Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 1 - GENERAL PROVISIONS › Section 18-235-17-18 - Production company personnel and contractors; required Hawaii tax notice

Current through June, 2024
(a) Any taxpayer claiming the income tax
				credit allowed under section
				235-17,
				HRS, shall provide every contractor, vendor, loan-out company, or other agent
				providing goods or performing services in the state that does not have a
				general excise tax license with a tax advisory informing such persons of state
				tax obligations and obtain acknowledgement that the advisory was received. The
				tax advisory under this section shall be provided to all such persons not later
				than thirty calendar days after engaging the contractor, vendor, loan-out
				company, or other agent.
(b) The tax
				advisory to be provided shall be any tax advisory made available to the motion
				picture and television film industry by the department through official
				pronouncement, and in a form that includes substantially the following:
"The purpose of this Tax Advisory is to provide notice to
				  persons engaged in the motion picture and television film production industry
				  (film industry) of their Hawaii tax obligations.
GENERAL EXCISE TAX
				  OBLIGATIONS
All businesses, including loan-out companies and independent
				  contractors, that engage in business in Hawaii are subject to the general
				  excise tax (GET). GET is a privilege tax that is measured by the business'
				  gross receipts. All businesses that provide services or have other business
				  activities in the Hawaii film industry are subject to the GET, as they are
				  engaged in business in Hawaii.
All businesses must register for a GET license
prior to engaging in business
in Hawaii. Submit Form
				  BB-1 together with a one-time $20 fee to register for a GET license. A $500
				  fine will be imposed on any non-cash-based business that receives income from
				  engaging in business in Hawaii prior to registering for a GET license. Hawaii
				  Revised Statutes (HRS) §
										237-9(c).
GET is reported and remitted by filing periodic returns (Form
				  G-45), followed by an annual reconciliation return (Form G-49) after the end of
				  the tax year. Other forms may be necessary depending upon the
				  circumstances.
The penalty for failure to file a tax return by the deadline
				  is 5% of the unpaid tax per month, with a maximum penalty of 25%. The penalty
				  for failure to pay the tax within 60 days of timely filing a return is 20% of
				  the amount that is unpaid. If the failure to pay tax is due to fraud, the
				  penalty is an amount up to 50% of the underpayment. The interest on nonpayment
				  of tax or underpayment of tax accrues at a rate of two-thirds of 1% per month.
				  HRS §
										231-39.
Taxpayers may register, file and pay GET online through the
				  Department's website at
https://hitax.hawaii.gov
.
INCOME TAX OBLIGATIONS
Income earned from performing services or conducting other
				  business activities in Hawaii is taxable regardless of residency.
Wages earned while working in Hawaii as an employee
				  (receiving Form W-2) are subject to Hawaii income tax for the amount of income
				  earned from performing services or conducting other business activities in
				  Hawaii.
Loan-out companies and independent contractors (receiving
				  Form 1099) are also subject to Hawaii income tax on the income earned from
				  performing services or conducting other business activities in Hawaii.
Income tax is reported and remitted by using the proper
				  income tax form. Resident individuals must file Form N-ll and nonresidents or
				  part-year resident individuals file Form N-15.
Corporations file Form N-30, S Corporations file N-35, and
				  partnerships and multimember limited liability companies file Form N-20. Other
				  forms may be necessary depending upon circumstances.
The penalty for failure to file a tax return by the deadline
				  is 5% of the unpaid tax per month, with a maximum penalty of 25%. The penalty
				  for failure to pay the tax within 60 days of timely filing a return is 20% of
				  the amount that is unpaid. If the failure to pay tax is due to fraud, the
				  penalty is an amount up to 50% of the underpayment. The interest on nonpayment
				  of tax or underpayment of tax accrues at a rate of two-thirds of 1% per month.
				  HRS §
										231-39.
CONTACT A TAX PROFESSIONAL
The Department suggests that any person affected by this Tax
				  Advisory contact a tax professional familiar with Hawaii tax laws to assist
				  them with any Hawaii tax issues.
ADDITIONAL INFORMATION
For additional information:
- Website: tax.hawaii.gov
- Telephone: (808) 587-1530
- Fax:(808)587-1584
- Hawaii Administrative Rules 18-235-17"
(c) A taxpayer claiming the tax credit under
				section
				235-17,
				HRS, shall retain evidence that the tax advisory was provided to the
				contractors, vendors, loan-out companies, or other agents, as required under
				subsection (a), not later than thirty calendar days after engaging such
				parties.