JOSH GREEN, M.D.

GARY S. SUGANUMAGOVERNORDIRECTOR OF TAXATIONSYLVIA LUKEKRISTEN M.R. SAKAMOTO

LT. GOVERNOR

DEPUTY DIRECTOR

STATE OF HAWAIʻIDEPARTMENT OF TAXATION
Ka 'Oihana 'Auhau
P.O. BOX 259
HONOLULU, HAWAIʻI 96809

PHONE NO: (808) 587-1530
FAX NO: (808) 587-1584

August 23, 2023

DEPARTMENT OF TAXATION ANNOUNCEMENT NO. 2023-03(AMENDED)
RE:

Relief for Taxpayers Affected by the Wildfires in the Counties of Maui and Hawaiʻi.

As a result of the wildfire disasters in the counties of Maui and Hawaiʻi, Lieutenant
Governor Sylvia Luke, in her capacity as Acting Governor, signed a proclamation on August 8,2023, declaring this event to constitute an emergency or disaster in accordance with section
127A-14, Hawaiʻi Revised Statutes (HRS). Additionally, second and third proclamations relating
to wildfires were issued by Acting Governor Luke on August 9, extending the disaster relief
period through August 31, 2023. On August 10, President Joe Biden approved a federal disasterdeclaration, making federal funds available for affected residents in Maui County. Governor Josh
Green issued fourth, fifth and sixth proclamations on August 10, August 13, and August 19,
respectively, to help facilitate response, recovery, and rebuilding for the affected counties.
This Tax Announcement describes various forms of relief that are available to taxpayers
affected by the disaster.
I.

FILING INSTRUCTIONS FOR REQUESTING WILDFIRE RELIEF

The Department of Taxation (“Department”) recognizes that taxpayers affected by thedisaster may have difficulty meeting their tax obligations. Accordingly, the Department willconsider requests by affected taxpayers for extensions to file and pay Hawaiʻi taxes, for waiversof any penalties and interest, and for relief based on interruptions to mail delivery, on a case-bycase basis. The relief provided by this section applies to all taxes that the Department
administers, including general excise, transient accommodations, net income, tobacco, andliquor.
For taxpayers who file by paper and wish to request relief, please clearly write “2023Wildfire Relief” on the top center of the return. Do not write “2023 Wildfire Relief” in the “DONOT WRITE IN THIS SPACE” area in the upper right corner of any return. For taxpayers who
file electronically and wish to request relief, please send a message at the time of filing via
Hawaiʻi Tax Online by selecting “I have a 2023 Wildfire Relief question” and include theinformation noted below.

Department of Taxation Announcement No. 2023-03 (Amended)
August 23, 2023
Page 2 of 3Taxpayers requesting relief should include a brief statement explaining what specificrelief they are requesting and how the wildfire disaster adversely affected their ability to meettheir tax obligations. Paper filers can attach this statement when submitting their return(s);electronic filers can include this statement with their message on Hawaiʻi Tax Online. An“adversely affected taxpayer” may include any individual, business entity, or other person who isunable to file returns or unable to make payments because of the wildfire disaster’s impact.
Depending on the circumstances, a taxpayer may be adversely affected even if their address on
file with the Department is not within the area directly affected by the wildfire. The Department
will consider all requests on a case-by-case basis.
II.

CASUALTY LOSSESFor purposes of Hawaiʻi income tax, taxpayers may claim all of the casualty loss
deductions allowed by section 165 of the Internal Revenue Code of 1986, as amended (IRC).
Please refer to Internal Revenue Service Publication 547 for more information. Casualty losses
on business property are deductible in full. The first $100 of eligible unreimbursed casualty
losses on nonbusiness property are not deductible. The remaining loss is deductible to the extent
it exceeds 10 percent of the taxpayer’s Hawaiʻi adjusted gross income. The following options areavailable after determining the amount of losses:
1. Taxpayers may elect to claim a casualty loss deduction on their 2022 income tax
returns, instead of on their 2023 income tax returns (an amended return may need tobe filed if this option is chosen) based on the President’s issuance of a federal disasterdeclaration;
2. Taxpayers may elect to deduct the losses on their 2023 income tax returns; or
3. If taxpayers’ casualty losses are more than their income, a net operating loss mayresult. A properly elected net operating loss may be carried forward and used to lower
taxes in a future year; however, any portion of a net operating loss that is a farming
loss may be used to lower taxes in each of the two preceding tax years.
III.

GENERAL EXCISE TAX EXEMPTION FOR INSURANCE PROCEEDSRECEIVED BECAUSE OF A NATURAL DISASTER

Pursuant to section 237-24.7(6), HRS, amounts received under property or casualty
insurance policies for damage or loss of inventory used in a trade or business located within anarea declared a disaster by the governor are exempt from general excise tax (GET). Please referto instructions for Form G-45 and G-49 for more information.
IV.

DISASTER RELIEF PAYMENTS

Pursuant to section 235-2.3, HRS, Hawaiʻi adopts IRC section 139 in its entirety. IRC
section 139 provides that any amounts received by an individual as a “qualified disaster reliefpayment” are excluded from the individual’s gross income and thus not subject to taxation.

Department of Taxation Announcement No. 2023-03 (Amended)
August 23, 2023
Page 3 of 3

Based on the August 10 federal disaster declaration, the following amounts received byan individual may be excluded from gross income for purposes of Hawaiʻi income tax:
1. Amounts to reimburse or pay reasonable and necessary personal, family, living, orfuneral expenses incurred as a result of the wildfires;
2. Amounts to reimburse or pay reasonable and necessary expenses incurred for therepair or rehabilitation of a personal residence (or repair or replacement of itscontents) to the extent that the need for such repair, rehabilitation, or replacement isattributable to the wildfires;
3. Amounts paid by a person engaged in the furnishing or sale of transportation as acommon carrier due to death or personal physical injuries incurred as a result of thewildfires; and4. Amounts paid by a federal, state, or local government, or an agency or instrumentality
thereof, in connection with the wildfires, in order to promote the general welfare.
These qualified disaster relief payment amounts may only be excluded from anindividual’s gross income to the extent that the individual does not receive compensation for thesame loss from other sources, such as homeowner’s insurance. Additionally, the general rule
preventing double benefits applies to disaster relief payments. No deduction or credit is allowed
for amounts that are excluded from gross income.
Tax forms and information are available on the Department’s website at tax.hawaii.gov,
or by calling the Department’s Technical Section at (808) 587-1577.
For all inquiries relating to relief for taxpayers affected by the wildfires in Maui
County and Hawaiʻi County, please email the Department at
Tax.2023WildfireRelief@hawaii.gov.

GARY S. SUGANUMA
Director of Taxation