reglab/statecodes huggingface dataset:
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-32-01 - Property factor; averaging property values

Current through June, 2024
(a) As a
				general rule, the average value of property owned by the taxpayer shall be
				determined by averaging the values at the beginning and ending of the tax
				period. However, the department may require or allow averaging by monthly
				values if that method of averaging is required to properly reflect the average
				value of the taxpayer's property for the tax period.
(b) Averaging by monthly values will
				generally be applied if substantial fluctuations in the values of the property
				exist during the tax period or if property is acquired after the beginning of
				the tax period or disposed of before the end of the tax period.
Example: The monthly value of the taxpayer's property was as
				  follows:
January
$ 2,000
July
$ 15,000
February
2,000
August
17,000
March
3,000
September
23,000
April
3,500
October
25,000
May
4,500
November
13,000
June
10,000
December
2,000
$ 25,000
$ 95,000
Total
$120,000
The average value of the taxpayer's property includable in
				  the property factor for the income year is determined as follows:
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Averaging with respect to rented property is achieved
				  automatically by the method of determining the net annual rental rate of that
				  property as set forth in section 18-235-31-02.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-33-02 - Payroll factor; denominator

Current through June, 2024
The denominator of the payroll factor is the total
				  compensation paid everywhere during the tax period. Accordingly, compensation
				  paid to employees whose services are performed entirely in a state where the
				  taxpayer is immune from taxation, for example, by Public Law 86-272, is
				  included in the denominator of the payroll factor.
Example:
A taxpayer has employees in its state
				  of legal domicile (State A) and is taxable in State B. In addition the taxpayer
				  has other employees whose services are performed entirely in State C where the
				  taxpayer is immune from taxation under Public Law 86-272. As to these latter
				  employees, the compensation will be assigned to State C where their services
				  are performed (i.e., included in the denominator but not the numerator of the
				  payroll factor) even though the taxpayer is not taxable in State C. If the
				  taxpayer is a corporation incorporated in this State, however, under section
				  235-4(d),
				  HRS, that compensation shall be assigned to this State.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-33-03 - Payroll factor; numerator

Current through June, 2024
The numerator of the payroll factor is the total amount paid
				  in this State during the tax period by the taxpayer for compensation. If
				  compensation paid to employees is included in the payroll factor by use of the
				  cash method of accounting or if the taxpayer is required to report compensation
				  under that method for unemployment compensation purposes, it shall be presumed
				  that the total wages reported by the taxpayer to this State for unemployment
				  compensation purposes constitute compensation paid in this State except for
				  compensation excluded under sections
				  18-235-33-01 to
				  18-235-34-01. The presumption may
				  be overcome by satisfactory evidence that an employee's compensation is not
				  properly reportable to this State for unemployment compensation
				  purposes.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-34-01 - Payroll factor; compensation paid in this State

Current through June, 2024
(a) Compensation is paid in this State if any
				one of the following tests, applied consecutively, is met:
(1) The employee's service is performed
				entirely within the State.
(2) The
				employee's service is performed both within and without the State, but the
				service performed without the State is incidental to the employee's service
				within the State. In this paragraph, "incidental" means any service which is
				temporary or transitory in nature, or which is rendered in connection with an
				isolated transaction.
(3) If the
				employee's services are performed both within and without this State, the
				employee's compensation shall be attributed to this State:
(A) If the employee's base of operations is
				in this State;
(B) If there is no
				base of operations in any state in which some part of the service is performed,
				but the place from which the service is directed or controlled is in this
				State; or
(C) If the base of
				operations or the place from which the service is directed or controlled is not
				in any state in which some part of the service is performed but the employee's
				residence is in this State.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-35-01 - Sales factor; in general

Current through June, 2024
(a) "Sales" means
				all gross receipts of the taxpayer not allocated under sections
				235-24
				to
				235-28,
				HRS. Thus, for the purposes of the sales factor of the apportionment formula
				for each trade or business of the taxpayer, sales means all gross receipts
				derived by the taxpayer from transactions and activity in the regular course of
				that trade or business. The following are rules for determining sales in
				various situations:
(1) In the case of a
				taxpayer engaged in manufacturing and selling or purchasing and reselling goods
				or products, sales includes all gross receipts from the sale of goods or
				products (or other property of a kind which would properly be included in the
				inventory of the taxpayer if on hand at the close of the tax period) held by
				the taxpayer primarily for sale to customers in the regular course of its trade
				or business. Gross receipts for this purpose means gross sales less returns and
				allowances, and includes all interest income, service charges, carrying
				charges, or time-price differential charges incidental to those sales. Federal
				and state excise taxes (including sales taxes and general excise taxes under
				chapter
				237, HRS) shall be included as part
				of the seller's receipts if the taxes are passed on to the buyer or included as
				part of the selling price of the product.
(2) In the case of cost plus fixed fee
				contracts, such as the operation of a government-owned plant for a fee, sales
				includes the entire reimbursed cost plus the fee.
(3) In the case of a taxpayer engaged in
				providing services, sales includes the gross receipts from the performance of
				those services, including fees, commissions, and similar items.
(4) In the case of a taxpayer engaged in
				renting real or tangible property, sales includes the gross receipts from the
				rental, lease, or licensing the use of the property.
(5) In the case of a taxpayer engaged in the
				sale, assignment, or licensing of intangible personal property such as patents
				and copyrights, sales includes the gross receipts from those
				activities.
(6) If a taxpayer
				derives receipts from the sale of equipment used in its business, those
				receipts constitute sales. For example, a truck express company owns a fleet of
				trucks and sells its trucks under a regular replacement program. The gross
				receipts from the sales of the trucks are included in the sales factor. See
				section 18-235-38-03 for rules that would apply if the sales were
				occasional.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-35-02 - Sales factor; denominator

Current through June, 2024
The denominator of the sales factor shall include the total
				  gross receipts derived everywhere by the taxpayer from transactions and
				  activity in the regular course of its trade or business, except receipts
				  excluded under section
				  18-235-38-03.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-35-03 - Sales factor; numerator

Current through June, 2024
The numerator of the sales factor shall include gross
				  receipts attributable to this State and derived by the taxpayer from
				  transactions and activity in the regular course of its trade or business. All
				  interest income, service charge, carrying charges, or time-price differential
				  charges incidental to those gross receipts shall be included regardless of (1)
				  the place where the accounting records are maintained or (2) the location of
				  the contract or other evidence of indebtedness.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-35-05 - Sales factor; no effect on warehousing exemption

Current through June, 2024
Nothing in sections
				  235-35
				  to
				  235-37,
				  HRS, or the rules under those sections shall be construed to expand or limit
				  the exemption in section
				  235-6,
				  HRS.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-36-01 - Sales factor; sales of tangible personal property in this State

Current through June, 2024
(a) Gross receipts from sales of tangible
				personal property (except sales to the United States Government; see section
				18-235-36-02 ) are in this State:
(1) If the
				property is delivered or shipped to a purchaser within this State regardless of
				the f.o.b. point or other conditions of sale; or
(2) If the property is shipped from an
				office, store, warehouse, factory, or other place of storage in this State and
				the taxpayer is not taxable in the state of the purchaser.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-36-02 - Sales factor; sales of tangible personal property to United States Government in this State

Current through June, 2024
Gross receipts from sales of tangible personal property to
				  the United States Government are in this State if the property is shipped from
				  an office, store, warehouse, factory, or other place of storage in this State.
				  For the purposes of this section, only sales for which the United States
				  Government makes direct payment to the seller pursuant to the terms of a
				  contract with an agency or instrumentality of the United States constitute
				  sales to the United States Government. Thus, as a general rule, sales by a
				  subcontractor to the prime contractor, the party to the contract with the
				  United States Government, do not constitute sales to the United States
				  Government.
Example 1:
A taxpayer contracts with General
				  Services Administration to deliver X number of trucks which were paid for by
				  the United States Government. The sale is a sale to the United States
				  Government.
Example 2:
The taxpayer, as a subcontractor to
				  a prime contractor with the National Aeronautics and Space Administration,
				  contracts to build a component of a rocket for $1,000,000.
The sale by the subcontractor to the prime contractor is not
				  a sale to the United States Government.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-37-01 - Sales factor; sales other than sales of tangible personal property in this State

Current through June, 2024
(a) Section 235-37,
				HRS, provides for the inclusion in the numerator of the sales factor of gross
				receipts from transactions other than sales of tangible personal property
				(including transactions with the United States Government). Under this section,
				gross receipts are attributed to this State if the income producing activity
				which gave rise to the receipts is performed wholly within this State. Also,
				gross receipts are attributed to this State if, with respect to a particular
				item of income, the income producing activity is performed within and without
				this State but the greater proportion of the income producing activity is
				performed in this State, based on costs of performance.
(b) As used in this section:
"Costs of performance" means direct costs determined in a
				  manner consistent with generally accepted accounting principles and in
				  accordance with accepted conditions or practices in the trade or business of
				  the taxpayer.
"Income producing activity" applies to each separate item of
				  income and means the transactions and activity directly engaged in by the
				  taxpayer in the regular course of its trade or business for the ultimate
				  purpose of obtaining gains or profit. Income producing activity does not
				  include transactions and activities performed on behalf of a taxpayer, such as
				  those conducted on its behalf by an independent contractor. Accordingly, income
				  producing activity includes but is not limited to the following:
(1) The rendering of personal services by
				employees or the utilization of tangible and intangible property by the
				taxpayer in performing a service;
(2) The sale, rental, leasing, licensing, or
				other use of real property;
(3) The
				rental, leasing, licensing, or other use of tangible personal property;
				and
(4) The sale, licensing, or
				other use of intangible personal property.
The mere holding of intangible personal property is not, of
				  itself, an income producing activity.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-38-01 - Equitable adjustment of apportionment formula

Current through June, 2024
(a) If
				the director of taxation determines that the apportionment formula prescribed
				by section
				235-29,
				HRS, does not fairly determine net income derived from or attributable to
				Hawaii, the director may direct or permit the use of an apportionment formula
				based on other factors that would more clearly reflect income attributable to
				Hawaii.
(b) A taxpayer may petition
				the director to use an allocation or apportionment method other than that
				prescribed in part II of chapter 235, HRS, by written request.
(1) The petition shall include data clearly
				showing that the application of factors provided in the law, including these
				rules, do not result in a reasonable attribution of net income to Hawaii due to
				the peculiar nature of the taxpayer's business and that the taxpayer's proposed
				method more clearly reflects income attributable to Hawaii.
(2) The petition shall disclose whether the
				method that is being used or requested is being employed in all other states to
				which the taxpayer reports under Article IV of the Multistate Tax Compact or
				the Uniform Division of Income for Tax Purposes Act.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-38-02 - Special rules; property factor

Current through June, 2024
(a) If the subrents
				taken into account in determining the net annual rental rate under section
				18-235-31-02 produce a negative or clearly inaccurate value for any item of
				property, another method which will properly reflect the value of rented
				property may be required by the department or requested by the taxpayer.
In no case, however, shall the value be less than an amount
				  which bears the same ratio to the annual rental rate paid by the taxpayer for
				  the property as the fair market value of that portion of the property used by
				  the taxpayer bears to the total fair market value of the rented
				  property.
Example:
The taxpayer rents a ten-story
				  building at an annual rental rate of $1,000,000. Taxpayer occupies two stories
				  and sublets eight stories for $1,000,000 a year. The net annual rental rate of
				  the taxpayer must not be less than two-tenths of the taxpayer's annual rental
				  rate for the entire year, or $200,000.
(b) If property owned by others is used by
				the taxpayer at no charge or rented by the taxpayer for a nominal rate, the net
				annual rental rate for the property shall be determined on the basis of a
				reasonable market rental rate for the property.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-38-04 - Allocation of income and deductions among taxpayers

Current through June, 2024
(a) If two or more organizations, trades, or
				businesses, whether or not incorporated or organized in Hawaii, are owned or
				controlled directly or indirectly by the same interests, the director may
				distribute, apportion, or allocate gross income, deductions, credits, or
				allowances between or among the organizations, trades, or businesses if the
				director determines that the distribution, apportionment, or allocation is
				necessary in order to prevent evasion of taxes or to clearly reflect the income
				attributable to any taxpayer's activity in Hawaii.
(b) This section shall not be construed to
				permit the filing of consolidated returns by two or more affiliated
				corporations except as provided by section
				235-92,
				HRS.
(c) The director shall not
				allocate or apportion income to Hawaii in excess of what is considered just and
				reasonable under the circumstances.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-38-05 - Apportionment method considered method of accounting

Current through June, 2024
(a) A
				taxpayer's change in any of the following shall be a change in the taxpayer's
				method of accounting within the meaning of sections 446 (with respect to
				methods of accounting) and 481 (with respect to adjustments required by changes
				in method of accounting), IRC, as operative under chapter
				235, HRS:
(1) The manner of prorating any item of
				deduction among the classes of income to which it is applicable. See section
				18-235-21-04.
(2) The manner in
				which income is classified as business income or nonbusiness income. See
				section 18-235-22-05.
(3) The
				manner of valuing property, or of excluding or including property in the
				property factor. See section 18-235-30-03.
(4) The treatment of compensation paid. See
				section 18-235-33-01.
(5) The
				manner of excluding or including gross receipts in the sales factor. See
				section 18-235-35-01.
(6) The
				apportionment formula employed. See section 18-235-38-01.
(7) Whether the taxpayer is employing a
				combined reporting method. See section 18-235-22-03.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-38-06 - Apportionment of income for special industries

Current through June, 2024
The director finds that neither the apportionment formula of
				  section
				  235-29,
				  HRS, nor the separate accounting method clearly or accurately reflects the
				  correct taxable income in Hawaii of taxpayers doing business within and without
				  Hawaii in the industries listed in the following table. Accordingly, income of
				  these taxpayers shall be apportioned using the methods in the section listed
				  opposite the name of the industry in the following table.
Special
							 industry
Section
Air carriers
18-235-38-06.02
Construction contractors
18-235-38-06.03
Ocean carriers
18-235-38-06.01
Publishing
18-235-38-06-05
Radio broadcasting
18-235-38-06.04
Television broadcasting
18-235-38-06.04
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-38-06.01 - Apportionment of income for ocean carriers

Current through June, 2024
(a) As used in this
				section:
"Originating revenue within this State" means revenue to an
				  ocean carrier from the transportation of revenue passengers and revenue cargo
				  first received by the carrier either as originating or connecting traffic at
				  ports within the State.
"Revenue tons handled", for an ocean carrier at a port, mean
				  the weight in tons of revenue passengers (at five hundred pounds per passenger)
				  and revenue cargo first received as originating or connecting traffic, or
				  finally discharged by the carrier at the port.
"Voyage hours" mean the total hours the ocean carrier's
				  vessels have spent over the high seas plus the hours spent in port. Voyage
				  hours do not include hours when vessels are withheld from service because of
				  strikes, repairs or maintenance, acts of God, or seasonal reduction of
				  service.
(b) Business
				income of an ocean carrier shall be apportioned to Hawaii by multiplying the
				income by a fraction, the denominator of which is three and the numerator of
				which is the sum of the following three ratios:
(1) The ratio of revenue tons handled by the
				ocean carrier at ports within this State during the taxable year to the total
				revenue tons handled by the carrier at ports within and without this State
				during the same period;
(2) The
				ratio of the ocean carrier's originating revenue within this State for the
				taxable year to the carrier's total originating revenue within and without this
				State for the same period; and
(3)
				The ratio of the ocean carrier's voyage hours within this State for the taxable
				year to the carrier's total voyage hours within and without this State for the
				same period.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-38-06.02 - Apportionment of income for air carriers

Current through June, 2024
(a) As used in this
				section:
"Flight operating hours" mean the normal air and ground
				  hours of aircraft of an air carrier in scheduled flights and nonscheduled
				  operations. Flight operating hours do not include time spent for repairs and
				  maintenance and delays caused by abnormal events such as strikes, acts of God,
				  and weather conditions.
"Originating revenue within this State" means revenue from
				  the transportation of revenue passengers and revenue cargo that are first
				  received by the air carrier either as originating or connecting traffic at
				  airports within the State.
(1)
				Originating revenue includes revenue from the carriage of express and
				mail.
(2) Originating revenue does
				not include passenger receipts that will be turned over to another air carrier
				as its share of the total passenger receipts.
"Revenue tons handled", by an air carrier at an airport,
				  mean the weight in tons of revenue passengers (at two hundred pounds per
				  passenger) and revenue cargo first received as originating or connecting
				  traffic, or finally discharged by the air carrier at the airport.
(1) Revenue tons handled includes
				express and mail tonnage.
(2) For
				purposes of computing revenue tons handled, revenue passengers do not include
				those passengers making transfers on connecting flights of the same carrier;
				however, passengers making voluntary stopovers at a connecting point for
				twenty-four hours or more shall not be considered to be making connecting
				flights.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-38.5-01 - Construction

Current through June, 2024
In construing part II of chapter
				  235, HRS, the department shall be
				  guided by the rules, regulations, and other published interpretations of the
				  Multistate Tax Commission relating to the Uniform Division of Income for Tax
				  Purposes Act and the Multistate Tax Compact, but with due regard to the water's
				  edge requirement of section
				  235-38.5,
				  HRS.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-38.5-02 - Exclusion of income, property, payroll, and sales of foreign affiliates

Current through June, 2024
(a) As used in this section:
"Foreign affiliate" of a taxpayer means a person, other than
				  the taxpayer, if no part of the business income of the person is subject to the
				  federal income tax under the federal Internal Revenue Code of 1986, as amended,
				  whether or not the person and the taxpayer are owned or controlled directly or
				  indirectly by the same interests.
"Subject to the federal income tax" when referring to a
				  person means that the United States has jurisdiction to subject the person to
				  the tax imposed by chapter 1 (with respect to income tax) of the federal
				  Internal Revenue Code of 1986, as amended.
(b) The income of a taxpayer shall not be
				computed with reference to the income or other attributes (such as property,
				payroll, or sales) of a foreign affiliate.
(1)
				No taxpayer shall file, and the director shall not require a taxpayer to file,
				a combined report with a foreign affiliate.
(2) A taxpayer's business income subject to
				apportionment shall not include the business income, deductions, or losses of a
				foreign affiliate; provided that transactions between a taxpayer and a foreign
				affiliate, such as a dividend paid to a taxpayer by a foreign affiliate, shall
				be recognized and shall not be eliminated.
(3) For any taxpayer using the apportionment
				formula set forth in section
				235-29,
				HRS, the numerator and the denominator of the taxpayer's property, payroll, and
				sales factors shall not include the property, payroll, or sales of a foreign
				affiliate.
(4) For any taxpayer
				using an apportionment formula other than that set forth in section
				235-29,
				HRS, attributes of a foreign affiliate shall not be included in the taxpayer's
				apportionment computation.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 3 - INDIVIDUAL INCOME TAX LAW › Section 18-235-52 - Tax in case of joint return of spouses or the return of a surviving spouse

Current through June, 2024
(a) In the case of a joint return of a
				husband and wife under section
				235-93, HRS, the
				tax imposed by section
				235-51,
				HRS, shall be twice the tax which would be imposed if the taxable income were
				cut in half. This basis of determining the tax is reflected in the tax table
				provided under section
				235-53,
				HRS, for a husband and wife filing a joint return or the return of a surviving
				spouse.
In computing the tax imposed by chapter
				  235, HRS, a husband and wife or a
				  surviving spouse shall determine their tax as provided by sections
				  235-51
				  and
				  235-52,
				  HRS, or, if applicable, as provided under section
				  235-53,
				  HRS.
(b) Requirements for
				qualifying as a surviving spouse.
(1) If a
				taxpayer is eligible to file a joint return for the taxable year in which the
				taxpayer's spouse dies, the tax return of the taxpayer shall be treated as a
				joint return beginning with the year in which the spouse died and for the two
				consecutive taxable years thereafter; provided all three of the following
				requirements are satisfied:
(A) The taxpayer
				has not remarried before the close of the taxable year in which the return is
				sought to be treated as a joint return;
(B) The taxpayer maintains a household which
				constitutes the principal place of abode of a person who is a son or daughter
				(whether by blood or adoption), or stepdaughter or stepson of the taxpayer;
				and
(C) The taxpayer qualifies for
				the deduction for personal exemption under section
				235-54(a),
				HRS (relating to deductions for dependents), with respect to the taxpayer's
				dependent son, stepson, daughter, or stepdaughter (whether by blood or
				adoption), or would have qualified for the deduction had the taxpayer not taken
				the exemption for blind, deaf, or person totally disabled, as provided by
				section
				235-54(c),
				HRS, in lieu of the exemptions provided by section
				235-54(a),
				HRS.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 3 - INDIVIDUAL INCOME TAX LAW › Section 18-235-53 - Tax tables for individuals

Current through June, 2024
(a) In general. In
				lieu of the tax imposed by section
				235-51,
				HRS, the director of taxation shall set forth in tables the amount of tax based
				on the tax rates prescribed in section
				235-51,
				HRS. As set forth in section
				235-53,
				HRS, and this section, the tax shall be imposed on the taxable income of every
				individual who does not itemize deductions for the taxable year and whose
				taxable income does not exceed the ceiling amount, as defined in section
				235-53(a)(2),
				HRS, for the taxable year.
(b)
				Taxpayers who itemize deductions. Pursuant to section
				235-53,
				HRS, the director also may prescribe tax tables, based on the tax rates
				prescribed in section
				235-51,
				HRS, for taxpayers who itemize their deductions.
(c) Short taxable periods; estates and
				trusts. Section
				235-53,
				HRS, and this section shall not apply to trusts, estates, or individuals making
				a return for a short taxable period of less than twelve months due to a change
				in the taxpayer's accounting period.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 3 - INDIVIDUAL INCOME TAX LAW › Section 18-235-54 - Exemptions

Current through June, 2024
(a) Individual. In computing taxable income,
				individual taxpayers are allowed a deduction for the exemptions as provided in
				section
				235-54, HRS. For
				taxable years after December 31, 1984, this deduction is determined as follows:
(1) Ascertain the number of exemptions which
				the individual can lawfully claim under section 151, IRC, (allowance of
				deductions for personal exemptions);
(2) Add an additional exemption if the
				taxpayer or the taxpayer's spouse is sixty-five years of age or older within
				the taxable year; and
(3) Multiply
				by $1,040.
The exemption for a taxpayer or a taxpayer's spouse who is
				  blind, deaf, or totally disabled shall be as set forth in section
				  235-54(c),
				  HRS, and subsection (c).
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 3 - INDIVIDUAL INCOME TAX LAW › Section 18-235-55.8 - Food/excise tax credit

Current through June, 2024
(a) For purposes of
				section
				235-55.8, HRS, and
				this section:
"Resident taxpayer" means an individual whose entire income
				  is subject to income tax under chapter
				  235, HRS, and as imposed by section
				  235-4,
				  HRS, without regard to source.
"Qualified exemption" means an exemption which is allowed
				  under section
				  235-54, HRS, except as
				  otherwise provided in this section. Additional exemptions available for
				  blindness, deafness, or total disability under section
				  235-54, HRS, shall not
				  qualify as an exemption for purposes of section
				  235-55.8, HRS, and
				  this section. In addition, for purposes of section
				  235-55.8, HRS, and
				  this section, a parent or guardian may claim an exemption for a dependent minor
				  child receiving support from the department of human services of the State,
				  social security survivor's benefits, and the like.
(b) In general.
(1) Taxpayers eligible to claim food/excise
				tax credit. Pursuant to section
				235-55.8, HRS, and
				this section and except as provided in this section, every resident taxpayer
				whether or not required to file an individual income tax return for a taxable
				year may claim the food/excise tax credit.
(2) Exceptions. Pursuant to section
				235-55.8, HRS, tax
				credit shall not be available to:
(A) A
				resident taxpayer who is eligible to be claimed as a dependent by another
				taxpayer for federal or state income tax purposes. While a dependent resident
				taxpayer may be required to file income tax return, the dependent resident
				taxpayer is not eligible to claim the food/excise tax credit if the dependent
				resident taxpayer qualifies as a dependent of another taxpayer under federal or
				state statutes and rules, as defined in section 152, IRC (dependent defined).
				The dependent resident taxpayer may not claim the tax credit even if the
				taxpayer eligible to claim the credit for the dependent does not take
				it.
(B) Any individual who has not
				physically resided in the State for more than nine months during the taxable
				year. No exemptions shall be available for individuals who are out of the State
				for business, vacation, education, or other reasons for more than three months
				in total during the taxable year.
(C) Any individual who has been convicted of
				a felony, has been committed to prison, and has been physically confined in a
				prison for the full taxable year.
(D) Any individual who would otherwise be
				eligible to be claimed as a dependent but has been committed to a youth
				correctional facility and has resided at the facility for the full taxable
				year.
(E) Any misdemeanant who has
				been committed to jail and has been physically confined for the full taxable
				year.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 3 - INDIVIDUAL INCOME TAX LAW › Section 18-235-61-01 - Deduction and withholding of income tax; in general

Current through June, 2024
Section
				  235-61,
				  HRS, and sections 18-235-61-01 to
				  18-235-61-14 relate to the
				  deduction and withholding of income tax from remuneration paid for or
				  attributable to services of an employee. These rules supplement sections
				  235-61
				  to
				  235-67,
				  HRS.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 3 - INDIVIDUAL INCOME TAX LAW › Section 18-235-61-02 - Definitions

Current through June, 2024
For purposes of section
				  235-61,
				  HRS, and sections
				  18-235-61-01 to
				  18-235-61-14:
"Employee" shall be defined as set forth in section
				  235-61(a),
				  HRS.
"Employer" shall be defined as set forth in section
				  235-61(a),
				  HRS, and includes an individual who is self-employed during the taxable
				  year.
"Miscellaneous payroll period" means a payroll period other
				  than a daily, weekly, biweekly (or other multiple of a week), semimonthly,
				  monthly, quarterly, semiannual, or annual payroll period. The payroll period is
				  to be used in determining the amount of tax to be withheld, except as otherwise
				  provided in section
				  235-61,
				  HRS, and sections
				  18-235-61-01 to
				  18-235-61-14.
"Payroll period" means the period of service for which a
				  payment of wages is ordinarily made by an employer to an employee. The payroll
				  period is to be used in determining the amount of tax to be withheld, except as
				  otherwise provided in section
				  235-61,
				  HRS, and sections
				  18-235-61-01 to
				  18-235-61-14.
"Remuneration" includes all payments, whether in cash or in
				  a medium other than cash, for services rendered in the course of the employer's
				  trade or business.
"Resident" shall be defined as set forth in section
				  235-1, HRS.
"Wages" shall be defined as set forth in section
				  235-61(a),
				  HRS.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 3 - INDIVIDUAL INCOME TAX LAW › Section 18-235-61-03 - Wages subject to withholding

Current through June, 2024
(a) An employer
				shall deduct and withhold tax from wages paid to an employee for services
				rendered, unless otherwise provided in section
				235-61,
				HRS, and sections 18-235-61-01 to 18-235-61-14. Wages earned by a self-employed
				individual, however, are not subject to withholding under section
				235-61,
				HRS, and sections 18-235-61-01 to 18-235-61-14. An exemption from withholding
				does not automatically exempt income from income taxation.
(b) Exceptions.
(1) An employer shall not withhold tax from
				income which is excluded from gross income pursuant to sections
				235-2.3
				and
				235-7,
				HRS. For example, an employer shall not withhold tax from:
(A) The rights, benefits, and other income,
				received under the state retirement system, exempted pursuant to section
				88-91,
				HRS, or any comparable rights, benefits, and other income received under any
				other public retirement system.
(B)
				Any compensation received in the form of a pension for past services
				rendered.
(C) Remuneration paid to
				a patient affected with Hansen's disease, employed by the State, in any
				hospital, settlement, or place for the treatment of Hansen's disease.
(D) The first $1750 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. Compensation in excess of $1750 shall be
				subject to withholding and shall be reported on the income tax return of the
				recipient.
With respect to payments which are excluded from income
				  pursuant to section
				  235-7(a)(1),
				  (5), and (6), HRS, the employer shall
				  withhold tax from the payments to the employee unless the employer or employee
				  presents evidence regarding the exclusion and obtains a ruling from the
				  department exempting the income from the withholding requirements of section
				  235-61,
				  HRS, and sections 18-235-61-01 to 18-235-61-14.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 3 - INDIVIDUAL INCOME TAX LAW › Section 18-235-61-04 - Services performed by employees within and without the State

Current through June, 2024
(a) Resident employee. Wages earned by
				resident employees are subject to Hawaii income tax and are subject to
				withholding pursuant to section
				235-61,
				HRS, and sections 18-235-61-01 to 18-235-61-14 regardless of where the services
				are performed. Therefore, even if the employee performs services out-of-state
				or for an employer which has an office in-state but is headquartered
				out-of-state, wages earned by a resident employee are subject to Hawaii income
				tax and withholding.
If wages earned by a resident employee also are taxed by
				  another jurisdiction, a tax credit may be available under section
				  235-55,
				  HRS.
(b) Nonresident
				employee.
(1) In general. Wages paid to a
				qualifying nonresident employee for services performed in the State are not
				subject to withholding. The wages, however, may be subject to Hawaii income tax
				as imposed by section
				235-4,
				HRS.
An employee is a qualifying nonresident employee for
				  purposes of section
				  235-61,
				  HRS, and this section if:
(A) The
				employee is performing services in the State for an aggregate of not more than
				sixty days during the calendar year;
(B) The employee is a nonresident as set
				forth in section
				235-1, HRS, or the
				employer reasonably believes the employee is a nonresident;
(C) The employee is paid for services
				performed from an office located outside the State;
(D) The employee's regular place of
				employment (where the employee regularly performs services for the employer) is
				outside the State; and
(E) The
				employer does not reasonably expect the employee to perform services in the
				State an aggregate of more than sixty days during the calendar year.
A qualifying nonresident employee does not include an
				  employee performing services for a contractor as defined in section
				  237-6(1),
				  HRS, and the contractor is performing work for a construction project located
				  in Hawaii.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 3 - INDIVIDUAL INCOME TAX LAW › Section 18-235-61-05 - Payroll period

Current through June, 2024
(a) In general.
				Pursuant to section
				235-61,
				HRS, and sections 18-235-61-01 to 18-235-61-14, an employer shall withhold
				taxes from wages paid to an employee for services rendered, unless otherwise
				exempted. The amount of tax the employer shall withhold from an employee's
				wages depends on the filing status of the employee, the number of exemptions
				the employee is eligible to claim, and the frequency of the payroll periods.
				The amount of tax shall be calculated by using the withholding tables or
				formula provided by the department.
(b) Daily payroll period. If an employee has
				a daily payroll period, the employer shall withhold taxes from the employee's
				daily wage. The employer shall use the daily or miscellaneous payroll period
				table provided by the department. However, if the wages are for a period of
				less than a week (seven days) and the employee verifies that the employee is
				not paid wages subject to withholding by any other employer during the same
				week, withholding may be calculated on a weekly payroll period basis.
(c) Miscellaneous payroll period. In order to
				calculate the amount of tax to withhold where an employee has either a
				miscellaneous payroll period, or has no payroll period, the employer shall:
(1) Count the number of days (including
				Sundays and holidays) in the period covered by the wage payment. If the wages
				are unrelated to a specific length of time (i.e., commissions paid upon
				completion of a sale), then the number of days in the wage payment shall be
				determined by counting the number of days from the date of the last payment to
				the date of the latter of: the last payment of wages made during the same
				calendar year; the date employment commenced (if during the same calendar
				year); or January 1 of the same calendar year.
(2) Determine the average wage per day by
				dividing the amount of the wage payment by the number of days covered by the
				wage payment.
(3) Compute the
				amount of tax to be withheld on the average wage per day by using the daily or
				miscellaneous payroll period table or formula provided by the
				department.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 3 - INDIVIDUAL INCOME TAX LAW › Section 18-235-61-06 - Amount of tax to be withheld

Current through June, 2024
To determine the amount of tax to be withheld, the employer
				  shall use either the tables or formula method provided by the
				  department.
If the payroll period is a multiple of one week, other than
				  biweekly, the employer shall determine the amount of tax to be withheld as
				  follows:
(1) Determine the average
				weekly or biweekly wage for the particular payroll period;
(2) Compute the amount of tax to be withheld,
				based upon the average wage paid to the employee; and
(3) Multiply the amount of tax to be withheld
				per payroll period by the number of weeks in the payroll period.
If wages are paid on a quarterly, semiannual, or annual
				  basis, the employer shall compute the amount of tax to be withheld by
				  multiplying the average wage for one month by the number of months in the
				  payroll period.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 3 - INDIVIDUAL INCOME TAX LAW › Section 18-235-61-07 - Additional withholding by agreement permissible

Current through June, 2024
The employer and employee may agree in writing to withhold
				  an amount greater than, but not less than, the amount required under section
				  235-61,
				  HRS and this section, and as calculated in the tables or formula method
				  provided by the department. Any additional amount withheld shall be considered
				  tax required to be deducted and withheld under section
				  235-61,
				  HRS, and this section.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 3 - INDIVIDUAL INCOME TAX LAW › Section 18-235-61-10 - Employer's identification number

Current through June, 2024
An employer shall apply for an employer identification
				  number with the department on forms prescribed by the department. Each employer
				  shall be assigned only one identification number. The director, however, may
				  require separate identification numbers for separate divisions of an employer's
				  business, or for services performed not in the course of the employer's trade
				  or business. The identification number assigned to an employer shall be used on
				  all applications, returns, payments, statements, forms, and correspondence with
				  the department.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 3 - INDIVIDUAL INCOME TAX LAW › Section 18-235-61-11 - Taxation district in which to file

Current through June, 2024
All applications, returns, payments, statements, forms, and
				  correspondence the employer is required to file with or submit to the
				  department, including any information required of the employee relating to
				  employment and the payment of taxes, shall be filed with the director or
				  designee in the taxation district in which the employer's principal place of
				  business is located. Where an employer is a nonresident and has no place of
				  business in the State, all filings and submissions shall be made to the
				  director or designee in the first taxation district of Oahu.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 3 - INDIVIDUAL INCOME TAX LAW › Section 18-235-61-12 - Statutory period

Current through June, 2024
Where monthly or quarterly returns must be filed under
				  section
				  235-62,
				  HRS, and a final return for the taxable year showing the reconciliation of
				  wages is required, the statutory period of limitation shall commence upon the
				  filing of the final return for the taxable year or the due date of the final
				  return, whichever is later.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 3 - INDIVIDUAL INCOME TAX LAW › Section 18-235-61-14 - Change of ownership; transfer of business; employer going out of business

Current through June, 2024
An employer must notify the director or designee if there is
				  a change in the business, including: a sale or other transfer of the business;
				  the employer is going out of business; the employer or business has a change of
				  address; or the name of the business changes.