Title 14, Taxation

§235-2.5 Administration, adoption, and interrelationship of Internal Revenue Code and Public Laws with this chapter. (a) Reference in provisions of the Internal Revenue Code which are operative in this State to provisions in the Internal Revenue Code which are not operative in th…

[§235-20] Comfort letters; authority to assess fees; established. The department may assess and collect a fee for the issuance of any comfort letter of the department. All fees collected under this section shall be deposited into the tax administration special fund established un…

§235-20.5 Tax administration special fund; established. (a) There is established a tax administration special fund, into which shall be deposited: (1) Fees collected under sections 235-20 and 235-110.9; (2) Revenues collected by the special enforcement section pursuant to section…

PART II. UNIFORM DIVISION OF INCOME FOR TAX PURPOSES §235-21 Definitions. As used in this part, unless the context otherwise requires: "Business income" means income arising from transactions and activity in the regular course of the taxpayer's trade or business and includes inco…

§235-22 Taxpayers affected. Any taxpayer having income from business activity which is taxable both within and without this State, other than activity as a public utility or the rendering of purely personal services by an individual, shall allocate and apportion the taxpayer's ne…

§235-23 Taxable in another state. For purposes of allocation and apportionment of income under this part, a taxpayer is taxable in another state if: (1) In that state the taxpayer is subject to a net income tax, a franchise tax measured by net income, a franchise tax for the priv…

§235-24 Specified nonbusiness income. Rents and royalties from real or tangible personal property, capital gains, interest, dividends, or patent or copyright royalties, to the extent that they constitute nonbusiness income, shall be allocated as provided in sections 235-25 to 235…

§235-25 Rents; royalties. (a) Net rents and royalties from real property located in this State are allocable to this State. (b) Net rents and royalties from tangible personal property are allocable to this State: (1) If and to the extent that the property is utilized in this Stat…

§235-26 Allocation of capital gains and losses. (a) Capital gains and losses from sales of real property located in this State are allocable to this State. (b) Capital gains and losses from sales of tangible personal property are allocable to this State if: (1) The property had a…

§235-27 Allocation of interest and dividends. Interest and dividends are allocable to this State if the taxpayer's commercial domicile is in this State. [L 1967, c 33, pt of §1; HRS §235-27]

§235-28 Allocation of patent and copyright royalties. (a) Patent and copyright royalties are allocable to this State: (1) If and to the extent that the patent or copyright is utilized by the payer in this State, or (2) If and to the extent that the patent or copyright is utilized…

§235-29 Apportionment of business income; percentage. All business income shall be apportioned to this State by multiplying the income by a fraction, the numerator of which is the property factor plus the payroll factor plus the sales factor, and the denominator of which is three…

§235-3 Legislative intent, how Internal Revenue Code shall apply, in general. (a) It is the intent of this chapter, in addition to the essential purpose of raising revenue, to conform the income tax law of the State as closely as may be with the Internal Revenue Code in order to …

§235-30 Apportionment; property factor. The property factor is a fraction, the numerator of which is the average value of the taxpayer's real and tangible personal property owned or rented and used in this State during the tax period and the denominator of which is the average va…

§235-31 Apportionment; property factor; owned and used property. Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at eight times the net annual rental rate. Net annual rental rate is the annual rental rate paid by the taxpay…

§235-32 Apportionment; property factor; average value. The average value of property shall be determined by averaging the values at the beginning and ending of the tax period but the director of taxation may require the averaging of monthly values during the tax period if reasona…

§235-33 Apportionment; payroll factor. The payroll factor is a fraction, the numerator of which is the total amount paid in this State during the tax period by the taxpayer for compensation, and the denominator of which is the total compensation paid everywhere during the tax per…

§235-34 Compensation; where paid. Compensation is paid in this State if: (1) The individual's service is performed entirely within the State; (2) The individual's service is performed both within and without the State, but the service performed without the State is incidental to …

§235-35 Apportionment; sales factor. The sales factor is a fraction, the numerator of which is the total sales of the taxpayer in this State during the tax period, and the denominator of which is the total sales of the taxpayer everywhere during the tax period. [L 1967, c 33, pt …

§235-36 Apportionment; sales factor; tangible personalty. Sales of tangible personal property are in this State if: (1) The property is delivered or shipped to a purchaser, other than the United States government, within this State regardless of the f.o.b. point or other conditio…

§235-37 Apportionment; sales factor; nontangible personalty. Sales, other than sales of tangible personal property, are in this State: (1) In the case of intangible property, to the extent the intangible property is used in this State; or (2) In the case of a service, to the exte…

§235-38 Equitable adjustment of formula. If the allocation and apportionment provisions of this part do not fairly represent the extent of the taxpayer's business activity in this State, the taxpayer may petition for or the director of taxation may require, in respect to all or a…

[§235-38.5] Application. It is the intent of the legislature that in administering this chapter, this part, and sections 235-4 and 235-5 or as a member of or administering the multistate tax compact under chapter 255 the department of taxation shall not use or allow the use of th…

§235-39 Citation of part. This part may be cited as the "Uniform Division of Income for Tax Purposes Act". [L 1967, c 33, pt of §1; HRS §235-39]

§235-4 Income taxes by the State; residents, nonresidents, corporations, estates, and trusts. (a) Residents. The tax imposed by this chapter applies to the entire income of a resident, computed without regard to source in the State. (b) Nonresidents. In the case of a nonresident,…

[§235-4.2] Persons lacking physical presence in the State; nexus presumptions. A person that lacks physical presence in the State is presumed to be systematically and regularly engaging in business in the State and taxable under this chapter if, during the current or preceding ca…

§235-4.5 Taxation of trusts, beneficiaries; credit. (a) There shall be excluded from gross income any intangible income, such as dividends and interest, earned by a trust sited in this State to the extent that, during the taxable year of the trust, the beneficial interest in the …

§235-5 Allocation of income of persons not taxable upon entire income. (a) This section applies to income not subject to part II of this chapter, including nonbusiness income and certain section 235-22 income. (b) Income (including gains), also losses, from property owned in the …

§235-5.5 Individual housing accounts. (a) There shall be allowed as a deduction from gross income the amount, not to exceed $5,000, paid in cash during the taxable year by an individual taxpayer to an individual housing account established for the individual's benefit to provide …

PART III. INDIVIDUAL INCOME TAX §235-51 Tax imposed on individuals; rates. (a) There is hereby imposed on the taxable income of every: (1) Taxpayer who files a joint return under section 235-93; and (2) Surviving spouse, a tax determined in accordance with the following table: In…

§235-51.5 Pass-through entity taxation election. (a) A partnership or S corporation may elect to be taxed pursuant to this section as an electing pass-through entity in any tax year; provided that a separate election shall be made for each taxable year. An election made pursuant …

§235-52 Tax in case of joint return or return of surviving spouse. In the case of a joint return of a husband and wife under section 235-93, the tax imposed, as near as may be, by this chapter shall be twice the tax which would be imposed if the taxable income were cut in half. F…

§235-53 Tax tables for individuals. (a) Imposition of tax table tax: (1) In general. In lieu of the tax imposed by section 235-51, there is hereby imposed for each taxable year on the taxable income of every individual: (A) Who does not itemize the individual's deductions for the…

§235-54 Exemptions. (a) In computing the taxable income of any individual, there shall be deducted, in lieu of the personal exemptions allowed by the Internal Revenue Code, personal exemptions computed as follows: Ascertain the number of exemptions which the individual can lawful…

§235-55 Tax credits for resident taxpayers. (a) Whenever an individual or person liable to the taxes imposed upon individuals, who is a resident of the State or who has filed a joint resident return under section 235-93, has become liable for income taxes to a state, or to the Di…

§235-55.6 Expenses for household and dependent care services necessary for gainful employment. (a) Allowance of credit. (1) In general. For each resident taxpayer, who files an individual income tax return for a taxable year, and who is not claimed or is not otherwise eligible to…

§235-55.7 Income tax credit for low-income household renters. (a) As used in this section: (1) "Adjusted gross income" is defined by section 235-1. (2) "Qualified exemption" includes those exemptions permitted under this chapter; provided that a person for whom exemption is claim…

§235-55.75 Refundable earned income tax credit. (a) [Repeal and reenactment on December 31, 2027. L 2023, c 163, §5.] Each qualifying individual taxpayer may claim a refundable earned income tax credit. Unless otherwise provided by law, the tax credit, for the appropriate taxable…

§235-55.85 Refundable food/excise tax credit. (a) Each individual taxpayer, who files an individual income tax return for a taxable year, and who is not claimed or is not otherwise eligible to be claimed as a dependent by another taxpayer for federal or Hawaii state individual in…

§235-55.91 Credit for employment of vocational rehabilitation referrals. (a) There shall be allowed to each taxpayer subject to the tax imposed by this chapter, a credit for employment of vocational rehabilitation referrals which shall be deductible from the taxpayer's net income…

§235-59 Decedents. In respect of a decedent, the determination of the income of the taxable period in which falls the date of the decedent's death, and the determination of the income of the estate and of the persons who acquire rights from the decedent or by reason of the decede…

§235-6 Foreign manufacturing corporation; warehousing of products. (a) For the purposes of sections 235-21 to 235-39, a foreign corporation engaged in the business of manufacturing without the State, having its manufactured products warehoused in this State by another person who …

WITHHOLDING AND COLLECTION OF TAX AT SOURCE §235-61 Withholding of tax on wages. (a) As used in this section: "Employee" includes an officer or elected official, or any other employee. "Employer" means: (1) The person or government for whom an individual performs or performed any…

§235-62 Return and payment of withheld taxes. (a) Every employer required by this chapter to withhold taxes on wages paid in any quarter of the calendar year shall make a return of such wages to the department of taxation on or before the fifteenth day of the calendar month follo…

§235-63 Statements to employees. (a) Every employer required to deduct and withhold any tax on the wages of any employee shall furnish to each employee in respect of the employee's employment during the calendar year, on or before January 31 of the succeeding year, or if the empl…

§235-64 Taxes withheld by employer held in trust; employer's liability. (a) All taxes withheld by any employer under section 235-61 shall be held in trust by the employer for the State and for the payment of the same to the collector in the manner and at the time required by this…