c 156, §15; am L 2004, c 164, §§8, 35(5); am L 2005, c 93, §7; am L 2008, c 28, §5; am L 2015, c 93, §1 and c 204, §3; am L 2017, c 181, §11; am L 2018, c 211, §2; am L 2019, c 20, §1; am L 2021, c 90, §2 and c 117, §16; am L 2024, c 17, §3; am L 2025, c 96, §4]
Haw. Rev. Stat. § 231-40 — HI Code / Division 1 / Title 14 / Chapter 231 / Section 231-40
Interpretation.
Status: in_force

Sections 231-34, 231-35, 231-36, and 231-36.4 shall be construed in accordance with judicial interpretations given to similar provisions of title 26 of the United States Code; consistent therewith, the term "wilfully" shall mean a voluntary, intentional violation of a known legal duty.
Haw. Rev. Stat. § 237-2 — HI Code / Division 1 / Title 14 / Chapter 237 / Section 237-2
"Business", "engaging" in business, defined.
Status: in_force

As used in this chapter:

"Business" includes all activities (personal, professional, or corporate) engaged in or caused to be engaged in with the object of gain or economic benefit either direct or indirect, but does not include casual sales.

"Engaging", with reference to engaging or continuing in business, includes the exercise of corporate or franchise powers. [L 1935, c 141, pt of §1; RL 1945, §5443; RL 1955, §117-2; HRS §237-2; am L 2017, c 12, §49]
Haw. Rev. Stat. § 243-1 — HI Code / Division 1 / Title 14 / Chapter 243 / Section 243-1
Definitions.
Status: in_force

Whenever used in this chapter:

"Alternative fuel" means methanol, denatured ethanol, and other alcohols; mixtures containing eighty-five per cent or more by volume of methanol, denatured ethanol, and other alcohols with gasoline or other fuels; natural gas; liquefied petroleum gas; hydrogen; coal-derived liquid fuels; biodiesel; mixtures containing twenty per cent or more by volume of biodiesel with diesel or other fuels; fuels (other than alcohol) derived from biological materials; and any other fuel that is substantially not a petroleum product and that the governor determines would yield substantial energy security benefits or substantial environmental benefits.

"Aviation fuel" means all liquid substances of whatever chemical composition usable for the propulsion of airplanes.

"Barrel" means forty-two United States gallons of crude oil or petroleum product.

"Crude oil" means petroleum in an unrefined state or natural state, including condensates and natural gasoline.

"Distributor" means:

(1) Every person who refines, manufactures, produces, or compounds liquid fuel or fossil fuel in the State and sells or uses the same therein;

(2) Every person who imports or causes to be imported into the State any liquid fuel or fossil fuel and sells it therein, whether in the original packages or containers in which it is imported or otherwise than in the original packages or containers, or who imports any liquid fuel or fossil fuel for the person's own use in the State;

(3) Every person who acquires liquid fuel or fossil fuel from a person not a licensed distributor and sells or uses it, whether in the original package or container in which it was imported (if imported) or otherwise than in the original package or container; and

(4) Every person who acquires liquid fuel or fossil fuel from a licensed distributor as a wholesaler thereof and sells or uses it.

"End user" means any person or government entity who acquires petroleum products for their own use and not for resale.

"Liquid fuel" or "fuel" means all liquids ordinarily, practically, and commercially usable in internal combustion engines for the generation of power and includes liquefied petroleum gases, all distillates of and condensates from petroleum, natural gas, coal, coal tar, and vegetable ferments, such distillates and condensates being ordinarily designated as a gasoline, naphtha, benzol, benzine, and alcohols so usable but not restricted to such designation. All aviation fuel that is sold for use in or used for airplanes is deemed to be "liquid fuel" or "fuel" whether or not coming within the definition contained in the foregoing sentence.

"Month" or "calendar month" means each full month of the calendar year; provided that whenever the books of any distributor in any county are kept on such a basis that its monthly records are made up on a basis other than a calendar month so that each business month of the distributor ends on some other day than the last day of the calendar month, and the distributor presents a sworn application to the department of taxation setting forth such facts and requesting that it be granted the privilege of making returns and paying the taxes and performing other duties required of it under this chapter upon the basis of such business month rather than a calendar month, the department shall in writing grant such privilege and thereupon, as to such distributor, the terms "month" or "calendar month" shall be deemed to mean and refer to such business month, and all returns and payments under this chapter shall be made upon the basis of such business month and all delinquencies and penalties shall attach and be calculated as of the last day of such business month.

"Person", except where the context or sense otherwise requires, means individuals, firms, associations, corporations, trusts, estates, partnerships, or other entities.

"Petroleum product" means any liquid hydrocarbon at standard temperature and pressure that is the product of the fractionalization, distillation, or other refining or processing of crude oil.

"Power-generating facility" means any electricity-generating facility that requires a permit issued under the federal Clean Air Act (42 U.S.C. 7401 through 7671q), the Hawaii air pollution control law (chapter 342B), or both.

"Retail dealer" means a person who purchases liquid fuel from a licensed distributor and sells the liquid fuel at retail. Only sales of liquid fuel for consumption or used by the purchaser, and not for resale, are sales at retail.

"Use", either as a noun or verb, and derivative expressions, means distribution or other disposition of fuel, or any other use thereof, whether with or without compensation. [L 1932 1st, c 19, §1; am L 1933, c 133, §1; RL 1935, §2010; am L Sp 1941, c 26, pt of §1; RL 1945, §5401; am L 1951, c 136, §1 and c 187, §1; RL 1955, §123-1; am L 1957, c 217, §1 and c 322, §1; am L Sp 1959 2d, c 1, §§14, 16; am L 1963, c 114, §1; HRS §243-1; gen ch 1985; am L 1991, c 55, §1; am L 1993, c 300, §3; am L 1997, c 178, §9; am L 2001, c 143, §2; am L 2007, c 103, §§2, 5(1); am L 2009, c 198, §3; am L 2012, c 188, §1; am L 2015, c 185, §2; am L 2016, c 76, §1; am L 2021, c 117, §20]
Haw. Rev. Stat. § 235-37 — HI Code / Division 1 / Title 14 / Chapter 235 / Section 235-37
Apportionment; sales factor; nontangible personalty.
Status: in_force

Sales, other than sales of tangible personal property, are in this State:

(1) In the case of intangible property, to the extent the intangible property is used in this State; or

(2) In the case of a service, to the extent the service is used or consumed in this State. [L 1967, c 33, pt of §1; HRS §235-37; am L 2019, c 96, §2]
Haw. Rev. Stat. § 237-34 — HI Code / Division 1 / Title 14 / Chapter 237 / Section 237-34
Filing of returns; disclosure of returns unlawful, penalty; destruction of returns.
Status: in_force

(a) All monthly and annual returns shall be transmitted in the form and manner prescribed by the department.

(b) All tax returns and return information required to be filed under this chapter, and the report of any investigation of the return or of the subject matter of the return, shall be confidential. It shall be unlawful for any person or any officer or employee of the State, including the auditor or the auditor's agent with regard to tax return information obtained pursuant to section 23-5(a), to intentionally make known information imparted by any tax return or return information filed pursuant to this chapter, or any report of any investigation of the return or of the subject matter of the return, or to wilfully permit any return, return information, or report so made, or any copy thereof, to be seen or examined by any person; provided that for tax purposes only, the taxpayer, the taxpayer's authorized agent, or persons with a material interest in the return, return information, or report may examine them. Unless otherwise provided by law, persons with a material interest in the return, return information, or report shall include:

(1) Trustees;

(2) Partners;

(3) Persons named in a board resolution or a one per cent shareholder in the case of a corporate return;

(4) The person authorized to act for a corporation in dissolution;

(5) The shareholder of an S corporation;

(6) The personal representative, trustee, heir, or beneficiary of an estate or trust in the case of the estate's or decedent's return;

(7) The committee, trustee, or guardian of any person in paragraphs (1) through (6) who is incompetent;

(8) The trustee in bankruptcy or receiver, and the attorney-in-fact of any person in paragraphs (1) through (7);

(9) Persons duly authorized by the State in connection with their official duties;

(10) Any duly accredited tax official of the United States or of any state or territory;

(11) The Multistate Tax Commission or its authorized representative;

(12) Members of a limited liability company; and

(13) A person contractually obligated to pay the taxes assessed against another when the latter person is under audit by the department.

Any violation of this subsection shall be a class C felony.

(c) The department may destroy the monthly returns filed pursuant to section 237-30, or any of them, upon the expiration of three years after the end of the calendar year in which the taxes so returned accrued. [L 1935, c 141, §6(2); RL 1945, §5465; am L 1945, c 253, §8; RL 1955, §117-29; am L Sp 1959 2d, c 1, §16; am L 1967, c 37, §1; HRS §237-34; am L 1974, c 139, §5; am L 1981, c 170, §1; am L 1984, c 95, §3; am L 1990, c 184, §9; am L 1993, c 5, §2; am L 1997, c 178, §5; am L 2000, c 34, §1; am L 2014, c 136, §5; am L 2021, c 117, §12]
Haw. Rev. Stat. § 240-1 — HI Code / Division 1 / Title 14 / Chapter 240 / Section 240-1
Electric light and power companies, tax on.
Status: in_force

Every person operating in the State an electric light or power business as a public utility, whose franchise does not provide for the payment to the county in which the public utility operates of a tax, or a tax of less than two and one-half per cent, based upon the gross receipts of such person from all electric light or power furnished to consumers during each calendar year, shall file with the director of finance of the county in which the public utility operates, within one month after the expiration of each calendar year, a detailed statement showing all gross receipts from all electric light or power furnished to consumers during the preceding calendar year. Such person shall, at the same time pay to the director of finance, for and on behalf of such county, in addition to any and all other payments required to be made by law, two and one-half per cent of the gross receipts; or, if such person's franchise provides for a tax of less than two and one-half per cent of the gross proceeds, the difference between the tax required under such franchise and two and one-half per cent of the gross receipts, of such person from all electric light or power furnished to consumers during the preceding calendar year.
Haw. Rev. Stat. § 237-4 — HI Code / Division 1 / Title 14 / Chapter 237 / Section 237-4
"Wholesaler", "jobber", defined.
Status: in_force

(a) "Wholesaler" or "jobber" applies only to a person making sales at wholesale. Only the following are sales at wholesale:

(1) Sales to a licensed retail merchant, jobber, or other licensed seller for purposes of resale;

(2) Sales to a licensed manufacturer of materials or commodities that are to be incorporated by the manufacturer into a finished or saleable product (including the container or package in which the product is contained) during the course of its preservation, manufacture, or processing, including preparation for market, and that will remain in such finished or saleable product in such form as to be perceptible to the senses, which finished or saleable product is to be sold and not otherwise used by the manufacturer;

(3) Sales to a licensed producer or cooperative association of materials or commodities that are to be incorporated by the producer or by the cooperative association into a finished or saleable product that is to be sold and not otherwise used by the producer or cooperative association, including specifically materials or commodities expended as essential to the planting, growth, nurturing, and production of commodities that are sold by the producer or by the cooperative association;

(4) Sales to a licensed contractor, of materials or commodities that are to be incorporated by the contractor into the finished work or project required by the contract and that will remain in such finished work or project in such form as to be perceptible to the senses;

(5) Sales to a licensed producer, or to a cooperative association described in section [237-23(a)(8)] for sale to a licensed producer, or to a licensed person operating a feed lot, of poultry or animal feed, hatching eggs, semen, replacement stock, breeding services for the purpose of raising or producing animal or poultry products for disposition as described in section 237-5 or for incorporation into a manufactured product as described in paragraph (2) or for the purpose of breeding, hatching, milking, or egg laying other than for the customer's own consumption of the meat, poultry, eggs, or milk so produced; provided that in the case of a feed lot operator, only the segregated cost of the feed furnished by the feed lot operator as part of the feed lot operator's service to a licensed producer of poultry or animals to be butchered or to a cooperative association described in section [237-23(a)(8)] of such licensed producers shall be deemed to be a sale at wholesale; and provided further that any amount derived from the furnishing of feed lot services, other than the segregated cost of feed, shall be deemed taxable at the service business rate. This paragraph shall not apply to the sale of feed for poultry or animals to be used for hauling, transportation, or sports purposes;

(6) Sales to a licensed producer, or to a cooperative association described in section [237-23(a)(8)] for sale to the producer, of seed or seedstock for producing agricultural and aquacultural products, or bait for catching fish (including the catching of bait for catching fish), which agricultural and aquacultural products or fish are to be disposed of as described in section 237-5 or to be incorporated in a manufactured product as described in paragraph (2);

(7) Sales to a licensed producer, or to a cooperative association described in section [237-23(a)(8)] for sale to such producer; of polypropylene shade cloth; of polyfilm; of polyethylene film; of cartons and such other containers, wrappers, and sacks, and binders to be used for packaging eggs, vegetables, fruits, and other agricultural and aquacultural products; of seedlings and cuttings for producing nursery plants or aquacultural products; or of chick containers; which cartons and such other containers, wrappers, and sacks, binders, seedlings, cuttings, and containers are to be used as described in section 237-5, or to be incorporated in a manufactured product as described in paragraph (2);

(8) Sales of tangible personal property where:

(A) Tangible personal property is sold upon the order or request of a licensed seller for the purpose of rendering a service in the course of the person's service business or calling, or upon the order or request of a person subject to tax under section 237D-2 for the purpose of furnishing transient accommodations;

(B) The tangible personal property becomes or is used as an identifiable element of the service rendered; and

(C) The cost of the tangible personal property does not constitute overhead to the licensed seller;

(9) Sales to a licensed leasing company of capital goods that have a depreciable life, are purchased by the leasing company for lease to its customers, and are thereafter leased as a service to others;

(10) Sales of services to a licensed seller engaging in a business or calling whenever:

(A) Either:

(i) In the context of a service-to-service transaction, a service is rendered upon the order or request of a licensed seller for the purpose of rendering another service in the course of the seller's service business or calling, including a dealer's furnishing of goods or services to the purchaser of tangible personal property to fulfill a warranty obligation of the manufacturer of the property;

(ii) In the context of a service-to-tangible personal property transaction, a service is rendered upon the order or request of a licensed seller for the purpose of manufacturing, producing, or preparing tangible personal property to be sold;

(iii) In the context of a services-to-contracting transaction, a service is rendered upon the order or request of a licensed contractor as defined in section 237-6 for the purpose of assisting that licensed contractor; or

(iv) In the context of a services-to-transient accommodations rental transaction, a service is rendered upon the order or request of a person subject to tax under section 237D-2 for the purpose of furnishing transient accommodations;

(B) The benefit of the service passes to the customer of the licensed seller, licensed contractor, or person furnishing transient accommodations as an identifiable element of the other service or property to be sold, the contracting, or the furnishing of transient accommodations;

(C) The cost of the service does not constitute overhead to the licensed seller, licensed contractor, or person furnishing transient accommodations;

(D) The gross income of the licensed seller is not divided between the licensed seller and another licensed seller, contractor, or person furnishing transient accommodations for imposition of the tax under this chapter;

(E) The gross income of the licensed seller is not subject to a deduction under this chapter or chapter 237D; and

(F) The resale of the service, tangible personal property, contracting, or transient accommodations is subject to the tax imposed under this chapter at the highest tax rate.

(11) Sales to a licensed retail merchant, jobber, or other licensed seller of bulk condiments or prepackaged single-serving packets of condiments that are provided to customers by the licensed retail merchant, jobber, or other licensed seller;

(12) Sales to a licensed retail merchant, jobber, or other licensed seller of tangible personal property that will be incorporated or processed by the licensed retail merchant, jobber, or other licensed seller into a finished or saleable product during the course of its preparation for market (including disposable, nonreturnable containers, packages, or wrappers, in which the product is contained and that are generally known and most commonly used to contain food or beverage for transfer or delivery), and which finished or saleable product is to be sold and not otherwise used by the licensed retail merchant, jobber, or other licensed seller;

(13) Sales of amusements subject to taxation under section 237-13(4) to a licensed seller engaging in a business or calling whenever:

(A) Either:

(i) In the context of an amusement-to-service transaction, an amusement is rendered upon the order or request of a licensed seller for the purpose of rendering another service in the course of the seller's service business or calling;

(ii) In the context of an amusement-to-tangible personal property transaction, an amusement is rendered upon the order or request of a licensed seller for the purpose of selling tangible personal property; or

(iii) In the context of an amusement-to-amusement transaction, an amusement is rendered upon the order or request of a licensed seller for the purpose of rendering another amusement in the course of the person's amusement business;

(B) The benefit of the amusement passes to the customer of the licensed seller as an identifiable element of the other service, tangible personal property to be sold, or amusement;

(C) The cost of the amusement does not constitute overhead to the licensed seller;

(D) The gross income of the licensed seller is not divided between the licensed seller and another licensed seller, person furnishing transient accommodations, or person rendering an amusement for imposition of the tax under chapter 237;

(E) The gross income of the licensed seller is not subject to a deduction under this chapter; and

(F) The resale of the service, tangible personal property, or amusement is subject to the tax imposed under this chapter at the highest rate.

As used in this paragraph, "amusement" means entertainment provided as part of a show for which there is an admission charge; and

(14) Sales by a printer to a publisher of magazines or similar printed materials containing advertisements, when the publisher is under contract with the advertisers to distribute a minimum number of magazines or similar printed materials to the public or defined segment of the public, whether or not there is a charge to the persons who actually receive the magazines or similar printed materials.

(b) If the use tax law is finally held by a court of competent jurisdiction to be unconstitutional or invalid insofar as it purports to tax the use or consumption of tangible personal property imported into the State in interstate or foreign commerce or both, wholesalers and jobbers shall be taxed thereafter under this chapter in accordance with the following definition (which shall supersede the preceding paragraph otherwise defining "wholesaler" or "jobber"): "Wholesaler" or "jobber" means a person, or a definitely organized division thereof, definitely organized to render and rendering a general distribution service that buys and maintains at the person's place of business a stock or lines of merchandise that the person distributes; and that the person, through salespersons, advertising, or sales promotion devices, sells to licensed retailers, to institutional or licensed commercial or industrial users, in wholesale quantities and at wholesale rates. A corporation deemed not to be carrying on a trade or business in this State under section 235-6 shall nevertheless be deemed to be a wholesaler and shall be subject to the tax imposed by this chapter. [L 1935, c 141, pt of §1; RL 1945, §5446; RL 1955, §117-5; am L 1957, c 34, §11(a); am L 1959, c 257, §§1, 2; am L 1963, c 70, §2; am imp L 1965, c 155, §2; am L 1966, c 28, §2; am L 1967, c 155, §1; HRS §237-4; am L 1970, c 180, §9; am L 1971, c 204, §2; am L 1979, c 105, §22; am L 1982, c 189, §1 and c 253, §2; am L 1984, c 73, §2; am L 1990, c 286, §2; am L 1991, c 286, §2; am L 1992, c 106, §5; gen ch 1992; am L 1999, c 71, §4 and c 173, §1; am L 2000, c 198, §1 and c 271, §1; am L 2001, c 164, §2; am L 2008, c 16, §5 and c 89, §1; am L 2015, c 22, §2]
Haw. Rev. Stat. § 235-7 — HI Code / Division 1 / Title 14 / Chapter 235 / Section 235-7
Other provisions as to gross income, adjusted gross income, and taxable income.
Status: in_force

(a) There shall be excluded from gross income, adjusted gross income, and taxable income:

(1) Income not subject to taxation by the State under the Constitution and laws of the United States;

(2) Rights, benefits, and other income exempted from taxation by section 88-91, having to do with the state retirement system, and the rights, benefits, and other income, comparable to the rights, benefits, and other income exempted by section 88-91, under any other public retirement system;

(3) Any compensation received in the form of a pension for past services;

(4) Compensation paid to a patient affected with Hansen's disease employed by the State or the United States in any hospital, settlement, or place for the treatment of Hansen's disease;

(5) Except as otherwise expressly provided, payments made by the United States or this State, under an act of Congress or a law of this State, which by express provision or administrative regulation or interpretation are exempt from both the normal and surtaxes of the United States, even though not so exempted by the Internal Revenue Code itself;

(6) Any income expressly exempted or excluded from the measure of the tax imposed by this chapter by any other law of the State, it being the intent of this chapter not to repeal or supersede any such express exemption or exclusion;

(7) Income received by each member of the reserve components of the Army, Navy, Air Force, Marine Corps, or Coast Guard of the United States of America, and the Hawaii National Guard as compensation for performance of duty, equivalent to pay received for forty-eight drills (equivalent of twelve weekends) and fifteen days of annual duty, at an:

(A) E-1 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2004;

(B) E-2 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2005;

(C) E-3 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2006;

(D) E-4 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2007; and

(E) E-5 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2008;

(8) Income derived from the operation of ships or aircraft if the income is exempt under the Internal Revenue Code pursuant to the provisions of an income tax treaty or agreement entered into by and between the United States and a foreign country[;] provided that the tax laws of the local governments of that country reciprocally exempt from the application of all of their net income taxes, the income derived from the operation of ships or aircraft that are documented or registered under the laws of the United States;

(9) The value of legal services provided by a legal service plan to a taxpayer, the taxpayer's spouse, and the taxpayer's dependents;

(10) Amounts paid, directly or indirectly, by a legal service plan to a taxpayer as payment or reimbursement for the provision of legal services to the taxpayer, the taxpayer's spouse, and the taxpayer's dependents;

(11) Contributions by an employer to a legal service plan for compensation (through insurance or otherwise) to the employer's employees for the costs of legal services incurred by the employer's employees, their spouses, and their dependents; and

(12) Amounts received in the form of a monthly surcharge by a utility acting on behalf of an affected utility under section 269-16.3; provided that amounts retained by the acting utility for collection or other costs shall not be included in this exemption.

(b) There shall be included in gross income, adjusted gross income, and taxable income:

(1) Unless excluded by this chapter relating to the uniformed services of the United States, cost-of-living allowances and other payments exempted by section 912 of the Internal Revenue Code, but section 119 of the Internal Revenue Code nevertheless shall apply; and

(2) Unless expressly exempted or excluded as provided by subsection (a)(6), interest on the obligations of a State or a political subdivision thereof.

(c) The deductions of or based on dividends paid or received, allowed to a corporation under chapter 1, subchapter B, part VIII of the Internal Revenue Code, shall not be allowed. In lieu thereof there shall be allowed as a deduction the entire amount of:

(1) Dividends received by any corporation upon the shares of stock of a national banking association;

(2) Qualifying dividends, as defined in section 243(b) of the Internal Revenue Code, received by members of an affiliated group; provided that "includible corporation" as used therein shall include domestic and foreign corporations;

(3) Dividends received by a small business investment company operating under the Small Business Investment Act of 1958 (Public Law 85-699);

(4) Seventy per cent of the amount received by any corporation as dividends upon the shares of stock of another corporation, if otherwise allowed under section 243 of the Internal Revenue Code.

(d) With respect to net operating loss deductions resulting from net operating losses for taxable years ending after December 31, 1966, the net operating loss deduction provisions of the Internal Revenue Code shall apply; provided that:

(1) In computing the net operating loss deduction allowed by this subsection, there shall be included in gross income the amount of interest which is excluded from gross income by subsection (a), decreased by the amount of interest paid or accrued which is disallowed as a deduction by subsection (e). In determining the amount of the net operating loss deduction under this subsection of any corporation, there shall be disregarded the net operating loss of such corporation for any taxable year for which the corporation is an electing small business corporation;

(2) No net operating loss carryback or carryover shall be allowed by this chapter if not allowed under section 172 of the Internal Revenue Code; and

(3) The election to relinquish the entire carryback period with respect to a net operating loss allowed under section 172(b)(3)(C) of the Internal Revenue Code shall be operative for the purposes of this chapter; provided that no taxpayer shall make such an election as to a net operating loss of a business where such net operating loss occurred in the taxpayer's business prior to the taxpayer entering business in this State.

(e) There shall be disallowed as a deduction the amount of interest paid or accrued within the taxable year on indebtedness incurred or continued to purchase or carry:

(1) Bonds the interest upon which is excluded from gross income by subsection (a); or

(2) Property owned without the State, or to carry on trade or business without the State, if the taxpayer is a person taxable only upon income from sources in the State.

(f) Losses of property as the result of tidal wave, hurricane, earthquake, or volcanic eruption, or as a result of flood waters overflowing the banks or walls of a river or stream, or from any other natural disaster, to the extent of the amount deductible, under this chapter, not compensated for by insurance or otherwise, may be deducted in the taxable year in which sustained, or at the option of the taxpayer may be deducted in equal installments over a period of five years, the first such year to be the calendar year or fiscal year of the taxpayer in which such loss occurred. [L Sp 1957, c 1, pt of §2; am L 1959, c 276, §2 and c 277, §8(a); am L Sp 1959 1st, c 29, §8; am L 1963, c 26, §1, c 47, §1, c 91, §2, and c 146, §4; am L 1965, c 155, §31(a) and c 201, §5; Supp, §121-5; am L 1967, c 32, §1; HRS §235-7; am L 1968, c 18, §2; am L 1969, c 152, §1; am L 1970, c 180, §1; am L 1971, c 95, §1; am L 1976, c 156, §6; am L 1978, c 173, §2(7); am L 1979, c 62, §2(6), (7), c 105, §21, and c 224, §3; am L 1981, c 185, §1 and c 209, §2; am L 1982, c 25, §2; am L 1983, c 124, §16; gen ch 1985; am L 1987, c 39, §3 and c 239, §1(7), (8); am L 1990, c 340, §2; am L 1992, c 103, §1; am L 1993, c 337, §5; am L Sp 1995, c 10, §3; am L 2003, c 172, §4; am L 2004, c 197, §2; am L 2007, c 166, §§1, 3; am L 2008, c 28, §21; am L 2010, c 59, §1 superseding c 211, §5, and c 112, §8; am L 2012, c 34, §19, c 165, §5, and c 220, §5; am L 2017, c 205, §4; am L 2018, c 18, §9; am L 2021, c 117, §5]
Haw. Rev. Stat. § 244D-17 — HI Code / Division 1 / Title 14 / Chapter 244D / Section 244D-17
Disposition of revenues.
Status: in_force

All moneys collected pursuant to this chapter shall be paid into the state treasury as state realizations, to be kept and accounted for as provided by law. [L Sp 1984 1st, c 1, pt of §2]
Haw. Rev. Stat. § 235-33 — HI Code / Division 1 / Title 14 / Chapter 235 / Section 235-33
Apportionment; payroll factor.
Status: in_force

The payroll factor is a fraction, the numerator of which is the total amount paid in this State during the tax period by the taxpayer for compensation, and the denominator of which is the total compensation paid everywhere during the tax period.
Haw. Rev. Stat. § 244D-14 — HI Code / Division 1 / Title 14 / Chapter 244D / Section 244D-14
Investigations; contempts; fees.
Status: in_force

The director of taxation, and any agent authorized by the director to conduct any inquiry, investigation, or hearing hereunder, shall have power to administer oaths and take testimony under oath relative to the matter of inquiry or investigation. At any hearing ordered by the director, the director or the director's agent authorized to conduct the hearing may subpoena witnesses and require the production of books, papers, and documents pertinent to the inquiry. No witness under subpoena authorized to be issued by this section shall be excused from testifying or from producing books or papers on the ground that such testimony or the production of such books or other documentary evidence would tend to incriminate the witness, but such evidence or the books or papers so produced shall not be used in any criminal proceeding against the witness.

Contempts. If any person disobeys such process or, having appeared in obedience thereto, refuses to answer any pertinent question put to the person by the director or the director's authorized agent or to produce any books and papers pursuant thereto, the director or the agent may apply to the circuit court of the circuit wherein the taxpayer resides or wherein the transaction, act, or activity under investigation has occurred, or to any judge of the court, setting forth such disobedience to process or refusal to answer, and the court or the judge shall cite the person to appear before the court or the judge to answer such question or to produce such books and papers, and, upon the person's refusal so to do, shall commit the person to jail until the person shall testify, but not for a longer period than sixty days. Notwithstanding the serving of the term of such commitment by any person, the director may proceed in all respects with such inquiry and examination as if the witness had not previously been called upon to testify.

Fees. Officers who serve subpoenas issued by the director or under the director's authority and witnesses attending hearings conducted by the director hereunder shall receive like fees and compensation as officers and witnesses in the circuit courts of the State, to be paid on vouchers of the director, from any moneys available for litigation expenses of the department of taxation. [L Sp 1984 1st, c 1, pt of §2; gen ch 1985]
Haw. Rev. Stat. § 239-5 — HI Code / Division 1 / Title 14 / Chapter 239 / Section 239-5
Public utilities, generally.
Status: in_force

(a) There shall be levied and assessed upon each public utility, except airlines, motor carriers, common carriers by water, and contract carriers taxed by section 239-6, a tax of such rate per cent of its gross income each year from its public utility business as shall be determined in the manner hereinafter provided. The tax imposed by this section is in lieu of all taxes other than those below set out, and is a means of taxing the personal property of the public utility, tangible and intangible, including going concern value. In addition to the tax imposed by this chapter there also are imposed income taxes, the specific taxes imposed by chapter 249, the fees prescribed by chapter 269, any tax specifically imposed by the terms of the public utility's franchise or under chapter 240, the use or consumption tax imposed by chapter 238, and employment taxes.

The rate of the tax upon the gross income of the public utility shall be four per cent; provided that if:

(1) A county provides by ordinance for a real property tax exemption for real property used by a public utility in its public utility business and owned by the public utility (or leased to it by a lease under which the public utility is required to pay the taxes upon the property), and

(2) The county has not denied the exemption to the public utility, but excluding a denial based upon a dispute as to the ownership, lease, or use of a specific parcel of real property,

then there shall be levied and assessed a tax in excess of the four per cent rate determined in the manner hereinafter provided upon the gross income allocable to such county. The revenues generated from the tax in excess of the four per cent rate hereinbefore established shall be paid by the public utility directly to such county based upon the proportion of gross income from its public utility business attributable to such county, based upon the allocation made in the public utility's filings with the State of Hawaii; provided that if the gross income from the public utility business attributable to such county is not so allocated in the public utility's State filings, then the gross income from the public utility business shall be equitably allocated to each county. The relative number of access lines in each county shall be deemed an acceptable basis of equitable allocation for telecommunication companies.

The rate of the tax in excess of the four per cent rate hereinbefore established upon the gross income from the public utility business shall be determined as follows:

If the ratio of the net income of the company to its gross income is fifteen per cent or less, the rate of tax in excess of the four per cent rate on gross income shall be 1.885 per cent; for all companies having net income in excess of fifteen per cent of the gross, the rate of the tax on gross income shall increase continuously in proportion to the increase in ratio of net income to gross, at such rate that for each increase of one per cent in the ratio of net income to gross, there shall be an increase of .2675 per cent in the rate of the tax.

The following formula may be used to determine the rate, in which formula the term "R" is the ratio of net income to gross income, and "X" is the required rate of the tax on gross income for the utility in question:

X = (26.75R-2.1275)%;

provided that in no case governed by the formula shall "X" be less than 1.885 per cent or more than 4.2 per cent.

However, if the gross income is apportioned under section 239-8(b) or (c), there shall be no adjustment of the rate of tax on the amount of gross income so apportioned to the State on account of the ratio of the net income to the gross income being in excess of fifteen per cent, and it shall be assumed in such case that the ratio is fifteen per cent or less.

(b) Notwithstanding subsection (a), the rate of the tax upon the portion of the gross income of a carrier of passengers by land which consists in passenger fares for transportation between points on a scheduled route, shall be 5.35 per cent. However, if the carrier has other public utility gross income the fares nevertheless shall be included in applying subsection (a) in determining the rate of tax upon the other public utility gross income.

(c) Notwithstanding subsection (a), the rate of tax upon the portion of the gross income of:

(1) A public utility that consists of the receipts from the sale of its products or services to another public utility that resells such products or services shall be one-half of one per cent; or

(2) A public utility engaged in the business of selling telecommunication services to a person defined in section 237-13(6)(C) who resells such products or services, shall be one-half of one per cent;

provided that the resale of the products, services, or telecommunication services is subject to taxation under this section or subject to taxation at the highest rate under section 237-13(6); and provided further that whenever the public utility has other public utility gross income, the gross income from the sale of its products or services to another public utility or a person subject to section 237-13(6)(C) shall be included in applying subsection (a) in determining the rate of tax upon the other public utility gross income. The department shall have the authority to implement the tax rate changes in paragraph (2) by prescribing tax forms and instructions that require tax reporting and payment by deduction, allocation, or any other method to determine tax liability with due regard to the tax rate changes. [L 1932 2d, c 43, §4; RL 1935, §2143; RL 1945, §5674; RL 1955, §126-5; am L Sp 1957, c 1, §9(c) to (f); am L 1963, c 147, §2(e); am L 1965, c 201, §§30, 31; HRS §239-5; am L 1968, c 59, §2; am L 1974, c 135, §1; am L 1990, c 34, §13; am L 2000, c 198, §14; am L 2001, c 64, §3; am L 2008, c 16, §10; am L 2015, c 22, §6; am L 2016, c 52, §2]
Haw. Rev. Stat. § 245-22.5 — HI Code / Division 1 / Title 14 / Chapter 245 / Section 245-22.5
Prohibition against stamping or sale of cigarettes not listed in the directory pursuant to chapter 486P.
Status: in_force

(a) Beginning December 1, 2003, it shall be unlawful for an entity to:

(1) Affix a stamp to a package or other container of cigarettes of a tobacco product manufacturer or brand family not included in the directory; or

(2) Import, sell, offer, keep, store, acquire, transport, distribute, receive, or possess for sale or distribution cigarettes of a tobacco product manufacturer or brand family not included in the directory.

(b) Any entity that knowingly violates subsection (a) shall be guilty of a class C felony.

(c) Any cigarettes that are unlawfully imported, possessed, offered, kept, stored, acquired, transported, stamped, distributed, received, or sold in violation of this section may be seized and forfeited as contraband pursuant to chapter 712A and all such cigarettes seized and forfeited shall be destroyed.

(d) This section shall not apply to cigarettes that are exempt from taxes as provided by section 245-3(b).

(e) For purposes of this section:

"Brand family", "cigarette", and "tobacco product manufacturer" shall have the same meaning as in section 486P-1.

"Directory" means the "directory" established pursuant to section 486P-6.

"Entity" means one or more individuals, a company, corporation, a partnership, an association, licensee, or any other type of legal entity. [L 2003, c 77, §1]
Haw. Rev. Stat. § 235-64.2 — HI Code / Division 1 / Title 14 / Chapter 235 / Section 235-64.2
Withholdings by partnerships, estates, and trusts.
Status: in_force

Partnerships, estates, and trusts shall withhold an amount equal to the highest marginal tax rate applicable to a nonresident taxpayer multiplied by the amount of the taxpayer's distributive share of income attributable to the State reflected on the partnership's, estate's, and trust's return for the taxable period. All amounts withheld shall be paid to the department of taxation in a manner that the department may prescribe. Withholding shall not be required to be submitted by a publicly traded partnership, as defined by section 7704(b) of the Internal Revenue Code, otherwise in compliance with this section. A publicly traded partnership shall file an annual information return reporting the name, address, taxpayer identification number, and other information requested by the department of taxation of each unit holder with income sourced to the State.
Haw. Rev. Stat. § 235-110.65 — HI Code / Division 1 / Title 14 / Chapter 235 / Section 235-110.65
[ §235-110.
Status: in_force

[ §235-110.65] Ship repair industry tax credit. (a) There shall be allowed to each taxpayer subject to the taxes imposed by this chapter a ship repair industry tax credit that shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter.

(b) The amount of the tax credit shall be equal to thirty per cent of the ship repair industry costs paid or incurred by the qualified entity to design and construct the purpose-built floating [drydock] to be used by the United States Navy in Pearl Harbor; provided that:

(1) A qualified entity may form a special purpose entity for the purposes of raising investor capital and claiming the credit on behalf of the qualified entity;

(2) The qualified entity, together with all of its special purpose entities, including all partners and members of the qualified entity and its special purpose entities, shall not claim any credit in any one taxable year that exceeds $6,000,000; however, if the total amount of credits applied for in any particular year exceeds the aggregate amount of credits allowed for such year under this section, the excess shall be treated as having been applied for in the subsequent year and shall be claimed in such year; provided that no excess shall be allowed to be claimed after December 31, 2026; and

(3) In no event shall a qualified entity or any of its special purpose entities or any other taxpayer claim a credit under this section prior to January 1, 2022, or after December 31, 2026.

A qualified entity shall become eligible to claim a credit under this section only after construction of the floating drydock has been completed and the floating drydock has been placed into service.

(c) In the case of an entity taxed as a partnership, credit shall be determined at the entity level, but distribution and share of the credit may be determined notwithstanding sections 704 or 706 of the Internal Revenue Code.

(d) The credit allowed under this section shall be claimed against the net income tax liability for the taxable year. If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of the tax credit over liability may be used as a credit against the taxpayer's net income tax liability in subsequent years until exhausted. All claims, including amended claims, for a tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

(e) The director of taxation shall prepare any forms that may be necessary to claim a credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of the claim for credit made under this section. The director of taxation may adopt rules to effectuate the purposes of this section pursuant to chapter 91.

(f) Any taxpayer claiming a tax credit under this section, within ninety days of the end of the calendar year in which the credit is properly claimable, shall submit the following information to the department of taxation:

(1) The amount of the eligible costs for which the tax credit may be claimed; and

(2) The qualified entity that incurred the costs.

Failure to timely submit the information shall be subject to a penalty of $5,000 per month or a fraction thereof, not to exceed $25,000.

(g) This section shall not apply to taxable years beginning after December 31, 2026.

(h) For the purpose of this section:

"Net income tax liability" means income tax liability reduced by all other credits allowed under this chapter.

"Qualified entity" means an entity with the principal purpose of facilitating and enhancing the ship repair business in the State and that is involved in the design and construction of a purpose-built floating drydock to be used by the United States Navy in Pearl Harbor.

"Ship repair industry costs" means capital expenditures, as used in section 263 of the Internal Revenue Code and the regulations promulgated thereunder, or capital expenditures for real property, fixtures, structures, machinery, equipment, or capital assets that are paid or incurred in connection with the construction of a purpose-built floating drydock; provided that the ship repair industry costs shall not include amounts for which another credit is claimed or any amounts received in any form from the State. [L 2019, c 260, §2]
Haw. Rev. Stat. § 237-24.5 — HI Code / Division 1 / Title 14 / Chapter 237 / Section 237-24.5
Additional exemptions.
Status: in_force

(a) In addition to the amounts exempt under section 237-24, this chapter shall not apply to amounts received by:

(1) An exchange from:

(A) Transaction fees charged exchange members by the exchange for:

(i) The sale or purchase of securities or products, or both, bought or sold on an exchange by exchange members for their own account or an account for which they have responsibility as an agent, broker, or fiduciary;

(ii) Order book executions made for purposes of effecting transactions; and

(iii) Trade processing performed by an exchange in matching trades, keypunching, record keeping, post cashiering, and notarization;

(B) Membership dues, fees, charges, assessments, and fines from individuals or firms, including charges for firm symbols (member identification), application processing, registration, initiation, membership transfers, floor or post privileges, transaction time extensions, expediting transactions, crossover trades (trading out of assigned functions) and rule infractions;

(C) Service fees charged to members including fees for communications, badges, forms, documents, and reports;

(D) Listing fees and listing maintenance fees charged to companies that wish to be listed and have their securities or products traded on the exchange; and

(E) Participation in the communication network consortium operated collectively by United States exchanges or other markets recognized by the Securities and Exchange Commission, the Commodities Futures Trading Commission, or similar regulatory authorities outside the United States that provides last sale and quote securities information to subscribers or that connects such markets or exchanges for purposes of data transmission;

(2) Exchange members by reason of executing a securities or product transaction on an exchange; provided that this exemption shall apply only to amounts received by exchange members from brokers or dealers registered with the Securities and Exchange Commission, from futures commission merchants, brokers, or associates registered with the Commodities Futures Trading Commission, or from similar individuals or firms registered with similar regulatory authorities outside the United States; and

(3) Exchange members as proceeds from the sale of their exchange memberships.

(b) As used in this section:

"Exchange" means an exchange or board of trade as defined in 15 United States Code section 78c(a)(1) or in 7 United States Code section 7, respectively, which is subject to regulation by the Securities and Exchange Commission or the Commodities Futures Trading Commission or an organization subject to similar regulation under the laws of a jurisdiction outside the United States.

"Exchange member" means an individual or firm that is qualified by an exchange as a member and pays membership dues to an exchange in order to trade securities or products on an exchange.

"Securities" means securities as defined in 15 United States Code section 78c and "products" means contracts of sale of commodities for future delivery, futures contracts, options, calls, puts, and similar rights as defined in 7 United States Code section 2, which securities or products are permitted to be traded on an exchange. [L 1988, c 295, §1; am L 1989, c 118, §§2, 3; am L 1990, c 108, §1; am L 1997, c 107, §5]
Haw. Rev. Stat. § 235-15 — HI Code / Division 1 / Title 14 / Chapter 235 / Section 235-15
Tax credits to promote the purchase of child passenger restraint systems.
Status: in_force

(a) Any taxpayer who files an individual income tax return for a taxable year may claim an income tax credit under this section against the Hawaii state individual net income tax.

(b) The tax credit shall be $25; provided that the taxpayer purchases one or more new child passenger restraint systems in the tax year for which the credit is properly claimed; and provided that such restraint system can be shown to be in substantial conformity with specifications for such restraint systems set forth by the federal motor vehicle safety standards which were in effect at the time of such purchase.

(c) If the tax credit claimed by the taxpayer under this section exceeds the amount of the income tax payments due from the taxpayer, the excess of credit over payments due shall be refunded to the taxpayer; provided that the tax credit properly claimed by a taxpayer who has no income tax liability shall be paid to the taxpayer; and provided that no refunds or payments on account of the tax credit allowed by this section shall be made for amounts less than $1.

(d) The director of taxation shall prepare such forms as may be necessary to claim a credit under this section, may require proof of the claim for the tax credit, and may adopt rules pursuant to chapter 91.

(e) All of the provisions relating to assessments and refunds under this chapter and under section 231-23(c)(1) shall apply to the tax credit under this section.

(f) Claims for the tax credit under this section, including any amended claims, shall be filed on or before the end of the twelfth month following the taxable year for which the credit may be claimed. [L 1982, c 134, §1]

Revision Note

In subsection (e), "231-23(c)(1)" substituted for "231-23(d)(1)" pursuant to §23G-15.
Haw. Rev. Stat. § 235-55.85 — HI Code / Division 1 / Title 14 / Chapter 235 / Section 235-55.85
Refundable food/excise tax credit.
Status: in_force

(a) Each individual taxpayer, who files an individual income tax return for a taxable year, and who is not claimed or is not otherwise eligible to be claimed as a dependent by another taxpayer for federal or Hawaii state individual income tax purposes, may claim a refundable food/excise tax credit against the taxpayer's individual income tax liability for the taxable year for which the individual income tax return is being filed; provided that an individual who has no income or no income taxable under this chapter and who is not claimed or is not otherwise eligible to be claimed as a dependent by a taxpayer for federal or Hawaii state individual income tax purposes may claim this credit.

(b) [Repeal and reenactment on December 31, 2027. L 2023, c 163, §5.] Each individual taxpayer may claim a refundable food/excise tax credit multiplied by the number of qualified exemptions to which the taxpayer is entitled in accordance with the table below; provided that spouses filing separate tax returns for a taxable year for which a joint return could have been filed by them shall claim only the tax credit to which they would have been entitled had a joint return been filed.

Adjusted gross income Credit per exemption

for taxpayers filing

a single return

Under $15,000 $220

$15,000 under $20,000 $200

$20,000 under $25,000 $170

$25,000 under $30,000 $140

$30,000 under $40,000 $110

$40,000 and over $ 0.

Adjusted gross income Credit per exemption

for heads of household,

surviving spouses,

spouses filing

separate returns, and

married couples filing

joint returns

Under $15,000 $220

$15,000 under $20,000 $200

$20,000 under $25,000 $170

$25,000 under $30,000 $140

$30,000 under $40,000 $110

$40,000 under $50,000 $ 90

$50,000 under $60,000 $ 70

$60,000 and over $ 0.

(c) For the purposes of this section, a qualified exemption is defined to include those exemptions permitted under this chapter; provided that no additional exemption may be claimed by a taxpayer who is sixty-five years of age or older; provided that a person for whom exemption is claimed has been physically present in the State for more than nine months during the taxable year; and provided further that multiple exemptions shall not be granted because of deficiencies in vision or hearing, or other disability. For purposes of claiming this credit only, a minor child receiving support from the department of human services of the State, social security survivor's benefits, and the like, may be considered a dependent and a qualified exemption of the parent or guardian.

(d) The tax credit under this section shall not be available to:

(1) Any person who has been convicted of a felony and who has been committed to prison and has been physically confined for the full taxable year;

(2) Any person who would otherwise be eligible to be claimed as a dependent but who has been committed to a youth correctional facility and has resided at the facility for the full taxable year; or

(3) Any misdemeanant who has been committed to jail and has been physically confined for the full taxable year.

(e) The tax credits claimed by a taxpayer pursuant to this section shall be deductible from the taxpayer's individual income tax liability, if any, for the tax year in which they are properly claimed. If the tax credits claimed by a taxpayer exceed the amount of income tax payment due from the taxpayer, the excess of credits over payments due shall be refunded to the taxpayer; provided that tax credits properly claimed by [an] individual who has no income tax liability shall be paid to the individual; and provided further that no refunds or payment on account of the tax credits allowed by this section shall be made for amounts less than $1.

(f) All claims for tax credits under this section, including any amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credits may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

(g) For the purposes of this section, "adjusted gross income" means adjusted gross income as defined by the Internal Revenue Code. [L 1998, c 157, §1; am L 2007, c 211, §1; am L 2015, c 223, §§2, 4; am L 2017, c 107, §3; am L 2023, c 163, §3]
Haw. Rev. Stat. § 231-93 — HI Code / Division 1 / Title 14 / Chapter 231 / Section 231-93
Cash-based business; defined.
Status: in_force

For purposes of sections 231-91 to 231-100, "cash-based business" means any person who operates a business, including for-profit or not-for-profit, where transactions in goods or services are exchanged substantially for cash and where the business is found, based upon reasonable cause including observation or evidence, to have met one of the following factors:

(1) Is found to have substantially underreported or misrepresented the proper amount of tax liability on any return or other submission to the department. For purposes of this paragraph, an amount has been substantially underreported if the amount properly includible on the return or submission is in excess of twenty-five per cent of the amount stated on the return or submission;

(2) Is required to be licensed, registered, or permitted under title 14 and is in fact not so licensed, registered, or permitted;

(3) Has a past pattern of noncompliance of obligations under title 14;

(4) Does not have a fixed and permanent principal place of business;

(5) Has not obtained any required tax clearance;

(6) Has failed to maintain adequate books and records, or those records required to be maintained by law or administrative rule;

(7) Does not accept checks or electronic payment devices for business transactions; provided that a business may establish reasonable criteria for accepting personal checks;

(8) Offers price differentials or otherwise deviates from usual business practices when the business transaction substantially involves payment of cash, except where there is a bona fide business reason for a price differential, such as the avoidance of merchant fees imposed by credit card companies; or

(9) Any other factor relevant to describing a cash-based business capable of noncompliance as determined by the director of taxation and issued pursuant to a tax information release;

provided that a business shall not be deemed to have met any of these factors while a genuine dispute as to that factor is pending in a contested case before any administrative agency or in any court. [L 2009, c 134, pt of §2, §13(3); am L 2013, c 58, §1]
Haw. Rev. Stat. § 237D-8.5 — HI Code / Division 1 / Title 14 / Chapter 237D / Section 237D-8.5
Collection of rental by third party; filing with department; statement required.
Status: in_force

(a) Every person authorized under an agreement by the owner of transient accommodations located within this State to collect rent on behalf of the owner shall be subject to this section.

(b) Every written rental collection agreement shall have on the first page of the agreement the name, address, social security or federal identification number, and, if available, the general excise tax license and transient accommodations tax registration numbers of the owner of the transient accommodations being rented, the address of the property being rented, and the following statement that shall be set forth in bold print and in ten-point type size:

" HAWAII TRANSIENT ACCOMMODATIONS TAXES MUST BE PAID ON THE GROSS RENTS COLLECTED BY ANY PERSON RENTING TRANSIENT ACCOMMODATIONS IN THE STATE OF HAWAII. A COPY OF THE FIRST PAGE OF THIS AGREEMENT, OR OF FEDERAL INTERNAL REVENUE FORM 1099 STATING THE AMOUNT OF RENTS COLLECTED, SHALL BE FILED WITH THE HAWAII DEPARTMENT OF TAXATION. "

Every person entering an oral rental collection agreement shall furnish the department of taxation the information required under this subsection and shall give the owner of the property a copy of the notice required by this subsection. The statement required by this subsection may be combined with the statement required under section 237-30.5 by adding in bold print and in ten-point type size to the front of the statement in section 237-30.5 the following:

" HAWAII TRANSIENT ACCOMMODATIONS TAXES AND " .

(c) Every person authorized to collect rent for another person shall file a copy of the first page of the rental collection agreement with the department of taxation within ninety days after June 9, 1988, or within thirty days after entering into the agreement, or shall file a copy of federal Internal Revenue form 1099, the property owner's social security or federal identification number, and, if available, the general excise tax license and transient accommodations tax registration numbers of the owner of the property being rented with the department of taxation at the same time that the forms must be filed with the Internal Revenue Service for the applicable tax year. The person also shall notify the owner that the information is being furnished and give the owner a copy of the notice required by subsection (b).

(d) If a person complies with the provisions of this section, the person shall be deemed to have complied with section 237-30.5.

(e) Failure to comply with any provision of this section shall be unlawful. The department of taxation may issue a citation to any person who fails to comply with any provision of this section. A citation issued pursuant to this subsection shall include a monetary fine of no more than $500 per violation. Any fine assessed under this subsection shall be due and payable thirty days after issuance, subject to appeal rights provided under this subsection. Citations may be appealed to the director or the director's designee, and the determination of the director may be appealed to the circuit court pursuant to chapter 91. [L 1988, c 241, pt of §1; am L 2024, c 76, §4]

Revision Note

"June 9, 1988" substituted for "the effective date of this section" pursuant to §23G-15.