reglab/statecodes huggingface dataset:
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 3 - INDIVIDUAL INCOME TAX LAW › Section 18-235-66 - Further withholdings at source; crediting of withheld taxes

Current through June, 2024
(a) (Reserved)
(b) Credit for tax withheld upon income.
				Taxes withheld at the source pursuant to section
				235-66,
				HRS, or sections
				235-61
				to
				235-66,
				HRS, shall be credited against the taxpayer's income tax liability. Where taxes
				are withheld by an employer against wages paid during any calendar year
				pursuant to sections
				235-61
				to
				235-66,
				HRS, the tax liability of the recipient of the income shall be credited for the
				amount of tax withheld for the taxable year during which the calendar year
				began. If the taxpayer has more than one taxable year beginning during the
				calendar year, the credit shall be applied against the tax liability resulting
				from the last of the taxable years. Taxes withheld shall be deemed payments of
				estimated taxes under section
				235-97(g),
				HRS.
(1) For purposes of this section,
				"recipient of the income" is the person who is subject to tax under chapter
				235, HRS, upon the wages or other
				income from which the tax is withheld.
(2) Withholding on income. Tax is considered
				withheld at the source if:
(A) The tax has
				actually been deducted and withheld from the income or wages, even if the
				employer or person required to withhold the tax has not submitted it to the
				State; or
(B) The tax has been paid
				to the State by the employer or person required to withhold the tax, and the
				recipient of the income has actually reimbursed the amount to the employer or
				person required to withhold it.
(3) Application of credit. After the taxpayer
				has determined the amount of tax for the taxable year, the credit for taxes
				withheld is applied by the taxpayer against the tax liability to determine
				whether there is a balance due or whether the return shows an overpayment. An
				overpayment of tax may be used as a credit against the taxpayer's estimated tax
				for the succeeding taxable year or may be refunded pursuant to section
				235-110,
				HRS.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 4 - CORPORATION INCOME TAX › Section 18-235-71 - Tax on corporations; rates; credit of shareholder of regulated investment company

Current through June, 2024
(a)
				(Reserved)
(b) Federal Treasury
				regulations relating to the Internal Revenue Code provisions of regulated
				investment companies shall apply and the imposition of tax and deductions for
				dividends paid shall be as provided under section
				235-71,
				HRS.
(c) Undistributed capital
				gains of a regulated investment company. Section
				235-71,
				HRS, provides that a shareholder of a regulated investment company is allowed a
				credit equal to the amount of tax imposed on capital gains which are includable
				in the shareholder's income tax return under section 852(b)(3)(D), IRC,
				(taxation of regulated investment companies and their shareholders) limited to
				the amount of tax paid by the regulated investment company at the state capital
				gain rate to the State. The credit shall be applied against the shareholder's
				tax liability as determined under chapter
				235, HRS. Any excess amount shall be
				applied or refunded to the shareholder pursuant to section
				235-110,
				HRS.
(d) Real estate investment
				trust; in general.
(1) Federal Treasury
				regulations relating to Internal Revenue Code provisions on real estate
				investment trusts shall apply and the imposition of tax and deductions for
				dividends paid shall be as provided under section
				235-71,
				HRS.
(2) Real estate investment
				trust; penalties. In addition to any other penalty provided by law, the
				assessable penalties with respect to liability for tax of real estate
				investment trusts shall be as provided under section
				235-71,
				HRS and as follows:
(A) The interest and
				penalty are determined based on the amount of adjustment, but only to the
				extent that the deficiency dividend deduction is allowed; and
(B) The nondeductible penalty is equal to the
				amount of interest for which the trust is liable on account of such adjustment.
The total penalty, however, is limited to one-half the
				  amount of the deficiency dividend deduction.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-92 - Returns, who shall make

Current through June, 2024
(a) Individual
				returns.
(1) Who is required to file.
				Pursuant to section
				235-92,
				HRS, for each taxable year, a return shall be filed by:
(A) Every individual doing business in the
				State during the taxable year, whether or not any taxable income is derived
				therefrom. As used in this paragraph, "doing business" includes all activities
				engaged in or caused to be engaged in with the object of gain or economic
				benefit, direct or indirect, with the exception of personal services performed
				as an employee under the direction and control of an employer. Every person
				receiving rent from property owned in the State is deemed to be doing business
				and shall file a return, whether or not taxable income is derived from the
				activity.
(B) Every individual
				receiving gross income in excess of the total amount of any personal exemptions
				which the taxpayer may claim and the standard deduction.
(C) Every individual claiming benefits
				available to individuals taking up residence in Hawaii after attaining the age
				of sixty-five years and before July 1, 1976. The return should be accompanied
				by a signed statement setting forth the date that the individual established
				residence in Hawaii and the individual's date of birth.
(D) Children receiving income during the
				taxable year who have not attained the age of fourteen years before the end of
				the taxable year. The income of a minor child is not included in the gross
				income of the parent for income tax purposes, except as provided in section
				235-7.5,
				HRS. The minor child's income shall be reflected in the return filed by or for
				such child.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-93 - Joint returns

Current through June, 2024
(a) In general. A
				husband and wife, as defined in section 235-1, HRS, may file a single joint
				return. A joint return may be filed even though one of the spouses has neither
				gross income nor deductions, and even though the spouses are not living
				together at any time during the taxable year, except as provided below:
(1) No joint return shall be filed if the
				spouses are legally separated under a decree of divorce or of separate
				maintenance;
(2) No joint return
				shall be filed if either spouse is a nonresident alien at any time during the
				taxable year; provided that section 6013(g), IRC, (joint returns of income tax
				by husband and wife) relating to the election to treat a nonresident alien
				individual as a resident of the United States is incorporated by reference and
				the election under the IRC shall be accepted as an election for the purposes of
				chapter 235, HRS;
(3) No joint
				return shall be filed if the husband and wife have different taxable years,
				except that if the spouses' taxable years begin on the same day and end on
				different days because of the death of either or both, then a joint return may
				be filed with respect to their taxable year. This exception shall not apply if
				the surviving spouse remarries before the close of the surviving spouse's
				taxable year, or if the taxable year of either spouse is a fractional part of a
				year due to a change of accounting period;
(4) In the case of the death of one or both
				spouses, the decedent's joint return may be filed only by the executor or
				administrator of each decedent's estate, except that in the case of the death
				of one spouse a joint return may be made by the surviving spouse with respect
				to both the surviving spouse and the decedent if no return for the taxable year
				has been made by the decedent, no executor or administrator has been appointed,
				and no executor or administrator is appointed before the last day for filing
				the return of the surviving spouse. If an executor or administrator of the
				decedent is appointed after the filing of a joint return by the surviving
				spouse, the executor or administrator may disaffirm the joint return filing by
				filing a separate return for the decedent's taxable year within one year after
				the last day for filing a return of a surviving spouse. The return filed by the
				surviving spouse shall constitute the surviving spouse's separate
				return;
(5) No joint return shall
				be filed if either spouse is a nonresident (i.e., resident of another state),
				unless the nonresident spouse agrees to subject all sources of income to Hawaii
				income tax.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-94 - Estate and trust returns

Current through June, 2024
(a) In general.
				Pursuant to section
				235-94(d),
				HRS, the fiduciary of an estate or trust is required to file an income tax
				return for the estate or trust and pay any tax liability due on the taxable
				income.
(b) Filing of estate and
				trust returns. The fiduciary of an estate or trust shall file an income tax
				return for each taxable year, reporting income subject to taxation under
				chapter
				235, HRS, if:
(1) An estate has taxable income of $400 or
				more;
(2) A trust, which under its
				governing instrument is required to distribute all of its income currently, has
				taxable income of $200 or more; or
(3) Any other trust which has taxable income
				of $80 or more.
If a nonresident trust or estate is doing business in the
				  State or has income from sources in the State, the fiduciary shall file an
				  income tax return for the trust or estate subject to the limitations set forth
				  in this subsection.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-96 - Returns by persons making payments

Current through June, 2024
(a) Return of
				information; payments of $600 or more.
(1)
				General rule. Except as provided in subsection (c), every person engaged in a
				trade or business in Hawaii or having a place of business in Hawaii shall make
				an information return for the calendar year with respect to payments made by
				the taxpayer during the year in the course of the taxpayer's trade or business
				to another person, of fixed or determinable:
(A) Salaries, wages, commissions, fees, and
				other forms of compensation for services rendered aggregating $600 or
				more;
(B) Interest, rents,
				royalties, annuities, pensions, and other gains, profits, and income
				aggregating $600 or more, except as provided in subsection (h); or
(C) Foreign items, as defined in this
				subsection, aggregating $600 or more.
The return required by this paragraph shall be made on
				  federal Form 1099 or on forms as prescribed by the department. Transmittal Form
				  N-196 shall accompany all submissions of federal Form 1099 or other information
				  returns required under this section on forms as prescribed by the department. A
				  separate return of information shall be furnished for each person to whom
				  payments of $600 or more are made.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-98 - Returns; form, verification and authentication, time of filing

Current through June, 2024
(a) The director of taxation may grant a
				reasonable extension of time for filing any return, declaration, statement, or
				other document required under chapter
				235, HRS; provided that no extension
				shall be for more than six months, except as otherwise provided by statute for
				cases in which exceptional circumstances require additional time, including
				cases of persons who are outside the United States.
(b) Any taxpayer required to file an income
				tax return, declaration, statement, or other document under chapter
				235, HRS, is granted an automatic
				six-month extension to file the tax return after the date prescribed for
				filing. The taxpayer need not file an application form to request an extension.
				However, if the taxpayer makes a payment of tax, the payment shall be submitted
				with the form prescribed by the department. Automatic extensions shall be
				granted subject to the following conditions:
(1) On or before the due date prescribed by
				the statute for the filing of a return, there shall have been paid, through
				refundable credits, nonrefundable credits, withholding of taxes, estimated tax
				payments, or a payment submitted with a form prescribed by the department, an
				amount equal to the properly estimated tax liability for the taxable
				year;
(2) The tax return shall be
				filed within the time granted by the automatic extension and shall be
				accompanied by payment of tax shown as due on the return to the extent not
				already paid; and
(3) A court has
				not ordered the taxpayer to file the tax return, declaration, statement, or
				other document to be extended on or before the prescribed due date.
The failure to file a tax return penalty under section
				  231-39(b)(l),
				  HRS, shall not be imposed on any return filed on or before the extended due
				  date if these conditions are met. However, if the stated conditions are not
				  met, the automatic extension shall be deemed invalid and penalties and interest
				  shall be assessed on the amount of tax owed as if no automatic extension had
				  been granted (i.e., the computation of penalties under section
				  231-39(b)
				  (1), HRS, and interest under section
				  231-39(b)(4),
				  HRS, shall relate back to the due date prescribed by the statute).
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-99 - Place and time of filing returns

Current through June, 2024
(a) In general. An
				individual taxpayer's income tax return for the taxable year shall be filed
				with the director of taxation or designee in the taxation district in which the
				taxpayer's residence or principal place of business is located, or if the
				individual has no residence or place of business in the State, then the return
				shall be filed with the director of taxation in Honolulu.
(b) Due date. Unless the due date for filing
				is extended, the return shall be filed on or before the twentieth day of the
				fourth month following the close of the taxable year. The return shall be
				accompanied by payment of the balance of the tax due, after applying credits
				allowable under chapter
				235, HRS, and after deducting
				payments of estimated tax for the taxable year, if any.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-102 - Records and special returns

Current through June, 2024
(a) In general.
				Except as provided in subsection (b) any person subject to tax under chapter
				235, HRS, or any person required to file a return of information with respect
				to income, shall keep such permanent books of account or records, including
				inventories, as are sufficient to establish the amount of gross income,
				deductions, credits, or other matters required to be reported in any income tax
				return or return information. The records shall be kept in the English language
				and shall be made available upon request by the director or designee.
(b) Wage earners. Individuals whose gross
				income includes salaries, wages, or similar compensation for personal services
				rendered are required to keep records which will enable the director of
				taxation to determine the correct amount of income subject to tax. It is not
				necessary, however, that with respect to the income discussed in this
				subsection that individuals keep the books of account or records required by
				subsection (a).
(c) Exempt
				organizations. In addition to such permanent books and records as required by
				subsection (a), with respect to the tax imposed on unrelated business income
				under section
				235-2.4,
				HRS, every organization exempt from tax under section
				235-9, HRS,
				shall keep permanent books of account or records, including inventories, which
				are sufficient to show specific items of gross income, receipts, and
				disbursements.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-109 - Jeopardy assessments, security for payments, etc

Current through June, 2024
(a) In general. Pursuant to sections
				235-1 (defining
				"taxable year") and
				235-109,
				HRS, and as set forth in section
				231-24,
				HRS, a jeopardy assessment may be issued if the director determines that a
				taxpayer may depart quickly from the State, may remove or conceal the
				taxpayer's self or the taxpayer's property in or outside the State, or do any
				other act tending to prejudice or jeopardize, in whole or in part, the
				assessment or collection of any tax liability. A jeopardy assessment only
				terminates the taxable period for purposes of computing the amount of tax to be
				assessed and collected. Pursuant to section
				231-24,
				HRS, tax liability for the taxable period in which a jeopardy assessment is
				made, may be recalculated.
(b) Tax
				for a short taxable year. Unlike the case of a short taxable year resulting
				from a change in accounting period made with the approval of the director, tax
				liability for a short taxable year resulting from a jeopardy assessment is not
				computed on an annual basis, and any available personal exemptions are not
				prorated. However, if tax liability for the taxable period is recalculated, the
				tax shall be recomputed over the entire period, including the portion which was
				subject to the jeopardy assessment. For example, if a jeopardy assessment is
				issued because a resident of the State is terminating residency and leaving the
				State, the taxpayer shall be allowed the full amount of any available personal
				exemptions and the tax liability shall be computed as if the income received
				during the short taxable year were the income for a taxable year of twelve
				months. However, if there is evidence that the taxpayer received income subject
				to taxation by the State after terminating residency, the director may
				recalculate the tax for the taxable period. The director shall recompute the
				tax for the entire twelve-month period, including the months which were subject
				to the previous jeopardy assessment, and any taxes paid on the previous
				jeopardy assessment shall be credited against any tax liability resulting from
				the twelve-month period.
(c)
				Recalculating tax liability after jeopardy assessment made. Where the taxable
				year has not yet expired, the director may recalculate the tax liability for a
				taxable period terminated by a jeopardy assessment each time the taxpayer is
				found to have received additional taxable income during the taxable year. The
				taxpayer may also reopen a taxable period terminated by a jeopardy assessment
				by filing a true and accurate return pursuant to chapter
				235, HRS.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-110.6 - Fuel tax credit for commercial fishers

Current through June, 2024
(a) The
				tax credit provided by section
				235-110.6,
				HRS, shall be equal to the amount of state and county fuel taxes imposed by
				section
				243-4(a),
				HRS, upon all liquid fuel purchased for use by the principal operators of
				commercial fishing vessels.
(1) The fuel tax
				credit shall be available only to a principal operator who purchases and
				actually uses the fuel to operate a fishing vessel for commercial purposes.
				Taxes paid on fuel used for operating ancillary equipment on board the vessel,
				such as pumps, gasoline-powered winches, and other related equipment shall
				likewise qualify for the credit.
(2) The amount of credit shall be limited to
				the amount of tax paid by the principal operator for fuel which is actually
				used to operate the vessel. Fuel taxes paid upon fuel used in the operation of
				pickup trucks, airplanes, or any other purpose or use not directly related to
				the operation of the commercial fishing vessel shall not qualify for the
				credit.
Example 1:
Taxpayer uses a pickup truck to
				  deliver fish to market. The fuel used to operate the pickup truck is not
				  directly related to the operation of the fishing vessel, and therefore, taxes
				  paid on the fuel do not qualify for the credit.
Example 2:
Taxpayer uses an airplane to scout
				  the ocean for fish. Upon spotting a school of fish, a fishing vessel is
				  dispatched for the haul. Taxes paid upon the fuel used to operate the airplane
				  do not qualify for the credit; only taxes paid on fuel for the operation of the
				  fishing vessel may be included in calculating the credit.
Example 3:
Taxpayer conducts research and
				  performs experiments for the University of Hawaii to improve commercial fishing
				  techniques, methodology, and practices, for which the taxpayer receives
				  payment. Because this is not primarily a commercial fishing endeavor, tax paid
				  on fuel used in a research or experimental expedition shall not be included for
				  credit.
(3) The fuel tax
				credit shall not apply to fuel used in the operation of charter fishing boats
				and the like, where the income is derived from fees and other sources rather
				than from commercial fishing.
(4)
				The fuel tax credit shall not apply to an individual or an electing small
				business corporation (S corporation) for fuel tax paid for fuel used in the
				operation of a fishing vessel where the activity is not engaged in for profit,
				as provided in section 183, IRC, (activities not engaged in for
				profit).
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-110.7-01 - Definitions

Current through June, 2024
For purposes of sections 18-235-110.7-01 to
				  18-235-110.7-22, unless otherwise
				  stated:
"ACRS" means the accelerated cost recovery system.
"Credit" means the capital goods excise tax credit.
"Department" means the department of taxation.
"Director" means the director of taxation.
"Eligible property" means new section 38 property or used
				  section 38 property (as defined in sections
				  18-235-110.7-05 and
				  18-235-110.7-06,
				  respectively).
"I.R.C." means the Internal Revenue Code of 1954, as
				  amended, which includes the Internal Revenue Code of 1986, and the Internal
				  Revenue Code of 1986, as amended.
"Lease" is defined as it is for federal income tax purposes.
				  For treatment, see section
				  18-235-110.7-02(c).
"Sale-leaseback" is defined as it is for federal income tax
				  purposes. For treatment, see section
				  18-235-110.7-02(c).
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-110.7-02 - Allowance of the credit

Current through June, 2024
(a) In general.
				There shall be allowed to each taxpayer subject to the tax imposed by chapter
				235, HRS, a credit which shall be deductible from the taxpayer's net income tax
				liability, if any, for the taxable year in which the credit is properly
				claimed, if the following conditions are met:
(1) The taxpayer purchases or imports
				eligible property;
(2) The purchase
				or import of eligible property results in a transaction which is subject to the
				imposition and payment of tax at the rate of four percent under chapters
				237 or
				238,
				HRS;
(3) The eligible property is
				used by the taxpayer in a trade or business;
(4) The eligible property is placed in
				service within Hawaii after December 31, 1987 (for property acquired during the
				period beginning January 1, 1988, to December 31, 1988, see section
				18-235-110.7-09 ); and
(5) The
				taxpayer files a claim for the credit on or before the end of the twelfth month
				following the close of the taxable year for which the credit may be claimed, or
				if an extension of time for filing a return has been granted, within the
				extension period.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-110.7-03 - Property eligible for the credit

Current through June, 2024
The determination of whether property is eligible for the
				  credit must be made with respect to the first taxable year in which the
				  property is placed in service by the taxpayer. Property which is eligible for
				  the credit is (1) new section 38 property (as defined in section
				  18-235-110.7-05 ), or (2) used
				  section 38 property (as defined in section
				  18-235-110.7-06
				  ).
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-110.7-04 - Section 38 property

Current through June, 2024
(a) In general.
				Section 38 property is defined as:
(1)
				Property which is (A) tangible personal property, or (B) other tangible
				property;
(2) Recovery property
				(within the meaning of I.R.C. section 168, without regard to useful life), or
				any other property with respect to which depreciation is allowable to the
				taxpayer; and
(3) Property which
				has an estimated useful life or recovery period (determined as of the time the
				property is placed in service) of three years or more. A property shall have
				the same estimated useful life or recovery period as that which is used for
				depreciation or ACRS purposes.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-110.7-05 - New section 38 property

Current through June, 2024
For calendar year 1988 (and fiscal year taxpayer
				  acquisitions occurring during the period beginning January 1, 1988, to December
				  31, 1988), and for calendar years beginning after December 31, 1988 (and fiscal
				  year taxpayer acquisitions occurring after December 31, 1988). Property
				  qualifies as new section 38 property if one of the following conditions is
				  met:
(1) Section 38 property, the
				original use of which commences with the taxpayer after December 31, 1987, and
				commences after the date the taxpayer acquires it.
(A) "Original use", defined. Original use
				means the first use to which the property is put, whether or not it is the
				taxpayer's first use of the property.
(B) Examples. Subparagraph (A) is illustrated
				as follows:
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-110.7-06 - Used section 38 property

Current through June, 2024
(a) For calendar
				year 1988 (and fiscal year taxpayer acquisitions occurring during the period
				beginning January 1, 1988, to December 31, 1988). Property qualifies as used
				section 38 property if:
(1) The property is
				section 38 property (as defined in section 18-235-110.7-04 );
(2) The property is not new section 38
				property (as defined in section 18-235-110.7-05 ); and
(3) The property is not used by the same
				person (i.e., taxpayer or a related person as defined in I.R.C.
				§179(d)(2)(A) or (B)) both before and after the purchase.
(A) Use by prior user. Property shall not be
				treated as used section 38 property if the property is used by the same person
				(i.e., taxpayer or a related person) both before and after its
				purchase.
(B) Substantial use.
				While used section 38 property must not be used by the same person both before
				and after its purchase, only substantial use before a purchase disqualifies
				used property for purposes of the credit. Casual use before a purchase would
				not disqualify used property from eligibility for the credit.
(C) Example. Subparagraph (B) is illustrated
				as follows:
A person rents equipment (1) for a period of 25 days and for
				  a different 2-day period within eleven months of the first rental, and (2) then
				  purchases the equipment. In this case, the prior use of the property will not
				  disqualify it as used section 38 property because the prior use will be
				  considered to have been only on a casual basis.
(D) Lease or sale-leaseback. Property sold
				under a sale-leaseback arrangement in the hands of the buyer/lessor does not
				qualify as used section 38 property because the seller/lessee continues to use
				the property. The same result follows where a taxpayer who has been leasing
				property subsequently purchases the property it had leased. Note that section
				38 property which is (i) sold and leased back by the same taxpayer within three
				months of the date the property was originally placed in service by the
				taxpayer, or (ii) leased to the same taxpayer within three months of the date
				the property was originally placed in service by that taxpayer may qualify as
				new section 38 property (see section 18-235-110.7-05(2) ).
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-110.7-08 - Placed in service

Current through June, 2024
(a) In general.
				Property shall be considered to be placed in service in the earliest of the
				following taxable years:
(1) The taxable year
				in which the period for depreciation with respect to the property
				begins;
(2) The taxable year in
				which under ACRS, a claim for recovery allowances with respect to the property
				begins; or
(3) The taxable year in
				which the property is placed in a condition or state of readiness and available
				for a specifically assigned function by the taxpayer. The following examples
				illustrate paragraph (3):
(A) Parts that are
				acquired and set aside during the taxable year for use as a replacement for a
				particular machine in order to avoid operational time loss shall be considered
				to be in a condition or state of readiness and available for a specifically
				assigned function by the taxpayer.
(B) If operational farm equipment is acquired
				during the taxable year and it is not practicable to use the equipment for its
				specifically assigned function in the taxpayer's business of farming until the
				following year, the equipment shall be considered to be in a condition or state
				of readiness and available for a specifically assigned function by the taxpayer
				in the latter year.
(C) Equipment
				that is acquired for a specifically assigned function and is operational but is
				undergoing testing to eliminate defects shall be considered to be in a
				condition or state of readiness and available for a specifically assigned
				function by the taxpayer.
(D)
				Fruit-bearing trees and vines shall not be considered to be in a condition or
				state of readiness and available for a specifically assigned function until
				they have reached an income-producing state.
(E) Materials and parts acquired to be used
				in the construction, reconstruction or erection of an item of equipment shall
				not be considered to be in a condition or state of readiness and available for
				a specifically assigned function until the equipment itself is
				functional.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-110.7-09 - Purchased and placed in service

Current through June, 2024
(a) In general. The
				discussion in this section only applies to claims for and recapture of credit
				for property acquired during calendar year 1988, and for fiscal year taxpayer
				acquisitions occurring during the period beginning January 1, 1988, to December
				31, 1988. From January 1, 1988, to December 31, 1988, all references in
				sections 18-235-110.7-01 to 18-235-110.7-22 to the phrase, "placed in
				service0", shall be substituted by the phrase, "purchased and placed in
				service". As a result, for property acquired during the period from January 1,
				1988, to December 31, 1988, the date corresponding to the substituted phrase,
				"purchased and placed in service", shall determine both the availability and
				recapture of any credit.
(b)
				"Purchased and placed in service", defined. Purchased and placed in service
				means the date the property is acquired, available or ready for use, whichever
				is earlier. Property purchased and placed in service does not include property
				which is acquired in a related-party transaction.
(c) "Related-party transaction", defined. A
				related-party transaction is a transaction in which:
(1) The acquired property is owned or used at
				any time during 1987 and 1988 by the taxpayer or related person; or
(2) The property is acquired in a transaction
				in which the user of the property does not change.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-110.7-10 - Determination of amount of credit

Current through June, 2024
(a) The amount of
				credit available is determined by applying the following rates against the
				basis of eligible property:
(1) For calendar
				years prior to 1988, there is no credit;
(2) For calendar year 1988, the rate is three
				percent;
(3) For calendar years
				beginning after December 31, 1988, the rate is four percent; and
(4) For taxpayers with fiscal taxable years,
				the rate is the rate for the calendar year in which the eligible property is
				placed in service within Hawaii.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-110.7-11 - Basis of eligible property

Current through June, 2024
(a) In general. The
				basis of eligible property means the cost of property.
(b) "Cost", defined. Cost of property means
				the lesser of either:
(1) The actual invoice
				price of eligible property; or
(2)
				The basis from which a deduction is taken under I.R.C. §167 (with respect
				to depreciation) or under I.R.C. §168 (with respect to ACRS).
In either case, the amount under paragraph (1) or (2) must
				  be subject to the imposition and payment of tax at the rate of four percent
				  under chapter
				  237 or
				  238,
				  HRS.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-110.7-12 - Amount of credit allowable and claimed is treated as a taxable income item, or the basis of eligible property for depreciation or ACRS purposes is reduced by the amount of credit allowable and claimed

Current through June, 2024
The taxpayer shall treat the amount of credit allowable and
				  claimed as a taxable income item for the taxable year in which it is properly
				  recognized under the method of accounting used to compute taxable income.
				  Alternatively, the basis of eligible property for depreciation or ACRS purposes
				  for state income taxes shall be reduced by the amount of credit allowable and
				  claimed.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-110.7-13 - Recapture of credit under section 235-110.7, HRS

Current through June, 2024
(a) In
				general. Subject to exceptions as discussed in section 18-235-110.7-16, a
				recapture rule applies to recompute previously taken credit if eligible
				property is disposed of or otherwise ceases to be eligible property within the
				recapture period. The recapture rule is limited to the statements in sections
				18-235-110.7-01 to 18-235-110.7-22. See section 18-235-110.7-15 for a
				discussion of when property ceases to be eligible property.
(b) "Recapture period", defined. The term
				recapture period means the period beginning on the first day of the month the
				eligible property is placed in service, and extending for a full three
				years.
(c) Recomputation. The
				credit is recomputed by multiplying the previously taken credit by a recapture
				percentage, and there should be taken into account any prior recapture
				determination in connection with the same property.
(d) Recaptured amount treated as increase in
				income tax. An increase in income tax as a result of credit recapture shall be
				treated as income tax imposed on the taxpayer by chapter
				235, HRS, for the recapture year.
				This is the rule notwithstanding that absent the recapture event, the taxpayer
				has no income tax liability, has a net operating loss, or no income tax return
				is otherwise required for the taxable year.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-110.7-14 - Recapture percentage

Current through June, 2024
(a) The following
				table determines the recapture percentage.
Recapture period: If the recovery property or
							 depreciable property ceases to be eligible property within:
The
							 recapture percentage is:
(i) One full year after placed in
							 service
100%
(ii) One full year after the close of the period
							 described in clause (i)
66%
(iii) One full year after the close of the period
							 described in clause (ii)
33%
(iv) One full year after the close of the period
							 described in clause (iii), and thereafter
-0-
(b)
				Example. Subsection (a) is illustrated as follows:
On June 15, 1989, calendar-year taxpayer A places in service
				  eligible property with a basis of $10,000. The asset is used entirely for
				  business purposes. The amount of credit allowable and taken in taxable year
				  1989 is $400 ($10,000 x 4%). On June 16, 1991, A sells the asset. In taxable
				  year 1991, A must recapture $132 [[($10,000 x 100% x 4%) - ($10,000 x 0% x 4%)]
				  x 33%] of the previously taken credit. The 33% recapture percentage is based on
				  a recapture period which begins on June 1, 1989 (i.e., the first day of the
				  month within which the eligible property was placed in service), and the date
				  the property ceases to be eligible property (i.e., June 16,
				  1991).
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-110.7-15 - Recapture event (i.e., property ceases to be eligible property)

Current through June, 2024
(a) In general.
Property ceases to be eligible property with respect to a
				  taxpayer:
(1) As a result of the
				occurrence of an event on a specific date (e.g., a sale, transfer, retirement,
				gift, distribution, or other disposition). The cessation shall be treated as
				having occurred on the actual date of the event; or
(2) For any reason other than the occurrence
				of an event on a specific date (e.g., the property is used predominantly in
				connection with the furnishing of lodging during the taxable year and does not
				fall within one of the exceptions; decrease in business use of listed
				property). The cessation shall be treated as having occurred on the first day
				of the taxable year.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-110.7-16 - Exceptions to the recapture rule

Current through June, 2024
(a) Transfer by
				reason of death. A transfer by reason of death is not considered to be a
				disposition of eligible property, subject to the recapture rule. This exception
				to the recapture rule applies to transfers by reason of death of a sole
				proprietor, partner, S corporation shareholder, or beneficiary of an estate or
				trust.
(b) Example. Subsection (a)
				is illustrated as follows:
A, a calendar-year taxpayer, places in service in 1988,
				  eligible property with a basis of $5,000. In 1988, A takes a credit in the
				  amount of $150 ($5,000 x 3%). A dies in 1989, and the property is transferred
				  to A's heir. In 1989, no credit is required to be recaptured. Further, the heir
				  can immediately dispose of the property without the possibility of credit
				  recapture.
(c) Transaction
				to which I.R.C. §381(a) applies. A disposition of eligible property in a
				transaction to which I.R.C. §381(a) (with respect to carryovers in certain
				corporate acquisitions) applies is not considered to be a disposition of
				eligible property, subject to the recapture rule. However, if the acquiring
				corporation disposes of the eligible property before the close of the recapture
				period, there will be an early disposition and the recapture rule will be
				triggered.
(d) Mere change in form
				of conducting a trade or business.
(1) In
				general. Recapture is not required as a result of a mere change in the form of
				conducting a trade or business if:
(A) the
				property is retained as eligible property in the same trade or business;
(B) the transferor (or in a case
				where the transferor is a partnership, estate or trust, or S corporation, the
				partner, beneficiary, or shareholder) of eligible property retains a
				substantial interest in the trade or business;
(C) substantially all the property (whether
				or not eligible property) necessary to operate the trade or business is
				transferred in the change of form; and
(D) the basis of eligible property in the
				hands of the transferee is determined in whole or in part by reference to the
				basis of eligible property in the hands of the transferor (i.e., carryover
				basis).
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-110.7-18 - Refund

Current through June, 2024
The credit is deductible from the taxpayer's net income tax
				  liability for the year in which it qualifies. If the credit exceeds the
				  taxpayer's net income tax liability, the excess of credit over liability shall
				  be refunded to the taxpayer; however, no refund on account of the credit shall
				  be made for an amount less than $1.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-110.7-20 - Filing procedure

Current through June, 2024
(a) In general. A
				claim for the credit, including an amended claim, must be filed on or before
				the end of the twelfth month following the close of the taxable year for which
				the credit may be claimed, or if an extension of time for filing a return has
				been granted, within the extension period.
(b) Form. The claim for the credit shall be
				made on Form N-312. For recapture purposes, a recomputation of the credit shall
				be made on Part II of Form N-312.
(c) Failure to comply with filing
				requirements. A failure to comply with these filing requirements shall
				constitute a waiver of the right to claim the credit.
(d) Partner, S corporation shareholder, or
				beneficiary of an estate or trust. In the case of a taxpayer who is involved in
				a pass-through entity (i.e., partnership, S corporation, estate, or trust) and
				who claims a credit for the entity's eligible property, the taxpayer shall
				attach to Form N-312, a copy of the Schedule K-1 and any other statement
				(relating to the credit) which is provided by the pass-through entity. A copy
				of the Schedule K-1 and other statement shall be attached to Form N-312 both
				when the credit is claimed, and when the credit is subject to
				recapture.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-110.7-21 - Identification of property

Current through June, 2024
(a) In general. A
				taxpayer must maintain records from which the taxpayer can establish, with
				respect to each item of eligible property, the following facts:
(1) The month and the taxable year in which
				the property was placed in service;
(2) The basis of the property;
(3) The estimated useful life or recovery
				period that was assigned to the property to determine eligibility for the
				credit; and
(4) The date the
				property is disposed of or otherwise ceases to be eligible property.
The above stated facts will be analyzed to determine both
				  the eligibility for the credit, and the necessity for any recapture of
				  credit.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-110.7-22 - Banks and other financial corporations

Current through June, 2024
Sections
				  18-235-110.7-01 to
				  18-235-110.7-21 shall apply to
				  banks and other financial corporations.
Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 6 - RETURNS AND PAYMENTS; ADMINISTRATION › Section 18-235-111 - Limitation period for assessment, levy, collection, or credit

Current through June, 2024
(a) Tax imposed under chapter
				235, HRS, shall be assessed or
				levied, and any overpayment shall be credited, within three years after filing
				the final income tax return for the taxable year, or within three years of the
				prescribed due date of the return, whichever is later.
(1) Running of the limitation period.
(A) In general. Although returns may be filed
				before the prescribed due date, the running of the limitation period for
				purposes of section
				235-111,
				HRS, and this section, unless otherwise prescribed, does not start until after
				the prescribed due date for filing.
(B) Where an amended return is filed. When a
				return has been timely filed as required by law and thereafter an amended
				return is filed, the limitation period begins to run from the date the original
				return was filed or the prescribed due date, whichever is later. Filing an
				amended return does not extend, nor does it stop, the running of the limitation
				period. The original return, however, must be complete and meet the statutory
				requirements; the limitation period will begin to run only upon the filing of a
				proper return. The running of the limitation period is not affected or
				suspended by the later filing of amended returns.
(C) Loss of S corporation status. Where
				corporate tax liability is found to be due upon a determination that the
				corporation is not entitled to the benefits of a corporation organized under
				subchapter S (sections 1361 to 1369) of the Internal Revenue Code of 1986, as
				amended, the limitation period for assessment and collection shall run from the
				date the return is filed or from the prescribed due date for filing the return,
				whichever is later.