LINDA LINGLEKURT KAWAFUCHIGOVERNORDIRECTOR OF TAXATIONJAMES R. AIONA, JR.

SANDRA L. YAHIRO

LT. GOVERNOR

DEPUTY DIRECTOR

STATE OF HAWAII

DEPARTMENT OF TAXATIONP.O. BOX 259
HONOLULU, HAWAII 96809
PHONE NO: (808) 587-1510
FAX NO: (808) 587-1560

December 23, 2008

DEPARTMENT OF TAXATION ANNOUNCEMENT NO. 2008-12
RE:HIGH TECHNOLOGY BUSINESS INVESTMENT CREDITI.

Comfort Rulings – Nonfossil Fuel Energy-Related Technology

On September 15, 2008, the Department issued Announcement No. 2008-06 notifyingtaxpayers of a temporary delay in issuing comfort rulings with regard to the high technology tax
incentives available under Sections 235-110.9 and 235-110.91 of the Hawaii Revised Statutes,("HRS"), ("High Tech Tax Incentives"), while the Department reviewed how comfort rulings would
be processed for High Tech Tax Incentives on a prospective basis. Since prior to September 24,
2008, the Department has been issuing comfort rulings in cases, other than nonfossil fuel energyrelated technology, that clearly meet the criteria for qualification.
This Announcement identifies some of the general factors the Department will consider
favorably when processing comfort rulings of High Tech Incentives for businesses that seek toqualify as a Qualified High Technology Business ("QHTB") engaged in qualified research under theNonfossil Fuel Energy-Related Technology category for purposes of satisfying the requirement that
more than 50% of the businesses activities must be in qualified research and more than 75% of its
qualified research must be conducted in Hawaii ("Activity Test").
These favorable factors are:(1)

The business is engaged in an activity that is clearly innovative, research-oriented
and/or substantially improves existing technology.

(2)

The technology developed or commercialized by the business will generate significant
amounts of energy for use by many people/users.

(3)

The business is not merely commercializing technology that was developed or
substantially improved by a separate business whose activities were already subsidized
with the High Tech Incentives.

DEPARTMENT OF TAXATION ANNOUNCEMENT NO. 2008-12
December 23, 2008
Page 2(4)

The U.S. National Renewable Energy Laboratory strongly supports the development ofthe type of renewable energy technology in question or favorably views the potentialfor the technology to efficiently produce useable energy.

The factors presented in this Announcement are intended to provide general guidance only;
the factors are not presented or intended as a substitute for the Activity Test. No one factor isdeterminative; and satisfactory responses to all factors will not guarantee a favorable comfort ruling.
Each factor will be reviewed independently, and the failure to satisfy a particular factor will not
automatically result in the rejection of a comfort ruling request.

II.
Requests for Extensions of Time to Fund Qualified High Technology Business
Investments for Calendar Year 2008
The Department of Taxation will no longer approve requests from qualified high technology
businesses (QHTBs) or their investors to extend the time within which investments must be madeinto QHTBs in order to generate high technology business investment tax credits under Section 235110.9, Hawaii Revised Statutes, for the 2008 taxable year.

KURT KAWAFUCHI
Director of Taxation