Hawaii Tax News
Volume 2, Number 1

State of Hawaii • Department of Taxation

Pay Your Taxes With
Discover Card!

In response to increased taxpayer interest in
credit card payments, the Oahu District Officeof the Department of Taxation is accepting the
Discover Card for payment of taxes and fees.
The Oahu District Office is accepting valid andunexpired Discover Cards for payment of all tax types
including net income and general excise taxes, and a varietyof fees. The Discover Card is the only credit card service
that will allow the State to pass on the transaction fee to the
cardholder, thereby avoiding the need for appropriations tocover the fee. Many taxpayers expressed a desire to pay bycredit card even with a passed on fee.
A transaction fee is being passed on to the cardholder
as follows:
Amount of Transaction
Transaction Fee$
0.00 50.00$ 1.00$50.01 - 100.00$ 2.00$ 100.01 - 500.00$ 6.00$ 500.01 - 1,000.00$ 9.00$ 1,000.01 and up$ 15.00
Taxpayers may present their Discover Card to the
cashiers at the Oahu District Office to make payment. Oncethe Discover Card is presented, the cashier will inform thetaxpayer of the transaction fee that will be added to thepayment according to the above schedule. The credit cardcharge slip will separately show the transaction fee and theamount of tax to be paid. The transaction would thenproceed as any other credit card transaction.
At this time, the Department is not equipped to accept
the Discover Card at its neighbor island District Offices,
over the telephone, or through the mail. The Department,
however, expects to expand its services in the future.
Discussions are ongoing to add Visa and Mastercard asparticipating credit card companies. 3

Filing Deadline

Everyone is reminded that the deadline forfiling individual income tax returns is
Monday, April 20, 1998. Persons who cannot
file their tax returns on time may apply for an automatic
4-month extension by filing Form N-101A. FormSPRING 1998

N-101A must be completed and filed with the
Department by April 20. The signature is not required on
Form N-101A. Federal Form 4868 will be accepted inlieu of Form N-101A if completed using amounts for
Hawaii income tax purposes. Also, the Hawaii
Administrative Rules relating to the requirements forextensions of time for filing income tax returns wereamended to conform with the Internal Revenue Service’s
regulations that authorize an extension of the time to filean income tax return if an individual shows the fullamount “properly estimated” as the tax due for the year.
The rules are effective for extensions filed in 1998.
Tax returns and extensions must be received by the
Department on or before April 20. If mailed through the
U.S. Postal Service, however, they only must be
postmarked by April 20. Hawaii also adopted the Internal
Revenue Code provision to allow documents andpayments delivered by a designated private delivery
service to qualify for the “timely mailing treated astimely filing/paying rule.” The Department will conformto the Internal Revenue Service (IRS) listing ofdesignated private delivery service companies, the typeof delivery services, and the effective date published in
the IRS Notice 97-26 for the “timely mailing treated astimely filing/paying rule.”(See Filing Deadline, Page 2)

IN THIS ISSUE
Pay Your Taxes With Discover Card! . . . . . 1
Filing Deadline . . . . . . . . . . . . . . . . . . . . . . 1
The Direct Line . . . . . . . . . . . . . . . . . . . . . . 2
Dividends Received Deduction . . . . . . . . . . 2
New Website Address . . . . . . . . . . . . . . . . 2
New Application Form. . . . . . . . . . . . . . . . . 3
Bulk Forms Distribution a Success . . . . . . . 3
Problem Solving Day . . . . . . . . . . . . . . . . . 3
Rules Amended for Pension Plans . . . . . . . 4
Neighbor Island Workshops Report . . . . . . 4
Tax Workshop Offered . . . . . . . . . . . . . . . . 4
Fuel Corporation Pleads Guilty . . . . . . . . . . 4
Second Quarter State Tax Collections . . . . 5
Contractor Selected For
Systems Project. . . . . . . . . . . . . . . . . . . . 5
Credit for Overpayments. . . . . . . . . . . . . . . 5
Recently Issued Tax Publications . . . . . . . . 5
Pending Tax Publications . . . . . . . . . . . . . . 6

Page 2

Hawaii Tax NewsThe Direct Line F
By Director Ray K. KamikawaO

f interest to you during the filing season is
the status of our Tax-1 (IRC conformitybill). By law, we submit to the Legislature
every year a “conformity” bill which adopts income,exclusion, and deduction items passed by Congress inthe previous year. Since Hawaii has its own rates,
credits, and procedures, changes affecting these items
are not appropriate for conformity.
Of particular concern are the changes by the feds toSchedule D items. We have proposed to conform to the
new section 121 exclusion for gain on the sale of aprincipal residence, including adoption of the May, 1997
retroactive date. As with the federal provision, old
sections 121 exclusion and 1034 rollover provisions arerepealed except for the preservation of the section 1034
provision for certain transition sales.
Since Hawaii has its own brackets and rates, including
the 7.25% cap on capital gains, changes made by Congressto the federal capital gains rates are not applicable. After
further discussions with practitioners, we now propose to
stick with the 12-month period (not change to the 18-monthholding period as stated in the Winter ’97 issue). Bracket
and rate relief are contained in other legislative vehicles,
including the proposal set forth by the Economic
Revitalization Task Force, but those would likely beeffective for the 1999 taxable year. 3

Filing Deadline(From Page 1)

Although the U.S. Postal Service will not have extended
hours on April 20, the Department will once again provide
curbside service for last minute filers on Oahu. Between
the hours of 5:00 P.M. and midnight, taxpayers may drive
up to either the Punchbowl or Halekauwila Street sides of
the Princess Ruth Keelikolani Building at 830 Punchbowl
Street, and simply hand their tax return to a waiting
department staff member. 3

Spring 1998

threshold presence in Hawaii, a minimum percentage ofownership by Hawaii corporations, or from banks orinsurance companies doing business in Hawaii. As such,the Department is administering section 235-7(c), HRS,
without regard to the threshold requirement of Hawaii
activity, ownership, or presence, for claiming the 70%
dividends received deduction. Therefore, corporations
that do not qualify for the 100% dividends received
deduction allowed under section 235-7(c), HRS, may
claim a 70% deduction for dividends received fromforeign or domestic corporations. The Department isseeking legislation this year to remove these conditions
to the allowance of the 70% dividends received
deduction. In the interim, Department of Taxation
Announcement No. 98-5 explains the Department’s
position on this issue.
Corporations that qualify for the 70% dividends
received deduction, as administered by the Department,
may claim the deduction as “Other deductions or
adjustments,” on the 1997 Form N-30, Schedule J, line
10. 3

New Website AddressSeveral months ago, the OIP OpenLine
newsletter, published by the Office ofInformation Practices, contained an article
that stated that there is a new Internet address (URL) for
the Hawaii State Government Home Page. In order tocomply with new domain-naming standards, the state
government is now also accessible via the URL
http://www.state.hi.us. Due to changes in thedomain-naming standards, the “gov” domain, once used
for any government entity, is now restricted to federal
government organizations only for any new(See Website Address, Page 3)

The Hawaii Tax News is a publication of the State of
Hawaii, Department of Taxation.

Dividends Received
DeductionT

he Department of Taxation recognizes that thedividends received deduction provided for by
section 235-7(c), HRS, is likely to be foundunconstitutional in limiting the 70% dividends deduction
to dividends received from payor corporations having a

Director:
Editors:
Address:
Telephone:
Fax:
Website:Forms by Fax:
Consumer Dial:

Ray K. Kamikawa
Lynne Kuroda & Cathleen Tokishi
Princess Ruth Keelikolani Building
830 Punchbowl Street, Room 220
Honolulu, HI 96813-5094
808-587-1577
808-587-1488
http://www.state.hi.us/tax/tax.html
808-587-7572 or 1-800-222-7572
808-587-1234 (message 7700)

Spring 1998

Hawaii Tax News

Website Address(From Page 2)

domain-name registrations. The “state.XX.us” domain is
now the standard for any state government URL.
Although these new domain-naming standards are inplace, it is not foreseen that http://www.hawaii.gov will
be disabled anytime soon. However, it is recommended
that everyone become familiar with and begin using theproper URL for the State’s home page.
This means that we should all be using the following
for the Department’s new website address:
http://www.state.hi.us/tax/tax.html

New Application FormA

new business registration form - the productof a joint project of the State Departments of
Taxation and Labor and Industrial Relations made its debut on February 2, 1998. The State of Hawaii
Basic Business Application, Form BB-1, takes the place ofa dozen different tax forms, licenses, and permits
applications totaling 20 pages. With this one form, abusiness completes its application for licenses andidentification numbers for general excise, use, employer’s
withholding, transient accommodations, rental motor
vehicle and tour vehicle, liquor, cigarette and tobacco, andliquid fuel taxes and unemployment insurance.
Form BB-1 may be obtained at any district tax office,by mail or fax through the Department’s 24-hour Forms
Request Line, or via the Internet (see the last page fortelephone numbers and addresses). Form BB-1, andForm BB-1X (State of Hawaii Basic Business Amended
Application) may be accessed through the Forms By Fax
system by entering their document number as 259 and
260, respectively. 3

Bulk Forms
Distribution a SuccessIt was in January 1987, eleven years ago, that the
Department’s Tax Services & Processing Division
began helping all tax practitioners and libraries
obtain the tax forms they requested for in bulk amounts by
the middle of January. Before that time, tax practitioners
would literally run down as soon as they received theirrequisition form so they would be among the first in line toturn in their order blank. An early submission meant thatthey would not have to wait until late February or early
March to receive their order of tax forms.

Page 3

The Tax Services & Processing Division has come along way since then. Instead of working from Friday
night to Sunday afternoon, sometimes finishing up on
Monday, most of the staff worked only a half-day on
Saturday, January 17, 1998, filling 225 orders for tax
practitioners who would be coming in the afternoon topick up the completed orders.
Several factors have made it so much more efficient andsuccessful. Because of new technology (Forms by Fax, theInternet, and the CD-ROM), more taxpayers are using
alternative ways to obtain tax forms. Eighty tax
practitioners opted to take only the CD-ROM, and forego
the hard copy forms. That was great! The small orders werefilled early and mailed to taxpayers, saving them a trip into
town. All of the libraries’ orders (really large orders) werefilled on Friday night and stored until the orders were
picked up the following week.
The night shift was very helpful in completing manyof the jobs. They completed the Forms N-20, N-30, N-35,
and N-40 mailouts to over 32,000 taxpayers.
Approximately 2,000 out-of-state tax practitioners were
mailed special designated packets. For the first time, all
out-of-state military bases that requested tax forms inbulk were given a complimentary CD-ROM instead.
Thus, they were fortunate enough to get tax forms, aswell as tax laws, rules, attorney general opinions, etc.
Since the cost of mailing forms and the cost of the
CD-ROM offset each other, this meant that both themilitary bases and the Department came out winners. 3

Problem Solving Day

T

he Department of Taxation and the Internal
Revenue Service held a joint “problem
solving day” for taxpayers on Maui andOahu. This was the first time that the Department
participated in the problem solving day. State and IRS
representatives were on hand to help resolve tax
problems such as non-receipt of refunds, unresolved
bills, misapplied payments, and non-filed returns.
Taxpayers interested in attending the problem solving
day could make an appointment to ensure that theappropriate representative would be available to provide
the type of assistance needed and also enabled
preliminary research to be done ahead of time. Taxpayers
without an appointment were also assisted.
Maui’s problem solving day was held on January 27
in the Internal Revenue Service office located in One
Main Plaza Building. A total of eight appointments weremade with problems ranging from non-filing of tax
returns to tax appeal cases. Two State tax appeal cases
were jointly resolved by IRS and State officials based on
the federal adjustments to their assessments.
(See Problem Solving, Page 4)

Page 4

Hawaii Tax News

Problem Solving(From Page 3)

On Oahu, the problem solving day was held on
January 29 in the Prince Kuhio Federal Building. The
Department assisted 21 taxpayers of which ten werewalk-ins with various problems ranging from tax
information to filing general excise tax and net income
tax returns. An assessment case was jointly resolved
based on the federal adjustments made.
As a result of the two problem solving days, taxpayers
were satisfied with the outcome of their problems andothers were relieved they were able to take care of theirtax obligations. 3

Rules Amended for
Pension Plans

E

ffective
January
1,
1998,
section18-235-7-03(c), Hawaii Administrative Rules,
were amended to clarify that pension plan
distributions in 1998 and subsequent years are exempt fromthe Hawaii income tax when the distributions are
attributable to certain employer contributions. The purposeof the amended rules is to exempt distributions attributableto employer contributions, notwithstanding the employer’s
choice of entity for doing business (i.e., sole proprietorship,
S corporations, partnerships, and limited liability
companies). Elective contributions where the individual
has the choice of receiving compensation as current income
or funding a retirement account (e.g., personal
contributions to a 401(k) plan), however, will continue tobe taxable. 3

Neighbor Island
Workshops ReportY

ear-end workshops were conducted by the
Neighbor
IslandDistrict
Offices.
Approximately sixty people attended theworkshop held on Maui on December 12, 1997. Judging
by the comments made at the workshop, attendees foundthe workshop to be very rewarding.
Despite the inclement weather, more than twenty tax
practitioners attended the workshop presented by staff ofthe Kauai District Office on December 16, 1997.
Attendees were happy with the workshop.
The Hawaii District Office conducted its year-end
workshop on December 18, 1997. The workshop waswell attended by approximately sixty people. The

Spring 1998

participation from the audience was spirited at times,
especially with the changes in the law for nonresidents
and part-year residents, and also regarding some of the
proposals from the Hawaii Economic Revitalization
Task Force. The practitioners who attended theworkshop were very pleased with the presentations. 3

Tax Workshop OfferedA

tax workshop will be offered by the
Department sometime in June. The topics
which will be covered at the workshop have
not yet been determined, but will probably feature recent
legislative changes and new rules. CPE credit for CPAs
attending the workshop will be available.
To have a registration form sent to you when they
become available, call your nearest district tax office, orcall the Department’s Forms Request Line on Oahu at
587-7572, or toll-free from the neighbor islands andmainland U.S. at 1-800-222-7572, and leave a message
on the Forms by Mail voice mail system. 3

Fuel Corporation
Pleads GuiltyP

acific Petroleum Services, Inc., a Honolulu fuelcorporation, pled guilty to two criminal tax
counts for failing to file its annual general excise
tax return and for failing to file its monthly fuel tax return.
The corporation’s president is Mr. Michael A. Rossman.
Mr. Stephen Pingree, the attorney representing thecorporation, entered a plea of guilty to failing to file thecorporation’s 1996 annual general excise tax return andfailing to file the monthly fuel tax return for the monthof December 1996. Both counts are misdemeanors.
In a plea agreement, District Court Judge Hong also
fined the corporation $60,000 on each count for a total
fine of $120,000. In addition, the corporation and Mr.
Rossman will fully cooperate with the Department of
Taxation to promptly file all required returns and begin
making arrangements for the payment of any
assessments. The tentative taxes, including penalties andinterest, will total in excess of $600,000.
As a result of the corporation’s guilty plea, no charges
will be brought forth against Mr. Rossman.
As part of the plea agreement, the corporation has
agreed to pay the Department of Taxation $87,154 forgeneral excise tax for the corporation’s 1996 tax year. In
calendar year 1996, the corporation grossed more than
$3.2 million dollars. In addition, the corporation has paid
(See Corporation Guilty, Page 5)

Spring 1998

Hawaii Tax News

Corporation Guilty

Page 5current levels; therefore, nothing will be paid if theperformance goals are not met. 3(From Page 4)

more than $13,500 for the unpaid fuel tax for the monthof December 1996.
The Department continues to encourage taxpayers tovoluntarily file their tax returns. The Department will
generally not initiate a criminal investigation when
taxpayers voluntarily come forward to report their failure
to file or other omissions. 3

Credit for
OverpaymentsHuring the second quarter of fiscal year 1998,
state tax collections totaled $799.1 million,
representing a 2.3% increase from the $781.3
million collected during the same period of fiscal year
1997. Collections of $1,631.5 million for the first six
months of fiscal year 1998 are 1.3% lower than the $1,653.4
million collected for the first six months of last fiscal year.
Monthly collections totaled $262.4 million, $243.5 million,
and $293.2 million, respectively for October to December
1997, averaging $266.4 million per month.
Second quarter general excise tax collections fell
0.5% from the second quarter of last fiscal year. Net
individual income tax collections for the second quartergrew 6.2%,
while transient accommodation tax
collections for the second quarter rose 7.1%.
Of the $799.1 million collected in the second quarter ofthis fiscal year, $687.0 million was deposited into the state
general fund, a 2.8% increase over the $668.0 million
deposited in the second quarter of last fiscal year. 3

ave you ever wondered why the Department
cannot adjust an overpayment credit when anerror is discovered on a return requesting tohave the overpayment applied to the next year’s tax return?
When a taxpayer requests that the overpayment (refund) on
their current year’s return be credited to the next year’s
estimated taxes, the overpayment is automatically picked
up by the Department’s computer system and applied to thefollowing year. This automatic pickup and application of
the credit is done prior to any system edits that would havediscovered the error on the taxpayer’s return. The
Department will address this problem during our systems
replacement project, recommending that the application of
the overpayment to the subsequent year’s return be madeafter the current year’s return has passed through the systemedits. Presently, when there is a correction to the taxpayer’s
return that affects the overpayment amount carried to thefollowing year, the Department assesses the taxpayer in thecurrent year and notifies the taxpayer of the option of
reducing the overpayment credit to cover the assessment.
To document this adjustment, the taxpayer is required to
notify the Department in writing. The overpayment credit
is then adjusted by the amount applied to the assessment.
If the adjustment results in a greater overpayment, thedifference is refunded to the taxpayer. Remember to ask
your clients if the amount applied from the prior year’s
return to the current year’s return was adjusted if otheradjustments were made to the prior year’s return. 3

Contractor Selected
For Systems Project

Recently Issued Tax
Publications

Second Quarter StateTax Collections

D

A

contractor has been selected to develop the
Department’s new computer system which
will fully integrate all of the various tax types,
and which will provide a more efficient filing system withless paper and better access to taxpayer information. The
Department is currently involved in extended contract
negotiations with the contractor due to the nature of theperformance-based contract. In the performance-based
contract, the Department sets the performance goals to beachieved, and works with the contractor to develop andimplement the best system for accomplishing those goals.
The contractor will be paid the contracted amount out of
the tax revenues generated by the new system which exceedT

he following is a list of the publications
issued by the Department of Taxation fromJanuary 1997 through March 1998. Copies ofthese publications may be obtained from any district tax
office, by calling the Forms Request Line on Oahu, or
via the Internet. Addresses and telephone numbers areprovided on the last page of this newsletter.
Sections 18-231-3.4-01 and 18-231-25.5-01
through 18-231-25.5-05, HAR - Relating to cost
recovery fees for selected goods and services provided
by the Department of Taxation.
(See Recent Publications, Page 6)

Page 6

Hawaii Tax News

Recent Publications(From Page 5)

Section 18-235-7-03(c), HAR - Relating to thetaxation of pensions under the Hawaii Income Tax Law.
Section 18-235-98, HAR - Relating to therequirements for extensions of time for filing income tax
returns.
TIR No. 97-1 - Provides taxpayers with further
guidance in determining their residency status.
TIR No. 97-2 - Reiterates the requirement that a
corporate taxpayer engaged in a unitary business as partof a unitary group must file a combined Hawaii income
tax return and clarifies that if any corporation in theunitary group has sufficient nexus with Hawaii, thecombined income tax return must include the income andapportionment factors of all corporations of the unitarygroup.
TIR No. 97-3 - Provides information on the
expansion of the “timely mailing treated as timely
filing/paying rule” to documents and payments deliveredby a designated private delivery service.
TIR No. 97-4 - Provides guidance regarding theapplication of the business entity classification rules
under the “check-the-box” regulations to the Hawaii
income tax and other taxes.
TIR No. 97-5 - Explains the proper interpretation of
the law regarding business development corporations
and associated tax benefits.
TIR No. 98-1 - Provides information on the income
tax exemption and credits available for persons engaged
in the motion picture and television film production
business.
TIR No. 98-2 - Explains the application of thegeneral excise tax to income received from leasing
personal property.
Announcement No. 97-1 - Provides a list of
candidates for political office who have registered withthe campaign spending commission.
Announcement No. 97-2 - Adopts the Internal
Revenue Service optional standard mileage rates.
Announcement No. 97-3 - Provides a listing of newtax forms, instructions, and schedules; and errors foundon Hawaii tax forms as of February 26, 1997.
Announcement No. 97-4 - A listing of the Tax
Information Releases in effect and obsolete and a listingof Hawaii Administrative Rules.
Announcement No. 97-5 - Adopts the Internal
Revenue Service optional standard mileage rates.
Announcement No. 97-6 - Announces the adoptionof Hawaii Administrative Rules, relating to cost
recovery fees for selected goods and services provided
by the Department of Taxation.
Announcement No. 97-7 - Informs taxpayers of theincrease in the cigarette tax rates.

Spring 1998

Announcement No. 97-8 - Informs taxpayers of thepenalties for electronic funds transfer payments that aredishonored and the penalties for failure to remit by an
EFT method approved by the Department of Taxation.
Announcement No. 98-1 - Provides a list of
candidates for political office who have registered withthe campaign spending commission.
Announcement No. 98-2 - Announces the adoptionof Hawaii Administrative Rules, relating to the taxationof pensions under the Hawaii Income Tax Law.
Announcement No. 98-3 - Announces the adoptionof Hawaii Administrative Rules, relating to therequirements for extensions of time for filing income tax
returns.
Announcement No. 98-4 - A listing of the Tax
Information Releases in effect and obsolete as of January
23, 1998, and a listing of Hawaii Administrative Rules.
Announcement No. 98-5 - Informs taxpayers of the
Department’s administration of the dividends received
deduction under section 235-7(c), HRS.
Tax Facts No. 97-1 - Provides general informationon the application of the general excise and use taxes forcontractors.
Tax Facts No. 97-2 - Provides income tax
information for nonresident members of the U.S. armed
services.
Tax Facts No. 97-3 - Provides information on thegeneral requirements for individuals starting a business.
Tax Facts No. 97-4 - Provides information on the1997 Form N-15 which was revised as a nonresident andpart-year resident income tax return.
Tax Advisory, dated April 21, 1997 - Provides
information regarding the application of the general
excise tax to tourist wedding activities of churches. 3

Pending Tax
Publications

T

he following is a list of tax projects inprogress, and the name and telephone
number of the staff member assigned to theproject. We will coordinate with the Director’s Advisory
Group in opening new tax projects.
Administration of Taxes• Clarify the application of cost recovery fees toselected goods and services, including installment
agreements - sections 231-3.4 and 231-25.5, HRS.
(Jayna Uyehara, 587-1553)• Clarify the application of penalties and interest andthe waiver of penalties and interest - sections 231-3
and 231-39, HRS. (Jayna Uyehara, 587-1553)(See Pending Publications, Page 7)

Spring 1998

Hawaii Tax News

Pending Publications(From Page 6)

Income Tax Law• Clarify the definitions of “residence” and “disability”- section 235-1, HRS. (Iris Kitamura, 587-1570)• Clarify the application of the income tax to amounts
from a pension plan that are “rolled over” into an
Individual Retirement Account - section 235-7, HRS.
(Iris Kitamura, 587-1570)• Clarify that net gains from the sales of certain
intangibles are included in the sales factor of theapportionment formula - section 235-21 to 235-39,
HRS. (Grant Tanimoto, 587-1569)• Clarify the apportionment formula for television andradio broadcasters and publishers - sections 235-21 to
235-39, HRS. (Johnson Lau, 587-1562)• Clarify the application of the business entity
classification rules under the check the box
regulations to the Hawaii income tax. (Johnson Lau,587-1562)
General Excise Tax Law• Clarify the application of the general excise tax tointerest income - section 237-3, HRS.
• Clarify the application of the general excise tax toproperty delivered in the State - section 237-13, HRS.
(Iris Kitamura, 587-1570)• Clarify the application of the general excise tax tointermediary services - section 237-13, HRS. (Grant
Tanimoto, 587-1569)• Clarify the application of the general excise tax toprepaid telephone calling cards - section 237-13,
HRS. (Jayna Uyehara, 587-1553)• Clarify the application of the general excise tax tosatellite broadcasters - section 237-13, HRS. (Jayna
Uyehara, 587-1553)• Clarify the application of the general excise tax toInternet service providers - section 237-13, HRS.
(Jayna Uyehara, 587-1553)• Clarify the use of resale certificates - section 237-13,
HRS. (Iris Kitamura, 587-1570)• Clarify the application of the general excise tax to thesale of gift certificates - section 237-13, HRS. (Grant
Tanimoto, 587-1569, Iris Kitamura 587-1570)• Clarify the application of the general excise tax toemployee leasing companies - section 237-13, HRS.
(Johnson Lau, 587-1562)• Clarify the application of the general excise tax tosales of omiyage by tour companies - section 237-13,
HRS.
• Clarify the application of the sublease deduction section 237-16.5, HRS. (Marshall Dimond,587-1533)• Clarify the income-splitting exemption for tour

Page 7companies and tour packagers - section 237-18, HRS.
(Grant Tanimoto, 587-1569)• Clarify the application of the general excise tax toreimbursements - section 237-20, HRS. (Grant
Tanimoto, 587-1569)• Clarify where a service is performed for purposes of
the general excise tax - sections 237-13 and 237-21,
HRS. (Johnson Lau, 587-1562)• Clarify the application of the general excise tax toscientific contracts - section 237-26, HRS. (Johnson
Lau, 587-1562)• Clarify the exemption for property shipped out of theState - section 237-29.5, HRS. (Marshall Dimond,587-1533)• Clarify the application of the business entity
classification rules under the check the box
regulations to the Hawaii general excise tax. (Johnson
Lau, 587-1562)
Use Tax Law• Clarify the temporary use exemption for property section 238-1, HRS. (Marshall Dimond, 587-1533)• Clarify the application of the use tax to property
delivered in the State - section 238-2, HRS. (Iris
Kitamura, 587-1570)• Clarify the application of the use tax to sales to thefederal government.
Franchise Tax Law• Clarify the application of the franchise tax tomortgage brokers, including sole proprietors andflow-through entities - section 241-3, HRS. (MarshallDimond, 587-1533)
Conveyance Tax Law• Clarify the application of the conveyance tax,
including the application to percentage leases.
Miscellaneous• Clarify the grounds on which the Department may
waive an IRS tax clearance - section 103-53, HRS.
(Iris Kitamura, 587-1570)• Clarify the state business tax credits and general
excise exemption for business located in enterprisezones - chapter 209E, HRS. (Grant Tanimoto,587-1569, Dana Oshiro-Viola, 587-1564)• Clarify the exemption for certified or approved
housing projects - section 237-29, HRS. (MarshallDimond, 587-1533) 3

WEB INFORMATION AND FORMS
http://www.state.hi.us/tax/tax.html
OAHU DISTRICT OFFICE
Princess Ruth Keelikolani Building
830 Punchbowl Street
Honolulu, HI 96813-5094
FAX: 808-587-1488
TELEPHONE:For Tax Information:808-587-6515 (January - April 20)
808-587-4242
1-800-222-3229 (Toll-Free From Neighbor
Islands and Mainland U.S.)
To Request Tax Forms by Mail or by Fax:
808-587-7572
1-800-222-7572 (Toll-Free From Neighbor
Islands and Mainland U.S.)
MAUI DISTRICT OFFICE
State Office Building
54 S. High Street, #208
Wailuku, HI 96793-2198
FAX: 808-984-8522
TELEPHONE: 808-984-8500
HAWAII DISTRICT OFFICE
State Office Building
75 Aupuni Street, #101
Hilo, HI 96720-4245
FAX: 808-974-6300
TELEPHONE: 808-974-6321
KAUAI DISTRICT OFFICE
State Office Building
3060 Eiwa Street, #105
Lihue, HI 96766-1889
FAX: 808-274-3461
TELEPHONE: 808-274-3456

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

DISTRICT TAX OFFICES
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.