Hawaii Tax News
Administering the tax laws for the State of Hawaii in a consistent, uniform, and fair manner

Volume 7, Number 1

State of Hawaii ! Department of Taxation

New Tax DirectorK

urt Kawafuchi, who has served as our Deputy
Director for the past several months, has been
appointed as our new Director of Taxation. He is both a
CPA and an attorney, and has recently served as thesupervisor of the Tax Division for the Department of the
Attorney General. He previously was a tax attorney withGoodsill, Anderson, Quinn and Stifel, and a trial
attorney with the U.S. Department of Justice, Tax
Division, representing the Internal Revenue Service.
Director Kawafuchi is actively involved withorganizations such as the Hawaii State Bar Associationand the Hawaii Society of Certified Public Accountants,
and has taught graduate tax and business courses at the
University of Hawaii and Hawaii Pacific University.
We are both pleased and excited that someone sohighly and uniquely qualified has been appointed to be
our new Director, and we’re sure that you will be too.

E-Filing Via theInternetJ

ust a reminder that you can enjoy the ease andconvenience of e-filing via the Internet 24 hours aday, 7 days a week!
From the e-filing site on the State’s Internet portal atwww.ehawaiigov.org/efile, you can register and e-file anumber of tax returns and other tax forms. If you are filingon behalf of a client, make sure that you have a power ofattorney to perform these services for your client.
So far, more than 10,000 taxpayers have registered touse this fast, convenient service. There is a nominal$2.50 fee that goes to the vendor operating the website,
but only if there is a payment made. You can pay using anelectronic check or a credit card. However, if you do use
a credit card, the credit card companies will assess anadditional fee. Check your total charges before
confirming your payment.
Other forms available for e-filing via the Internet
include extensions, estimated tax payment vouchers, andthe application for tax clearance.

SPRING 2003

Conformity to Federal
Tax ChangesWe began the legislative session tracking
approximately 350 tax-related bills relating
to revenue enhancement, funding for specific programs,
economic stimulus, and more.
Of particular interest to you right now are the annual
conformity measures, especially with respect to federal
provisions that impact returns currently being filed forthe 2002 tax year. This year, the companion conformity
bills are Senate Bill 1394 and House Bill 1223.
As you know, taxpayers can’t file Hawaii returns
based on federal law that has not yet been adopted by
Hawaii. Returns filed now must be prepared based on
current law and amended later if an applicable federal
provision is later adopted.
An alternative is to delay filing until the conformity
measure becomes law. In this case, taxpayers generally
must request an extension of time to file the return, and file
the request form on or before the due date of the return.
Beginning this year, individual taxpayers will generally
not have to file Form N-101A to request the automatic
4-month extension. Use Form N-101A to accompany any
payment of additional tax due. Form N-101B is stillrequired to obtain the additional 2-month extension.

IN THIS ISSUE
New Tax Director . . . . . . . . . . . . . . . . . . . . 1
E-Filing Via the Internet. . . . . . . . . . . . . . . . 1
Conformity to Federal Tax Changes . . . . . . 1
The Direct Line . . . . . . . . . . . . . . . . . . . . . . 2
Practitioners’ Forum . . . . . . . . . . . . . . . . . . 2
2003 Hawaii Small Business Fair . . . . . . . . 2
Taxation of Foster Care Payments . . . . . . . 3
Ice Storage Systems . . . . . . . . . . . . . . . . . . 3
Certification For Vehicles Purchased
Outside Hawaii . . . . . . . . . . . . . . . . . . . . . 4
Withholding on Nonresident
Employee’s Wages . . . . . . . . . . . . . . . . . 4
Tax Review Commission Report . . . . . . . . . 5
Corrections to 2002 Tax Forms. . . . . . . . . . 6
Recently Issued Tax Publications . . . . . . . . 7
Second Quarter State Tax Collections . . . . 7

Page 2

Hawaii Tax NewsThe Direct Line F
By Director Kurt Kawafuchi

There has been a lot of discussion about the cost to the
public for Act 221 high technology tax credits, the benefits
to Hawaii taxpayers resulting from those credits, and thepossibility that certain taxpayers are abusing those credits.
In response, we are taking the following 3 steps.
First, we have compiled data regarding the amountof high technology credits claimed for the 2001 tax year,
and will do the same for the 2002 tax year in due time.
Second, we have developed new forms and revised
existing forms for the high technology business
investment tax credit (credit) for the tax year 2002.
New Form N-317, Statement by a Qualified HighTechnology Business, will require a qualified hightechnology business (QHTB) to provide information ona calendar year basis on the type of qualified activities it
performed; benefits to Hawaii taxpayers (e.g. number
and description of temporary and permanent jobs
created; salaries, expenditures, and investments in
Hawaii; etc.); and investments received by the QHTB.
For the calendar year 2002, all QHTBs must submit asigned and completed Form N-317 with any required
documents by June 16, 2003.
Form N-318 (Revised in 4/2003) must be used bytaxpayers claiming the credit for tax year 2002. Any
taxpayer who has filed Form N-318 (Rev. 2002) with the2002 income or franchise tax return must submit acompleted Form N-318 (Rev. 4/2003) with any required
documents; otherwise, the taxpayer’s claim to the credit for
the tax year 2002 will be denied.
New Form N-318A, Statement of Investment in a
Qualified High Technology Business, will require an
investor to provide information on the credit being claimed(e.g. whether the investor received more or less than aproportionate share of the credit based on the amountactually invested) and a certification of that investment by
the QHTB. Any taxpayer claiming the credit must attach
Form N-318A to Form N-318 (Rev. 4/2003) with any
required documents. For more information, see theinstructions for these forms and Department of Taxation
Announcement No. 2003-1.
Third, we have issued Tax Information Release No.
2003-1 and Department of Taxation Announcement No.
2003-1 and will be issuing additional guidance toaddress abusive situations.
Visit our website at www.state.hi.us/tax for the latest
forms and information.

Spring 2003

Practitioners’ ForumThe Department will be holding a Practitioners’
Forum on May 28, 2003, from 9:00 a.m. to
12:00 p.m., in the Princess Ruth Keelikolani Building,Rooms 310 and 313. The Practitioners’ Forum is an
informal meeting with Director Kurt Kawafuchi, key
Department of Taxation staff members, and tax
practitioners to discuss various matters, raise questions,resolve problems and tax issues. This is not an
educational workshop for which educational credits areavailable, but is instead an opportunity for the tax
practitioner community to make their concerns known
and to enter into an informal dialog with the Department
about those concerns. Audience participation anddiscussions are the key to a successful Forum.
A registration form for the Practitioners’ Forum may
be obtained from our website at www.state.hi.us/tax, orby calling our request line at 587-7572 (toll-free at
1-800-222-7572).

2003 Hawaii Small
Business FairThe FREE 2003 Hawaii Small Business Fair iscoming soon, and we are once again excited to
be one of the Fair’s organizing members.
The 2003 Hawaii Small Business Fair will be held on
Saturday, June 21, 2003, from 8:00 A.M. to 3:30 P.M., at
Leeward Community College in and around the Theateron the Diamond Head side of the campus.
See Small Business Fair, Page 3

The Hawaii Tax News is a publication of the State of
Hawaii, Department of Taxation.
Director:
Editor:Address:
Telephone:
Fax:
E-mail:Website:Forms By
Fax/Mail:
Consumer Dial:

Kurt Kawafuchi
Lynne Kuroda
Princess Ruth Keelikolani Building
830 Punchbowl Street, Room 219
Honolulu, HI 96813-5094
808-587-1577
808-587-1584
Technical_Section@tax.state.hi.us
www.state.hi.us/tax
808-587-7572
Toll-Free 1-800-222-7572
808-587-1234, code 7700

Spring 2003

Hawaii Tax News

Small Business Fair
(From Page 2)

This unique fair showcases only government andnonprofit organizations that provide free and low-costservices to small businesses. You do not need to register,
there is no cost to attend, and even the parking is free!
Visit the exhibitors to learn about the different
services, programs, and resources available to small
businesses.
Attend free seminars throughout the day on topics
ranging from how to get started, marketing, financing,managing the paperwork, exporting and importing, taxes(of course), and much, much, more!
This year’s theme is, “Starting and Growing Your
Small Business in Hawaii,” and the keynote address,
currently scheduled for 11:30 A.M., will be given by Ted
Liu, Director of the State Department of Business,
Economic Development and Tourism. A panel of local
business owners will follow Director Liu, and share theirpersonal experiences with you.
So mark your calendar! Call your friends! Tell yourclients! We’ll see you there!
For more information, visit the Fair’s website at
http://smallbusinessfair.state.hi.us, or call Cathy
Tokishi of our External Training & Outreach staff at
587-1786.

Taxation of Foster
Care PaymentsWe have been informed that notices have been
sent to care givers from businesses or
non-profit organizations regarding the income taxationof foster care payments. These notices indicate that theamendments to Internal Revenue Code (IRC) section
131 made by the Job Creation and Worker Assistance
Act (JCWAA) of 2002 (Public Law 107-147) apply tocare providers.
Current Hawaii Income Tax Law provides thatHawaii conforms to IRC section 131 as amended as ofDecember 31, 2001. Although our annual conformity
bill proposes conformity with respect to IRC section
131, to date, Hawaii has not adopted the amendments to
IRC section 131 made by the JCWAA of 2002. See
sections 235-2.3 and 235-2.4, Hawaii Revised Statutes(HRS). Until the amendments to IRC section 131 madeby the JCWAA of 2002 are adopted by the State of
Hawaii, these amendments do not apply for Hawaii
income tax purposes for taxable years beginning after
December 31, 2001. The amendments that are notPage 3applicable for Hawaii income tax purposes include
the following:(1) the expansion of the definition of qualified foster
care payments to include payments by any placement
agency that is licensed or certified by a State or local
government, or an entity designated by a State or local
government to make payments to providers of fostercare, and(2) the expansion of the definition of a qualified
foster care individual to include foster care individuals
placed by a qualified foster care placement agency(regardless of the individual’s age at the time ofplacement).
If any of the amendments to IRC section 131 made by
the JCWAA of 2002 impact a return currently being
filed by a care provider for the 2002 tax year, please referto the article, Conformity to Federal Tax Changes, on
page 1 for information on filing the 2002 return.
We have also been informed that care givers may beunder the impression that IRC section 131 applies to
Hawaii general excise tax purposes.
IRC section 131 does not apply for Hawaii general
excise tax purposes. Hawaii Income Tax Law and
Hawaii General Excise Tax Law are two separate laws.
Unless expressly exempted and/or excluded under
Hawaii General Excise Tax Law, gross income derived
by care providers are subject to Hawaii general excise
tax. Please be advised that section 237-24(15), HRS,
provides for a general excise tax exemption for “money
paid by the State or eleemosynary child-placingorganizations to foster parents for their care of children
in foster homes.”
Questions on this matter may be answered by our
Taxpayer
Services
Branchbye-mailat
Taxpayer_Services@tax.state.hi.us; by phone at (808)587-4242 or 1-800-222-3229; or by mail at Taxpayer
Services, P.O. Box 259, Honolulu, HI 96809. Additional
information is available at our website atwww.state.hi.us/tax.

Ice Storage SystemsWe have been informed that advertisements
have been circulated suggesting that
refrigerators and/or freezers qualify for the energy
conservation income tax credit with respect to ice
storage systems under section 235-12(b)(8), Hawaii
Revised Statutes (HRS).
Refrigerators and/or freezers are not ice storage
systems for the purpose of the energy conservation
income tax credit. Section 235-12(e), HRS, defines an
ice storage system as “ice banks or other cool energy
See Ice Storage Systems, Page 4

Page 4

Hawaii Tax News

Ice Storage Systems(From Page 3)

storage tanks, containers, accessories, and controls thatare specifically designed to store ice or chilled fluids forthe express purpose of shifting the consumption ofenergy to off-peak periods.” Emphasis added. The
legislature intended to provide an income tax credit forice storage systems that are specifically designed to shift
air conditioning or commercial refrigeration loads toelectric utilities’ off-peak demand periods. See Senate
Standing Committee Report No. 88-86, and Senate
Standing Committee Report No. 345-86, Act 70, Session
Laws of Hawaii 1986.
Refrigerators and/or freezers are not specificallydesigned for the express purpose of shifting air
conditioning loads or commercial refrigeration toelectric utilities’ off-peak periods. Since refrigerators
and/or freezers do not meet the definition of ice storage
systems in section 235-12(e), HRS, refrigerators and/or
freezers do not qualify for the energy conservation
income tax credit.
Any taxpayer who has filed a Hawaii income tax
return or franchise tax return (if applicable) claiming theenergy conservation income tax credit for a refrigerator
and/or freezer, should file an amended Hawaii income
tax return or franchise tax return (if applicable) toremove the claim for the credit. Taxpayers who (1)claimed the energy conservation income tax credit for
refrigerators and/or freezers and (2) do not file amended
returns to remove the claims for the credit may be subject
to the provisions in sections 231-36 and 231-39, HRS,
upon examination of their returns.
Questions on this matter may be answered by our
Taxpayer
Services
Branchbye-mailat
Taxpayer_Services@tax.state.hi.us; by phone at (808)587-4242 or 1-800-222-3229; or by mail at Taxpayer
Services, P.O. Box 259, Honolulu, HI 96809. Additional
information is available at our website atwww.state.hi.us/tax.

Certification For
Vehicles Purchased
Outside Hawaii

Beginning January 1, 2003, Act 225, Session
Laws of Hawaii 2002 (Act 225), requires
owners of motor vehicles of the current, previous, andsubsequent model years to provide proof of payment of
the Hawaii use tax at the time they register their vehicles

Spring 2003

in Hawaii. For vehicles registered in 2003, thisrequirement will apply to 2002, 2003, and 2004 modelyear vehicles imported into Hawaii.
Persons registering motor vehicles they imported at
any county motor vehicle registration office generally
must complete Form G-27, Motor Vehicle Use Tax
Certification, to certify that (1) the use tax due on theimported vehicle has been paid, OR (2) no use tax is dueon the imported vehicle. Form G-27 is submitted withthe application for motor vehicle registration. Autodealers, government agencies, and nonresident
active-duty military personnel who have already paidsales or use taxes to their home states are not required tocomplete Form G-27.
The Hawaii use tax is levied at the rate of 4% on thevalue of goods, services, and contracting imported into
Hawaii for use in Hawaii, and is supposed to level theplaying field between in-State businesses subject to thegeneral excise tax and out-of-State businesses that don’t
pay either the Hawaii general excise tax or an equal or
greater amount of sales/use tax to another state.
Additional information on the use tax imposed on motor
vehicles is available in Tax Information Release No.
93-3. General information about the use tax also isavailable in our brochure, An Introduction to the UseTax, and Tax Facts No. 95-1, All About the Hawaii Use
Tax.
Form G-27, Frequently Asked Questions about Act
225, and the publications mentioned above are available
on our website at www.state.hi.us/tax. Form G-27 also isavailable by calling our request line at 587-7572(toll-free at 1-800-222-7572), from any district tax
office, and at all county motor vehicle registration
offices.

Withholding on
Nonresident
Employee’s Wages

A

supplemental insert to Booklet A, Employer’s
Tax Guide (Revised 2001) was mailed to all
employers registered for Hawaii withholding taxes.
Several sections of Booklet A were revised to discusschanges to Form HW-6, Employee’s Statement to
Employer Concerning Nonresidence in the State of
Hawaii, and to introduce new Form HW-7, Exemption
From Withholding on Nonresident Employee’s Wages.
Form HW-6 was revised to include additionalquestions regarding the employee’s residency status.
Form HW-6 must be completed by the nonresident
employee and filed with their employer in order to
See Nonresident Employee, Page 5

Spring 2003

Hawaii Tax News

Nonresident Employee(From Page 4)

qualify for the exemption from withholding on theirwages. By filing Form HW-6 with their employer, theemployee is informing their employer that the employee
is a nonresident of Hawaii.
The employer must file Form HW-7, along with theoriginal Form HW-6 completed by the nonresident
employee, with the Department of Taxation whenwithholding is not required on the employee’s wages
because all of the following conditions apply:• Wages are being paid for services performed in
Hawaii,• The employee establishes that the employee is anonresident,• The employee is performing services in the State foran aggregate of not more than 60 days during thecalendar year,• The employee is paid for the employee’s services in
the State from an office outside the State,• The employee’s regular place of employment (where
the employee regularly performs services for theemployer) is outside the State, and• The employer does not reasonably expect theemployee to perform services in the State anaggregate of more than 60 days during the calendar
year.
If all of the above conditions are met, except for the
60-day requirement, and if the Director of Taxation findsthat the withholding requirement is unduly onerous or
impracticable of enforcement, the Director may grant
permission to an employer for exception from thewithholding requirement. However, a nonresident
employee performing services for a contractor will not
qualify for a withholding exemption when the contractor
is performing work for a construction project located in
Hawaii.
The employer should not file Form HW-7 or Form
HW-6 with the Department of Taxation whenwithholding is not required on the employee’s wages
because both of the following conditions apply:• Wages are being paid for services performed outside
Hawaii, and• The employee establishes that the employee is anonresident.
If both of the above conditions are met, withholding
is not required on the employee’s wages. The employer
should keep a copy of their employee’s Form HW-6 fortheir records.
Form HW-6, Form HW-7, and the supplemental
insert to Booklet A are available from our website atPage 5www.state.hi.us/tax, by calling our request line at587-7572 (toll-free at 1-800-222-7572), or from any
district tax office.
For more information on Forms HW-6 and HW-7,
including information on the determination of residency
status or whether Form HW-7 should be submitted to the
Department of Taxation, call the Department at
587-4242 (toll-free at 1-800-222-3229).

Tax Review
Commission ReportThe Report of the 2001 – 2003 Tax Review
Commission was completed and submitted to
the Legislature in December, and should be of interest to
all taxpayers in Hawaii.
A Tax Review Commission is convened every five
years in accordance with the Hawaii Constitution. The
commission members, who serve without pay, areappointed by the Governor with the advice and consent
of the Senate to independently evaluate the State’s tax
structure and recommend revenue and tax policy.
With the Legislature currently in full swing and anumber of tax measures on the table, you may find thereport of immediate interest and thought provoking withrespect to tax policy affecting both you and yourbusiness.
The Report of the 2001 – 2003 Tax Review
Commission begins by establishing the framework used
to evaluate Hawaii’s tax system as a whole. The fiveprinciples of sound tax policy presented in the report are:(1) the provision of appropriate revenues, (2) neutrality,(3) equity, (4) easy and economical to administer, and(5) accountability.
The second section, “Recommendations andAnalysis,” addresses the following 11 specific areas: (1)streamlined sales tax project, (2) business incentive tax
credits, (3) general excise tax, (4) taxation of nonprofit
organizations, (5) net income tax, (6) taxation ofretirement income, (7) estate and transfer tax, (8)Department of Taxation operations, (9) revenue
sufficiency for future needs, (10) enhancement ofresearch and modeling capabilities, and (11) otherconsiderations.
The appendices at the end of the report include
special reports to the Commission and a letter from theTax Foundation of Hawaii.
To view the Report of the 2001 – 2003 Tax Review
Commission, go to our website at www.state.hi.us/tax,
select “Useful Links,” and then select “2001-2003 Tax
Review Commission Report.”

Page 6

Hawaii Tax News

Corrections to 2002
Tax Forms

T

he following errors were found on the 2002
Hawaii tax forms.
Form N-332• On page 1, line 6, the area is shaded. The area should
not be shaded.
• On page 1, line 11 which reads, “ . . . Schedule CR,
Part I, line 9R; or . . . on Form N-40, Schedule E, line
9R.” should read “ . . . Schedule CR, Part I, line 11; or. . . on Form N-40, Schedule E, line 11.”
Form N-332 Instructions• On page 1, third column, last sentence of firstparagraph which reads, “Examples of things which
would not qualify include repainting your houseinside and outside, . . .” should read “Examples ofthings which would not qualify include repainting
your house inside, . . .”Form N-615 Instructions• On page 1, third column, line 9, the income limits
under the heading “the amount on Form N-615, line
8, is over” are incorrect. The following income limits
should be used:
Single - $20,000
Married filing joint return or qualifying widow(er)with dependent child - $40,000
Married filing separate return - $20,000
Head of Household - $30,000
Form N-11/N-12 Instructions• On page 29, Form N-12 - Capital Gain/Loss
Worksheet, line 4 and line 11 should haveparentheses.
• On page 29, Form N-12 - Capital Gain/Loss
Worksheet, line 6 and line 13 should not haveparentheses.
Form VP-1• The top right corner which reads, “2002” should read“2003”
Form N-35• On page 2, Schedule B, line 11 which reads, “(1) filed
its election to be an S corporation after 1986” should
be deleted.
Form N-30• On page 1, at the bottom left of the page, “PaidPreparer’s Information” heading should be printed
on 3 lines instead of 4 lines. (“Information” is printed
on two lines instead of one.)i• On page 1, at the bottom of the page which reads, “May the Hawaii Department of Taxation discuss thisSpring 2003

return . . .” should read “* May the Hawaii
Department of Taxation discuss this return . . .”Form N-20 Instructions• On page 6, middle column, line 22, 1st paragraph,last sentence which reads, “ . . . for costs incurred
before July , 2003,” should read “ . . . for costs
incurred before July 1, 2003,”
Schedule D-1• On page 1, line 8 which reads, “. . . unless line 8 is again & S corp subject to capital gains tax.” should bedeleted.
Schedule D-1 Instructions• On page 3, column 1, 2nd to the last paragraph whichreads, “Partnerships should enter . . . Enter thesection 179 expense deduction on Form N-20,
Schedule K, line 28.” should read “Partnerships
should enter . . . Enter the section 179 expense
deduction on Form N-20, Schedule K, line 30.”
Schedule K-1 (Form N-20)• On page 2, line 30b which reads, “Other than on line
28a.” should read “Other than on line 30a.”
Schedule K-1 (Form N-35)• On page 2, line 23 which reads, “. . . in lines 1 through
21. . .,” should read “ . . . in lines 1 through 22. . .”Schedule K-1 (Form N-40)• Decedent is misspelled (decendent) in three places.
Form N-304• On page 1, 3rd line which reads, “Has the groupmade the election . . .” should be deleted.
Form N-70NP• On page 1 in the Paid Preparer’s Section which reads,“Printe Preparer’s Name,” should read “Print
Preparer’s Name”
Form FP-1• On the reverse side of Vouchers 1, 2, 3, and 4, 1stparagraph which reads, “Act 38, Session Laws of
Hawaii 1992,” should read “Sections 241-5 and239-7, HRS, . . .”Form RV-5
8,• Line 6, rates, column c rate which reads “$65 ”
should read “$65”
See Department of Taxation Announcement No.
2003-2, A Listing of New and Obsolete Tax Forms,
Instructions, and Schedules; Errors Found on Hawaii
Tax Forms.

Spring 2003

Hawaii Tax News

Recently Issued Tax
Publications

T

he following is a list of the publications issued
by the Department of Taxation from August
2002 through April 2003. Copies of these publications
may be obtained from our website atwww.state.hi.us/tax, by calling our request line at587-7572 (toll-free at 1-800-222-7572), or from any
district tax office.
TIR No. 2002-4 - Provides information on Act 98,
SLH 2002, Relating to the Conformity of the State Tax
Laws to the United States Constitution.
TIR No. 2003-1 - Provides information on the proper
application of the law regarding the high technology
business investment tax credit.
TIR No. 2003-2 - Provides information on theextension of deadlines and other tax relief for membersof the armed forces, reserves, and Hawaii National
Guard.
Announcement No. 2002-18 - Announces the
adoption of amendments to chapters 18-243 and 18-251,
HAR, and the repeal of chapter 18-244D, HAR.
Announcement No. 2002-19 - Provides additional

Page 7

information on Act 246, SLH 2002, which increases theexcise tax on cigarettes.
Announcement No. 2002-20 - Provides informationon the general excise tax exclusion for certain amounts
collected under Act 176, SLH 2002, which implements a“bottle bill.”
Announcement No. 2003-1 - Provides informationon the new and revised high technology business
investment tax credit forms.
Announcement No. 2003-2 - A listing of new andobsolete tax forms, instructions, and schedules; errors
found on Hawaii tax forms.
Announcement No. 2003-3 - Provides a list of
candidates for political office who voluntarily filed
affidavit forms with the campaign spending
commission.

Second Quarter State Tax Collections
October 2002 - December 2002
(In Millions of Dollars)
Difference
Individual Income Tax
Corporate Income Tax
General Excise Tax
Transient Accommodations Tax
All Others
Total Tax Collections

FY 2003$ 271.9
6.7
410.3
36.7
170.8
$ 896.5

FY 2002$ 260.7
-10.2
409.5
36.0
156.3
$852.5

Amount$ 11.1
16.9
0.8
0.7
14.4
$44.0

Percent
4.3%
nm*
0.2%
1.9%
9.2%
5.2%

General Fund Revenues$ 776.0$ 740.0$ 36.1

4.9%(Note: Totals may not add up due to rounding.)*nm = not meaningful

Total tax collections for the second quarter of fiscal year 2003 amounted to $896.5 million, or $44.0 million more than
the same period of last fiscal year. General fund revenues of $776.0 million for the second quarter also advanced$36.1 million from last year’s total of $740.0 million. As illustrated above, all major tax categories showed increases
from the previous year. A large amount of income tax refunds in December 2001 explains the big increase incorporate ($16.9 million) and individual ($11.1 million) income taxes. However, general excise and transient
accommodations taxes collections increased only 0.2% and 1.9%, respectively. Also, an additional $9.7 million for
public service company taxes, $5.6 million for franchise taxes (banks), and $2.1 million for employment security
taxes contributed to the $14.4 million increase in the all others category. For the first half of fiscal year 2003, total
state tax collections are ahead 5.5% over the first half of last fiscal year.

DISTRICT TAX OFFICESState Office Building
3060 Eiwa Street, #105
Lihue, HI 96766-1889
Telephone: 808-274-3456 Fax: 808-274-3461
E-mail: Kauai_Office@tax.state.hi.us

KAUAI DISTRICT OFFICE

State Office Building
75 Aupuni Street, #101
Hilo, HI 96720-4245
Telephone: 808-974-6321 Fax: 808-974-6300
E-mail: Hilo_Office@tax.state.hi.us

HAWAII DISTRICT OFFICE

State Office Building
54 S. High Street, #208
Wailuku, HI 96793-2198
Telephone: 808-984-8500 Fax: 808-984-8522
E-mail: Maui_Office@tax.state.hi.us

MAUI DISTRICT OFFICE

Princess Ruth Keelikolani Building
830 Punchbowl Street
Honolulu, HI 96813-5094
E-mail: Taxpayer_Services@tax.state.hi.us
Fax: 808-587-1488
Telephone:
For Tax Information:808-587-6515 (January - April 20)
808-587-4242
1-800-222-3229 (Toll-Free)808-587-1418 (TDD - For the hearing impaired)
1-800-887-8974 (TDD Toll-Free - For the hearing impaired)
Forms By Fax/Mail:
808-587-7572
1-800-222-7572 (Toll-Free)OAHU DISTRICT OFFICEWEB INFORMATION AND FORMS
www.state.hi.us/tax

Forms and Information may be obtained from any district tax office,Mondays through Fridays, except State holidays, from 7:45 A.M. to
4:30 P.M.

Taxpayer Services BranchState of Hawaii
Department of Taxation
P.O. Box 259
Honolulu, HI 96809-0259