General Provisions

HRS div. 1, tit. 14, ch. 235, pt. I

in effect

HRS §235-1 Definitions

235-1. Definitions "Biotechnology" means fundamental knowledge regarding the function of biological systems from the macro level to the molecular and subatomic levels that has application to development including the development of novel products, services, technologies, and subtechnologies from insights gained from research advances that add to that body of fundamental knowledge. "Blind" means a person whose central visual acuity does not exceed 20/200 in the better eye with correcting lenses, or whose visual acuity is greater than 20/200 but is accompanied by a limitation in the field of vision such that the widest diameter of the visual field subtends an angle no greater than twenty degrees. The impairment of sight shall be certified to on forms prescribed by the department of taxation on the basis of a written report on an examination performed by a qualified ophthalmologist or qualified optometrist. "Computer data" means any representation of information, knowledge, facts, concepts, or instructions that is being prepared or has been prepared and is intended to be processed, is being processed, or has been processed in a computer or computer network. "Computer program" means an ordered set of computer data representing coded instructions or statements, that, when executed by a computer, causes the computer to perform one or more computer operations. "Computer software" means computer data, a computer program, or a set of computer programs, procedures, or associated documentation concerned with the operation and function of a computer system, and includes both systems and application programs and subdivisions, such as assemblers, compilers, routines, generators, and utility programs. "Corporation" means the same as in the Internal Revenue Code. A "domestic corporation" is one organized under the laws of the State. A "foreign corporation" is any other corporation. "Deaf" means a person whose average loss in the speech frequencies (500-2000 Hertz) in the better ear is eighty-two decibels, A.S.A., or worse. The impairment of deafness shall be certified to by a qualified otolaryngologist or a licensed audiologist under chapter 468E on forms prescribed by the department of taxation. "Dividend" means any distribution by a corporation to its shareholders or holders on an interest therein which is treated as a dividend by the Internal Revenue Code. "Employee" means the same as in the Internal Revenue Code. "Fiduciary" means the same as in the Internal Revenue Code. "Fiscal year" means the same as in the Internal Revenue Code. "Gross income", "adjusted gross income", "ordinary income", "ordinary loss", and "taxable income" respectively mean the same as gross income, adjusted gross income, ordinary income, ordinary loss, and taxable income as defined and determined under the Internal Revenue Code, except as otherwise provided in this chapter. "Head of household" means any individual who qualifies as a head of household under the Internal Revenue Code. "Husband and wife" means the same as in the Internal Revenue Code. "Includes" and "including" when used in a definition shall not be deemed to exclude other things otherwise within the meaning of the term defined. "Income tax law of 1901" means the income tax law enacted by Act 20 of the Session Laws of 1901 as it read from time to time prior to the enactment of the income tax law of 1932. "Income tax law of 1932" means the income tax law enacted by Act 44 of the Second Special Session Laws of 1932, as it read from time to time prior to the enactment of the income tax law of 1957. "Income tax law of 1957" means the income tax law enacted by the Twenty-Ninth Legislature, as it reads from time to time. "Individual" means a person other than a trust, estate, partnership, or corporation, as defined. "Internal Revenue Code of 1954, as amended" includes the Internal Revenue Code of 1986 and the Internal Revenue Code of 1986, as amended. "Investment" means a nonrefundable investment, at risk, as that term is used in section 465 (with respect to deductions limited to amount at risk) of the Internal Revenue Code, in a qualified high technology business, of cash that is transferred to the qualified high technology business, the transfer of which is in connection with a transaction in exchange for stock, interests in partnerships, joint ventures, or other entities, licenses (exclusive or nonexclusive), rights to use technology, marketing rights, warrants, options, or any items similar to those included in this definition, including but not limited to options or rights to acquire any of the items included in this definition. The nonrefundable investment is entirely at risk of loss where repayment depends upon the success of the qualified high technology business. If the money invested is to be repaid to the taxpayer, no repayment except for dividends or interest shall be made for at least one year from the date the investment is made. The annual amount of any dividend and interest payment to the taxpayer shall not exceed twelve per cent of the amount of the investment. "Legal service plan" or "plan" means a plan in which the cost of the services are paid by a member or by some other person or organization in the member's behalf. A legal service plan is a plan by which legal services are rendered to members identifiable in terms of some common interest. A plan shall provide: (1) That individual members shall be afforded freedom of choice in the selection of their own attorney or attorneys to provide legal services under the plan; and (2) For the payment of equal amounts for the cost of services rendered without regard to the identity of the attorney or attorneys selected by the plan member or members. No plan shall otherwise discriminate on the basis of the selection. "Nonresident" means every individual other than a resident. "Nonresident estate" or "nonresident trust" means one other than resident. "Paid or incurred, paid or accrued" means the same as in the Internal Revenue Code. "Partner" means the same as in the Internal Revenue Code. "Partnership" means the same as in the Internal Revenue Code. "Person" includes an individual, a trust, estate, partnership, association, company, or corporation. "Person totally disabled" means a person who is totally and permanently disabled, either physically or mentally, which results in the person's inability to engage in any substantial gainful business or occupation. The disability shall be certified to by a: (1) Physician or osteopathic physician licensed under chapter 453; (2) Qualified out-of-state physician who is currently licensed to practice in the state in which the physician resides; or (3) Commissioned medical officer in the United States Army, Navy, Marine Corps, or Public Health Service, engaged in the discharge of the officer's official duty. Certification shall be on forms prescribed by the department of taxation. "Regulated investment company" means a corporation which qualifies as such under sections 851 and 852 of the Internal Revenue Code. "Resident" means every: (1) Individual domiciled in the State; and (2) Other individual, whether domiciled in the State or not, who resides in the State. To "reside" in the State means to be in the State for other than a temporary or transitory purpose. Every individual who is in the State more than two hundred days of the taxable year in the aggregate shall be presumed to be a resident of the State. This presumption may be overcome by evidence satisfactory to the department of taxation that the individual maintains a permanent place of abode outside of the State and is in the State for a temporary or transitory purpose. No person shall be deemed to have gained or lost a residence simply because of the person's presence or absence in compliance with military or naval orders of the United States, or while engaged in aviation or navigation, or while a student at any institution of learning. "Resident estate" means an estate of a resident decedent the fiduciary of which was appointed by a court of this State and the administration of which is carried on in this State, and "resident trust" means a trust of which the fiduciary is a resident of the State or the administration of which is carried on in the State. "Shareholder" means the same as in the Internal Revenue Code. "Stock" means the same as in the Internal Revenue Code. "Taxable year" means the calendar year or the fiscal year ending during such calendar year upon the basis of which income is computed under this chapter. "Taxable year" includes, in the case of a return made for a fractional part of a year under this chapter or under regulations prescribed by the department of taxation, the period for which such return is made, and in cases where the department terminates the taxable year in accordance with section 231-24 and levies a jeopardy assessment on income for such portion or period of a year under section 235-109, then the period or portion of the year for which the jeopardy assessment is made. "Taxpayer" means a person subject to a tax imposed by this chapter. "Trade or business" includes the performance of the functions of a public office. "Uniformed services of the United States" means the Army, Navy, Air Force, Marine Corps, Coast Guard, Coast and Geodetic Survey, and Public Health Service, and all regular and reserve components thereof, including the National Guard. The term "uniformed services of the United States" applies only to persons who are deemed members thereof under the laws of the United States relating to pay and allowances. Service as a member of the uniformed services includes inactive duty training. "Without regard to source in the State" shall mean income derived or earned from all sources whether from sources located within or from sources located without the State. [L Sp 1957, c 1 pt of §2; am L 1959, c 246, §13 and c 277, pt of §6; am L Sp 1959 2d, c 1, §§16, 19; Supp, §121-1; am L 1967, c 250, §2; HRS §235-1; am L 1968, c 42, §3; am L 1970, c 90, §1; am L 1971, c 97, §1; am L 1973, c 217, §10; am L 1974, c 42, §2; am L 1976, c 156, §5 and c 208, §1; am L 1978, c 173, §2(3), (4), and (5); gen ch 1985; am L 1987, c 239, §1(4); am L 1988, c 81, §1; am L 1990, c 17, §1; am L 1997, c 178, §1; am L 2000, c 297, §4; am L 2001, c 36, §1; am L 2009, c 11, §27; am L 2012, c 34, §17; am L 2017, c 12, §39]

HRS §235-2.3 Conformance to the federal Internal Revenue Code; general application

235-2.3. Conformance to the federal Internal Revenue Code; general application (a) For all taxable years beginning after December 31, 2024, as used in this chapter, except as provided in this section and sections 235-2.35, 235-2.4, and 235-2.45, "Internal Revenue Code" means subtitle A, chapter 1, of the federal Internal Revenue Code of 1986, as amended as of December 31, 2024, as it applies to the determination of gross income, adjusted gross income, ordinary income and loss, and taxable income, except those provisions of the Internal Revenue Code which, pursuant to this chapter, do not apply or are otherwise limited in application. Sections 9672(1) (relating to tax treatment of targeted EIDL advances) and 9673(1) (relating to tax treatment of restaurant revitalization grants) of Public Law 117-2 shall be operative for purposes of this chapter. No amount received under section 9601 (relating to 2021 recovery rebates to individuals) of Public Law 117-2 shall be included in gross income for purposes of this chapter. Sections 276(b)(1) (relating to subsequent paycheck protection program loans), 277 (relating to emergency financial aid grants), 278(b)(1) (relating to emergency EIDL grants and targeted EIDL advances), 278(c)(1) (relating to subsidy for certain loan payments), and 278(d)(1) (relating to grants for shuttered venue operators) of Division N of Public Law 116-260 shall be operative for purposes of this chapter. Sections 213 (relating to modification of limitations on charitable contributions) and 214 (relating to temporary special rules for health and dependent care flexible spending arrangements) of Division EE of Public Law 116-260 shall be operative for purposes of this chapter. Sections 301, 302, and 304 (relating to disaster tax relief) of Division EE of Public Law 116-260 shall be operative for purposes of this chapter. No amount received under section 272 (relating to additional 2020 recovery rebates for individuals) of Division N of Public Law 116-260 shall be included in gross income for purposes of this chapter. Sections 1106(i) (relating to exclusion of loan forgiveness from gross income), 2202(b) (relating to loans from retirement plans), and 2205 (relating to charitable contributions) of Public Law 116-136 shall be operative for purposes of this chapter. No amount received under section 2201 (relating to recovery rebates) of Public Law 116-136 shall be included in gross income for purposes of this chapter. Section 2202(a) (relating to tax-favored withdrawals from retirement plans) of Public Law 116-136 shall be operative for purposes of this chapter and shall apply to taxable years beginning after December 31, 2019. Prior law shall continue to be used to determine: (1) The basis of property, if a taxpayer first determined the basis of property in a taxable year to which prior law applies; and (2) Gross income, adjusted gross income, ordinary income and loss, and taxable income for a taxable year to which prior law applies. (b) The following Internal Revenue Code subchapters, parts of subchapters, sections, subsections, and parts of subsections shall not be operative for the purposes of this chapter, unless otherwise provided: (1) Subchapter A (sections 1 to 59A) (with respect to determination of tax liability), except section 1(h)(2) (relating to net capital gain reduced by the amount taken into account as investment income), except sections 2(a), 2(b), and 2(c) (with respect to the definition of "surviving spouse" and "head of household"), except section 41 (with respect to the credit for increasing research activities), except section 42 (with respect to low-income housing credit), except sections 47 and 48, as amended, as of December 31, 1984 (with respect to certain depreciable tangible personal property), and except section 48(d)(3), as amended, as of February 17, 2009 (with respect to the treatment of United States Department of Treasury grants made under section 1603 of the American Recovery and Reinvestment Tax Act of 2009). For treatment, see sections 235-110.91, 235-110.7, and 235-110.8; (2) Section 78 (with respect to dividends received from certain foreign corporations by domestic corporations choosing foreign tax credit); (3) Section 86 (with respect to social security and tier 1 railroad retirement benefits); (4) Section 91 (with respect to certain foreign branch losses transferred to specified 10-percent owned foreign corporations); (5) Section 103 (with respect to interest on state and local bonds). For treatment, see section 235-7(b); (6) Section 114 (with respect to extraterritorial income). For treatment, any transaction as specified in the transitional rule for 2005 and 2006 as specified in the American Jobs Creation Act of 2004 section 101(d) and any transaction that has occurred pursuant to a binding contract as specified in the American Jobs Creation Act of 2004 section 101(f) are inoperative; (7) Section 120 (with respect to amounts received under qualified group legal services plans). For treatment, see section 235-7(a)(9) to (11); (8) Section 122 (with respect to certain reduced uniformed services retirement pay). For treatment, see section 235-7(a)(3); (9) Section 135 (with respect to income from United States savings bonds used to pay higher education tuition and fees). For treatment, see section 235-7(a)(1); (10) Section 139C (with respect to COBRA premium assistance); (11) Subchapter B (sections 141 to 150) (with respect to tax exemption requirements for state and local bonds); (12) Section 151 (with respect to allowance of deductions for personal exemptions). For treatment, see section 235-54; (13) Section 179B (with respect to expensing of capital costs incurred in complying with Environmental Protection Agency sulphur regulations); (14) Section 181 (with respect to special rules for certain film and television productions); (15) Section 196 (with respect to deduction for certain unused investment credits); (16) Section 199 (with respect to the U.S. production activities deduction); (17) Section 199A (with respect to qualified business income); (18) Section 222 (with respect to qualified tuition and related expenses); (19) Sections 241 to 247 (with respect to special deductions for corporations). For treatment, see section 235-7(c); (20) Section 250 (with respect to foreign-derived intangible income and global intangible low-taxed income); (21) Section 267A (with respect to certain related party amounts paid or accrued in hybrid transactions or with hybrid entities); (22) Section 280C (with respect to certain expenses for which credits are allowable). For treatment, see section 235-110.91; (23) Section 291 (with respect to special rules relating to corporate preference items); (24) Section 367 (with respect to foreign corporations); (25) Section 501(c)(12), (15), (16) (with respect to exempt organizations); except that section 501(c)(12) shall be operative for companies that provide potable water to residential communities that lack any access to public utility water services; (26) Section 515 (with respect to taxes of foreign countries and possessions of the United States); (27) Subchapter G (sections 531 to 565) (with respect to corporations used to avoid income tax on shareholders); (28) Subchapter H (sections 581 to 597) (with respect to banking institutions), except section 584 (with respect to common trust funds). For treatment, see chapter 241; (29) Section 642(a) and (b) (with respect to special rules for credits and deductions applicable to trusts). For treatment, see sections 235-54(b) and 235-55; (30) Section 646 (with respect to tax treatment of electing Alaska Native settlement trusts); (31) Section 668 (with respect to interest charge on accumulation distributions from foreign trusts); (32) Subchapter L (sections 801 to 848) (with respect to insurance companies). For treatment, see sections 431:7-202 and 431:7-204; (33) Section 853 (with respect to foreign tax credit allowed to shareholders). For treatment, see section 235-55; (34) Section 853A (with respect to credits from tax credit bonds allowed to shareholders); (35) Subchapter N (sections 861 to 999) (with respect to tax based on income from sources within or without the United States), except sections 985 to 989 (with respect to foreign currency transactions). For treatment, see sections 235-4, 235-5, and 235-7(b), and 235-55; (36) Section 1042(g) (with respect to sales of stock in agricultural refiners and processors to eligible farm cooperatives); (37) Section 1055 (with respect to redeemable ground rents); (38) Section 1057 (with respect to election to treat transfer to foreign trust, etc., as taxable exchange); (39) Sections 1291 to 1298 (with respect to treatment of passive foreign investment companies); (40) Subchapter Q (sections 1311 to 1351) (with respect to readjustment of tax between years and special limitations), except for section 1341 (with respect to computation of tax where taxpayer restores substantial amount held under claim of right); (41) Subchapter R (sections 1352 to 1359) (with respect to election to determine corporate tax on certain international shipping activities using per ton rate); (42) Subchapter U (sections 1391 to 1397F) (with respect to designation and treatment of empowerment zones, enterprise communities, and rural development investment areas). For treatment, see chapter 209E; (43) Subchapter W (sections 1400 to 1400C) (with respect to District of Columbia enterprise zone); (44) Section 1400O (with respect to education tax benefits); (45) Section 1400P (with respect to housing tax benefits); (46) Section 1400R (with respect to employment relief); (47) Section 1400T (with respect to special rules for mortgage revenue bonds); (48) Section 1400U-1 (with respect to allocation of recovery zone bonds); (49) Section 1400U-2 (with respect to recovery zone economic development bonds); and (50) Section 1400U-3 (with respect to recovery zone facility bonds). [L 1978, c 173, §2(1); am L 1979, c 62, §2(1) to (3); am L 1980, c 235, §1 and c 238, §2; am L 1981, c 3, §2(2), c 208, §2, and c 209, §1; am L 1982, c 22, §1(1) and c 25, §1; am L 1983, c 88, §1; am L 1984, c 99, §1; am L 1985, c 19, pt of §1; am L 1986, c 283, §1; am L 1987, c 39, §2 and c 239, §1(5); am L 1988, c 10, §1(2), c 102, §1, c 107, §2, and c 216, §3; am L 1989, c 13, §1; am L 1990, c 15, §1 and c 289, §2; am L 1991, c 54, §1 and c 137, §2; am L 1992, c 37, §1; am L 1993, c 73, §1; am L 1994, c 13, §2; am L 1995, c 7, §1; am L 1996, c 187, §1; am L 1997, c 297, §2; am L 1998, c 113, §1; am L 1999, c 178, §28 and c 198, §1; am L 2000, c 174, §2; am L 2001, c 199, §1; am L 2002, c 223, §2; am L 2003, c 172, §2; am L 2004, c 89, §3; am L 2005, c 60, §2; am L 2006, c 124, §1; am L 2007, c 84, §1; am L 2008, c 93, §1; am L 2009, c 133, §2; am L 2010, c 112, §4; am L 2011, c 91, §2; am L 2012, c 179, §2 and c 184, §2; am L 2013, c 43, §2; am L 2014, c 88, §2; am L 2015, c 52, §2; am L 2016, c 33, §2 and c 53, §1; am L 2017, c 95, §2; am L 2018, c 27, §2; am L 2019, c 69, §2; am L 2020, c 13, §2 and c 70, §5; am L 2021, c 89, §2; am L 2022, c 7, §2; am L 2023, c 56, §2; am L 2024, c 75, §2 and c 178, §10; am L 2025, c 123, §2]

HRS §235-2.4 Operation of certain Internal Revenue Code provisions; sections 63 to 530

235-2.4. Operation of certain Internal Revenue Code provisions; sections 63 to 530 (a) Section 63 (with respect to taxable income defined) of the Internal Revenue Code shall be operative for the purposes of this chapter, subject to the following: (1) Section 63(c)(1)(B) (relating to the additional standard deduction), 63(c)(1)(C) (relating to the real property tax deduction), 63(c)(1)(D) (relating to the disaster loss deduction), 63(c)(1)(E) (relating to the motor vehicle sales tax deduction), 63(c)(4) (relating to inflation adjustments), 63(c)(7) (defining the real property tax deduction), 63(c)(8) (defining the disaster loss deduction), 63(c)(9) (defining the motor vehicle sales tax deduction), and 63(f) (relating to additional amounts for the aged or blind) of the Internal Revenue Code shall not be operative for purposes of this chapter; (2) Section 63(c)(2) (relating to the basic standard deduction) of the Internal Revenue Code shall be operative, except that the standard deduction amounts provided therein shall instead mean: (A) $4,400 in the case of: (i) A joint return as provided by section 235-93; or (ii) A surviving spouse (as defined in section 2(a) of the Internal Revenue Code); (B) $3,212 in the case of a head of household (as defined in section 2(b) of the Internal Revenue Code); (C) $2,200 in the case of an individual who is not married and who is not a surviving spouse or head of household; (D) $2,200 in the case of a married individual filing a separate return; (E) For taxable years beginning after December 31, 2023: (i) $8,800 in the case of a joint return as provided by section 235-93 or a surviving spouse (as defined in section 2(a) of the Internal Revenue Code); (ii) $6,424 in the case of a head of household (as defined in section 2(b) of the Internal Revenue Code); (iii) $4,400 in the case of an individual who is not married and who is not a surviving spouse or head of household; or (iv) $4,400 in the case of a married individual filing a separate return; (F) For taxable years beginning after December 31, 2025: (i) $16,000 in the case of a joint return as provided by section 235-93 or a surviving spouse (as defined in section 2(a) of the Internal Revenue Code); (ii) $12,000 in the case of a head of household (as defined in section 2(b) of the Internal Revenue Code); (iii) $8,000 in the case of an individual who is not married and who is not a surviving spouse or head of household; or (iv) $8,000 in the case of a married individual filing a separate return; (G) For taxable years beginning after December 31, 2027: (i) $18,000 in the case of a joint return as provided by section 235-93 or a surviving spouse (as defined in section 2(a) of the Internal Revenue Code); (ii) $13,500 in the case of a head of household (as defined in section 2(b) of the Internal Revenue Code); (iii) $9,000 in the case of an individual who is not married and who is not a surviving spouse or head of household; or (iv) $9,000 in the case of a married individual filing a separate return; (H) For taxable years beginning after December 31, 2029: (i) $20,000 in the case of a joint return as provided by section 235-93 or a surviving spouse (as defined in section 2(a) of the Internal Revenue Code); (ii) $15,000 in the case of a head of household (as defined in section 2(b) of the Internal Revenue Code); (iii) $10,000 in the case of an individual who is not married and who is not a surviving spouse or head of household; or (iv) $10,000 in the case of a married individual filing a separate return; and (I) For taxable years beginning after December 31, 2030: (i) $24,000 in the case of a joint return as provided by section 235-93 or a surviving spouse (as defined in section 2(a) of the Internal Revenue Code); (ii) $18,000 in the case of a head of household (as defined in section 2(b) of the Internal Revenue Code); (iii) $12,000 in the case of an individual who is not married and who is not a surviving spouse or head of household; or (iv) $12,000 in the case of a married individual filing a separate return; (3) Section 63(c)(5) (limiting the basic standard deduction in the case of certain dependents) of the Internal Revenue Code shall be operative, except that the limitation shall be the greater of $500 or the individual's earned income; and (4) The standard deduction amount for nonresidents shall be calculated pursuant to section 235-5. (b) Section 67 (with respect to the 2-percent floor on miscellaneous itemized deductions) of the Internal Revenue Code shall be operative for purposes of this chapter, except that the suspension in section 67(g) shall not be operative for purposes of this chapter. (c) Section 68 (with respect to the overall limitation on itemized deductions) of the Internal Revenue Code shall be operative; provided that the: (1) Thresholds shall be those that were operative for federal tax year 2009; and (2) Suspension in section 68(f) shall not be operative for purposes of this chapter. (d) Section 72 (with respect to annuities; certain proceeds of endowment and life insurance contracts) of the Internal Revenue Code shall be operative for purposes of this chapter and be interpreted with due regard to section 235-7(a), except that the ten per cent additional tax on early distributions from retirement plans in section 72(t) shall not be operative for purposes of this chapter. (e) Section 85 (with respect to unemployment compensation) of the Internal Revenue Code shall be operative for purposes of this chapter, except that section 85(c) shall not be operative for purposes of this chapter. (f) Section 108 (with respect to income from discharge of indebtedness) of the Internal Revenue Code shall be operative for purposes of this chapter, except that section 108(i) (relating to deferral and ratable inclusion of income arising from business indebtedness discharged by the reacquisition of a debt instrument) shall not be operative for purposes of this chapter. (g) Section 121 (with respect to exclusion of gain from sale of principal residence) of the Internal Revenue Code shall be operative for purposes of this chapter, except that for the election under section 121(f), a reference to section 1034 treatment means a reference to section 235-2.4(n) in effect for taxable year 1997. (h) Section 132 (with respect to certain fringe benefits) of the Internal Revenue Code shall be operative for purposes of this chapter, except that: (1) The suspensions in section 132(f)(8) and 132(g)(2) shall not be operative for purposes of this chapter; and (2) Section 132(n) shall not apply to United States Department of Defense Homeowners Assistance Program payments authorized by the American Recovery and Reinvestment Act of 2009. (i) Section 162 (with respect to trade or business expenses) of the Internal Revenue Code shall be operative for the purposes of this chapter, except that sections 162(f)(2), (3), and (4) (all of which relate to exceptions to the general rule, established in section 162(f)(1), that no deduction is allowed for the payment of fines or penalties) shall not be operative for purposes of this chapter. (j) Section 163 (with respect to interest) of the Internal Revenue Code shall be operative for the purposes of this chapter, except that the following provisions shall not be operative for the purposes of this chapter: (1) Section 163(d)(4)(B) (defining net investment income to exclude dividends); (2) Section 163(e)(5)(F) (suspension of applicable high-yield discount obligation (AHYDO) rules); (3) Section 163(h)(3)(F) (limiting mortgage interest); and (4) Section 163(i)(1) as it applies to debt instruments issued after January 1, 2010 (defining AHYDO). (k) Section 164 (with respect to taxes) of the Internal Revenue Code shall be operative for the purposes of this chapter, except that: (1) Section 164(b)(6)(B) (limiting the deduction for state and local taxes) shall not be operative for the purposes of this chapter; (2) The deductions under section 164(a)(3) and (b)(5) shall not be operative for corporate taxpayers and shall be operative only for the following individual taxpayers: (A) A taxpayer filing a single return or a married person filing separately with a federal adjusted gross income of less than $100,000; (B) A taxpayer filing as a head of household with a federal adjusted gross income of less than $150,000; and (C) A taxpayer filing a joint return or as a surviving spouse with a federal adjusted gross income of less than $200,000; and (3) Section 164(a)(3) shall not be operative for any amounts for which the credit under section 235-55 has been claimed. (l) Section 165 (with respect to losses) of the Internal Revenue Code shall be operative for purposes of this chapter, except that: (1) The amount prescribed by section 165(h)(1) (relating to the limitation per casualty) of the Internal Revenue Code shall be a $100 limitation per casualty; (2) Section 165(h)(3)(A) and (B) (both of which relate to special rules for personal casualty gains and losses in federally declared disasters) of the Internal Revenue Code shall not be operative for the purposes of this chapter; (3) Section 165(h)(5) (relating to the limitation on the deductibility of personal casualty losses that are not attributable to federally declared disasters) shall not be operative for purposes of this chapter; and (4) Section 165 as operative for this chapter shall also apply to losses sustained from the sale of stocks or other interests issued through the exercise of the stock options or warrants granted by a qualified high technology business as defined in section 235-7.3. (m) Section 168 (with respect to the accelerated cost recovery system) of the Internal Revenue Code shall be operative for purposes of this chapter, except that sections 168(j) (relating to property on Indian reservations), 168(k) (relating to the special allowance for certain property acquired during the period specified therein), and 168(m) (relating to the special allowance for certain reuse and recycling property) of the Internal Revenue Code shall not be operative for purposes of this chapter. (n) Section 172 (with respect to net operating loss deductions) of the Internal Revenue Code shall be operative for purposes of this chapter in the form that it existed as of December 31, 2019, and as further provided in section 235-7(d). (o) Section 179 (with respect to the election to expense certain depreciable business assets) of the Internal Revenue Code shall be operative for purposes of this chapter, except as provided in this subsection: (1) The aggregate cost provided in section 179(b)(1), which may be taken into account under section 179(a) for any taxable year, shall not exceed $25,000; (2) The amount at which the reduction in limitation provided in section 179(b)(2) begins shall exceed $200,000 for any taxable year; and (3) The following shall not be operative for purposes of this chapter: (A) Defining section 179 property to include computer software in section 179(d)(1); (B) Inflation adjustments in section 179(b)(5); (C) Irrevocable election in section 179(c)(2); and (D) Special rules for qualified disaster assistance property in section 179(e). (p) Section 198A (with respect to the expensing of qualified disaster assistances expenses) of the Internal Revenue Code shall not be operative for purposes of this chapter. (q) Section 217 (with respect to moving expenses) of the Internal Revenue Code shall be operative for purposes of this chapter, except that the suspension in section 217(k) shall not be operative for purposes of this chapter. (r) Section 219 (with respect to retirement savings) of the Internal Revenue Code shall be operative for the purpose of this chapter. For the purpose of computing the limitation on the deduction for active participants in certain pension plans for state income tax purposes, adjusted gross income as used in section 219 as operative for this chapter means federal adjusted gross income. (s) Section 220 (with respect to medical savings accounts) of the Internal Revenue Code shall be operative for the purpose of this chapter, but only with respect to medical services accounts that have been approved by the Secretary of the Treasury of the United States. (t) Section 265 (with respect to expenses and interest relating to tax-exempt income) of the Internal Revenue Code shall be operative for purposes of this chapter; except that section 265(b)(3)(G) and (7) shall not be operative and section 265 shall not apply to expenses for royalties and other income derived from any patents, copyrights, and trade secrets by an individual or a qualified high technology business as defined in section 235-7.3. These expenses shall be deductible. (u) Section 274 (with respect to the disallowance of certain entertainment, etc., expenses) of the Internal Revenue Code shall be operative for this chapter in the form that it existed as of December 21, 2017. (v) Section 280E (with respect to expenditures in connection with the illegal sale of drugs) of the Internal Revenue Code shall be operative for the purposes of this chapter, except that section 280E shall not be operative with respect to the production and sale of medical cannabis and manufactured cannabis products by dispensaries licensed under chapter 329D and their subcontractors, as defined in section 329D-1. (w) Section 382 (with respect to limitation on net operating loss carryforwards and certain built-in losses following ownership change) of the Internal Revenue Code shall be operative for the purposes of this chapter, except that section 382(n) shall not be operative for purposes of this chapter. (x) Section 408A (with respect to Roth Individual Retirement Accounts) of the Internal Revenue Code shall be operative for the purposes of this chapter, except that section 408A(d)(3)(A)(iii) shall not be operative for purposes of this chapter. For the purposes of determining the aggregate amount of contributions to a Roth Individual Retirement Account or qualified rollover contribution to a Roth Individual Retirement Account from an individual retirement plan other than a Roth Individual Retirement Account, adjusted gross income as used in section 408A as operative for this chapter means federal adjusted gross income. (y) In administering the provisions of sections 410 to 417 (with respect to special rules relating to pensions, profit sharing, stock bonus plans, etc.), sections 418 to 418E (with respect to special rules for multiemployer plans), and sections 419 and 419A (with respect to treatment of welfare benefit funds) of the Internal Revenue Code, the department of taxation shall adopt rules under chapter 91 relating to the specific requirements under those sections and to other administrative requirements under those sections as may be necessary for the efficient administration of sections 410 to 419A. In administering sections 401 to 419A (with respect to deferred compensation) of the Internal Revenue Code, Public Law 93-406, section 1017(i), shall be operative for the purposes of this chapter. In administering section 402 (with respect to the taxability of beneficiary of employees' trust) of the Internal Revenue Code, the tax imposed on lump sum distributions by section 402(e) of the Internal Revenue Code shall be operative for the purposes of this chapter and the tax imposed therein is hereby imposed by this chapter at the rate determined under this chapter. (z) In administering section 403 (with respect to taxation of employee annuities) of the Internal Revenue Code, any funds that represent pre-tax employee deferrals or contributions that are distributed from the annuity and used solely to obtain retirement credits under the state employees' retirement system shall not be treated as a rollover for purposes of section 403(b)(8)(A) of the Internal Revenue Code, and those funds shall be subject to income tax under this chapter. (aa) Section 451 (which provides general rules for taxable year of inclusion) of the Internal Revenue Code shall be operative, except that section 451(k)(3) and (6), as it relates to a qualified electric utility, shall not be operative for purposes of this chapter. (bb) In administering section 457 (with respect to compensation plans of state and local governments and tax-exempt organizations) of the Internal Revenue Code, any funds that represent pre-tax employee deferrals or contributions that are distributed from the deferred compensation plan and used solely to obtain retirement credits under the state employees' retirement system shall not be treated as a rollover for purposes of section 457(e)(16)(A) of the Internal Revenue Code and those funds shall be subject to income tax under this chapter. (cc) Section 461 (with respect to the general rule for taxable year of deduction) of the Internal Revenue Code, shall be operative for purposes of this chapter in the form that it existed as of December 31, 2019. (dd) Section 468B (with respect to special rules for designated settlement funds) of the Internal Revenue Code shall be operative for the purposes of this chapter and the tax imposed therein is hereby imposed by this chapter at a rate equal to the maximum rate in effect for the taxable year imposed on estates and trusts under section 235-51. (ee) Section 469 (with respect to passive activities and credits limited) of the Internal Revenue Code shall be operative for the purposes of this chapter. For the purpose of computing the offset for rental real estate activities for state income tax purposes, adjusted gross income as used in section 469 as operative for this chapter means federal adjusted gross income. (ff) Sections 512 to 514 (with respect to taxation of business income of certain exempt organizations) of the Internal Revenue Code shall be operative for the purposes of this chapter as provided in this subsection. "Unrelated business taxable income" means the same as in the Internal Revenue Code, except that: (1) In the computation of unrelated business taxable income, sections 235-3 to 235-5, and 235-7 (except subsection (c)), shall apply; (2) In the determination of the net operating loss deduction there shall not be taken into account any amount of income or deduction that is excluded in computing the unrelated business taxable income; and (3) Unrelated business taxable income shall not include any income from a legal service plan. For a person described in section 401 or 501 of the Internal Revenue Code, as modified by section 235-2.3, the tax imposed by section 235-51 or 235-71 shall be imposed upon the person's unrelated business taxable income. (gg) Section 521 (with respect to cooperatives) and subchapter T (sections 1381 to 1388, with respect to cooperatives and their patrons) of the Internal Revenue Code shall be operative for the purposes of this chapter as to any cooperative fully meeting the requirements of section 421-23, except that Internal Revenue Code section 521 cooperatives need not be organized in Hawaii. (hh) Sections 527 (with respect to political organizations) and 528 (with respect to certain homeowners associations) of the Internal Revenue Code shall be operative for the purposes of this chapter and the taxes imposed in each section are hereby imposed by this chapter at the rates determined under section 235-71. (ii) Section 529 (with respect to qualified tuition programs) shall be operative for the purposes of this chapter, except that sections 529(c)(6), 529(c)(7), and 529(e)(3)(A)(iii) shall not be operative. (jj) Section 529A (with respect to qualified ABLE programs) shall be operative for the purposes of this chapter, except that section 529A(c)(3) (with respect to additional tax for distributions not used for disability expenses) shall not be operative. (kk) Section 530 (with respect to Coverdell education savings accounts) of the Internal Revenue Code shall be operative for the purposes of this chapter. For the purpose of determining the maximum amount that a contributor could make to an education individual retirement account for state income tax purposes, modified adjusted gross income as used in section 530 as operative for this chapter means federal modified adjusted gross income as defined in section 530. [L 1985, c 19, pt of §1; am L 1987, c 239, §1(6); am L 1989, c 13, §2 and c 321, §2; am L 1990, c 16, §2; am L 1991, c 207, §1; am L 1996, c 187, §2; am L 1997, c 297, §3; am L 1998, c 113, §2; am L 1999, c 198, §2, c 253, §2, and c 270, §2; am L 2000, c 148, pt of §2, c 174, §3, and c 297, pt of §5; am L 2001, c 221, §5; am L 2002, c 223, §3; am L 2003, c 172, §3; am L 2004, c 89, §4; am L 2005, c 60, §3; am L 2006, c 110, §2; am L 2008, c 93, §2; am L 2009, c 60, §§1, 6(3), c 133, §3, c 165, §2, and c 181, §1; am L 2010, c 23, §1 and c 112, §§5, 6; am L 2011, c 91, §4 and c 97, §2; am L 2012, c 34, §§9, 18; am L 2014, c 88, §3; am L 2015, c 52, §3; am L 2016, c 230, §4; am L 2017, c 170, §2; am L 2018, c 27, §3; am L 2019, c 69, §3 and c 111, §6; am L 2020, c 13, §3; am L 2023, c 56, §3; am L 2024, c 46, §1]

HRS §235-2.5 Administration, adoption, and interrelationship of Internal Revenue Code and Public Laws with this chapter

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 this State shall be considered inoperative for the purposes of determining gross income, adjusted gross income, ordinary income and loss, and taxable income; provided that: (1) References to time limits and other administrative provisions in subtitle F (sections 6001 to 7873) of the Internal Revenue Code contained in operative sections of the Internal Revenue Code shall be deemed references to applicable provisions of this chapter or chapter 231 or 232, and in the absence of applicable provisions in this chapter or chapters 231 or 232, then to rules adopted by the director of taxation under subsection (b); (2) If inoperative provisions of the Internal Revenue Code have been codified in this chapter such references shall be deemed references to the codified provisions in this chapter. Transitory and savings provisions in federal Public Laws amending sections of the Internal Revenue Code operative in this chapter shall be operative for the purposes of this chapter. Provisions in this chapter or chapter 231 or 232 in conflict with the Internal Revenue Code or transitory or savings provisions in federal Public Law shall control; and (3) Retroactive and prospective provisions in federal Public Laws amending sections of the federal Internal Revenue Code operative in this chapter and retroactive and prospective provisions in federal Public Laws that are operative in this chapter affecting taxable years beginning or ending before the December 31 date in section 235-2.3 shall be operative for the purposes of this chapter; provided that the effective dates in Public Law 96-471 placing it in effect for the taxable year 1980 shall be operative for the purposes of this chapter. (b) The director of taxation may adopt by rule under chapter 91 the rules and regulations promulgated by the United States Secretary of Treasury or a delegate of the Secretary relating to the provisions of subtitle A, chapter 1 or 6, of the Internal Revenue Code operative in this chapter and any administrative provisions of the Internal Revenue Code (subtitle F, sections 6001 to 7873) not in conflict with or similar to provisions contained in this chapter or chapter 231 or 232 either by reference or by setting them forth in full. (c) The department of taxation shall submit to each regular session of the legislature a bill to amend sections 235-2.3, 235-2.4, and 235-2.45 and such other sections and subsections of this chapter as may be necessary to adopt the Internal Revenue Code as it exists on the December 31 preceding such regular session. In submitting the bill the department may provide that certain amendments to the Internal Revenue Code by Congress during the preceding calendar year shall not be operative in this State or as operative are limited in their operation. The department shall also prepare a digest and explanation of the amended provisions of the Internal Revenue Code recommended for operation, as well as those provisions that are limited in their operation, or that are not recommended for operation, and shall submit with the bill required by this subsection the digest, explanation, and a statement of revenue impact of the adoption of the bill. In preparing the bill, digest, and explanation the department may request the assistance of the office of the legislative reference bureau. It is the intent of the legislature that it shall each year adopt all amendments to the Internal Revenue Code for the calendar year preceding the year in which the legislature meets; provided that the legislature may choose to adopt none of the amendments to the Internal Revenue Code or may provide that certain amendments are limited in their operation. [L 1985, c 19, pt of §1; am L 1988, c 102, §2; am L 1989, c 13, §3; am L 1996, c 187, §3; am L 2001, c 199, §2; am L 2008, c 93, §4; am L 2013, c 43, §3; am L 2014, c 88, §5; am L 2023, c 56, §4]

HRS §235-3 Legislative intent, how Internal Revenue Code shall apply, in general

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 simplify the filing of returns and minimize the taxpayer's burdens in complying with the income tax law. The rules and regulations, forms and procedures adopted and established under this chapter shall conform as nearly as possible, and unless there is good reason to the contrary, to the rules and regulations, forms and procedures adopted and established under the Internal Revenue Code. (b) The Internal Revenue Code, so far as made operative by this chapter, is a statute adopted and incorporated by reference. The Internal Revenue Code shall be applied using changes in nomenclature and other language, including the omission of inapplicable language, where necessary to effectuate the intent of this section. In the Internal Revenue Code, references to terms such as: (1) "Secretary or his delegate" shall refer to the director of taxation and the director's duly authorized subordinates; (2) "Estate taxes" shall refer to the estate and transfer tax imposed by chapter 236D or the estate and generation-skipping [transfer] tax imposed by chapter 236E, as applicable; (3) "The highest rate of tax imposed upon individuals" or "39.6 per cent" shall refer to the highest rate imposed upon individuals under section 235-51; (4) "The highest rate of tax imposed upon corporations" shall refer to the highest rate imposed upon corporations under section 235-71; and (5) "Interest at the underpayment rate" or "interest at the overpayment rate" shall refer to the interest rate set forth in section 231-39(b)(4) or section 231-23(d)(1), as the case may be. (c) Where, under a provision of the Internal Revenue Code made operative in this chapter, the allowance or disallowance to a taxpayer of a deduction, exclusion, adjustment, credit, or exemption is dependent on whether, under the Internal Revenue Code or a prior applicable federal income tax law, the following was or was not, is or is not, in relation to the same taxpayer or another taxpayer, for the same taxable year or a prior taxable year, an operative factor: the imposition or payment of an income tax, an inclusion in gross income, an exclusion from gross income, or a deduction from gross income--the allowance or disallowance under this chapter of such deduction, exclusion, adjustment, credit, or exemption shall depend on the operativeness of such factor or factors under this chapter or a prior applicable income tax law of the State. This subsection shall govern the application of such sections of the Internal Revenue Code as, for example, sections 111, 215, 668(b), and 7852(c) and all matters of a similar nature. (d) Whenever, in a taxable year of a corporation or its shareholders not governed by the income tax law of 1957, a distribution of money, stock, securities, or other property (whether in complete or partial liquidation or otherwise) has been made by a corporation to shareholders owning such shares in the State, or stock, securities, or other property has been transferred to a corporation, or corporate stock or securities exchanged, in the course of a corporate organization or reorganization effected under the laws of the State, in the application of the income tax law of 1957 effect shall be given to the recognition of income by the income tax laws of 1901 and 1932, if any, to the extent necessary to avoid double taxation, for example, in determining the earnings and profits of any corporation involved or the basis of any stock, securities, or other property so received, transferred, or exchanged. No increase in basis shall be allowed on account of such events in taxable years not governed by the income tax law of 1957, except as provided by this subsection. As used in this subsection the words "double taxation" mean and refer to double taxation of the same taxpayer, or taxation of both a corporation and its shareholders when the taxation of both would not have occurred had the income tax law of 1957 governed prior taxable years. (e) In the determination of the basis or adjusted basis of any stock, securities, or other property: (1) If the property was acquired by an exchange (including an involuntary conversion or the sale of an old residence and purchase of a new residence where both occur within a one-year period) the "cost" thereof to the taxpayer shall be deemed to include among other things, any income of the taxpayer recognized by the income tax laws of 1901 and 1932 as a result of the exchange; (2) If the basis is dependent upon acquisition from a decedent, the property shall be deemed to have been acquired from a decedent if deemed so acquired for the purposes of chapter 236 prior to July 1, 1983, or after June 30, 1983, under this chapter but not otherwise, and the residence or nonresidence of the decedent, the location of the property, and chapter 236 for property acquired prior to July 1, 1983, or this chapter where the property has been acquired after June 30, 1983, shall be considered; (3) If the basis is dependent upon deductions, exclusions, or exemptions taken or allowable, under the Internal Revenue Code or a prior applicable federal income tax law, in a prior year, it shall depend upon deductions, exclusions, or exemptions taken or allowable under the income tax law of the State governing such prior years; (4) If the basis is dependent upon the election provided for by section 307, Internal Revenue Code, it shall be governed by the election actually made under the Internal Revenue Code for the taxable year, whether or not the taxable year was governed by the income tax law of 1957. [L Sp 1957, c 1, pt of §2; am L Sp 1959 2d, c 1, §16; Supp, §121-2; HRS §235-3; am L 1979, c 62, pt of §2; am L 1983, c 217, §7(1), (2); gen ch 1985; am L 1996, c 187, §4; am L 2014, c 43, §1]

HRS §235-4 Income taxes by the State; residents, nonresidents, corporations, estates, and trusts

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, the tax applies to the income received or derived from property owned, personal services performed, trade, or business carried on, and any and every other source in the State. In the case of a nonresident spouse filing a joint return with a resident spouse, the tax applies to the entire income of the nonresident spouse computed without regard to source in the State. (c) Change of status. Except where a joint return is filed, when the status of a taxpayer changes during the taxable year from resident to nonresident, or from nonresident to resident, the tax imposed by this chapter applies to the entire income earned during the period of residence in the manner provided in subsection (a) of this section and during the period of nonresidence the tax shall apply upon the income received or derived as a nonresident in the manner provided in subsection (b) of this section; provided that if it cannot be determined whether income was received or derived during the period of residence or during the period of nonresidence, there shall be attributed to the State such portion of the income as is determined by applying to such income for the whole taxable year the ratio which the period of residence in the State bears to the whole taxable year, unless the taxpayer shows to the satisfaction of the department of taxation that the result is to attribute to the state income, dependent upon residence, received or derived during the period of nonresidence, in which event the amount of income as to which such showing is made shall be excluded. The apportionment of income provided by this subsection shall not apply where one spouse is a resident of this State and a joint return is filed with the nonresident spouse in which event the tax shall be computed on their aggregate income in the manner provided in section 235-52 without regard to source in the State. Where, however, both spouses change their status from resident to nonresident or from nonresident to resident, their income shall be apportioned in the manner provided in this subsection. (d) A corporation, foreign or domestic, is taxable upon the income received or derived from property owned, trade or business carried on, and any and every other source in the State. In addition thereto a domestic corporation is taxable upon its income from property owned, trade or business carried on, and any and every other source outside the State, unless subjected to income tax thereon in any other jurisdiction. Subjection to federal tax does not constitute subjection to income tax in another jurisdiction. "Corporation" includes any professional corporation incorporated pursuant to chapter 415A or 416. (e)(1) The income of a resident estate or trust shall be computed without regard to source in the State. The income of a nonresident estate or trust shall be that received or derived from sources in the State. (2) A beneficiary of an estate or trust, or person treated as the owner of any portion of a trust, who is taxable upon income thereof under the Internal Revenue Code, shall be taxed thereon as herein provided, irrespective of the taxability of the estate or trust or whether it is required to make a fiduciary return under this chapter. If all such income consists of income which would be taxable under this chapter if received directly by the beneficiary or person, the beneficiary or person shall be taxed upon all of it. If some of it consists of income which would not be taxable if received directly by the beneficiary or person, then unless the trust instrument provides otherwise the income of each such beneficiary or person shall be conclusively presumed to have been received or derived out of each class of income of the estate or trust, and the beneficiary or person shall be taxed upon such part of it as would be taxable if received directly by the beneficiary or person. (3) Each estate or trust shall include in its return all of the information necessary to determine the taxability of the income of the estate or trust, regardless of source. Only in the case of a nonresident estate or trust of which all the beneficiaries are nonresidents and no part of which is treated as owned by a resident shall the return be confined to income from sources in the State. This paragraph shall not cause income to be taxed to an estate or trust that otherwise would not have been so taxed. [L Sp 1957, c 1, pt of §2; am L Sp 1959 2d, c 1, §16; Supp, §121-3; HRS §235-4; am L 1969, c 226, §5; am L 1974, c 9, §1; am L 1976, c 60, §1; am L 1978, c 95, §1; am L 1983, c 167, §18 and c 206, §1; am L 1985, c 270, §4; gen ch 1985; am L 1988, c 141, §19] Note Chapter 416 referred to in text is repealed.

HRS §235-4.2 Persons lacking physical presence in the State; nexus presumptions

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 calendar year: (1) The person engages in two hundred or more business transactions with persons within the State; or (2) The sum of the value of the person's gross income attributable to sources in this State equals or exceeds $100,000 or for a person that does business within and without the State the numerator of the person's sales factor for the State equals or exceeds $100,000. [L 2019, c 221, §1]

HRS §235-4.5 Taxation of trusts, beneficiaries; credit

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 trust shall be held by a beneficiary or beneficiaries residing outside this State. This exclusion shall not apply to income received from real property held in a land trust formed under chapter 558. (b) If a trust sited in this State owns one hundred per cent of the stock of a foreign corporation which does not engage in an active trade or business but acts solely as a holding company receiving intangible income, such as dividends and interest, the intangible income of the foreign corporation shall be excluded from gross income for Hawaii income tax purposes but only to the extent that the income of the trust beneficiaries is excluded from taxation under subsection (a). As used in this section, foreign corporation means a corporation not created or organized in the United States or under the laws of the United States, Hawaii, or any other state. (c) Any resident beneficiary of a trust with a situs in another state may claim a credit for income taxes paid by the trust to the other state on any income received which is attributable to assets other than intangibles. [L 1985, c 283, §1; am L 1988, c 33, §1]

HRS §235-5 Allocation of income of persons not taxable upon entire income

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 State and from any other source in the State shall be determined by an allocation and separate accounting so far as practicable. Losses from property owned outside the State and from other sources outside the State shall not be deducted. (c) Deductions connected with income taxable under this chapter shall be allowed, but deductions connected with income not taxable under this chapter shall not be allowed. Deductions from adjusted gross income that are not connected with particular property or income, such as medical expenses, shall be allowed only to the extent of the ratio of the adjusted gross income attributed to this State to the entire adjusted gross income computed without regard to source in the State. Deductions by individual taxpayers from gross income for alimony and separate maintenance payments under section 215 of the Internal Revenue Code shall be allowed only to the extent of the ratio of gross income attributed to this State to the entire gross income computed without regard to source in this State; provided that as used in this sentence "gross income" means gross income as defined in the Internal Revenue Code, minus the deductions allowed by section 62 of the Internal Revenue Code, other than the deductions for alimony and separate maintenance payments under section 215 of the Internal Revenue Code. Deductions by individual taxpayers from gross income for pension, profit-sharing, stock bonus plans, and other plans qualified under sections 401 to 409 of the Internal Revenue Code, as such sections are operative for the purposes of this chapter, shall be allowed only to the extent that such deductions are attributed to compensation earned in this State. (d) The standard deduction as provided in section 235-2.4 and personal exemptions as provided in section 235-54 shall be allowed only to the extent of the ratio of the adjusted gross income attributed to this State to the entire adjusted gross income computed without regard to source in the State. (e) If in the opinion of the department the allocations hereinabove provided do not clearly and accurately reflect the actual amount of the adjusted gross income and taxable income received or derived from all property owned and any and every other source in the State, or if any person shows that the allocations hereinabove provided result in adjusted gross income or taxable income being attributed to the State in a larger amount than is just and equitable, then the same shall be determined, allocated, and apportioned under such rules, processes, and formulas as the department prescribes as being just and equitable. [L Sp 1957, c 1, pt of §2; am L Sp 1959 2d, c 1, §16; Supp, §121-4; HRS §235-5; am L 1978, c 173, §2(6); am L 1983, c 88, §2; gen ch 1985; am L 1989, c 11, §1; am L 1999, c 253, §3]

HRS §235-5.5 Individual housing accounts

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 funding for the purchase of the individual's first principal residence. A deduction not to exceed $10,000 shall be allowed for a married couple filing a joint return. No deduction shall be allowed on any amounts distributed less than three hundred sixty-five days from the date on which a contribution is made to the account. Any deduction claimed for a previous taxable year for amounts distributed less than three hundred sixty-five days from the date on which a contribution was made shall be disallowed and the amount deducted shall be included in the previous taxable year's gross income and the tax reassessed. The interest paid or accrued within the taxable year on the account shall not be included in the individual's gross income. For purposes of this section, the term "first principal residence" means a residential property purchased with the payment or distribution from the individual housing account which shall be owned and occupied as the only home by an individual who did not have any interest in, individually, or whose spouse did not have any interest in, if the individual is married, a residential property within the last five years of opening the individual housing account. In the case of a married couple filing separate returns, the sum of the deductions allowable to each of them for the taxable year shall not exceed $5,000, or $10,000 for a joint return, for amounts paid in cash, excluding interest paid or accrued thereon. The amounts paid in cash allowable as a deduction under this section to an individual for all taxable years shall not exceed $25,000, excluding interest paid or accrued. In the case of married individuals having separate individual housing accounts, the sum of the separate accounts and the deduction under this section shall not exceed $25,000, excluding interest paid or accrued thereon. (b) For purposes of this section, the term "individual housing account" means a trust created or organized in Hawaii for the exclusive benefit of an individual, or, in the case of a married individual, for the exclusive benefit of the individual and spouse jointly, but only if the written governing instrument creating the trust meets the following requirements: (1) Contributions shall not be accepted for the taxable year in excess of $5,000 (or $10,000 in the case of a joint return) or in excess of $25,000 for all taxable years, exclusive of interest paid or accrued; (2) The trustee is a bank, a savings and loan association, a credit union, or a depository financial services loan company, chartered, licensed, or supervised under federal or state law, whose accounts are insured by the Federal Deposit Insurance Corporation, the National Credit Union Administration, or any agency of this State or any federal agency established for the purpose of insuring accounts in these financial institutions. The financial institution must actively make residential real estate mortgage loans in Hawaii; (3) The assets of the trust shall be invested only in fully insured savings or time deposits. Funds held in the trust may be commingled for purposes of investment, but individual records shall be maintained by the trustee for each individual housing account holder which show all transactions in detail; (4) The entire interest of an individual or married couple for whose benefit the trust is maintained shall be distributed to the individual or couple not later than one hundred twenty months after the date on which the first contribution is made to the trust; (5) Except as provided in subsection (g), the trustee shall not distribute the funds in the account unless it (A) verifies that the money is to be used for the purchase of a first principal residence located in Hawaii, and provides that the instrument of payment is payable to the mortgagor, construction contractor, or other vendor of the property purchased; or (B) withholds an amount equal to ten per cent of the amount withdrawn from the account and remits this amount to the director within ten days after the date of the withdrawal. The amount so withheld shall be applied to the liability of the taxpayer under subsections (c) and (e); and (6) If any amounts are distributed before the expiration of three hundred sixty-five days from the date on which a contribution is made to the account, the trustee shall so notify in writing the taxpayer and the director. If the trustee makes the verification required in paragraph (5)(A), then the department shall disallow the deduction under subsection (a) and subsections (c), (e), and (f) shall not apply to that amount. If the trustee withholds an amount under paragraph (5)(B), then the department shall disallow the deduction under subsection (a) and subsection (e) shall apply, but subsection (c) shall not apply. (c) Any contributions paid or distributed out of an individual housing account shall be included in gross income by the individual for whose benefit the account was established for the taxable year in which the payment or distribution is received, unless the amount is used exclusively in connection with the purchase of the first principal residence in Hawaii for the individual for whose benefit the account was established. (d) The transfer of an individual's interest in an individual housing account to a spouse under a dissolution of marriage decree or under a written instrument incident to a dissolution of marriage shall not be considered a taxable transfer made by the individual, and the interest, at the time of the transfer, shall be treated as part of an individual housing account of the transferee, and not of the transferor. After the transfer, the account shall be treated, for purposes of this section, as maintained for the benefit of the transferee. (e) If a distribution from an individual housing account to an individual for whose benefit the account was established is made and not used in connection with the purchase of the first principal residence in Hawaii for the individual, the tax liability of the individual under this chapter for the taxable year in which the distribution is received shall be increased by an amount equal to ten per cent of the amount of the distribution which is includable in the individual's gross income for the taxable year. If, during any taxable year, the individual uses the account or any portion thereof as security for a loan, the portion so used shall be treated as if it had been distributed to that individual. (f) If the individual for whose benefit the individual housing account was established purchases a residential property in Hawaii with the distribution from the individual housing account: (1) Before January 1, 1990, and if the individual sells in any manner or method or by use of any instrument conveying or transferring the residential property, the gross income of the individual under this chapter for the taxable year in which the residential property is sold, conveyed, or transferred, whichever is applicable, shall include an amount equal to the amount of the distribution from the individual housing account, and in addition, the gross income of the individual shall be increased by an amount equal to ten per cent of the total distribution from the individual housing account; or (2) After December 31, 1989, the individual shall report one-tenth of the total distribution from the individual housing account used to purchase the residential property as gross income in the taxable year in which the distribution is completed and in each taxable year thereafter until all of the distribution has been included in the individual's gross income at the end of the tenth taxable year after the purchase of the residential property. If the individual sells in any manner or method or by use of any instrument conveying or transferring the residential property, the gross income of the individual under this chapter for the taxable year in which the residential property is sold, conveyed, or transferred, whichever is applicable, shall include an amount equal to the amount of the distribution from the individual housing account not previously reported as gross income, and in addition, the tax liability of the individual shall be increased by an amount equal to ten per cent of the total distribution from the individual housing account. If the individual sells the residential property in any manner as provided in this paragraph after all of the distribution has been included in the individual's gross income at the end of the tenth taxable year after the purchase of the residential property, the tax liability of the individual shall not be increased by an amount equal to ten per cent of the total distribution from the individual housing account. An individual who purchased a residential property in Hawaii with the distribution from an individual housing account before January 1, 1990, who is subject to paragraph (1) may elect to report as provided in paragraph (2). The election shall be made before January 1, 1991. If the individual makes the election, the individual shall report one-tenth of the total distribution from the individual housing account as gross income in the taxable year in which the election occurs and in each taxable year thereafter until all of the distribution has been included in gross income as provided by paragraph (2). If the individual making the election sells the residential property in any manner as provided in paragraph (2), then the individual shall include as income the amount of the distribution not previously reported as income and increase the individual's tax liability as provided in the second sentence of paragraph (2), except when the third sentence of paragraph (2) applies. In the alternative, any individual subject to paragraph (2) who established the individual housing account before January 1, 1990, may elect within one year after the date of purchase, to be subject to paragraph (1). (g) No tax liability shall be imposed under this section if: (1) The payment or distribution is attributable to the individual dying or becoming totally disabled; or (2) Residential property subject to subsection (f) is transferred by will or by operation of law or sold due to the death or total disability of an individual or individual's spouse, subject to the following: An individual shall not be considered to be totally disabled unless proof is furnished of the total disability in the form and manner as the director may require. Upon the death of an individual for whose benefit an individual housing account has been established, the funds in the account shall be payable to the estate of the individual; provided that if the account was held jointly by the decedent and a spouse of the decedent, the account shall terminate and be paid to the surviving spouse; or, if the surviving spouse so elects, the spouse may continue the account as an individual housing account. Upon the total disability of an individual for whose benefit an individual housing account has been established, the individual or the individual's authorized representative may elect to continue the account or terminate the account and be paid the assets; provided that if the account was held jointly by a totally disabled person and a spouse of that person, then the spouse or an authorized representative may elect to continue the account or terminate the account and be paid the assets. (h) If the individual for whose benefit the individual housing account was established subsequently marries a person who has or has had any interest in residential property, the individual's housing account shall be terminated, the funds therein shall be distributed to the individual, and the amount of the funds shall be includable in the individual's gross income for the taxable year in which such marriage took place; provided that the tax liability defined under subsection (f) shall not be imposed. (i) The trustee of an individual housing account shall make reports regarding the account to the director and to the individual for whom the account is maintained with respect to contributions, distributions, and other matters as the director may require under rules. The reports shall be filed at a time and in a manner as may be required by rules adopted under chapter 91. A person who fails to file a required report shall be subject to a penalty of $10 to be paid to the director for each instance of failure to file. [L 1982, c 285, §2; am L 1986, c 231, §2; am L 1990, c 99, §§1, 2; am L 1992, c 183, §§1, 2; am L 1994, c 49, §1; am L 1998, c 120, §2]

HRS §235-6 Foreign manufacturing corporation; warehousing of products

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 is engaged in the business of warehousing in this State and whose compensation for providing the warehousing is included in the measure of the tax imposed by chapter 237 or 239, shall not be deemed to be carrying on a trade or business in this State if all of the following requirements are met: (1) Every delivery of sale of such products so warehoused is made at the warehouse to fill an order for such property procured by a representative (as defined in subsection (b)) from a seller licensed under chapter 237 and purchasing such property for purposes of resale; (2) Every order so procured was made subject to acceptance and was accepted by the corporation at an office located out of this State; (3) No collection for the payment of the products delivered as described in paragraph (1) is made in this State by any of its employees or agents or by any representative; and (4) Except as provided in this section, it is not carrying on a trade or business in this State within the meaning of sections 235-21 to 235-39. (b) "Representative" means a salesperson, commission agent, broker, or other person who is authorized or employed as an independent contractor and not as an employee by the foreign manufacturing corporation described in subsection (a) to assist the manufacturer in selling its products in this State, by procuring orders for such sale, and who carries on such activities in this State (it being immaterial whether such activities are regular or intermittent), but whose functions and authority do not include the accepting of orders for, or the making of deliveries of, or the collecting of payment for deliveries of such products. [L 1963, c 70, §1; Supp, §121-4.1; HRS §235-6; am L 1992, c 134, §1; gen ch 1993]

HRS §235-7 Other provisions as to gross income, adjusted gross income, and taxable income

235-7. Other provisions as to gross income, adjusted gross income, and taxable income (a) There shall be excluded from gross income, adjusted gross income, and taxable income: (1) Income not subject to taxation by the State under the Constitution and laws of the United States; (2) Rights, benefits, and other income exempted from taxation by section 88-91, having to do with the state retirement system, and the rights, benefits, and other income, comparable to the rights, benefits, and other income exempted by section 88-91, under any other public retirement system; (3) Any compensation received in the form of a pension for past services; (4) Compensation paid to a patient affected with Hansen's disease employed by the State or the United States in any hospital, settlement, or place for the treatment of Hansen's disease; (5) Except as otherwise expressly provided, payments made by the United States or this State, under an act of Congress or a law of this State, which by express provision or administrative regulation or interpretation are exempt from both the normal and surtaxes of the United States, even though not so exempted by the Internal Revenue Code itself; (6) Any income expressly exempted or excluded from the measure of the tax imposed by this chapter by any other law of the State, it being the intent of this chapter not to repeal or supersede any such express exemption or exclusion; (7) Income 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, equivalent to pay received for forty-eight drills (equivalent of twelve weekends) and fifteen days of annual duty, at an: (A) E-1 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2004; (B) E-2 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2005; (C) E-3 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2006; (D) E-4 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2007; and (E) E-5 pay grade after eight years of service; provided that this subparagraph shall apply to taxable years beginning after December 31, 2008; (8) Income derived from the operation of ships or aircraft if the income is exempt under the Internal Revenue Code pursuant to the provisions of an income tax treaty or agreement entered into by and between the United States and a foreign country[;] provided that the tax laws of the local governments of that country reciprocally exempt from the application of all of their net income taxes, the income derived from the operation of ships or aircraft that are documented or registered under the laws of the United States; (9) The value of legal services provided by a legal service plan to a taxpayer, the taxpayer's spouse, and the taxpayer's dependents; (10) Amounts paid, directly or indirectly, by a legal service plan to a taxpayer as payment or reimbursement for the provision of legal services to the taxpayer, the taxpayer's spouse, and the taxpayer's dependents; (11) Contributions by an employer to a legal service plan for compensation (through insurance or otherwise) to the employer's employees for the costs of legal services incurred by the employer's employees, their spouses, and their dependents; and (12) Amounts received in the form of a monthly surcharge by a utility acting on behalf of an affected utility under section 269-16.3; provided that amounts retained by the acting utility for collection or other costs shall not be included in this exemption. (b) There shall be included in gross income, adjusted gross income, and taxable income: (1) Unless excluded by this chapter relating to the uniformed services of the United States, cost-of-living allowances and other payments exempted by section 912 of the Internal Revenue Code, but section 119 of the Internal Revenue Code nevertheless shall apply; and (2) Unless expressly exempted or excluded as provided by subsection (a)(6), interest on the obligations of a State or a political subdivision thereof. (c) The deductions of or based on dividends paid or received, allowed to a corporation under chapter 1, subchapter B, part VIII of the Internal Revenue Code, shall not be allowed. In lieu thereof there shall be allowed as a deduction the entire amount of: (1) Dividends received by any corporation upon the shares of stock of a national banking association; (2) Qualifying dividends, as defined in section 243(b) of the Internal Revenue Code, received by members of an affiliated group; provided that "includible corporation" as used therein shall include domestic and foreign corporations; (3) Dividends received by a small business investment company operating under the Small Business Investment Act of 1958 (Public Law 85-699); (4) Seventy per cent of the amount received by any corporation as dividends upon the shares of stock of another corporation, if otherwise allowed under section 243 of the Internal Revenue Code. (d) With respect to net operating loss deductions resulting from net operating losses for taxable years ending after December 31, 1966, the net operating loss deduction provisions of the Internal Revenue Code shall apply; provided that: (1) In computing the net operating loss deduction allowed by this subsection, there shall be included in gross income the amount of interest which is excluded from gross income by subsection (a), decreased by the amount of interest paid or accrued which is disallowed as a deduction by subsection (e). In determining the amount of the net operating loss deduction under this subsection of any corporation, there shall be disregarded the net operating loss of such corporation for any taxable year for which the corporation is an electing small business corporation; (2) No net operating loss carryback or carryover shall be allowed by this chapter if not allowed under section 172 of the Internal Revenue Code; and (3) The election to relinquish the entire carryback period with respect to a net operating loss allowed under section 172(b)(3)(C) of the Internal Revenue Code shall be operative for the purposes of this chapter; provided that no taxpayer shall make such an election as to a net operating loss of a business where such net operating loss occurred in the taxpayer's business prior to the taxpayer entering business in this State. (e) There shall be disallowed as a deduction the amount of interest paid or accrued within the taxable year on indebtedness incurred or continued to purchase or carry: (1) Bonds the interest upon which is excluded from gross income by subsection (a); or (2) Property owned without the State, or to carry on trade or business without the State, if the taxpayer is a person taxable only upon income from sources in the State. (f) Losses of property as the result of tidal wave, hurricane, earthquake, or volcanic eruption, or as a result of flood waters overflowing the banks or walls of a river or stream, or from any other natural disaster, to the extent of the amount deductible, under this chapter, not compensated for by insurance or otherwise, may be deducted in the taxable year in which sustained, or at the option of the taxpayer may be deducted in equal installments over a period of five years, the first such year to be the calendar year or fiscal year of the taxpayer in which such loss occurred. [L Sp 1957, c 1, pt of §2; am L 1959, c 276, §2 and c 277, §8(a); am L Sp 1959 1st, c 29, §8; am L 1963, c 26, §1, c 47, §1, c 91, §2, and c 146, §4; am L 1965, c 155, §31(a) and c 201, §5; Supp, §121-5; am L 1967, c 32, §1; HRS §235-7; am L 1968, c 18, §2; am L 1969, c 152, §1; am L 1970, c 180, §1; am L 1971, c 95, §1; am L 1976, c 156, §6; am L 1978, c 173, §2(7); am L 1979, c 62, §2(6), (7), c 105, §21, and c 224, §3; am L 1981, c 185, §1 and c 209, §2; am L 1982, c 25, §2; am L 1983, c 124, §16; gen ch 1985; am L 1987, c 39, §3 and c 239, §1(7), (8); am L 1990, c 340, §2; am L 1992, c 103, §1; am L 1993, c 337, §5; am L Sp 1995, c 10, §3; am L 2003, c 172, §4; am L 2004, c 197, §2; am L 2007, c 166, §§1, 3; am L 2008, c 28, §21; am L 2010, c 59, §1 superseding c 211, §5, and c 112, §8; am L 2012, c 34, §19, c 165, §5, and c 220, §5; am L 2017, c 205, §4; am L 2018, c 18, §9; am L 2021, c 117, §5] Note L 2017, c 181, §8 purports to amend subsection (a) effective January 1, 2019.

HRS §235-7.3 Royalties derived from patents, copyrights, or trade secrets excluded from gross income

235-7.3. Royalties derived from patents, copyrights, or trade secrets excluded from gross income (a) In addition to the exclusions in section 235-7, there shall be excluded from gross income, adjusted gross income, and taxable income, amounts received by an individual or a qualified high technology business as royalties and other income derived from any patents, copyrights, and trade secrets: (1) Owned by the individual or qualified high technology business; and (2) Developed and arising out of a qualified high technology business. (b) With respect to performing arts products, this exclusion shall extend to: (1) The authors of performing arts products, or any parts thereof, without regard to the application of the work-for-hire doctrine under United States copyright law; (2) The authors of performing arts products, or any parts thereof, under the work-for-hire doctrine under United States copyright law; and (3) The assignors, licensors, and licensees of any copyright rights in performing arts products, or any parts thereof. (c) For the purposes of this section: "Performing arts products" means: (1) Audio files, video files, audiovideo files, computer animation, and other entertainment products perceived by or through the operation of a computer; and (2) Commercial television and film products for sale or license, and reuse or residual fee payments from these products. "Qualified high technology business" means a business that conducts more than fifty per cent of its activities in qualified research. "Qualified research" means: (1) The same as in section 41(d) of the Internal Revenue Code; (2) The development and design of computer software for ultimate commercial sale, lease, license or to be otherwise marketed, for economic consideration. With respect to the software's development and design, the business shall have substantial control and retain substantial rights to the resulting intellectual property; (3) Biotechnology; (4) Performing arts products; (5) Sensor and optic technologies; (6) Ocean sciences; (7) Astronomy; or (8) Nonfossil fuel energy-related technology. [L 1999, c 178, §22; am L 2000, c 297, §6; am L 2001, c 221, §7; am L 2004, c 215, §6]

HRS §235-7.5 Certain unearned income of minor children taxed as if parent's income

235-7.5. Certain unearned income of minor children taxed as if parent's income (a) In the case of any child to whom this section applies, the tax imposed by this chapter shall be equal to the greater of: (1) The tax imposed by section 235-51 without regard to this section, or (2) The sum of: (A) The tax which would be imposed by section 235-51 if the taxable income of such child for the taxable year were reduced by the net unearned income of such child, plus (B) Such child's share of allocable parental tax. (b) This section shall apply to any child for any taxable year if: (1) Such child has not attained age fourteen before the close of the taxable year, and (2) Either parent of such child is alive at the close of the taxable year. (c) For the purpose of this section: (1) The term "allocable parental tax" means the excess of: (A) The tax which would be imposed by section 235-51 on the parent's taxable income if such income included the net unearned income of all children of the parent to whom this section applies, over, (B) The tax imposed by section 235-51 on the parent without regard to this section. For purposes of subparagraph (A), net unearned income of all children of the parent shall not be taken into account in computing any exclusion, deduction, or credit of the parent. (2) A child's share of any allocable parental tax of a parent shall be equal to an amount which bears the same ratio to the total allocable parental tax as the child's net unearned income bears to the aggregate net unearned income of all children of such parent to whom this section applies. (3) Except as provided in rules, if the parent does not have the same taxable year as the child, the allocable parental tax shall be determined on the basis of the taxable year of the parent ending in the child's taxable year. (d) For purposes of this section: (1) The term "net unearned income" means the excess of: (A) The portion of the adjusted gross income for the taxable year which is not attributable to earned income as defined in the Internal Revenue Code, over, (B) The sum of: (i) The amount in effect for the taxable year under section 63(c)(5)(A) (relating to the limitation on standard deduction in the case of certain dependents) of the Internal Revenue Code as operative under section 235-2.4(a), plus (ii) The greater of the amount described in clause (i) or, if the child itemizes the child's deductions for the taxable year, the amount of the itemized deductions allowed by this chapter for the taxable year which are directly connected with the production of the portion of adjusted gross income referred to in subparagraph (A). (2) The amount of the net unearned income for any taxable year shall not exceed the individual's taxable income for such taxable year. (e) For purposes of this section, the parent whose taxable income shall be taken into account shall be: (1) In the case of parents who are not married (within the meaning of section 235-93), the custodial parent (within the meaning of section 152(e) (with respect to the support test in case of child of divorced parents, etc.) of the Internal Revenue Code) of the child, and (2) In the case of married individuals filing separately, the individual with the greater taxable income. (f) The parent of any child to whom this section applies for any taxable year shall provide the social security number of such parent to such child and such child shall include such parent's social security number on the child's return of tax imposed by this section for such taxable year. (g) Election to claim certain unearned income of child on parent's return. (1) If: (A) Any child to whom this section applies has gross income for the taxable year only from interest and dividends (including Alaska Permanent Fund dividends), (B) Such gross income is more than $500 and less than $5,000, (C) No estimated tax payments for such year are made in the name and social security number of such child, and no amount has been deducted and withheld under section 3406 (with respect to backup withholding) of the Internal Revenue Code, and (D) The parent of such child (as determined under subsection (e)) elects the application of paragraph (2), such child shall be treated (other than for purposes of this paragraph) as having no gross income for such year and shall not be required to file a return under this chapter. (2) In the case of a parent making the election under this subsection: (A) The gross income of each child to whom such election applies (to the extent the gross income of such child exceeds $1,000) shall be included in such parent's gross income for the taxable year, (B) The tax imposed by this section for such year with respect to such parent shall be the amount equal to the sum of: (i) The amount determined under section 235-51 after the application of subparagraph (A), plus (ii) For each such child, the lesser of $10 or two per cent of the excess of the gross income of such child over $500. (3) The director shall prescribe such rules as may be necessary or appropriate to carry out the purposes of this subsection. [L 1987, c 239, §1(3); am L 1989, c 13, §4; am L 1990, c 15, §2; am L 1991, c 54, §2; am L 2001, c 199, §3]

HRS §235-9.5 Stock options from qualified high technology businesses excluded from taxation

235-9.5. Stock options from qualified high technology businesses excluded from taxation (a) Notwithstanding any law to the contrary, all income earned and proceeds derived from stock options or stock, including stock issued through the exercise of stock options or warrants, from a qualified high technology business or from a holding company of a qualified high technology business by an employee, officer, or director of the qualified high technology business, or investor who qualifies for the credit under section 235-110.9, that would otherwise be taxed as ordinary income or as capital gains to those persons shall be excluded from taxation under this chapter. Similar provisions shall apply to options to acquire equity interests and to equity interests themselves with regard to entities other than corporations. (b) For the purposes of this section: "Holding company of a qualified high technology business" means any business entity that possesses: (1) At least eighty per cent of the total voting power of the stock or other interest; and (2) At least eighty per cent of the total value of the stock or other interest; in the qualified high technology business. "Income earned and proceeds derived from stock options or stock" includes income from: (1) Dividends from stock or stock received through the exercise of stock options or warrants; (2) The receipt or the exercise of stock options or warrants; or (3) The sale of stock options or stock, including stock issued through the exercise of stock options or warrants. "Qualified high technology business" means the same as defined in section 235-7.3. [L 1999, c 178, §20; am L 2000, c 297, §7; am L 2001, c 221, §8]

HRS §235-12.5 Renewable energy technologies; income tax credit

235-12.5. Renewable energy technologies; income tax credit (a) Each individual or corporate taxpayer that files an individual or corporate net income tax return for a taxable year may claim a tax credit under this section against the Hawaii state individual or corporate net income tax. The tax credit may be claimed for every eligible renewable energy technology system that is installed and placed in service in the State by a taxpayer during the taxable year. The tax credit may be claimed as follows: (1) For each solar energy system: thirty-five per cent of the actual cost or the cap amount determined in subsection (b); provided that: (A) For taxable years beginning after December 31, 2019, and except as provided in subparagraphs (B) and (C), no tax credit may be claimed for a solar energy system that is five megawatts in total output capacity or larger and requires a power purchase agreement approved by the public utilities commission; (B) A solar energy system that is five megawatts in total output capacity or larger, installed and placed in service pursuant to a power purchase agreement approved or pending approval by a decision and order by the public utilities commission prior to December 31, 2019, shall continue to receive a tax credit equal to thirty-five per cent of the actual cost, or $500,000 per solar energy system that has a total output capacity of at least one thousand kilowatts per system of direct current, whichever is less; and (C) For each solar energy system integrated with a pumped hydroelectric energy storage system, the tax credit may be claimed for thirty-five per cent of the actual cost or the cap amount determined in subsection (b), whichever is less; provided that applicable project approval filings have been made to the public utilities commission by December 31, 2021; or (2) For each wind-powered energy system: twenty per cent of the actual cost or the cap amount determined in subsection (b), whichever is less; provided further that multiple owners of a single system shall be entitled to a single tax credit; and provided further that the tax credit shall be apportioned between the owners in proportion to their contribution to the cost of the system. In the case of a partnership, S corporation, estate, or trust, the tax credit allowable is for every eligible renewable energy technology system that is installed and placed in service in the State by the entity. The cost upon which the tax credit is computed shall be determined at the entity level. Distribution and share of credit shall be determined pursuant to administrative rule. (b) The amount of credit allowed for each eligible renewable energy technology system shall not exceed the applicable cap amount, which is determined as follows: (1) If the primary purpose of the solar energy system is to use energy from the sun to heat water for household use, then the cap amounts shall be: (A) $2,250 per system for single-family residential property; (B) $350 per unit per system for multi-family residential property; and (C) $250,000 per system for commercial property; (2) For all other solar energy systems, the cap amounts shall be: (A) $5,000 per system for single-family residential property; provided that if all or a portion of the system is used to fulfill the substitute renewable energy technology requirement pursuant to section 196-6.5(a)(3), the credit shall be reduced by thirty-five per cent of the actual system cost or $2,250, whichever is less; (B) $350 per unit per system for multi-family residential property; and (C) $500,000 per system for commercial property; and (3) For all wind-powered energy systems, the cap amounts shall be: (A) $1,500 per system for single-family residential property; provided that if all or a portion of the system is used to fulfill the substitute renewable energy technology requirement pursuant to section 196-6.5(a)(3), the credit shall be reduced by twenty per cent of the actual system cost or $1,500, whichever is less; (B) $200 per unit per system for multi-family residential property; and (C) $500,000 per system for commercial property. (c) For the purposes of this section: "Actual cost" means costs related to the renewable energy technology systems under subsection (a), including accessories and installation, but not including the cost of consumer incentive premiums unrelated to the operation of the system or offered with the sale of the system and costs for which another credit is claimed under this chapter. "Household use" means any use to which heated water is commonly put in a residential setting, including commercial application of those uses. "Renewable energy technology system" means a new system that captures and converts a renewable source of energy, such as solar or wind energy, into: (1) A usable source of thermal or mechanical energy; (2) Electricity; or (3) Fuel. "Solar or wind energy system" means any identifiable facility, equipment, apparatus, or the like that converts solar or wind energy to useful thermal or electrical energy for heating, cooling, or reducing the use of other types of energy that are dependent upon fossil fuel for their generation. (d) For taxable years beginning after December 31, 2005, the dollar amount of any utility rebate shall be deducted from the cost of the qualifying system and its installation before applying the state tax credit. (e) The director of taxation shall prepare any forms that may be necessary to claim a tax credit under this section, including forms identifying the technology type of each tax credit claimed under this section, whether for solar or wind. The director may also require the taxpayer to furnish reasonable information to ascertain the validity of the claim for credit made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91. (f) If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of the credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted, unless otherwise elected by the taxpayer pursuant to subsection (g) or (h). All claims for the tax credit under this section, including amended claims, shall 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. Failure to comply with this subsection shall constitute a waiver of the right to claim the credit. (g) For solar energy systems, a taxpayer may elect to reduce the eligible credit amount by thirty per cent and if this reduced amount exceeds the amount of income tax payment due from the taxpayer, the excess of the credit amount over payments due shall be refunded to the taxpayer; provided that tax credit amounts properly claimed by a taxpayer who has no income tax liability shall be paid to the taxpayer; and provided further that no refund on account of the tax credit allowed by this section shall be made for amounts less than $1. The election required by this subsection shall be made in a manner prescribed by the director on the taxpayer's return for the taxable year in which the system is installed and placed in service. A separate election may be made for each separate system that generates a credit. An election once made is irrevocable. (h) Notwithstanding subsection (g), for any renewable energy technology system, an individual taxpayer may elect to have any excess of the credit over payments due refunded to the taxpayer, if: (1) All of the taxpayer's income is exempt from taxation under section 235-7(a)(2) or (3); or (2) The taxpayer's adjusted gross income is $20,000 or less (or $40,000 or less if filing a tax return as married filing jointly); provided that tax credits properly claimed by a taxpayer who has no income tax liability shall be paid to the taxpayer; and provided further that no refund on account of the tax credit allowed by this section shall be made for amounts less than $1. A husband and wife who do not file a joint tax return shall only be entitled to make this election to the extent that they would have been entitled to make the election had they filed a joint tax return. The election required by this subsection shall be made in a manner prescribed by the director on the taxpayer's return for the taxable year in which the system is installed and placed in service. A separate election may be made for each separate system that generates a credit. An election once made is irrevocable. (i) No taxpayer shall be allowed a credit under this section for the portion of the renewable energy technology system required by section 196-6.5 that is installed and placed in service on any newly constructed single-family residential property authorized by a building permit issued on or after January 1, 2010. (j) To the extent feasible, using existing resources to assist the energy-efficiency policy review and evaluation, the department shall assist with data collection on the following for each taxable year: (1) The number of renewable energy technology systems that have qualified for a tax credit during the calendar year by: (A) Technology type; and (B) Taxpayer type (corporate and individual); and (2) The total cost of the tax credit to the State during the taxable year by: (A) Technology type; and (B) Taxpayer type. (k) This section shall apply to eligible renewable energy technology systems that are installed and placed in service on or after July 1, 2009. [L 2003, c 207, §§2, 4; am L 2004, c 97, §1; am L 2006, c 240, §§2, 3; am L 2007, c 151, §1; am L 2008, c 204, §4; am L 2009, c 154, §1 superseding c 155, §15; am L 2020, c 61, §1; am L 2021, c 117, §6]

HRS §235-13 Sales of residential land to lessees; involuntary conversion

235-13. Sales of residential land to lessees; involuntary conversion (a) A sale by an organization exempt under section 501(c)(3), or treated as an estate or trust under Subchapter J of the Internal Revenue Code to a lessee of the entire interest in the land of the lessor organization, estate, or trust shall be an involuntary conversion of property used in trade or business or a capital asset of the lessor organization, estate, or trust and shall not be a sale of property held by the lessor organization, estate or trust in the ordinary course of a trade or business, irrespective of the number of such sales in any taxable year, if: (1) The lessee has a right to terminate such lease and to acquire the entire interest of the lessor in the land, which right exists by virtue of chapter 516 and not because of any private agreement or privately created condition; (2) The lessee exercises the lessee's right to purchase such entire interest; (3) The lessor organization, estate, or trust has held the land for a period determined under subsection (b) prior to the date of purchase by lessee; and (4) The land is developed single-family residential land. (b) The period for which a lessor organization, estate, or trust has held land, within the meaning of subsection (a)(3), shall be determined under the rules of section 1223 of the Internal Revenue Code, except that if such land shall have been acquired by the lessor organization, estate, or trust from a decedent, within the meaning of section 1014 of the Internal Revenue Code, or if such land shall have been acquired by the lessor organization, estate, or trust from a donor, within the meaning of section 1015 (other than section 1015(c)) of the Internal Revenue Code, the holding period shall include the period during which such land shall have been held by such decedent or by such donor and also the period if any for which such land shall have been held by an inter vivos or testamentary trust estate created by such decedent or by such donor. (c) This section shall not apply with respect to any transaction governed by section 1055 of the Internal Revenue Code. (d) As used in this section: (1) "Lessee" means the original lessee and any successor who has the right under chapter 516 to bring about an involuntary conversion. (2) "Lessor" means any fee simple owner, any sublessor, and any person entitled to share in the rents or subrents of the land involved in an involuntary conversion described in subsection (a). (e) The gain derived from sales qualified as involuntary conversion of property under this section shall be treated as provided in section 1033 of the Internal Revenue Code of 1954, as amended. [L 1977, c 75, §1; gen ch 1985]

HRS §235-15 Tax credits to promote the purchase of child passenger restraint systems

235-15. Tax credits to promote the purchase of child passenger restraint systems (a) Any taxpayer who files an individual income tax return for a taxable year may claim an income tax credit under this section against the Hawaii state individual net income tax. (b) The tax credit shall be $25; provided that the taxpayer purchases one or more new child passenger restraint systems in the tax year for which the credit is properly claimed; and provided that such restraint system can be shown to be in substantial conformity with specifications for such restraint systems set forth by the federal motor vehicle safety standards which were in effect at the time of such purchase. (c) If the tax credit claimed by the taxpayer under this section exceeds the amount of the income tax payments due from the taxpayer, the excess of credit over payments due shall be refunded to the taxpayer; provided that the tax credit properly claimed by a taxpayer who has no income tax liability shall be paid to the taxpayer; and provided that no refunds or payments on account of the tax credit allowed by this section shall be made for amounts less than $1. (d) The director of taxation shall prepare such forms as may be necessary to claim a credit under this section, may require proof of the claim for the tax credit, and may adopt rules pursuant to chapter 91. (e) All of the provisions relating to assessments and refunds under this chapter and under section 231-23(c)(1) shall apply to the tax credit under this section. (f) Claims for the tax credit under this section, including any amended claims, shall be filed on or before the end of the twelfth month following the taxable year for which the credit may be claimed. [L 1982, c 134, §1]

HRS §235-17 Motion picture, digital media, and film production income tax credit. [Repeal and reenactment on January 1, 2033

235-17. Motion picture, digital media, and film production income tax credit. [Repeal and reenactment on January 1, 2033 (1) Twenty-two per cent of the qualified production costs incurred by a qualified production in any county of the State with a population of over seven hundred thousand; or (2) Twenty-seven per cent of the qualified production costs incurred by a qualified production in any county of the State with a population of seven hundred thousand or less. A qualified production occurring in more than one county may prorate its expenditures based upon the amounts spent in each county, if the population bases differ enough to change the percentage of tax credit. In the case of a partnership, S corporation, estate, or trust, the tax credit allowable is for qualified production costs incurred by the entity for the taxable year. The cost upon which the tax credit is computed shall be determined at the entity level. Distribution and share of credit shall be determined by rule. If a deduction is taken under section 179 (with respect to election to expense depreciable business assets) of the Internal Revenue Code of 1986, as amended, no tax credit shall be allowed for those costs for which the deduction is taken. The basis for eligible property for depreciation of accelerated cost recovery system purposes for state income taxes shall be reduced by the amount of credit allowable and claimed. (b) The credit allowed under this section shall be claimed against the net income tax liability for the taxable year. For the purposes of this section, "net income tax liability" means net income tax liability reduced by all other credits allowed under this chapter. (c) If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of credits over liability shall be refunded to the taxpayer; provided that no refunds or payment on account of the tax credits allowed by this section shall be made for amounts less than $1. All claims, including any amended claims, for tax credits under this section shall 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. Failure to comply with any of the foregoing provision shall constitute a waiver of the right to claim the credit. (d) To qualify for this tax credit, a production shall: (1) Meet the definition of a qualified production specified in subsection (o); (2) Have qualified production costs totaling at least $100,000; (3) Provide the State a qualified Hawaii promotion, which shall be at a minimum, a shared-card, end-title screen credit, where applicable; (4) Provide evidence of reasonable efforts to hire local talent and crew; (5) Provide evidence when making any claim for products or services acquired or rendered outside of this State that reasonable efforts were unsuccessful to secure and use comparable products or services within this State; (6) Provide evidence of financial or in-kind contributions or educational or workforce development efforts, in partnership with related local industry labor organizations, educational institutions, or both, toward the furtherance of the local film and television and digital media industries; (7) Provide evidence of reasonable efforts to comply with all applicable requirements under title 14, including tax return filing and payments; and (8) Provide complete responses to the department of taxation's inquiries and document requests, in the form prescribed by the department, no later than ninety days from the inquiry or request; provided that a taxpayer shall be given notice of and an opportunity to cure any failure to meet the requirements of this subsection, including chapter 237, within thirty days of receipt of the notice; provided further that nothing in this subsection shall be interpreted as waiving any act required by this section. (e) On or after July 1, 2006, no qualified production cost that has been financed by investments for which a credit was claimed by any taxpayer pursuant to section 235-110.9 is eligible for credits under this section. (f) To receive the tax credit, the taxpayer shall first prequalify the production for the credit by registering with the department of business, economic development, and tourism during the development or preproduction stage. (g) The director of taxation shall prepare forms as may be necessary to claim a credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of the claim for credit made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91. (h) Every taxpayer claiming a tax credit under this section for a qualified production shall, no later than ninety days following the end of each taxable year in which qualified production costs were expended, submit a written, sworn statement to the department of business, economic development, and tourism that identifies: (1) All qualified production costs as provided by subsection (a), if any, incurred in the previous taxable year; (2) The amount of tax credits claimed pursuant to this section, if any, in the previous taxable year; and (3) The number of total hires versus the number of local hires by category and by county. This information may be reported from the department of business, economic development, and tourism to the legislature pursuant to subsection (i)(4). (i) The department of business, economic development, and tourism shall: (1) Maintain records of the names of the taxpayers and qualified productions thereof claiming the tax credits under subsection (a); (2) Obtain and total the aggregate amounts of all qualified production costs per qualified production and per qualified production per taxable year; (3) Provide a letter to the director of taxation specifying the amount of the tax credit per qualified production for each taxable year that a tax credit is claimed and the cumulative amount of the tax credit for all years claimed; and (4) Submit a report to the legislature no later than twenty days prior to the convening of each regular session detailing the non-aggregated qualified production costs that form the basis of the tax credit claims and expenditures, itemized by taxpayer, in a redacted format to preserve the confidentiality and that shall include the dollar amount claimed, name of company, and name of the qualified production of the taxpayers claiming the credit. (j) Upon each determination required under subsection (i), the department of business, economic development, and tourism shall issue a letter to the taxpayer, regarding the qualified production, specifying the qualified production costs and the tax credit amount qualified for in each taxable year a tax credit is claimed; provided that the department of business, economic development, and tourism shall issue the letter to the taxpayer no later than seven months after receipt of the taxpayer's statement under subsection (h). The taxpayer for each qualified production shall file the letter with the taxpayer's tax return for the qualified production to the department of taxation. Notwithstanding the authority of the department of business, economic development, and tourism under this section, the director of taxation may audit and adjust the tax credit amount to conform to the information filed by the taxpayer. (k) Each taxpayer claiming a tax credit under this section shall submit to the department of business, economic development, and tourism a fee for the motion picture, digital media, and film production income tax credit in an amount equal to 0.2 per cent of the tax credit claimed by the qualified production no later than the deadline stated in subsection (c). The department of business, economic development, and tourism may prescribe the form and method by which this fee is remitted, including through electronic means. The fees collected under this subsection shall be deposited into the Hawaii film and creative industries development special fund under section 201-113. (l) Total tax credits claimed per qualified production shall not exceed $17,000,000. (m) Qualified productions shall comply with subsections (d), (e), (f), (h), and (k). (n) The total amount of tax credits allowed under this section in any particular year shall be $50,000,000; however, if the total amount of credits applied for in any particular year exceeds the aggregate amount of credits allowed for that year under this section, the excess shall be treated as having been applied for in the subsequent year and shall be claimed in the subsequent year; provided that no excess shall be allowed to be claimed after December 31, 2032. (o) For the purposes of this section: "Commercial": (1) Means an advertising message that is filmed using film, videotape, or digital media, for dissemination via television broadcast or theatrical distribution; (2) Includes a series of advertising messages if all parts are produced at the same time over the course of six consecutive weeks; and (3) Does not include an advertising message with Internet-only distribution. "Digital media" means production methods and platforms directly related to the creation of cinematic imagery and content, specifically using digital means, including but not limited to digital cameras, digital sound equipment, and computers, to be delivered via film, videotape, interactive game platform, or other digital distribution media. "Post-production" means production activities and services conducted after principal photography is completed, including but not limited to editing, film and video transfers, duplication, transcoding, dubbing, subtitling, credits, closed captioning, audio production, special effects (visual and sound), graphics, and animation. "Production" means a series of activities that are directly related to the creation of visual and cinematic imagery to be delivered via film, videotape, or digital media and to be sold, distributed, or displayed as entertainment or the advertisement of products for mass public consumption, including but not limited to scripting, casting, set design and construction, transportation, videography, photography, sound recording, interactive game design, and post-production. "Qualified production": (1) Means a production, with expenditures in the State, for the total or partial production of a feature-length motion picture, short film, made-for-television movie, commercial, music video, interactive game, television series pilot, single season (up to twenty-two episodes) of a television series regularly filmed in the State (if the number of episodes per single season exceeds twenty-two, additional episodes for the same season shall constitute a separate qualified production), television special, single television episode that is not part of a television series regularly filmed or based in the State, national magazine show, or national talk show. For the purposes of subsections (d) and (l), each of the aforementioned qualified production categories shall constitute separate, individual qualified productions; and (2) Does not include: (A) News; (B) Public affairs programs; (C) Non-national magazine or talk shows; (D) Televised sporting events or activities; (E) Productions that solicit funds; (F) Productions produced primarily for industrial, corporate, institutional, or other private purposes; and (G) Productions that include any material or performance prohibited by chapter 712. "Qualified production costs" means the costs incurred by a qualified production within the State that are subject to the general excise tax under chapter 237 at the highest rate of tax or income tax under this chapter if the costs are not subject to general excise tax and that have not been financed by any investments for which a credit was or will be claimed pursuant to section 235-110.9. Qualified production costs include but are not limited to: (1) Costs incurred during preproduction such as location scouting and related services; (2) Costs of set construction and operations, purchases or rentals of wardrobe, props, accessories, food, office supplies, transportation, equipment, and related services; (3) Wages or salaries of cast, crew, and musicians; (4) Costs of photography, sound synchronization, lighting, and related services; (5) Costs of editing, visual effects, music, other post-production, and related services; (6) Rentals and fees for use of local facilities and locations, including rentals and fees for use of state and county facilities and locations that are not subject to general excise tax under chapter 237 or income tax under this chapter; (7) Rentals of vehicles and lodging for cast and crew; (8) Airfare for flights to or from Hawaii, and interisland flights; (9) Insurance and bonding; (10) Shipping of equipment and supplies to or from Hawaii, and interisland shipments; and (11) Other direct production costs specified by the department in consultation with the department of business, economic development, and tourism; provided that any government-imposed fines, penalties, or interest that are incurred by a qualified production within the State shall not be "qualified production costs". "Qualified production costs" does not include any costs funded by any grant, forgivable loan, or other amounts not included in gross income for purposes of this chapter. L 2022, c 217, §4.] (a) Any law to the contrary notwithstanding, there shall be allowed to each taxpayer subject to the taxes imposed by this chapter, an income tax credit that shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed. The amount of the credit shall be: [L 1997, c 107, §1; am L 1998, c 156, §11; am L 2006, c 88, §§2, 4(2); am L 2013, c 89, §§2, 3; am L 2017, c 143, §§2, 3; am L 2019, c 275, §2; am L 2022, c 217, §3; am L 2024, c 169, §1]

HRS §235-18 Deposit beverage container deposit exemption

235-18. Deposit beverage container deposit exemption This chapter shall not apply to amounts received as a deposit beverage container deposit collected under part VIII of chapter 342G. L 2004, c 241, §1

HRS §235-19 Exceptional trees; tax deduction

235-19. Exceptional trees; tax deduction (a) Subject to subsection (b), there shall be allowed as a deduction from gross income the amount, not to exceed $3,000 per exceptional tree, for amounts paid, excluding interest paid or accrued thereon, during the taxable year by an individual taxpayer for expenditures to maintain, on the taxpayer's real property, each exceptional tree that has been designated by the county arborist advisory committee under chapter 58 as an exceptional tree. (b) No deduction shall be allowed to exceed the amount of expenditures deemed reasonably necessary by a certified arborist. No deduction shall be allowed in more than one taxable year out of every three consecutive taxable years. (c) The director of taxation shall prepare such forms as may be necessary to claim a tax deduction under this section, may require proof of the claim for the tax deduction, including an affidavit signed by the certified arborist, and may adopt rules pursuant to chapter 91. (d) For the purpose of this section, the term "exceptional tree" shall have the same meaning as defined in section 58-3. [L 2004, c 195, §2]

HRS §235-20.5 Tax administration special fund; established

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 231-85; provided that in each fiscal year, of the total revenues collected by the special enforcement section, all revenues in excess of $2,000,000 shall be deposited into the general fund; and (3) Fines assessed pursuant to section 237D-4. (b) The moneys in the fund shall be used for the following purposes: (1) Issuing comfort letters, letter rulings, written opinions, and other guidance to taxpayers; (2) Issuing certificates under [section] 235-110.9; (3) Administering the operations of the special enforcement section; (4) Funding support staff positions in the special enforcement section; and (5) Developing, implementing, and providing taxpayer education programs, including tax publications. [L 2004, c 215, pt of §3; am L 2007, c 206, §§3, 8; am L 2009, c 134, §§5, 13(1), (3); am L 2013, c 58, §1; am L 2014, c 89, §1; am L 2015, c 204, §2; am L 2018, c 123, §1; am L 2019, c 261, §1]

Source: Hawaii State Legislature (capitol.hawaii.gov), via Internet Archive capturesURL: http://www.capitol.hawaii.gov/hrscurrent/Vol04_Ch0201-0257/HRS0235/HRS_0235-.htmFetched: 11/10/2026